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MORNING-Midwest-Digest-December 28, 2016

Max Armstrong's Midwest Digest

Max Armstrong shares news of an interesting lawsuit in Nebraska. He talks about the need to be vigilant in search of marketing opportunities. He shares information about the owner of a Ford 8N who was rear-ended by a drunk driver. And he offers news of a man who fell asleep a theater and a reminder of an Everly Brothers song from that incident.

Midwest Digest is a twice-daily look at news from around the Midwest. Veteran broadcaster Max Armstrong offers news and commentary for the region.

Farm Progress America - December 28, 2016

FarmProgressAmerica_FeatureIMG

Max Armstrong shares some insight on the Quarterly Hog and Pig report, which had some big numbers with inventory up 4%. Max explains that hog producers are losing on every animal they sell, at the rate of about $78 million per week. The challenge isn't just that farmers are increasing animal numbers but breeding efficiency is up too.

Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Max Armstrong, veteran farm broadcaster and host of This Week in Agribusiness.

2017 BEEF Seedstock 100

Seedstock 100

Never judge your neighbor’s kids or cattle if you want to avoid controversy. This time-proven wisdom also applies to building a list of the nation’s top 100 beef cattle seedstock suppliers.

Yet BEEF takes on this annual challenge for a number of reasons, which include monitoring the level of seedstock concentration and the relative market engagement of seedstock suppliers. It’s also meant to recognize the contribution of seedstock producers who make all or a substantial portion of their cattle income from the seedstock business.

BEEF’s Seedstock 100 list is based on the number of bulls marketed last year, not the number of cattle registered annually or the number of cows listed in inventories with a breed association or other genetic organization.

The volume of product offered is never equivalent to product quality. In the seedstock business, though, it typically speaks to a host of supplier attributes associated with customer satisfaction over the long haul, such as specialization, industry knowledge and commitment, adaptability and the wherewithal to earn repeat business.

The BEEF Seedstock 100 list makes no claim to be a proxy for the seedstock industry as a whole. And just because an operation isn’t listed doesn’t mean its genetics are any less important and useful to cow-calf producers. If you study the list, though, compare it with recent years, you can see some overall industry trends.

For instance, there is the overall growth in bull numbers as the nation’s cowherd expanded, including recovery from drought in the Southern Plains. This year’s list of 102 operations represents seedstock suppliers marketing at least 205 bulls last year for a total of 54,699 bulls. That’s 4.8% more bulls than last year and 23% more than two years ago.

You can also see the ongoing preponderance of commercial focus on utilizing Angus, Red Angus and their composite

Year-to-year, there appears to be increased focus on hybrids and composites. Consider that Sim-Angus emerges as one of the top five genetic offerings with 12% of operations citing them. That’s just ahead of Charolais at 11%, and behind Angus (74%), Red Angus (20%) and Hereford (16%).

The beef business is changing and as it does, its genetics suppliers are changing too. The BEEF Seedstock 100 list is your sourcebook and your history book for this highly important sector of the beef business.

And also check out BEEF’s Seedstock Directory, a list of many top seedstock operations that, while they may not market enough bulls to make the Seedstock 100 list, offer outstanding genetics for cow-calf producers. Click here for the Seedstock Directory.

 

Fed Cattle Recap|Cash fed cattle market catches the Christmas spirit

Fed cattle recap

“Tis the season for gifting and cattle feeders will take all the presents that the cattle market will offer. The cash market for finished cattle was mostly $3-$4 per cwt higher for the week ending Dec. 24, settling at $115-$116 in the Southern and Northern plains. Iowa and Minnesota ended the week at $113-$115, which made them $5-$7 higher, allowing the region to catch up with other areas. 

 Dressed carcass prices were $180-$181, $5-$6 higher than the week before.

  The weekly weighted average cash steer price for the Five Area region, which includes the major central feeding areas, was $115.14 per cwt, compared with $111.39 the previous week, which was $3.75 higher.

 The cash dressed steer price was $179.79, compared to $174.13 the previous week. 

 The Five Area total cash steer and heifer volume was 105,244 head, compared with about 71,000 the previous week.

 Five Area formula sales totaled 167,425 head, compared with about 171,000 the previous week. The five area average formula price was $176.66, compared with $179.38 the previous week.  

 Nationally reported forward contracted cattle harvested was about 43,000 head, compared with 60,000 head the previous week. Packers have over 226,000 head of forward contracts available for December and about 219,000 head for January.

 The latest average national steer carcass weight for week ending Dec. 10 was 5 pounds lower at 908 pounds, compared with 909 pounds last year, which keeps it below year-ago levels. The five year average steer carcass weight is 884 pounds, so we are still utilizing cheaper feed costs to produce more total tonnage.

 The Choice-Select spread was $10.83 on Friday, $2.71 lower than the week prior but higher than the $8.16 spread last year. The spread drops fast this time of the year because demand and prices for the daily spot Choice rib dropped 72 cents in the last two weeks and the demand for the round and chuck increases which are less dependent on being Choice. The daily spot Choice round primal has jumped 23 cents in the past two weeks.

 

 

 

 

GIPSA rule threatens more than cattle, beef prices

Getty Images/John Moore GIPSA rule threatens cattle prices

Enjoy the potential of receiving more money for cattle with more value while you can. USDA’s decision to move forward with publishing final rulemaking on the 2010 Grain Inspection, Packers and Stockyards Act (GIPSA) could force packers to pay the same price for all cattle. That would narrow or remove any spread in prices offered by cattle feeders. So, every cow-calf producer would receive the same price for calves, regardless of value.

 “It allows USDA to broaden the scope of what they can do to enforce the marketplace. It basically lets USDA determine what is fair in cattle marketing,” says Colin Woodall, senior vice president of government affairs for the National Cattlemen’s Beef Association (NCBA).

 

“Given the broad and vague nature of USDA’s approach, it provides a field day for trial attorneys,” Woodall explains. “What we have confirmed in talking with our attorneys and other partners in the supply chain is that anybody who thinks the price they’re getting for cattle is unfair could sue packers, processors and others in the supply chain because the GIPSA rule gives them standing.”

 In other words, no one has to prove injury in order to start spending someone else’s money in legal fees.

 “The packers and processors have told us they cannot absorb that kind of liability,” Woodall says. “As such, we will probably lose our Alternative Marketing Arrangements (AMAs) and our value-added marketing programs that have been decades in the making.”

 Whether or not that is the intent of the GIPSA rule, that’s what the language enables. At best, it’s like the flawed Waters of the United States rule, which would allow the government to regulate mud puddles on private property, no matter the intent. That’s a key reason why NCBA and other livestock trade organizations opposed the GIPSA rule from the outset.

AMAs add value and reduce cost

 You probably remember a boisterous discussion a few years back regarding AMAs, which include forward contracting and formulas that reward and discount cattle based on specific performance thresholds. Neither contributes directly to spot cash price discovery.

 The mainstream cattle industry fully endorses AMA use; upwards of 80% of fed cattle have traded away from the cash market in recent years.

 A vocal minority continues to rage against such arrangements, though, ignoring the net, broad-based benefits documented by credible scientific research. Basically, it seems to irk them that some producers have figured out ways to get higher prices for their cattle.

 Caterwauling from the minority resulted in the congressionally mandated GIPSA Livestock and Meat Marketing Study in 2007.

 Among the AMA benefits for cattle markets cited by the study are reduced cost, improved product quality and enhanced risk management.

 “Buyers and sellers of livestock and meat may have a number of different economic incentives associated with using alternative or cash marketing arrangements or the cash market,” according to the report.

 “Buyers of livestock and meat may choose to use specific marketing arrangements because they reduce the cost of procurement, improve the quality of animals and products purchased, aid in risk management, and generate efficiencies in procurement and marketing. Likewise, sellers of livestock and meat may choose to use specific marketing arrangements because they facilitate market access, reduce the cost of selling, increase the price received, and reduce risk.”

 If AMAs are restricted, according to the study, consumer beef demand decreases with declining beef quality, while slaughter and processing costs increase.

 “The cost savings and quality improvements associated with the use of AMAs outweigh the effect of potential oligopsony market power that AMAs may provide packers,” according to the report.

 “In the model simulations, even if the complete elimination of AMAs would eliminate market power that might currently exist, the net effect would be reductions in prices, quantities, and producer and consumer surplus in almost all sectors of the industry because of additional processing costs and reductions in beef quality. Collectively, this suggests that reducing the use of AMAs would result in economic losses for beef consumers and the beef industry.”

 Getting rid of all AMAs would result in billions of lost dollars across the beef industry, according to the study’s empirical analysis.

 More recently, the Price Discovery Research Project (PDRP) conducted by Stephen Koontz, agricultural economist at Colorado State University, found that even as cash markets thin, both cattle feeders and beef packers find too much value in AMAs to return to more spot cash marketing .

 Benefits cited in the PDPR study include lower transaction costs, improved inventory and supply chain management, as well as the ability of cattle feeders and packers to aim cattle toward markets that yield the most value

GIPSA rule makes all cattle average

 If preventing packers from differentiating—rewarding and discounting—cattle based on value sounds socialistic at its core, that’s because it is. It flies in the face of everything that democracy and capitalism embody. Everybody gets the same price, no matter the difference in product value, no matter the difference in abilities and dedication of individual producers to develop a product more valuable to the consumer.

 It’s akin to the industry raising the proverbial white flag and saying, “This is it. This is as competitive as we will ever be relative to pork, fish and chicken.”

 USDA made some cosmetic changes in the final GIPSA rule, but nothing that addresses the chief concerns of cattle producers.

 “As we have consistently stated, if adopted, this rulemaking will drastically limit the way our producers can market cattle and open the floodgates to baseless litigation,” emphasizes Tracy Brunner, NCBA president. “In a time of down cattle markets, the last thing USDA needs to do is limit opportunity. The fact of the matter is, we don’t trust the government to meddle in the marketplace.

 “USDA is going well beyond their statutory limitations, limiting marketing options for a product that America is demanding. If USDA was interested in real solutions rather than increased government regulations, they wouldn’t have rushed these rules out the door at the very close of the Administration’s term, bypassing any input from industry.”

 The GIPSA rule is scheduled to go into effect 60 days after publication in the Federal Register, whicdh occurred Dec. 20. So comments can be submitted through Feb. 21, 2017. The Act also includes two proposed rules to address undue preference and the poultry grower ranking system.

 Barring swift and early action by the Trump administration to stop the regulation, Woodall says NCBA and other partners in the supply chain are exploring legal remedies.

 Allowed to move forward, such a rule also sets a dangerous regulatory precedent. What’s next, Uncle Sam gets to decide what speech is legal?

 Today, if someone wants to sue under libel or slander law, they must prove, among other things: what was written or said is false; injury because of what was written or said; intentional malice on the part of the one writing or saying it. That means you have to listen to blasphemous idiots, but it also means you get to express both your opinion and the truth.

Exports, markets, forages & feeding a hungry world

Amanda Radke Feeding A Hungry World

Catch up on top industry news with this round up of key headlines. These articles answer questions on beef production, cattle markets, exports and your winter feed needs.

1. “Feeding cattle and a hungry world” by Bryce Winfrey for The Agriculturalist, Texas Tech University

Winfrey writes, “The world’s population has surpassed the 7 billion mark and is well on its way to reaching 9.5 billion people by 2050. Last year, 9 million people died from hunger, compared to the 1.21 million deaths caused by road accidents, according to the Food and Agriculture Organization.”

2. “Nutrition data review shows red meat has neutral effect on cardiovascular disease risk factors” from Purdue University

“Consuming red meat in amounts above what is typically recommended does not affect short-term cardiovascular disease risk factors, such as blood pressure and blood cholesterol,” according to a new review featured on Science Daily.

3. “Cattle market not out of its rut yet” by Lisa Young for AgriNews.com

Young writes, “This year was a rough one for beef producers. Two experts broke down how things stand and where they are headed in the marketplace during the recent Minnesota Cattle Industry Convention.”

4. “Size matters when it comes to forages fed to beef cattle” by Kay Ledbetter for AgriLife Today

Just how much forage does a ruminant need if a ruminant does need forage? Jenny Jennings, a Texas A&M AgriLife Research beef nutritionist in Amarillo, and her team are on their second research trial aimed at determining forage needs for proper rumination in beef cattle consuming high concentrate diets.

The opinions of Amanda Radke are not necessarily those of beefmagazine.com or Penton Agriculture.

6 Trending Headlines: All American Beef Battalion gets a gift; PLUS: Who’s the largest landowner?

The Beef Battalions mission will continue And what you ask might that mission be Bottom line a full belly and a big smile on a soldiers faceFor the past five years the National Livestock Credit Corporation has perfected the art of a donated calf being auctioned and reauctioned to benefit the Beef Battalions mission to feed returning troops a great American steak This years event raised more than 61000 for the All American Beef Battalionthe largest single donation ever for the

All American Beef Battalion gets big gift from Oklahoma cattle buyers

Santa’s helpers, posing as cattle buyers, gave an impressive gift to the All American Beef Battalion, according to the Oklahoma Farm Report. In what has become a tradition for the final sale day at the Oklahoma National Stockyards each calendar year, the regular feeder and stocker sale was stopped for about 30 minutes to sell and resell a calf donated to raise money for the All American Beef Battalion. This year’s sale raised more than $53,000 to help the group prepare ribeye meals for returning and deploying U.S. soldiers.

2016 is the seventh year for the National Livestock companies to be involved in supporting the All American Beef Battalion. Last year's auction brought in more than $45,000, meaning contributors to this event have raised more than $265,000 from the annual auction of a donated calf.

Click here to read more.

Abuse allegations at USMARC proven false

The New York Times got it wrong. Again. A report from USDA’s Office of Inspector General (OIG), stemming from a 2015 New York Times article that alleged animal abuse at the U.S. Meat Animal Research Center, found no evidence of animal mistreatment, Brownfield Ag News reports. The facility is located near Clay Center, Neb.

Pete McClymont, executive vice president of Nebraska Cattlemen, says the report “validates the excellent care” that USMARC employees provide to animals. “This report does a really good job of validating the professional approach they’ve had for years,” McClymont says. “Unfortunately, when a select few want to try to pull down something as great as the Meat Animal Research Center, we have to go through a deliberate process like this.”

Click here to read more.

Tips for selecting bulls

While a bull contributes half the genetics in a calf for an individual mating, your bull battery makes more than half the genetic contribution to your herd because you cull bulls, as a general rule, about twice as often as you cull cows. That means your bull selection criteria must be at the top of its game. The Angus Journal offers five tips to help you select your bull battery.

First, establish your needs. One of the greatest challenges bull buyers face is deciding what they need in a bull. Identifying a desired market will help. Some bulls excel in carcass traits and yearling weight. Others sire great replacement heifers, and there’s always bulls advertised for their calving ease and low birth weight. Knowing their desired market helps producers focus on bulls that excel in the right areas.

Click here for more bull-buying tips.

Now is an ideal time for forage management

Wintertime isn’t down time for ranchers. The next couple of months give a window of opportunity to get our arms around some important record keeping tasks, which will allow a cattle operation to be more efficient, says Hugh Aljoe with the Noble Foundation.

"Although many of us think of the winter as being a slow time in forage management, it is actually the ideal time to perform some key activities that allow us to better manage our pastures and grazing for the coming growing season. Activities that come to mind are summarizing production and grazing records, analyzing last year's management plan, and drafting next year's management plan.”

Click here to read more. 

Here’s a list of the 100 largest U.S. landowners

Land has always been a solid investment, as many in America know. Recently, The Land Report released its list of the top 100 largest U.S. landowners. For the sixth year in a row, Liberty Media CEO John Malone and his good friend Ted Turner top the list, with 2.2 million acres and 2 million acres, respectively. California's Emmerson family added 35,000 acres to solidify its hold on No. 3. Stan Kroenke jumped from Number 9 to Number 4 based on his purchase of the historic Waggoner Ranch in Texas.

To download the 2016 Land Report 100, sponsored by LandLeader, click here.

There’s a fungus among us, or at least in your stockpiled forage, perhaps

For kids, deep, persistent snow is associated with lots of sledding. For ranchers, however, snow plays a different role, serving as the perfect insulator. Plants are more likely to survive the winter under snow cover, and the buffered soil frost heaves less, helping the roots stay anchored, according to onpasture.com.

However, for as long as snow sticks around, it keeps a cool, mostly steady temperature and moist environment, perfect for the select few common fungus species that are adapted to colder temperatures and are opportunistic enough to feed on living species without lots of competition from other pathogens.

Click here to read more.

 

MIDDAY-Midwest-Digest-December 27, 2016

Max Armstrong's Midwest Digest

Max Armstrong shares news of how tough it is to control fires during that Christmas wind storm and blizzard in the Dakotas; news of a serial robber in Omaha with very specific tastes; good weather in South America that will bring a potential record soybean crop; and he offers news of the continued hunt for Big Foot in the Upper Peninsula of Michigan.

Midwest Digest is a twice-daily look at news from around the Midwest. Veteran broadcaster Max Armstrong offers news and commentary for the region.

Farm Progress America - December 27, 2016

Max Armstrong shares insight into the U.S. ethanol industry with insight on the rising use of renewable fuels. And he reports that the market for 2017 is looking better with positive signs from the incoming Trump Administration, and increased interest in renewable fuels at the retail level. 

Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Max Armstrong, veteran farm broadcaster and host of This Week in Agribusiness.

Looking ahead to 2020: Agribusiness trends to watch

Amanda Radke Agribusiness Trends

With just a few days left in 2016, it’s time to start looking ahead to 2017 and beyond. Which food trends are going to be big in the New Year? How will farm economics reshape the food sector? What will consumers be looking for at the meat case?

Rabobank AgriFinance recently identified the long-term prospects for food and agribusiness for 2017 and beyond. Here are a few trends to watch in the next three to five years:

“After three years of consecutive losses, farmers have used much of their liquidity and are forced to make financial decisions on how to structure debt and leverage equity,” according to Rabobank.

As a result, it’s expected that after 2018, a lower cost structure, particularly in land values, will set in. Row crop farmers have experienced three years of financial losses, and it’s forcing folks to restructure debt and leverage equity.

Rabobank says, “For row-crop farming to recover, a combination of higher commodity prices, lower input costs, and government policy needs to come together. The landscape of row-crop farming will depend heavily on the weight each of the three carries in driving the recovery.”

While a modest rebound in the livestock sector is expected in 2018, Rabobank sees ranchers only slightly expanding production levels, and margins will be expected to tighten into the New Year.
 
Rabobank reports, “The decline in U.S. grain prices is creating an expansion in its animal protein sector, particularly during 2017. In addition, despite feed costs in Mexico having increased, the steady demand and prices continue to incentivize an expansion in the sector, while Canada is likely to expand at a slower rate.”

Looking at the numbers, the U.S. cattle herd grew in 2016, following the 4% growth recorded in 2015. Rabobank projects additional growth through 2019, at just under 4%.

“While domestic U.S. consumption is expected to increase due to lower prices, exports will have to make up 11% of production or more by 2018/19 in order to sustain the new U.S. cattle inventory levels. This is a critical milestone, as the U.S. has never sustained 11% in exports for an entire year. Failure to sustain these higher levels of exports will result in faster and potentially deeper herd liquidation beginning as early as 2019,” Rabobank economists say.

It will be challenging for the animal protein sector in North America to find more demand growth and value creation, says Rabobank, and societal demands will continue to shape and change production methods in the future.

Rabobank says, “At this point, consumer trends surrounding antibiotics, animal welfare, and organic could erode the traditional U.S. animal protein sector. This should be an opportunity to create value in certain segments. However, companies need to focus more on adding value, increase productivity, and be closer to consumers.”

The opinions of Amanda Radke are not necessarily those of beefmagazine.com or Penton Agriculture.