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Restaurant Sales Bounce Back

As far as the recession-driven slump in restaurant sales is concerned, “the worst is over,” food analyst Harry Balzer told participants of the National Chicken Council Annual Conference in Washington last Wednesday. In the third quarter of 2010, restaurant sales bounced back after five quarters of decline, he says.

Based on actual sales reported by 39 leading restaurant chains, the change in weekly same-store sales hit 3% higher in some weeks in the third quarter after plunging as low as 6% lower in the first quarter of 2010 and spending most of 2009 in negative territory, said Balzer, who is chief industry analyst and vice president of The NPD Group in Chicago.

Chicken remains tied with pork with a share of about 26% of restaurant meals, with beef in first place with about 33%, Balzer adds.

To read the entire article, link here.

Online Forum Digs Into HSUS Lies

hsus-deception.jpg I was searching for some information on the Humane Society of the U.S. (HSUS) recently when I ran across a forum with the discussion title: "The Truth About HSUS." Of course, I was immediately intrigued by the conversation that was being held by pet owners and animal enthusiasts. Because I was so interested by what others outside of the agriculture industry have realized about HSUS, I thought you might enjoy snippets of the conversation as well.

Here is a compilation of the most interesting comments from the conversation. You can read the entire forum here. Feel free to pass along some of these points with your friends and colleagues. It's time to start educating the public about HSUS and their deceitful business practices. Don't wait; start today.

1.When you give your money to a well-known group like HSUS you are NOT supporting your local rescue organization, which most likely is a volunteer group that operates on a shoe-string budget of donations. 25% of what you give to HSUS will be spent on their fund raising efforts, not on helping animals.

2.I urge you to check out your local groups, whatever name they go by and give them your support - all money and/or time from you can make a great difference in your community.

3.Believe what you want, but in my opinion, HSUS is scarier than PETA. At least everyone knows PETA is a bunch of whack jobs. I will not support either organization.

4. I've been questioning HSUS on my own, especially after watching their many TV commercials. I know how much money it costs to make just one TV advertisement, and it just makes me wonder, where are they getting all this money? I mean, they are supposed to be a non-profit organization that completely functions on nothing but donations, right? How are they getting that much money in donations to make those TV commercials?

5.The local "humane societies" generally have no connection to the HSUS. The HSUS came much later than the first local "humane societies," and it's an animal rights, political activist group, named the "humane society" to confuse people and make them sound more credible.

Want more information on HSUS? Link here or check out HumaneWatch.

Natural Beef Gaining Fans

When cattle prices were low and buyers were scarce in the mid-1990s, seven Oregon ranchers banded together and formed Painted Hills Natural Beef, headquartered in Fossil, to fill what they hoped would become a viable niche market for hormone- and antibiotic-free cattle raised on rangeland in Central and Eastern Oregon.

It took a few years of hard work to put all the pieces together necessary to turn their dream into a reality, but the popularity of Painted Hills Natural Beef is spreading across the country due to a growing demand for food that is grown naturally by farmers and ranchers who connect with consumers and buyers, according to Will Homer, manager of Painted Hills Natural Beef.

“Our niche is the people who don't want to be exposed to hormones and antibiotics. You can make the first sale with that claim, but delivering a consistent, quality eating experience is what keeps people coming back again and again,” Homer says.

To read the entire article, link here.

Of course, conventional beef has fans as well. Read this BEEF article for more information.

Corn Prices Rocket

“Folks were expecting to see a drop in average yields from last month’s report because of poor late-season weather conditions across much of the Corn Belt, but nobody was forecasting this big of a drop in the corn crop,” says John Anderson, an American Farm Bureau Federation economist.

Surprise is an understatement. In Friday’s crop report, USDA decreased the estimated corn crop by a staggering 4%. Average estimated corn yield declined 6.7 bu./acre to 155.8 bu./acre compared to September estimates. All told, this year’s crop is estimated to be 12.664 billion bu., not the record crop estimated through last month’s report, and below last year’s record crop of 13.11 billion bu.

On one hand, there’s plenty of corn to go around. According to the National Corn Growers Association (NCGA), the estimated harvest of 12.7 billion bu. is the third-largest crop in history and will still provide a surplus, or ending stocks, of nearly 1 billion bu.

“A global perspective is important,” says NCGA President Bart Schott, a grower in Kulm, ND. “Global coarse grain supplies are nearly unchanged, and lower U.S. supplies are offset by increased foreign grain production. We expect farmers in South America to respond to these market signals, just as we know U.S. farmers will do when it comes time to make planting decisions for the 2011 crop.”

Further, Schott points out only 37% of the U.S. corn crop was harvested by Oct. 3, and much of what has been harvested to date was in areas most adversely impacted by the summer weather. So, NCGA analysts see the potential for an upward adjustment in overall production as harvest is completed.

On the other hand, Friday’s World Agricultural Supply and Demand Estimates (WASDE) pushed ending stocks, as a percentage of total use, to the lowest level in 15 years. WASDE estimated season average corn prices increased 50¢ on the lower end of the range and 70¢ on the higher end to $4.00-$4.80/bu.

All of that is another way of saying that calf and feeder prices continue to decline in the face of higher grain prices (see "Feeder Futures Crumble"). Feeder-cattle futures prices declined an average of $1.47 across the board Friday. They lost $3.50-$4.00 from the previous Friday’s close. Truck bids for corn were 25¢-35¢ higher Friday, according to the USDA Daily National Grain Market Summary.

“Corn producers will welcome the higher price, but livestock and dairy producers will have to pay more than they expected for feed,” Anderson says.

Keep in mind, the Environmental Protection Agency (EPA) has yet to make a ruling on increasing the inclusion rate of ethanol in gasoline. As reported in the previous issue of BEEF Stocker Trends, that decision is expected in a matter of weeks. Various analysts expect EPA will either increase the minimum rate from 10% to 12% for all vehicles, or to 15% for newer vehicles. If so, the door is opened wide to further corn price increase.

Congressmen Ask For GIPSA Analysis

USDA Secretary Tom Vilsack received a bipartisan letter last week from 115 members of the U.S. House of Representatives calling for a comprehensive economic analysis of the proposed GIPSA rule that threatens to undermine the efforts of producers to create and retrieve more value.

“In the 2008 Farm Bill, Congress directed USDA to promulgate a discrete set of regulations under the Packers and Stockyards Act. However, in doing so, GIPSA also included additional proposed regulations that greatly exceed the mandate of the Farm Bill,” according to the letter. “Such a broad rule that extends so far beyond Congress’ direction in the Farm Bill and that would precipitate major changes in livestock and poultry marketing requires a vigorous economic analysis. The analysis contained in 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.”

The letter was led by House Agriculture Committee Chairman Collin Peterson (D-MN); Ranking Member Frank Lucas (R-OK), Livestock Subcommittee Chairman David Scott (D-GA) and Livestock Subcommittee Ranking Member Randy Neugebauer (R-TX). National Cattlemen’s Beef Association President Steve Foglesong says the 115 Congressmen and women that signed the letter should be given credit for standing up for U.S. farmers and ranchers and all of rural America.

“These 115 policymakers took the commonsense approach to rule making. To further regulate America’s farmers and ranchers with no aggressive economic analysis of the rule’s unintended consequences is foolish. Those supporting this rule are doing so blindfolded with no facts and figures,” Foglesong says. “I encourage my fellow farmers and ranchers to look at this letter carefully and see who signed it and let it serve as a tool on election day.”

The elected leaders wrote in their letter that the proposed rule is “sweeping in its scope” and would carry “major consequences in the marketing of livestock and poultry for producers and processors of all sizes.” The Congressmen and women said in the letter that an economic analysis is necessary in order for Congress and the public to evaluate this rule and its implications.

“This is yet another example of the Obama administration attempting to intrude into private business, rather than letting the markets work,” Foglesong says. “This administration continues to tout revitalization of America through economic reform and the creation of jobs. If this is true, why wouldn’t the President force USDA to conduct an economic analysis on a rule that could very well cost this country jobs and financially devastate a sector responsible for providing this country with safe and affordable food? This type of a rule could possibly be the last thing this economy needs right now.”

The National Agricultural Law Center at the University of Arkansas (www.nationalaglawcenter.org) will present a nationwide webinar on the proposed GIPSA livestock rules Oct. 14. The webinar (11 a.m. to 1 p.m. CST) is free and will provide an overview of GIPSA's proposed rule changes for poultry and livestock, review the UDSA rule-making process, explain how producers and others can submit comments on the proposed rules. It will also include a question-and-answer session.

The webinar will be hosted via eXtension for participants around the country. More info is available at www.nationalaglawcenter.org/gipsa.

Patch Burning Shows Promise

So far, there's been no noticeable difference in cattle performance in patch-burn pastures that are part of a long-term study at Kansas State University (KSU).

“Forage growth has shifted toward annual grasses and forbs, and there's been a decrease in basal cover. Sericea lespedeza plants have decreased in height because of the grazing pressure,” explains Walt Fick, KSU Extension range management specialist. “Most importantly for producers, though, is maintaining the long-term health of the pasture; with increased grazing pressures, the pasture may not be able to recover. We have three more years to determine this.”

This is the third year of the six-year project aimed at evaluating the viability of patch-burn grazing. Though it’s a relatively new concept in rangeland management, Fick says it has occurred naturally for hundreds of years.

Historically, Fick explains Native Americans purposely started prairie fires, and lightning did the same thing naturally. Bison and other native herbivores were attracted to the new growth that comes up after the land burned; consequently, these animals moved from grazing area to grazing area searching out the most attractive areas of new growth.

Some ranchers are mimicking that grazing pattern by sectioning a large pasture into three or more burn areas.

“Every year, one of those sections is prescribed burned, concentrating the grazing pressure in specific areas of the pasture,” Fick says. “The cattle are free-roaming over the entire pasture, but tend to gravitate toward the one-third area of the pasture that has been burned, because that's where the most attractive new growth has occurred.”

The main purpose of patch-burn grazing is ecology-driven; it has a high potential to increase biodiversity and wildlife habitat.

“Through our research, we would like to determine how it affects livestock performance, if it will compromise the health of the prairie, and if it can control the highly invasive plant, Sericea lespedeza,” Fick says.

Pinching Pennies On Ryegrass Seed Costs, Not Saves

In Texas, Lloyd Nelson, AgriLife Research small grains breeder, says producers lose money when they try to save on ryegrass varieties and fertilizer.

Nelson has developed several high-yielding ryegrass varieties, including TAM 90, TAMTBO and most recently, "Nelson." The latter has higher yield potential than other high-yielding varieties such as TAM 80, Prine and Jumbo.

Yet, Nelson says the most commonly planted ryegrass for winter pasture is the Gulf variety.

"Gulf costs about 34-36¢/lb., while newer varieties like Nelson, Prine and TAMTBO are about 45-48¢/lb.," Nelson says.

So, at the recommended planting rates of 20-25 lbs./acre, he explains farmers save about $3/acre in seed costs.

"But, for that $3 savings, they will typically give up about 2,000 lbs./acre of high-quality forage," Nelson says. That 2,000 lbs. is the equivalent of at least two large round bales of hay per acre, which typically would sell for $40 or more each, according to Nelson.

There's still plenty of time to plant ryegrass for winter pasture in Texas; the planting window is from mid-October through the first week of December. However, as with all ryegrasses, Nelson explains ryegrass needs adequate soil moisture to emerge. Ryegrass is typically overseeded over existing, dormant warm-season grass pastures after a light disking.

Likewise, Nelson emphasizes all ryegrasses need to be fertilized to soil tests. Usually this means 100-150 lbs. of actual nitrogen during the season.

Because of high nitrogen costs, farmers may try to grow ryegrass for winter pastures at a reduced nitrogen rate or not fertilize at all. This is another bad business decision, Nelson says.

"If they're not going to fertilize, I wouldn't recommend them planting any ryegrass. Just buy the hay," Nelson says.

Incidentally, the “Nelson” variety has averaged about 7,000 lbs./acre of forage in heavy gumbo soil tests near College Station and Beaumont.

Nelson ryegrass' three-year average yields in East Texas at the Texas AgriLife Research and Extension Center in Overton where the soils are sandy loams topped 9,500 lbs. Gulf produced 8,300 lbs. at the Overton site, while Prine and Passerel Plus ryegrasses produced 9,270 lbs. and 9,160 lbs., respectively.

Silage Costs Increase, Too

Just as the stocker value of gain increases with higher grain costs, so does the value of silage.

“…one ton of well-eared corn silage will contain about 7.5 bu. of corn grain. If corn is $5/bu., the grain alone is worth $35-$40/ton of silage. And that doesn’t give any value to the stover. If you just value the stover based on the nutrients removed that may need to be replaced with fertilizer, that adds another $10-$15/ton,” says Bruce Anderson, University of Nebraska Extension forage specialist, in one of his recent Hay and Forage Minutes.

“This means corn silage should be worth somewhere between $50 and $60/ton. I find it interesting that even with the huge change we’ve had in grain prices and input costs, the old rule-of-thumb that says a ton of corn silage is worth 10 times the price of a bushel of corn still is pretty accurate," Anderson says.

“…In these examples, the silage is assumed to be 65% moisture. That means there are 700 lbs. of nutrients and 1,300 lbs. of water in each ton. If the silage is drier, say only 50% moisture, the silage is worth more. At 50% moisture there are 1,000 lbs. of nutrients in a ton of silage, making the silage worth $71-$85/ton. Wet silage, around 80% moisture, would only contain 400 lbs. of nutrients and be worth just $29-$35/ton.”

For the week ending Oct. 3, according to the National Agricultural Statistics Service:

Corn – 93% is at or beyond the mature stage, 39% ahead of last year and 14% ahead of the average pace. Maturity was nearly complete across much of the Corn Belt, where progress was well ahead of both last year and the average pace. 37% of the crop is in the bin, which is 28% or 36 days ahead of last year; 16% ahead of average. Harvest was most advanced and nearly complete in Tennessee, 62% ahead of last year and 21% ahead of the average. In the Corn Belt, warm, dry conditions continued to promote a rapid harvest pace, with progress in Illinois and Indiana 59% or more ahead of last year and 43% or more ahead of normal. 66% is in Good to Excellent condition, 4% less than a year ago.

Soybeans – Leaves were dropping on 88% of the crop, 11% ahead of last year and 3% more than the five-year average. Double-digit progress was evident throughout much of the major soybean-producing areas of the country as leaf drop neared completion across much of the Corn Belt, lower Delta and Ohio Valley. Harvest is 37% complete, 23% ahead of last year and 9% more than average. Producers in Illinois, Indiana, Iowa, Minnesota and Nebraska, the five largest soybean-producing states, harvested 22% or more of their crop during the week. 64% is rated in Good or Excellent condition, 3% less than last year.

Winter wheat – 53% is planted, the same as last year and 1% behind the five-year average. 22% has emerged, 4% behind last year and 3% behind the five-year average. Emergence was most advanced in Washington, where warm temperatures and adequate soil-moisture levels have provided ideal germination conditions during the past several weeks.

Sorghum – 77% is at or beyond the mature stage, 25% ahead of last year and 13% ahead of the five-year average. Warm temps continued to promote a rapid maturity pace throughout much of the major sorghum-producing areas of the country. 39% has been harvested, 9% ahead of last year and 1% ahead of the five-year average. In Texas, harvest was just beginning in the Northern High Plains while producers in the Coastal Bend were waiting for their fields to dry out before continuing to harvest their crop. 60% is in Good to Excellent condition, 11% more than the same time last year.

Barley – 94% is harvested, which is 5% behind last year and 5% behind the five-year average. Improved weather conditions and six days suitable for fieldwork allowed producers in Montana time to harvest 8% of their crop, but overall progress remained 15% behind last year and 17% behind the average.

Pasture – 44% of the nation’s pasture and range is rated as Good or Excellent, 4% less than last year. 24% is rated Poor or Very Poor, 2% more than a year ago.

Cattle Markets Being Squeezed From Both Ends

Continued erosion of boxed beef values over the last month is squeezing packer margins and pressuring fed cattle prices back into the mid $90 level. Painfully slow economic recovery has left domestic beef demand stagnant, especially for middle and the restaurant sector. Recent restaurant performance indicators have shown that business has remained virtually unchanged in recent months. Fortunately, strong export demand has continued to support wholesale beef values as it has for the past nine or ten months, helped recently by a weaker dollar. Recent improvement in the stock market is positive but is overshadowed by lingering high unemployment and weak macroeconomic psychology.

At the same time, latest USDA crop reports suggest a significantly smaller corn crop due to lower than expected yields. Current projections call for crop year ending stocks of roughly 1 billion bushels, a level that provokes the market to begin rationing corn.


Cattle feedlots, in particular, are caught in a vice in this market environment. Even before this latest corn market news, feedlots were looking at breakevens approaching.

A Special Thanks To BEEF Daily Readers

wed.jpg Last Friday, I tied the knot with my best friend, Tyler Radke. It seems forever ago when we sat next to each other in our meats judging class at South Dakota State University. He was as shy as I was outgoing, but as the old adage goes -- opposites attract. After exchanging our vows, we now look forward to pursuing our dreams in the cattle business, and I couldn't have asked for a better partner in this industry.

I can't thank all of you enough for your kind words on the blog and through emails, wishing Tyler and me your congratulations on our marriage. Your advice, wisdom, generosity and thoughtfulness are such a blessing, and I feel truly fortunate to have such a strong support group in the beef cattle industry to back me up in my professional career and personal endeavors. Tyler and I enjoyed a wonderful evening at our ceremony and reception. Our first dance was "I Cross My Heart" by George Strait, and beef was at the center of the dinner plate, of course! We wish all of you could have been there to celebrate with us! Thanks to all of you for thinking of us on our wedding day!

Looking ahead for the rest of the week, you can anticipate blog spots on GIPSA, HSUS and weaning calves. In the meantime, I would like to hear from all of you. Which topics would you like to read about in future posts? What beef-related conversations would you like to have on BEEF Daily? What questions would you like for me to pursue? This blog is all yours; I'm simply here to offer the opportunity to visit with producers across the country.

Thanks again for your messages of support. It means the world to me!