Beef Magazine is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Sitemap


Articles from 2006 In August


Boom or Bust Bidding

Just like the weather extremes that have defined the past year, last week was a case study in the stocker and feeder market taking a sizeable jump or a steep drop.

Try this on for size: According to reporters from the Ag Marketing Service (AMS), last week's sales ranged from $3 lower to a whopping $10 higher depending on location. Overall, the market was called steady to $2 higher.

"The really rough spot in this week's market picture was a $5 drop in boxed-beef cutouts," AMS analysts say, but point out the direct feedlot trade, finally under way by Friday afternoon in Nebraska, was $1 higher than the previous week at $87. For the week, the average price was on par with the previous one at $85.59 for steers and $85.66 for heifers. The average price for both at the same time last year was $79.07.

The summary below reflects the week ended Aug. 25 for Medium and Large 1 - 500- to 550-lb., 600- to 650-lb., and 700- to 750-lb. feeder heifers and steers (unless otherwise noted). The list is arranged in descending order by auction volume and represents sales reported in the weekly USDA National Feeder and Stocker Cattle Summary:

Summary Table
State Volume Steers Heifers
Calf Weight 500-550 lbs. 600-650 lbs. 700-750 lbs. 500-550 lbs. 600-650 lbs. 700-750 lbs.
OK 34,100 $129.92 $123.04 $118.81 $117.57 $114.11 $109.66
TX 33,100 $118.00 $113.45 $106.74 $111.53 $103.77 $106.43
MO 28,700 $131.14 $126.97 $117.73 $120.87 $116.30 $108.07
KY* 18,100 $117-125 $108-118 $103-1135 $10-115 $99-1083 $94-1045
Dakotas 17,400
South Dakota
North Dakota

$1305.63
**

$126.16
$128.02

$126.32
$123.83

$124.95
**

$117.404
**

$114.42
$114.59
AL 16,400 $115-123 $108-1153 $102-1065 $108-116 $102-108 $94-1035
NE 12,800 $138.19 $126.29 $125.66 $123.592 $117.624 $116.88
AR 10,700 $119.40 $113.56 $108.81 $111.72 105.50 $98.80
TN* 9,900 $118.60 $111.92 $106.15 $110.13 $102.41 $97.81
FL* 9,100 $96-118 $96-108 $97-1034 $94-112 $88-102 $87-964
GA*(***) 8,700 $103-123 $99-114 $93-107 $100-116 $92-105 $89-94
MS* 8,000 $110-120 $100-110 $90-1004 $100-1101 $90-1003 **
Carolinas* 7,000 $102-125 $99-1153 $95-1085 $96-111 $90-1053 $78-955
KS 6,500 $133.84 $127.22 $121.18 $120.102 $115.61 $114.09
LA* 5,900 $108-119 $101-113 ** $103-118 $97-1102 **
WY* 5,600 ** $121.744 $116.83 ** $111.614 $112.64
VA 3,100 $122.992 $115.75 $112.804 $108.25 $106.17 $106.054
WA* 2,500 ** $111.17 $106.11 ** $105.29 $100.97

* Plus 2
** None reported at this weight or near weight
(***) Steers and bulls
NDNo Description
1500-600 lbs.
2550-600 lbs.
3600-700 lbs.
4650-700 lbs.
5700-800 lbs.
6750-800 lbs.
7800-850 lbs.

National ID Process Remains Muddled

Anyone hoping for answers and clarity at last week's ID/InfoExpo -- a de facto national forum for discussing and developing the national ID system -- surely walked away disappointed. Though USDA Secretary Mike Johanns was on the docket and took questions from the crowd, his answers remained vague and non-committal.

For example, Johanns repeatedly dodged questions about whether USDA's intent was to make and maintain NAIS as a voluntary or mandatory program. He stressed it's a voluntary program today and believes a voluntary program is preferable. Yet USDA's NAIS Implementation Plan (animalid.aphis.usda.gov/nais) issued in April states in black and white that adopting mandatory regulations is a contingency plan for producer participation.

Johanns also demurs from questions aimed at assessing what level of voluntary participation is required for effective animal-health trace-back.

Similarly, Johanns will not provide an answer about the system's cost, other than alluding to the $83 million USDA has already poured into it. One reason may be no such estimate exists, despite repeated requests from the industry for a cost-benefit analysis.

In a separate one-on-one interview, Chief Veterinary Officer, John Clifford, was more specific, implying producers will be responsible for purchasing and applying NAIS tags. He pointed out no state is currently charging producers to register their premises with NAIS, which is a prerequisite to obtaining official NAIS tags.

On the issue of money, there was no public mention of the General Accounting Office's current investigation of NAIS at the behest of a U.S. Senator. Nor was any mention made of the fact there remains some question about whether the $33 million in federal dollars earmarked for NAIS next year will be frozen until specific answers are provided to Congress, as was stipulated in one of the appropriations bills awaiting conferencing.

Other key questions still unanswered:
Who guarantees confidentiality? For obvious reasons, producers are unlikely to provide any NAIS data if they believe it could be accessed by anyone other than state and federal animal-health officials. Johanns said, "I agree with livestock producers who believe information about your livestock is your business, period."

Again, in a separate interview, Clifford was more specific. He explains USDA has protected producer info from prying eyes and the Freedom of Information Act via the Privacy Act. However, state animal-health officials and others continue to emphasize the need for legislation at both levels aimed at protecting NAIS data specifically.

What about working group recommendations? Each livestock species devised its own working group to make NAIS recommendations to the Secretary of Ag. Those from the Cattle Industry Working Group were submitted months ago and have yet to receive approval or denial from USDA. That means anything beyond premises registration remains speculation. In turn, that means few producers are likely to begin tagging cattle with NAIS tags until species-specific recommendations are adopted.

Is it all for all and one for all? Cattle and swine are more advanced in NAIS development than any of the others. Some other species are just getting started, while others continue to dig their feet in against elements of the program. It's difficult to imagine cattle producers embracing a program like NAIS if other species are allowed to sit on the sidelines.

Do you know what you're talking about? The cooperative effort between the livestock industry and the state and federal animal-health officials charged with protecting those industries emphasized the need for a national system for animal health purposes. Yet Johanns continues to harp on his belief the market will drive NAIS adoption, that there are already economic incentives in the domestic and international markets to provide ID.

It's true that in isolated circumstances a few producers are able to command a higher price for source verification or other process verification tied to ID. Even if the economic incentives were high and widespread, NAIS isn't about those things. It's about the nation's ability to better protect its livestock industry, period.

Perhaps the most positive outcome of the meeting was a public display of the livestock industry's ongoing resolve to develop and implement a national animal ID system for the purpose of protecting the nation's livestock. In an informal survey of the 600 meeting participants, 78% believe such a system is so imperative to protecting the livestock industry that it should be made mandatory.

Drought Stalls Herd Expansion

"Cow-harvest rates have picked up dramatically, indicating nationwide cowherd expansion has essentially stopped. In fact, if recent trends continue, the Jan. 1, 2007, U.S. beef-cow inventory could be slightly below 2006's," say Livestock Marketing Info Center (LMIC) analysts.

"The lack of moisture combined with concerns for tight forage supplies this winter has resulted in a larger number of cull beef cows in the harvest mix than under normal circumstances," say the LMIC folks. "At the same time, dairy-cow harvest has also increased in past weeks, not only due to tighter supplies of quality forage but also lower milk prices."

As Derrell Peel, Oklahoma State University Extension livestock marketing specialist, explained in a recent newsletter, "So far in 2006, the numbers suggest cow culling in the state could be running 1.5 to 2% higher than last year and we haven't even gotten into the traditional culling season. Many producers are just now assessing forage and hay availability and needs, along with water supplies, and there's no doubt more culling will occur."

What is most surprising about all this, Peel adds, is how well markets have held up.

"Feeder prices are steady to stronger and are likely to have less than usual tendency for seasonal weakness this fall. Cull cows have softened somewhat, but surprisingly little given the increased culling numbers we're seeing. I continue to worry most about potential impacts on the cull-cow market this fall. That seems to me to be the greatest risk for prices to show classic drought impacts," Peel says.

Though rains last week in some of the most parched areas of the South and Southwest boosted spirits, the die is likely cast.

For the week ending Aug. 20, according to the National Ag Statistics Service (NASS).

  • Corn -- 82% is at or beyond the Dough Stage, compared to 78% last year and 71% for the five-year average. Doughing was at or ahead of normal in all states, except Kansas. 44% has entered the Dent Stage, which is 6% ahead of last year and 11% ahead of average. 57% is rated Good or better, compared to 50% last year.
  • Soybeans -- Acreage setting pods or beyond advanced to 93% of the acreage, 1% behind last year, but 5% ahead of normal 4% of the acreage was dropping leaves, 2% ahead of last year and the five-year average. 58% is rated Good or better; 52% was at the same time last year.
  • Spring Wheat -- 82% of the crop is in the bin, which is 25% ahead of last year and 29% ahead of the five-year average.
  • Barley -- Harvest advanced to 72% complete, compared to 61% at this time last year and 53% for normal.
  • Oats -- 96% of the acreage is harvested, compared to 91% last year and 84% for average.
  • Sorghum -- 83% of the acreage is in the heading stage, which is 2% behind last year but 2% ahead of normal. 45% was at or beyond turning color, 6% ahead of last year and 5% ahead of normal. 30% is ranked Good or better, compared to 41% last year.
  • Pasture -- 19% is rated Good and 3% is rated Excellent, compared to 31% and 4%, respectively last year. 26% is rated Poor and 25% is ranked Very Poor, compared to 21% and 11% respectively at the same time last year.
States with the worst pasture conditions -- at least 40% of the acreage rated poor or worse -- include: Alabama (77%); Arizona (70%); Arkansas (63%); California (57%); Colorado (50%); Georgia (56%); Kansas (53%); Louisiana (41%) ; Minnesota (47%); Mississippi (55%); Missouri (73%); Montana (43%); Nebraska (66%); Nevada (56%); North Dakota (71%); Oklahoma (85%); South Dakota (66%); Texas (78%); and Wyoming (75%).

States with the lushest pasture conditions -- at least 40% rated good or better -- include: Idaho (49%); Illinois (48%); Indiana (65%); Kentucky (54%); Maine (89%); Maryland (50%); Michigan (57%); New York (61%); North Carolina (46%); Ohio (65%); Utah (54%); Washington (56%); and West Virginia (42%).

Sign Up Now For BEEF Quality Summit, Nov. 14-15

Sign up now at www.beef-mag.com for BEEF magazine's 2006 BEEF Quality Summit. The Nov. 14-15 workshop in Oklahoma City's Clarion Hotel aims to provide attendees with the background, tools and the environment to make the connections for involvement, and the potential rewards offered, in the new beef-value chain.

The first day's program is devoted to outlining the opportunity available in the new beef-value chain, the second to how to link your production into that chain. Among the topics to be discussed are:

  • How U.S. beef consumers define quality.
  • Quality, profit and the cattle cycle.
  • International competition and opportunities for U.S. quality beef.
  • Current international beef trade opportunities.
  • Producers will discuss how they're paid for quality.
  • Selecting a marketing partner.
  • A value-chain production and marketing workshop -- attendees will learn how to match their production with available markets for the cattle, and management adjustments needed to make the "next" calf crop fit a chosen market.
  • Linking up with a marketing partner -- an opportunity to meet with participating marketing channel reps.
For more detail, visit www.beef-mag.com and click on the " BEEF Quality Summit" box in the top right corner of the opening page.


Drought Taking Billion-Dollar Toll

"Three-fourths of the land in range and pasture is too dry to produce much grazing or hay that's harvestable. Without rain soon, livestock herds will face further liquidation," says Carl Anderson, Texas A&M University (TAMU) Extension economist and professor emeritus, in a recent edition of TAMU's AgNews publication.

Anderson says rising hay and supplemental feed costs are forcing many ranchers to liquidate herds, while lack of water has forced some to sell out completely. He explains "Cattle sales are up sharply from a year ago. The reduction in herd size will curtail beef supplies for several years.The lack of adequate nutrition for cows also means a smaller calf crop next year."

What's more, according to TAMU analysts, ag lenders are reporting fewer loan repayments and greater demand for loan renewals and extensions from a year ago, according to the Federal Reserve Bank's Second Quarter 2006 "Survey of Ag Credit Conditions." Producers are collecting insurance based on individual coverage on dryland crops, and many cow-calf operators have taken out larger loans because of higher feed costs.

"Others have sold their herds due to limited water and forage," Anderson says. "High energy prices have substantially increased production costs to further stress an already depressed production environment. Some crop and cow-calf operators can't financially withstand more losses and will be forced to seek other jobs or business alternatives."

All told, estimated drought losses for Texas have reached $4.1 billion, eclipsing the $2.1-billion mark set in 1998, according to Texas Cooperative Extension economists.

Crop losses are estimated at $2.5 billion and livestock $1.6 billion, the report says. The current drought equals the multi-year dry period of the 1950s, and could go down as the worst ever if substantial rainfall isn't received by the end of the year, say Extension officials.

"Most of North Texas, East Texas and the Coastal Bend were in various stages of drought since May of last year, and hay supplies were depleted maintaining livestock over the summer and winter," says Travis Miller, TAMU Extension agronomist. "Much of the corn and soybean crops have been harvested for silage or hay; pastures are bare and hay barns are empty. Much of the hay being fed is from out-of-state or along the upper coast, which has received favorable rains. Livestock water supplies are disappearing and ranchers are unable to sustain herds with purchased hay and dry tanks."

The driest regions in Texas are the Panhandle, Southern High Plains and Rolling Plains, Northeast Texas and the Lower Rio Grande Valley.

Beyond the Lone Star State, Derrell Peel, Oklahoma State University Extension livestock marketing specialist, reports: "Emerging market data continues to confirm the significant impacts drought is having on cattle numbers in Oklahoma. Feeder cattle marketed in the eight federally reported auctions in Oklahoma are up 6.1% for the year to date compared to 2005. Since July 1, feeder marketings have been up by more than 65,000 head. This despite the fact that the Jan. 1 estimated feeder supply in Oklahoma was down by 30,000 head. Clearly the increased summer marketings are mostly early movement of 2006 calves rather than yearling stockers."

Peel goes on to explain, "This pattern has been confirmed in the last Cattle on Feed report which indicated a large increase in July placements compared to last year, with the largest increase in the cattle under 600-lbs. category. Given the Oklahoma numbers it appears August feedlot placements could follow a similar pattern.

"These changes in the timing of cattle marketings suggest several implications for the remainder of 2006. First, fall runs of weaned calves should be smaller than previously expected. Second, should we manage to get some wheat pasture, there will be a smaller supply of stocker calves available to fill wheat pasture. Third, feeder supplies will stay tight for the rest of the year and into 2007, especially if we should be able to establish some winter grazing on wheat," he says.

You can find the complete TAMU report at agnews.tamu.edu/dailynews/stories/DRGHT/Aug1106a.htm

Canada Confirms New BSE Case

Canadians confirmed an eighth case of BSE in that country last Wednesday, this one in a mature cow they believe was either born just before the ban on feeding mammalian protein or during the program's early stages.

A day later, the Canadian Food Inspection Agency (CFIA) completed its investigation into the seventh BSE case there -- confirmed July 13 -- in a cow born after the ban. As to the completed investigation, CFIA officials say: "A particular incident was documented in one commercial feed facility that may have permitted the contamination of a single batch of cattle feed with prohibited material. The entire batch of feed was shipped to the BSE-positive animal's farm. While the investigation looked at all possible routes of exposure, this particular batch of feed is the most probable source of infection. The CFIA has launched an enforcement investigation."

As for the effectiveness of Canada's feed ban, CIFA reports, "Investigators observed good levels of compliance with the feed ban at the farm, retail and manufacturing levels... In 2005, Canadian and American officials reviewed and confirmed the effectiveness of Canada's feed ban. In addition, the surveillance program continues to indicate the feed ban has prevented the level of infectivity in Canada from increasing. Nonetheless, the extremely small infective dose of BSE means even very limited opportunities for contamination may permit periodic cases."

You'll recall that, following discovery of the seventh case, USDA delayed final rulemaking to expand Canadian imports to include cattle over 30 months of age and the beef from them. There's no telling how the completed investigation and the more recent discovery will impact the proposed rule.

According to USDA officials on Friday, "USDA participated in the investigation and we're now reviewing the report to determine whether it impacts the Department's proposed minimal risk rule."

Horse Slaughter Opponents Aren't Anti-Meat

After reading Troy Marshall's article, "Horse Slaughter Ban Is Important To Cattlemen," Aug. 18 issue, I wish to relieve the minds of cattlemen. Very few of the people I know fighting to stop horse slaughter for foreign profit and consumption would pass up a good steak. I have no desire to become a vegetarian and neither do the majority of anti horse slaughter people.

Horses are simply different from cattle. The only people profiting from horse slaughter are three, foreign-owned slaughter plants; some large breeders who dump their breeding mistakes at a kill auction; and a few kill buyers who can't figure out another way to make a living.

USDA ignored Congress and the will of the people when they allowed the horse slaughter plants to pay their own inspectors. How in the world can you expect such inspectors to be totally unbiased toward the people paying their salary?
Patricia A. Cornell
Sanderson, FL

Horse Processing Isn't The Beef Industry's Fight

Contrary to the contention of your Aug. 18 piece, "Horse Slaughter Ban Is Important To Cattlemen," the horse slaughter ban is more important to horsemen than cattlemen. Troy Marshall admits the horse has never been considered a meat animal, nor are they raised, handled or medicated as meat animals.

Horse processing is also not a "very important management practice," as he alleges. It's America's dirty little secret that only accounts for less than 1% of the horses in our country annually. The only horse groups that are pro-slaughter are those dominated by cattlemen.

Contrary to Marshall's claim, it's the meat industry that is using emotion, invoking the "slippery slope" metaphor as a scare tactic. Are you really going to support the Chinese and Koreans if they try to open dog slaughterhouses in the U.S.?

Our meat industry is important to us, and has many regulations and laws to keep our food supply safe. Very few of these apply to horses. Almost all equine medications are labeled "not to be used on animals intended for human consumption." The meat industry should tend to its own and leave us non-meat industries to do the same.
Janine Starykowicz
www.barntowire.com


South Dakota Grazing School Set For Sept. 12-14

A three-day intensive, hands-on grazing school is set for Sept. 12-14 at the CLC Ranch in Oacoma, SD. The short course, "Managed Grazing: Pathway to Profit," will provide participants with hands-on training in pasture allocation, improved knowledge of principles of grassland productivity and the opportunity to network with other grazing lands managers.

The format is set up to be rather informal -- participants are encouraged to bring their ranch maps and can ask questions about individual operations. Instruction will take place in both the classroom and out in the field.

The school is limited to 30 participants. Cost is $150/person and includes resource materials, two breakfasts, three lunches, two dinners and breaks. For more information call Mindy Hubert at 605/394-2236.
-- Stephanie Veldman