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Sept. Commercial Red-Meat Production Down

In September, commercial red-meat production for the U.S. totaled 4.16 billion lbs., down 2% from the 4.26 billion lbs. produced in September 2009, according to the National Agricultural Statistics Service, Agricultural Statistics Board, USDA.

Totaling 2.25 billion lbs., beef production was 1% above the previous year. Cattle slaughter totaled 2.90 million head, up 3% from September 2009. The average live weight was down 21 lbs. from the previous year, at 1,289 lbs.

Veal production totaled 11.3 million lbs. and was 4% less than September a year ago. Calf slaughter totaled 71,200 head, down 12% from September 2009. The average live weight was up 28 lbs. from last year at 273 lbs.

To read the entire article, link here.

I Wouldn't Change A Thing

I’m addressing you today from Indianapolis, IN, where I’m attending the 83rd National FFA Convention, serving as a volunteer for the Mitchell (SD) FFA Chapter and to help coach my middle sister, Courtney, in the job interview competition. I will admit it feels odd being on the other side of the coin, where it’s not me gearing up for another contest and competing; however, it’s a different kind of excitement, and I’m happy to be here.

It’s hard to believe that three years ago, I became widely known for the peaceful walkout I orchestrated at the National FFA Convention during a performance by country singer CArrie Underwood, a Humane Society of the U.S. (HSUS) supporter. At the time, it was viewed as a radical move, standing out against one of the leading youth agriculture organizations, and I’m often asked if I would do things differently next time.

The answer is absolutely not. I firmly believed that the agriculture industry shouldn’t stand behind a country singer who supports an organization such as HSUS. After four years, the message is loud and clear to farmers and ranchers: HSUS is working every day to put us out of business. They will use their millions of dollars to blast TV commercials, push forward ballot initiatives and work with Hollywood to manipulate the popular perceptions about who we are and what we do. I’m not ashamed of the ruckus I caused in Indianapolis three years ago, and it’s great to be reunited with the city and recall old memories from that concert.

What battles are you currently fighting with your state HSUS activists? How have their initiatives impacted your state? On a happier note, what are some of your fondest memories from your FFA days? Did you ever go to the national convention? Join in the conversation in the comments section below. Thanks for your thoughts!

Beef

Don’t Sell Your Vaccines Short

Handling and storing vaccines properly can help ensure efficacy.

Vaccination alone may not be all that is necessary to help protect cattle from respiratory disease.

“Simply vaccinating animals doesn’t always mean that they will be protected,” says J.P. Pollreisz, DVM, Veterinary Operations, Pfizer Animal Health. “To help ensure vaccines are effective and work the way they’re supposed to, producers need to make sure they’re also handling and storing vaccines properly.”

In fact, handling and storing vaccines properly can play a big part in how well animals are protected against diseases like bovine respiratory disease (BRD).

“Ultraviolet light and heat can disrupt the physical structure of the viruses that are in vaccines,” Dr. Pollreisz says. “A vaccine won’t go from effective to worthless in five minutes, but if left in the sun or exposed to heat for any amount of time, there’s no way to tell how much damage has been done to a vaccine. That’s why it’s so important vaccines are stored in coolers when producers are out working cattle.”

Dr. Pollreisz says producers should pay close attention to labels to determine how vaccines should be administered, when they should be given and to which animals. Additionally, producers also should be careful not to use vaccines past their expiration date and should not mix, or rehydrate, more vaccine than they can use in one hour.

Dr. Pollreisz also recommends producers talk to their veterinarians to choose vaccines that best fit their individual operations and goals, and those that come from a trusted company.

“Pfizer Animal Health has a longstanding history within the cattle industry,” Dr. Pollreisz says. “Plus, veterinarians and producers can always call our Veterinary Medical Investigations and Product Support (VMIPS) or Veterinary Operations when they have a problem and we’ll do everything we can to make it right — it’s a commitment to service.”

When handled properly, vaccines like Bovi-Shield GOLD® 5 — the first and only respiratory vaccine with a label claim for the prevention of disease caused by infectious bovine rhinotracheitis (IBR) for at least nine months— can help protect cattle against economically devastating diseases like BRD. What’s more, Bovi-Shield GOLD 5 offers a nine-month duration of immunity for respiratory disease caused by bovine virus diarrhea (BVD) virus Types 1 and 2 and IBR, and helps protect cattle against other viruses that lead to BRD, including parainfluenza type 3 (PI3) virus and bovine respiratory syncytial virus (BRSV).

“It’s a common misunderstanding that killed vaccines are more forgiving to mishandling than modified live vaccines, but that’s just not true,” Dr. Pollreisz says. “Proper vaccine handling holds true for any vaccine.”

Beef

Red Angus highlights achievements, growth and market share

Multi-breed EPDs and record-setting FCCP enrollment, registrations and GridMaster Awards are focus of convention

New multi-breed EPDs, record Feeder Calf Certification Program (FCCP) enrollment, increased registration growth and record-high GridMaster Awards are positive indicators of Red Angus’ status in the industry. Red Angus Association of America (RAAA) members convened in Springfield, Mo., Sept. 16 – 17, at the Association’s 57th annual convention to conduct business, socialize and celebrate the breed’s milestones.

“Providing genetic and marketing solutions to industry challenges is how we expanded market share,” said RAAA CEO Greg Comstock in his State of the Association address. “Our commercial producers’ increased demand indicates their success using Red Angus genetics and using our FCCP program to market their product.”

Comstock explained that this growth is even more impressive considering the industry lost well over a million beef cows in the U.S. over the past two years, reducing bull needs by 9,000 head. “Competition is fierce,” said Comstock, “yet Red Angus continues to gain market share.”

While other major breeds are experiencing declines in their registration numbers, Red Angus exhibited 3.1 percent annual growth in registrations, continuing RAAA’s growth trend over the past decade.

In addition to registration growth, RAAA reached milestones in their commercial marketing program for the second year in a row. The FCCP – the industry’s most experienced marketing program – reached an all-time record by selling 117,500 tags in one year. Since the programs inception 17 years ago, RAAA has enrolled 1,250,000 calves into the FCCP program.

"The FCCP delivers real-world solutions to add value to Red Angus bull customers’ calf crops while remaining the beef industry's most user-friendly & least expensive age- and source-verified program,” said RAAA Commercial Marketing Director Clint Berry. “Feeders love the program for the same reasons coupled with the assurance that they're purchasing cattle with the ability to convert, gain and grade; and packers are assured a minimum 50 percent Angus makeup that is genetically verified, providing a more consistent end product."

The FCCP program is USDA approved for genetic, age and source verification, offers value-based marketing options and includes free feeder and fed cattle marketing services through the Association.

RAAA presented a record-setting 39 GridMaster Awards for both conventional- and natural-fed cattle harvested through the industry's major packers as well as Meyer Natural Angus. To earn the GridMaster, cattle must be enrolled in the FCCP, harvested in near-load-lot sizes and reach required carcass quality specifications ranking them in the top percentiles amongst all cattle harvested.

Multi-breed EPDs, New Fee Structure and Red Angus Foundation

RAAA celebrated an industry milestone with the release of multi-breed EPDs between RAAA and the American Simmental Association (ASA) this past summer. Growth and carcass EPDs are now calculated on the same model for both breeds, increasing the accuracy of the EPD numbers because of the increased herd database.

By working together, both breeds are better positioned to evaluate emerging technologies and advance the value and accuracy of EPDs. These enhancements will be guided by a joint Technical Advancement Committee (TAC), which will prioritize projects and make budget requests to the respective breeds. TAC will be made up of an appropriate mix of industry, academic and leadership from the respective breeds.

RAAA also changed their fee structure this past year by eliminating A.I. certificates and transfer fees. “Producers can spend less time on paperwork and more time focusing on breeding and raising their cattle,” said Comstock. By registering and transferring seedstock to the new buyers, Red Angus breeders are enabling their customers to participate in the FCCP program and enhance their marketing options and bottom line.

The enhanced and revised Red Angus Foundation, Inc. (RAFI) debuted at RAAA National Convention with a new set of by-laws and special fundraisers to kick off the RAFI’s goals. Among the highlights was the auction of seven limited-edition, signed prints of Tim Cox’s “Where Change Comes Slowly,” that featured Red Angus cattle. The custom-framed prints garnered $28,000 for the general RAFI fund to support juniors, breed improvement or education.

The Junior Red Angus Association (JRA) also auctioned off a bronze of a Red Angus bull and Mont-Vue Farms of Lenoir City, Tenn., donated a heifer during the “Red Angus in the Ozarks” sale held in conjunction with convention. Proceeds of both fundraisers will benefit the JRA.

Board of Director Elections

Joe Mushrush of Strong City, Kan., was elected to serve as RAAA’s President.

Tom Woodward of Decatur, Texas, will serve as First Vice President and director for Region 4 – Southwest.

Tommy Coley of Birmingham, Iowa, was elected to serve as Second Vice President and director for Region C.

Bob Morton of Three Forks, Mont., was elected as director of Region A.

Kevin Miller of Briggsdale, Colo., will serve as director for District 3 – Rocky Mountains.

Barry Horsley, Soper, Okla., was elected as director for District 6 – Great Plains.

Morgan Martin, Leicester, N.C., was re-elected as director for District 7 – Northeast.

Larry Ellison of Fair Grove, Mo., was re-elected as director for District 9 – Midwest.

Next year’s Red Angus convention will be held in Durham, N.C., Sept. 15 – 16. For more information about the Association, visit redangus.org or call the national office at (940) 387-3502.

Impact Of Body Condition On Reproductive Productivity In Beef Cattle

Reproductive performance is greatly impacted by total body energy reserves. Most importantly, if cows are thin at calving, reproductive performance in the subsequent breeding season will suffer, resulting in reduced yearly profits per cow. Therefore, as we head into winter, to optimize reproductive performance next spring, we may need to consider what winter supplementation strategies are needed to meet the nutritional requirements of the cow herd to make certain that optimal breeding performance is achieved in the spring.

The most practical method to estimate the energy reserves of a cow is by evaluating her proportion of body fat via body condition scoring (BCS). BCS are based on a numeric scale of 1 to 9, with cows with 1 being extremely thin and 9 being obese.


To read this entire article, link here.

Cattle Industry: Bright Long-Term Outlook

The cattle industry is ready to set records for high prices this year and next. While this is positive news for finished cattle prices, calves and feeder cattle still face the price-depressing burden of high feed costs. In the longer-run, current high feed prices will keep the industry in a liquidation phase and smaller beef supplies in coming years will be positive for returns for years to come.

The cattle industry continues to adjust to high feed prices not only from the last three years, but also from the most recent increases in corn, distillers, and soybean meal costs. The longer-term adjustments continue to play out in the reduction of cow numbers. The most recent surge in feed prices will likely keep producers from expanding until feed prices moderate. That will not be until the 2011 U.S. crops are assured, which is still at least 10 months away. This means cow numbers will not likely expand until 2012 and that beef supplies will not start to grow until 2014.

To read the entire article, link here.

Vilsack Ignores Effort To Help Cattle Industry

In responding to calls from 115 members of the U.S. House of Representatives and several U.S. Senators, USDA Secretary Tom Vilsack ignored requests for a comprehensive economic analysis of the USDA’s Grain Inspection, Packers and Stockyards Administration’s (GIPSA) proposed rule on livestock and poultry marketing under the Packers and Stockyards Act.

The proposed GIPSA rule was written in response to a directive made by Congress in the 2008 Farm Bill. However, as the 115 House members cite, “GIPSA also included additional proposed regulations that greatly exceed the mandate of the Farm Bill.” The members also stated that “the analysis contained the proposed rule fails to demonstrate the need for the rule, assess the impact of its implementation on the marketplace, or establish how the implementation of the rule would address the demonstrated need.”

To read the entire article, link here.

Trying To Put The GIPSA Debate In Context

Last week, I received a lot of emails from producers trying to understand the GIPSA debate. A few were disgruntled that I hadn’t presented both sides in an unbiased manner. Most of what I have written is editorial, however; it is my opinion.

I can understand how some people are a little confused about the GIPSA debate, as the two sides claim the proposed GIPSA rules will have drastically different results. The following hopefully will be helpful in understanding this debate.

The origins of the GIPSA debate: This debate goes back a lot of years to the start of the value-based marketing revolution. In addition to branded programs and grids, we started to see some feedyards struggling with managing their marketings on a timely and consistent basis because of increased show-list sizes.

Economies of scale had given larger feedyards significant production-efficiency advantages, which led to declining margins and larger operations. Managing risk and marketing these larger show lists on a timely basis was occasionally difficult.

In an effort to manage their market risk and make it easier to sell their offerings on a timely basis, these feedyards sought out alternative marketing arrangements (AMAs) like formulas and contracts. These arrangements allowed packers to better manage their risk as well, and to have less exposure to daily and weekly market fluctuations. Thus, it was beneficial to both sides who were participating – lowering risk and marketing costs.

These changes helped solidify the efficiency advantage of the large feeding complexes and changed the structure of the feeding industry. These large complexes reduced costs, increased efficiencies, lowered labor costs and leveraged economies of scale.

Still, those weren’t the biggest changes. These new complexes ran year around and they essentially made the mid-size feedlot business model unviable. These large operations looked at turning their money over 2.5 times a year. As a result of this increased inventory turnover, a profit of just $10/head became an extremely good return on the money.

The result was that generally only extremely small farmer feeders, or large commercial feeding operations, were viable. This change and shift was, of course, painful if you were in that mid-tier category.

At the same time, the overall industry was experiencing a significant loss in demand, which resulted in declining profits and margins. Needless to say, these weren’t good times, and many producers attributed these problems to AMAs. Captive supplies thus became the nemesis in the minds of a lot of cattle feeders and cow-calf producers.

Getting to the debate. The debate over captive supplies is viewed by many as the cause of a lot of our industry problems. Studies on captive supplies have been conducted for more than 30 years, and because there are so many variables to be sorted out, the results haven’t been in complete agreement.

Essentially the most recent USDA study concluded that AMAs have had a net beneficial effect on cattle prices. Yet, many studies show that captive supplies have a limited but negative impact on the cash market.

The latest GIPSA study showed that for every 10% increase in captive supplies, there is a corresponding 0.11% decline in cash prices. How can they be a benefit to overall prices, but slightly negative to cash prices? While these two circumstances would seem to be in contradiction, they actually aren’t.

If one takes 10% of the cattle off the market and it’s better than average quality of the mix moving through alternative channels, then the remainder of the cattle will be worth less. But that doesn’t mean that the net price for the entire mix is reduced.

The important and the trivial. There are a lot of provisions in the new rule that address particular circumstances. The two that have been highlighted within the beef industry are the provisions that limit packer-to-packer sales, and the provision that prevents one buyer from holding two different bids.

Regarding the first, the argument is that packer-to-packer sales would allow packers to manage and lower overall supplies. Of course, this would mean that the packers were colluding. Nobody wants this, but conspiring together is already illegal and would be aggressively punished.

Anecdotally, people who follow the markets will tell you that packers are far more likely to bid the price up if a packer is caught short-bought than they are to try and help the other packer out, but it remains a concern. The example often used is the Washington packing entity that owns a feedyard in Kansas. Would they have to ship their cattle to Washington? The law of unintended consequences comes into full view when one contemplates what impact this might have on complexes like Five Rivers or Cargill Cattle Feeding, which are tied to packing companies.

While the impacts could be dramatic on the calf market, few people see this as a real or likely threat to the current market. And, it’s widely assumed that this provision was merely included for compromise sake when it is modified or removed.

The buyer not being allowed to carry two bids is another red herring, as it simply doesn’t happen frequently enough to have an impact on overall market prices.

However, it certainly has a significant impact on those areas that are on the fringe. The problems are obvious if the two were to agree to conspire and split up the cattle; they could buy them cheaper. Conversely, if you are at a small barn with fairly small cull-cow runs, it might not make sense to have an individual buyer there, and obviously having one buyer instead of two is probably not good, either. We see order buyers carrying bids for multiple buyers all the time at sale barns; most people would argue that at times it is very beneficial, and at times it may be harmful to prices.

There is no easy answer, but we have historically relied on the marketplace to fix imbalances. If the basis is too wide, buyers migrate in and out of markets based on profit expectations. These are complicated issues without obvious solutions, but nobody claims they are primary drivers in creating price-discovery issues.

This argument is all about AMAs. Those who support the rule claim it is these non-cash cattle that provide packers with leverage to lower cash prices, and those who oppose it believe AMAs allow producers to differentiate their product, build demand and manage risk.

Where it gets confusing is that one side argues the rules won’t eliminate these arrangements, while the other argues it’s a rejection of the entire quality movement away from commodity production and is a return to a marketing structure that was a dismal failure in the distant past. How can there be two such divergent views?

It comes down to the fact that one side sees declining demand and a commodity system that leads to less profitability and contraction within the industry. The other side sees a lack of profitability under today’s rules, and concludes that things would be dramatically better if we returned to the rules of the game before value-based marketing.

There’s no debating the economic impact here. Loss of demand has been devastating to our industry, and a commodity system promotes marketing to the lowest possible denominator. Meanwhile, value-based marketing sends price signals to consumer preferences and demands throughout the production system, thereby increasing quality and consistency of our product.

Thus, we have the dilemma – how can anyone be against value creation, product differentiation and demand growth? You can’t, so both sides claim they are in favor of all that. Those who favor the rule say it won’t affect these things; those who oppose say it will have a devastating effect. So who does one believe?

Let me begin by saying that the rhetoric from both sides isn’t important, but actual policy stances are. Barack Obama may claim he’s for deficit reduction and reduced regulatory burdens on business, but his policies would say something quite different.

We see the same thing all the time in the cattle industry. Those who avidly oppose trade, claim they are for fair trade when they have never supported any access to our markets ever.

The solution. Start by reading the concerns of the National Cattlemen’s Beef Association, the National Pork Producers Council and the various state cattlemen groups about the rule. Then, read R-CALF’s position on what GIPSA will do. If you’re really ambitious, call up your land-grant university and read the marketing studies done on captive supplies and demand, then determine for yourself which is the larger problem. Then, read the proposed GIPSA rule for yourself and make your own decision.

As for myself, I believe price discovery will become more of an issue and a major component of that is price transparency as AMAs continue to grow. I think our system has some problems, but market manipulation is minor compared to insufficient differentiation in pricing.

The market works amazingly well; the price swings we endure are testament to that. Demand issues overwhelm market power issues on their impact on our industry. The first is the cause of our troubles and our hope for the future. The second is of minimal impact that merely diverts us from attacking real issues; even worse, it leads to lessened demand.

For perspective, a 30% reduction in AMAs would result in a cash price increase of .33% – that’s point .33% in cash prices. I don’t have a good figure to use on the loss of premiums received and ultimately the loss in demand. But we wouldn’t be talking about tenths of pennies/lb.

The simplistic analogies. Let’s say a farmer has 100 tons of hay (representing the fed market). If he sells it on the cash market, he can receive $100/ton or $10,000 for it. A dairy is willing to pay a premium for 20 tons and will pay $150/ton. But, he can only get $95/ton for the remaining hay. Should he do it?

Or, let’s say that the farmer’s production cost is $70/ton, and he has a $7,000 note at the bank. Should he be allowed to sell 50 tons of it at $80/ton early summer and the remainder in the fall to manage his risk? If there are four ranchers who each need to buy 25 tons, is price affected if all four show up to buy the 25 tons on a given day, or if one buys his a week earlier than the others leaving three ranchers to buy 75 tons?
-- Troy Marshall

Cattle Industry Has A Bright Long-Term Outlook

The cattle industry is ready to set records for high prices this year and next, says Purdue University Extension economist Chris Hurt.

“Although this is positive news for finished-cattle prices, calves and feeder cattle still face the price-depressing burden of high feed costs. In the longer run, current high feed prices will keep the industry in a liquidation phase, and smaller beef supplies in coming years will be positive for returns for years to come,” he says.

“The most recent surge in feed prices will likely keep producers from expanding until feed prices moderate. That will not be until the 2011 U.S. crops are assured, which is still at least 10 months away. This means cow numbers will not likely expand until 2012 and that beef supplies will not start to grow until 2014.”

USDA expects beef exports to expand by 18% this year, with imports falling 5%. More exports and fewer imports means nearly 500 million lbs. of beef won’t be available in the U.S. compared to last year. That represents almost 2% of domestic production and enhances finished cattle prices by $2-$3/cwt., he says.

“It is increasingly encouraging that Asian markets are leading the export volume increases so far this year. Purchases from South Korea are up 130% from last year with Japanese purchases up 21%. China is back in the market as well with an increase of 50% in beef purchases,” Hurt says. Still, annual exports will be only 91% of pre-BSE tonnage in 2003, he adds.

Smaller beef supplies will continue to support high finished cattle prices for the rest of 2010 and all of 2011. Per capita beef supplies in the U.S. will be down about 3% this year and an additional 1-2% in 2011.

“Prices will be supported not only by reduced beef supplies but by strength in the world economy and some recovery in the U.S. economy, which will enhance demand. Recent high feed prices are expected to keep the hog industry from expanding and to cut into the previously expected 3% expansion in chicken production. Smaller supplies of competitive meats support beef prices,” Hurt notes.

Hurt says Nebraska finished steer prices averaged $93.75 in the first three quarters this year, compared to $83.25 in 2009 when recession deflated demand. Assuming the prices in the final quarter of 2010 are about $98, 2010 will have reached a new record price of $94.80, exceeding the previous record high of $92.27 in 2008.

That record price is expected to be broken next year with Nebraska finished steers averaging in the low $100s. Prices are expected to be in the low $100s during the first quarter and then reach yearly highs in the second quarter when they may average about $105, he said.

“Expect prices to drop $2-$4/cwt. in the summer quarter and then finish the final quarter of 2011 in the very low $100s. Price forecasts tend to have large errors so consider a range of at least $3 higher or lower from these forecasts,” he says.

Hurt says the retail beef price so far this year has averaged $4.37/lb., exceeding the previous record of $4.29 for the same period in 2008. Early forecasts of retail prices in 2011 are $4.60 to $4.65, an increase of about 6% over the 2010 record price.

“Although cow-calf producers would have received much higher prices for calves without the recent increase in feed prices, they should hold on to their cow herds because record finished cattle prices and, hopefully, cheaper feed in the fall of 2011 should result in much higher calf prices, perhaps for multiple years to come,” he says.
-- University of Illinois

Exercise Caution When Grazing Cattle In Cold Weather

As frost begins to cover fields, cattle producers should protect grazing livestock against prussic acid poisoning and bloat, a Purdue University Extension beef specialist says.

Prussic acid, also commonly referred to as cyanide or hydrocyanic acid, is a potent, rapidly acting poison often used in rodent and vermin killers. It accumulates in a number of common plants, and once animals consume those plants, the toxin rapidly enters the blood stream, is transported throughout the body and inhibits use of oxygen by the cells in the animal's body.

"In essence, the animal suffocates," says Ron Lemenager.

Sorghums and related plant species can easily accumulate these toxic compounds following events such as frost that rupture plant cells.

Ruminants are more susceptible to prussic acid poisoning than other animals because the ruminal microorganisms have enzymes that release the acid in the animal's digestive tract.

"Signs of prussic acid poisoning can occur anywhere from 15 minutes to a few hours after animals consume toxic forages," Lemenager says. "Animals are often found dead. Clinical signs, when noticed, occur in rapid succession and include excitement, rapid pulse and generalized muscle tremors, followed by rapid and labored breathing, staggering and collapse."

In addition to creating prussic acid in sorghum and related plants, frost also can create high levels of soluble protein in alfalfa, winter wheat and white clover. When an animal consumes these, the result is frothy or legume bloats, Lemenager says. Cattle suffering from bloat can die within an hour. Rapid swelling of the left side of the body and various signs of discomfort often can be symptoms.

"It is important to know when to graze cattle and when not to," Lemenager says. "The best prevention of both prussic acid poisoning and bloat is to keep livestock from grazing on nights when frost is likely and to keep animals from grazing at least 5-7 days after a frost."

Lemenager suggests that cattle be fed before they are let back out to graze so that they are full and less likely to over-eat infected plants. Producers also should wait until dew is off alfalfa plants before setting cattle out to graze and avoid grazing them on young plants, where the risk of bloat is often highest.
-- Purdue University release