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Friday, August 29,2008

Russia may pull out of trade deals

by DTN
Russia may pull out of trade deals Amid fraying trade relations between Moscow and Washington, Russia said it would slash U.S. import quotas for chicken and pork, both big export products to the region from the U.S, reported the Wall Street Journal. After U.S. officials said Russia’s war with Georgia had cast doubt on Russia’s bid to enter the World Trade Organization (WTO), Prime Minister Vladimir Putin last Monday called for pulling out of trade deals that Russia had signed when it was expecting quick admission into the trade body. Then Russian Agriculture Minister Alexei Gordeyev said last Wednesday that Moscow plans to reduce quotas for imports of chicken and pork by "not tens but hundreds of thousands of tons." Russia has helped the American meat industry grow for the past decade. Russia was the biggest importer of U.S. chicken meat in 2007, spending $741.5 million on U.S. imports, according to the USA Poultry and Egg Export Council. In 2005, the U.S. and Russia entered into an agreement that allowed U.S. producers of poultry, pork and beef to export a specified quantity of product to Russia at a lower-than-usual tariff. That agreement, which was extended through 2009, was a way for Russia to bolster its free-trade credentials ahead of WTO accession talks. Russian officials now say WTO membership is a long way off—Western officials have called for blocking the talks to punish Russia for its war with Georgia—and so observing the deals is no longer in Russia’s immediate interest. Officials at the Office of the U.S. Trade Representative (USTR) say they haven’t been officially notified of Russia’s decision to cut some meat import quotas. "If Russia decides to step back from those ... commitments, that will obviously further delay its aspirations to join the WTO," said USTR spokesman Sean Spicer. — DTN

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Friday, August 29,2008

Food-vs.-fuel debate changing

by DTN
Food —Argument shifting from bushels to acres Heavy rains flooded Midwestern cornfields in June, raising questions about what a severely crippled corn crop would mean to the ethanol industry. But improved seed hybrids and ideal weather may be turning the food-versus-fuel debate on its head. An August USDA production forecast of a 12.3-billion-bushel corn crop in the face of seemingly catastrophic corn losses in some parts of the Corn Belt has left ethanol supporters scratching their heads. "It was surprisingly high," said Rick Tolman, president of the National Corn Growers Association (NCGA). "Every year we have better germplasm traits that make that plant less susceptible to the environment. The flooding was bad, but when it dried, we had good moisture. We’ve had a pretty cool summer, and the heat stress is not there." The flooding raised doubts about the future of the ethanol industry and the ability of farmers to overcome crop disasters to continue meeting demands for food, feed and fuel. If the USDA forecast holds up, however, the debate could be shifting. Bradley D. Lubben, an assistant professor and extension public policy specialist at the University of Nebraska-Lincoln, said perhaps the focus should be on future land use. "The current food-versus-fuel debate is a great illustration of the role of politics over economics," he said. "As the adage goes, politics always trumps economics. In the short run, we are calling it a food-versus-fuel debate because the public perceives that the cause of food price rises can all be blamed on fuel prices and policies. That significantly shortchanges the analysis." One way to characterize the issue, Lubben said, is that "we are not competing for bushels; rather, we are competing for acres. The true test of supply response will be how we allocate acres among multiple uses, including crops, forages, grazing land and habitat, among other uses." Talk about how a transition away from corn ethanol to cellulosic ethanol will solve the food-versus-fuel problem is "an argument over bushels," he said. "The real argument will be over acres, and at present technologies, gallons of ethanol from cellulose could require as many acres of grasses and biomass as gallons of ethanol from starch from corn," Lubben said. For instance, in 2007, higher market prices encouraged more corn production, and producers planted 15 million more corn acres. In 2007, those extra corn acres largely came from other crops, Lubben said, mostly from soybeans and some cotton. In 2007 and 2008, he said, the prices for other commodities "joined the rally" and enticed acres back into other crops. Hosein Shapouri, an ethanol economist with USDA, said there are about 36 million acres of land in the Conservation Reserve Program (CRP). About 8 million acres of the CRP land are suitable for production of corn and soybeans, he said. In addition, there are 60 million acres of cropland in pasture, Shapouri said, and some of that acreage could be used for production of corn, soybeans and other commodities. Corn hybrid technology has made drastic improvements in the past 60-plus years. According to USDA, 85 million corn acres were harvested in 1944—the same as 2007. Yet the total corn production increased from about 2.8 billion bushels in 1944 to around 13.1 billion bushels in 2007, along with a dramatic increase in bushels per acre from 33 to 151, according to USDA numbers. By 2030, NCGA’s Tolman said, many of the major seed companies have told corn growers to expect 300-bushel corn to be possible. "Agronomists shake their heads at that number," he said, "but seed companies say it’s doable." Tolman said the corn industry has changed profoundly from the development of a biofuels industry. Farmers, however, believe they should have been getting $5 corn all along, and hope to see those prices even after cellulosic ethanol begins commercial production within the next five to 10 years. "It takes stronger prices to produce," he said. "There was no future in $2 corn. We see the cellulosic piece as evolutionary and not revolutionary. Frankly, corn is the first source of cellulose. We want corn to move into a higher value." That future could include using corn to produce more industrial chemicals and biodegradable plastics, for example. Most cellulosic-ethanol technologies in development right now will rely heavily on the ability of the U.S. farmer to produce so-called ‘energy crops’ such as switchgrass, miscanthus, prairie grass, wheat straw, corn cobs and, someday, corn stover, or the leafy part of the corn plant. Chris Hurt, an agriculture economist at Purdue University in Lafayette, IN, said emergence of biofuels has changed the agricultural landscape. "Fuel and food markets are now fairly closely linked by biofuels," he said. "But this is not to say that each will have all the grains and soy products they would like to have, or that usage in each category will be at the same levels as pre-2006." The ethanol-investment surge was a phenomenon moving from a planned capacity of about 6.1 billion gallons at the start of 2006 to a planned capacity of about 13.6 billion in August, according to the Renewable Fuels Association. So the surge in corn demand is coming in the 2007 to 2009 crops and totals about 3 billion added bushels of potential usage over those three crops, he said. Hurt said it’s rare to experience a demand surge "as large and well defined as the ethanol surge we are going through right now." As a result, he said that a "less dynamic period" for corn will unfold in 2010 and beyond. "I think it is also clear that food will compete effectively with fuel for corn supplies," Hurt said. "In fact, in the long-run, food will probably be able to outbid fuel because of the greater overall value of food compared to fuel uses for corn." — DTN -vs.-fuel debate changing.

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Friday, August 29,2008

Grazing wheat likely offers profits this winter

by WLJ
Grazing wheat likely offers profits this winter With grain and harvested forage prices likely to stay quite high throughout the next few months, producers looking for profitable opportunities should take a good look at grazing winter wheat, say experts. Though the costs of grazing cattle are higher than in recent years due to elevated wheat prices, feeder cattle prices have kept in step and may still offer attractive profit margins to good managers. Derrell Peel, ag marketing specialist with Oklahoma State University, said that uncertainty abounds in both the wheat and cattle markets. This makes it difficult to predict how good the wheat grazing prospects look, but for those with sharp pencils, good opportunities will surely appear. "The situation’s pretty volatile right now with all there is going on in the futures markets," he said. "In general, it’s more expensive to do everything now, but that shouldn’t keep producers from looking for opportunities. Even though it costs more to grow the wheat for farmers, the forage is worth more as well." Nervous bankers, along with wheat farmers who might not want to take chances with their valuable wheat crops, could put a dent in the number of acres available for grazing, Peel said. "A lot of wheat farmers, and particularly their lenders, are suffering from sticker shock when they look at the input costs as planting rolls around," he said. "But, by the same token, the value of grazing is high and there are some real opportunities. The budgets that we’ve run show that it looks good for both the farmer and the cattleman to graze the wheat." Ranchers must pay attention to the futures markets to reduce the risk of buying feeders just for winter grazing, and farmers must decide whether revenue from grazing is worth risking lower yields. "There’s definitely a way to pencil in some profits, because the margins are there, but the question becomes whether either party is willing to take the risk," Peel explained. "Is the farmer willing to put up with the additional fertilizer costs and decreased yields, and is the cattle producer willing to go out and buy expensive feeder cattle to graze the wheat with?" Just as all input costs have risen over recent years, so has the cost of grazing wheat, but not without an equal rise in cattle prices—and potential profits. "We used to look at the cost of grazing wheat on a per-pound of gain basis in the area of 30-35 cents," he notes. "Now we’re at least up around 40-45 cents per pound of gain just to pay the production costs. On the other hand, the value of that gain is potentially up around 80-85 cents. Those figures are based on March feeder futures that were up around $115. Since we figured those numbers out, the futures have dropped, but it shows that there are definitely opportunities to lock in some profits if you jump on the futures at the right point." Peel said not using the futures market to reduce the risk of purchasing feeding cattle is unlikely to lead to disaster, but that playing the markets to your advantage is helpful when deciding whether the venture is worth it. "The lesson is it’s one thing to notice futures being elevated to a certain price point, but it’s quite another to act on it. You have to look for opportunities in the market and take them when you can," said Peel. "If you just go out and buy feeders to put out on wheat and don’t hedge them, it’s unlikely that prices will drop significantly by the time you market the cattle. If you can live with that much risk, maybe you don’t need to hedge, but it’s better to just lock something in when you get the chance." The increased costs of grazing wheat are not limited to the cattle producer, notes Peel, who says farmers face additional risk along with discouraging lenders. "Wheat farmers, once they figure in the cost of fertilizer, loss of yield and other factors, are looking at spending about an extra $80 per acre to graze the wheat, but that doesn’t mean they can’t recoup that much and more," he explained. "It costs more money to play the game nowadays, and neither the farmers or the ranchers should ignore an opportunity just because it seems too expensive." Peel said that because of the way the feeder cattle market is rewarding heavier cattle with equal or better price-per-cwt. numbers than lightweight calves, there may not be a large demand for wheat grazing this winter. "We’re also not sure how many calves we will even have out on wheat this year because when you look at the incentives to retain ownership, we really may not see a very big calf run," noted Peel. "In many cases it’s paying for producers to just background the calves and put a couple extra hundred pounds on them rather than to sell them after weaning." Higher input costs may make wheat grazing seem riskier than ever, says Peel, but the tools to manage those risks are still around for good managers to use. "There is opportunity in the wheat pasture situation. The costs may scare some people, but the input costs and your gross revenues are unimportant. The margin is what’s important, and that’s what you need to look for to take advantage of today’s market," he said. "Business as usual is something different than what it used to be." — Tait Berlier, WLJ Editor

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Friday, August 29,2008

47BeefBits2

by WLJ
ICE wants to work with meat packers Addressing the meat industry on the thorny issue of illegal immigration and the difficulty for employers of securing a legitimate workforce, Assistant Secretary of Homeland Security for U.S. Immigrations and Customs Enforcement (ICE) Julie Myers said the agency and industry need to partner to ensure compliance with the related laws. Though she acknowledged that effective immigration law is lacking in the U.S., Myers said companies are best to approach ICE and demonstrate the intent to cooperate and legalize their labor forces prior to potential enforcement actions. Thus far in fiscal 2008, ICE has issued more than 1,000 individual criminal charges related to illegal employment, including 121 against either employers or managers. AMS to educate on COOL USDA’s Agricultural Marketing Service (AMS) will spend the first six months following official implementation of mandatory country-of-origin labeling (COOL) on Sept. 30 conducting outreach at retail establishments rather than focusing on enforcement. AMS Associate Deputy Administrator Bill Sessions told attendees at National Meat Association’s summer conference that his agency will not enforce the law during the first six months. The goal, rather, will be to educate retailers about its requirements. Sessions said AMS has been writing up guidance documents, which should be distributed soon. USDA schedules hearing on irradiated beef The USDA Food Safety and Inspection Service (FSIS) has scheduled a public meeting on a three-year-old petition requesting the approval of irradiation for use on the surface of chilled beef carcasses. FSIS will hold the meeting Sept. 18 at a location yet to be announced. The petition was submitted in 2005 by the American Meat Institute in an effort to further improve beef safety. Irradiation is a safe and simple process that uses energy to destroy E. coli O157:H7, salmonella, listeria and other harmful bacteria on food products. The energy passes through the product the same way as in a microwave oven. Food irradiation has been intensely studied and scrutinized for safety. The energy does not leave any residue nor does it cook the product or alter taste in any demonstrable way. Wyoming Beef Council names USMEF rep Wyoming Beef Council members have reappointed Irv Petsch as the Wyoming representative to the U.S. Meat Export Federation (USMEF). Petsch will serve a three-year term representing Wyoming on the USMEF Board. Contributions of Wyoming checkoff dollars provide for a Wyoming director to serve on the USMEF board. Petsch served the last three years as Wyoming’s representative to USMEF. During his first term, he was appointed to a USMEF steering committee developed to determine market availability and how to best use Beef Checkoff dollars to access foreign markets. In his role as USMEF director, Petsch will work to increase the value and profitability of the U.S. beef industry by enhancing demand for U.S. beef and beef products in targeted export markets. New technology predicts tenderness Fresh meat tenderness may be predicted using hyperspectral imaging, according to new research. The University of Nebraska-Lincoln project uses a combination of video image analysis and spectroscopy to determine the muscle profile and biochemical properties of a steak in order to predict how tender it will become during aging. The system, consisting of a digital video camera and a spectrograph, captures multiple images at hundreds of wavelengths with regular intervals, predicting with 77 percent accuracy which of three categories (tender, intermediate and tough) steaks would fall into once cooked and tested. The technology, still two or three years away from commercial application, would mean a boost to the beef industry as it would allow retailers to charge a premium for "guaranteed tender" meat. FSIS launching new food safety assessments USDA’s Food Safety and Inspection Service (FSIS) is rolling out a new methodology of conducting food safety assessments at 5,300 Hazard Analysis and Critical Control Point meat processing plants aimed at improving the consistency of inspections and documenting findings. Under the new program, those plants can expect a random food safety assessment at least once every four years, creating a set cycle for all plants, which had not been the case in the past. A new set of questions will also provide a structure by which enforcement, investigations and analysis officers can better collect data for input in a database.

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Friday, August 29,2008

Grazing workshop offers classroom and hands-on opportunities

by WLJ
Grazing workshop offers classroom and hands-on opportunities Livestock and wildlife producers, land managers, and others interested in learning about managing and optimizing their grazing lands are invited to attend a USDA Natural Resources Conservation Service (NRCS) Grazing Lands Conservation Initiative (GLCI) workshop in Cresson, TX, on Sept. 10, 2008, at the Bear Creek Ranch. The "My Piece of Texas" grazing workshops are a series that will teach attendees how to estimate forage production, determine grazeable acres, set proper stocking rates, and other grazing management principles. This workshop is one of five in the grazing workshop series. There is a $25 registration fee which includes lunch and a copy of the newly published handbook titled Managing My Piece of Texas. The handbook was peer reviewed by ranchers throughout Texas after being developed by grazing specialists from the Texas GLCI, Texas AgriLife Extension Service, and NRCS. Attendees can expect to receive valuable information about managing grazing lands through classroom instruction during the morning session. After lunch, outdoor demonstrations will provide hands-on instruction targeting forage production and management presentations in the field. "Balancing animal demand with forage supply has long been a cornerstone principle of grazing management," said Jeff Goodwin, NRCS rangeland management specialist in Corsicana, TX. "This grazing workshop will not only reinforce those principles, but will cover an array of grazing topics that a rancher can take home and implement right away." Sponsors for the grazing workshop are NRCS, Texas GLCI, Texas AgriLife Extension Service, Parker Co. Soil and Water Conservation District (SWCD), and Texas Section of Society for Range Management. For those who plan on attending the grazing workshop, please call the Parker Co. SWCD at 817/594-4672 and RSVP by Sept. 5, 2008. For more information, please contact Jeff Goodwin at 903/874-5131 Ext.3, or Randy Henry at 817/467-3867. GLCI information can be obtained at http://www.glci.org or Texas NRCS Web site at www.tx.usda.nrcs.gov. — WLJ

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Friday, August 29,2008

44 Farms and Ankony Farms merge Angus cattle operations

by WLJ
44 Farms and Ankony Farms merge Angus cattle operations 44 Farms and Ankony Farms announced the merger of their Angus cattle operations. The new combined Angus cattle program represents a total of 166 years in agricultural production in the U.S. and creates an inventory of over 3,000 registered Angus cattle. The merger provides grassroots purebred Angus operations from the Pacific Coast in Terrebonne, OR, to the Atlantic coast in Clarkesville, GA, to a home in the heartland of America in the Sandhills of North Platte, NE, to the rich river bottom land of 44 Farms deep in the heart of Texas. It is the vision and mission of 44 Ankony Farms to provide consumers around the world with the very finest eating experience through nutritious and delicious Angus beef. 44 Ankony Farms is blessed to be able to provide the highest quality Angus genetics and responsive customer service to cattle breeders throughout the U.S. and the world. The genetically strong and high performing Angus herds of 44 Farms and Ankony Farms were further enhanced by the 2007 acquisition of the entire Angus herd of Bill and Barbara Rishel of North Platte, NE. Their lifelong devotion to the Angus breed, teamwork and friendship have been and continue to be instrumental in the furtherance of the quality of the 44 Ankony Farms program and the Angus breed. The Rishel prefix of B/R is found in more than 1,500,000 current Angus three-generation pedigrees. "We are very excited about the opportunities, extraordinary product quality, and outstanding service that this alliance provides our customers. The knowledge, integrity and commitment to customer service that Virgil Lovell, Tom Hill and Bill and Barb Rishel possess inspires us all," said Bob McClaren, CEO of 44 Farms. The merged Angus programs of 44 Farms and Ankony Farms also includes the ownership of over 220 registered Angus females that record a Dollar Beef Index of $60 or more, which places those females in the top 1 percent of the Angus breed, and more than 274 females that score a Marbling EPD in the top 2 percent of the Angus breed. "I have been in Angus business all of my life and these combined operations represent some of the finest cattle that I have ever seen. It is a credit to Bill and Barb Rishel, 44 Farms and the wonderful men and women of Ankony Farms. These proven Angus genetics can help cattle breeders around the world and provide consumers a great tasting product," said Lovell, CEO of Ankony Farms. With the increased number of animal units, 44 Ankony Farms will be able to further enhance its ability to gather structured carcass data through its association with Prather Ranch in California. The merger also provides opportunities for the furtherance of marketing alliances with Niman Ranch Meat Company, Oregon Country Beef, Painted Hills Beef, Superior Livestock Auctions and Western Video Market. — WLJ

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Friday, August 29,2008

Help prevent scours with colostrum management

by WLJ
Help prevent scours with colostrum management Research shows scours can cause up to 18 percent of calf mortality, making it the number one calf killer. A calf’s best defense against scours is colostrum, which carries antibodies that help provide immunity against scours-causing pathogens. "To get the highest levels of colostrum antibodies, you need to start with a quality nutritional program for the mother cows during gestation," said Jon Seeger, DVM, managing veterinarian with Pfizer Animal Health. "Colostrum develops during late gestation at the same time major fetal growth occurs. These activities require significant quantities of energy and protein. Cow management should focus on quality nutrition to support this colostrum development." According to Seeger, colostrum management should also focus on enhancing antibody levels in the colostrum. Vaccinating a dam with a scours vaccine helps produce high levels of antibodies in the dam’s blood stream. The antibodies are then transferred to the calf through colostrum, eventually entering the calf’s blood stream through the GI tract. Cows transfer antibodies from their blood into colostrum two to five weeks prior to calving. Vaccinating against scours before this time helps build up the highest level of antibodies in the cow’s blood during the period that the antibodies are being transferred to the colostrum. "Vaccination timing is really important because all antibody transfer from the dam to calf is done through the colostrum," explained Seeger. "If the vaccination isn’t done at the right time to help build a high level of antibodies in the cow’s blood stream—and in the colostrum—the calf won’t get the best protection possible." Producers should also make sure calves nurse early and properly so they get an adequate quantity of colostrum within two hours of birth. Seeger recommends four quarts of colostrum within the first 12 hours of birth and an additional four to six quarts in the first 24 hours after birth. — WLJ

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Friday, August 22,2008

Grain, transportation costs continue to grip feeder markets

by WLJ
Grain, transportation costs continue to grip feeder markets Last week offered good insight into the current state of the cash feeder cattle markets, especially in the western U.S., as Western Video Market and Superior Livestock Auction both held large sales. As buyers in the Midwest begin to bid up for the higher quality runs of calves they find in local auction markets, the large video sales gave a good sample of what both lightweight and heavier feeder cattle are worth throughout the Plains and West. For weeks now, high grain prices have caused buyers to seek out heavy feeders to reduce the time required the finish the cattle out. Less grain in equals lower input costs, which can help feed yards cut heavy losses and in some cases, help the operation remain in the black. High fuel costs have contributed to a wide basis on cattle coming out of areas far removed from feeding operations and grain production, as evidenced by the heavy discounts on lightweight feeder cattle which often sell below the heavies on a price-per-cwt. basis. Darrell Mark, agricultural economist with the University of Nebraska-Lincoln, says the current state of the feeder cattle market makes sense, given the high cost of inputs. "There are pretty understandable forces driving the feeder cattle market right now," he said. "It’s really Economics 101 in some respects. Softness in the cash market is to be expected, and it gets worse the further away you get from feed yards or grain." Volatility in the corn markets is not through yet, said Mark, who pointed out that even once harvest starts, grains will be on a roller coaster ride until a firm grip on the total harvest amount is established. "There’s so much risk right now in terms of what corn is going to do that the uncertainty in those grain markets will keep feeder cattle on the defensive. The projections are for a corn crop that will be adequate, but there’s still a lot that can happen between now and harvest. There may be some surprises, and the crop is not in the bin yet." High transportation costs and expensive grains are production factors that are not likely to go away any time soon, said Mark, who also mentioned the increased demand for heavier feeder cattle. "People are definitely responding to feed costs by trying to cut the number of days on feed down and especially in areas far removed from grain sources, the heavy feeders are selling at a premium to the lighter calves," Mark pointed out. "I don’t see any reason to believe that this trend will change within the next year. In certain local markets, there may not be a discount for lightweight feeders, but on a national basis, the economic forces that are causing this to happen will likely still be in place for awhile." Despite the way the numbers appear on the surface, Mark says he believes the discounted lightweight cattle may offer savvy buyers an opportunity. "Using numbers penciled out from a couple weeks ago, you may actually be able to take the lighter weight calves at a discount and get better returns on them, even though you’d have to feed them longer," he explained. "At the time, projections showed almost a $40/head difference in favor of a 550 lb. calf versus a heavy yearling." Even so, he adds, the risk in purchasing lightweight calves is high if you are unable to keep a tight lid on feed costs. "Maybe people should be taking a look at these lighter weight calves, but you can’t just throw caution to the wind. You definitely have to buy them at a discount, then hedge your corn and hedge the cattle. The deferred futures look good to be able to do that, but the risk might still be too high." Western Video Market’s Cheyenne sale offered 122,000 head, by far the most ever for that sale. Lots from all over the west and Plains were offered and were met by firm demand. Steers in a lot of 135 head coming out of Nebraska with a base weight of 840 lbs. brought $114.50. Steers with an 800 lb. base weight in a lot of 125 head sold at $114.10, also coming out of Nebraska. A large group of 800 head of Wyoming steers with a 925 lb. base weight sold for $108.60, while another good group of Wyoming feeder steers numbering 410 head sold for $112.50 at an 850 lb. base weight. A lot size of 272 head of Kansas steers weighing 810 lbs. sold at $114.50. Steers from South Dakota in a lot of 148 head sold for $113.85 with a 750 lb. base weight. Montana steers in a lot numbering 140 head and weighing 950 lbs. sold for $108.00, while a group of 109 steers from Idaho and a base weight of 975 lbs. sold at $101.50. Seventy head of weaned steers from Nevada with a base weight of 800 lbs. sold for $107. Oregon steers in a 218-head lot and an 880 lb. base weight sold for $106.10, while another group of 215 head from the same state weighing 900 lbs. sold for $104.25. Steers carrying a base weight of 830 lbs. in a lot of 295 head from California brought $108.75, while a load of 67 steers from the same state weighing 740 lbs. sold for $111. Weaned steers from Colorado in a 65-head group and a base weight of 670 lbs. brought $114.50. Superior Livestock Auction sold 84,000 head of cattle on the first day of their sale which offered 181,000 total head. Averages from region one, which includes California, Nevada, Oregon, Washington and Idaho, saw steers with a base weight of 700-725 lbs. sell between $95-110.50, and 850-890 lb. steers go for $101-105.50. Region two, which includes Montana, the Dakotas, Nebraska, Utah and Colorado, had 700-740 lb. steers selling for $104-115, while 850-885 lb. steers brought $106.75-113.50. Region three, which includes Arizona, New Mexico, Texas, Oklahoma, Arkansas and Louisiana, saw 700-745 lb. feeder steers selling from $95 to $116, while steers at an average base weight of 850 lbs. sold for $101.50-108.25. At the Oklahoma National Stockyards in Oklahoma City, OK, a total of 7,223 head were offered, where compared to the week prior, feeder cattle and calves were steady with good demand for calves. Demand was moderate to good for feeder cattle, despite corn futures which closed sharply higher on sale day. The quality of offerings continued to be below average with many consignments of No. 2 cattle included. Steers weighing an average of 721 lbs. sold for $114.99, while 736 lb. feeder heifers sold for $108.78. The Joplin Regional Stockyards near Joplin, MO, offered 4,711 head for sale last week where steers under 500 lbs. were steady to $2 higher, with weights from 500-700 lbs. steady and weights over 700 lbs. steady to $2 lower. Heifers were mostly steady. Demand and supply were moderate and the bulk of the offering consisted of yearlings or weaned calves. Buyers paid $112.27 for steers weighing an average of 733 lbs. while 717 lb. heifers sold at $105.52. Last week’s Winter Livestock Feeder Cattle Auction in Dodge City, KS, saw receipts of 1,963 head where steers stayed steady on a light offering. Heifers also remained steady. Steers weighing an average of 707 lbs. sold at $114.50 while 745 lb. heifers brought $111. A total of 4,150 head were received last week at the Bassett Livestock Auction in Bassett, NE, where the only testable weights for feeders were for those over 750 lbs. In that category, steers trended fully steady, with heifers trading steady to $2 lower. Receipts included a fairly even mix of fall calves and long yearlings. Feeder steers weighing 716 lbs. sold for $127.41 while heifers weighing 711 lbs. sold at $112.77. Fed cattle Fed cattle trade was mostly lower last week as a sagging cutout and weak futures markets failed to provide any lift ahead of the Labor Day holiday. The majority of trade in the south came in $1-2 lower than the prior week at $98-99 live while the Corn Belt cattle feeders traded steady to $3 lower in a range of $153 to $156.50 dressed and $98-98.50 live last week. Nebraska trade was not fully developed at mid-day last Thursday, although light trade was reported at $155-156 dressed. Packers were buying for a holiday-shortened week and demand was reported to be moderate for cattle as most had already fulfilled orders to meet weekend demand. The lackluster consumer demand also translated into a weakening cutout which was led lower by the middle meat complex, with ribs and loins showing the biggest drop last week. Morning prices last Thursday stood at $162.67 on the Choice product, down 42 cents from the previous day’s level, while Select was up 26 cents at $157.30. Slaughter volume for the week stood at 505,000 head, down 7,000 from the prior week’s robust pace as packers slowed production to match demand and maintain margins ahead of what is largely expected to be slowing domestic demand. Analysts have been cautioning that the pricing structure this fall is most likely to be driven by the demand side of the equation. Fed cattle supplies are predicted to be tight through the fourth quarter, however, they cautioned that any weakness in movement on the consumer side of the equation could translate into weaker prices being paid for fed cattle supplies, regardless of supply levels. Export markets will continue to be a key factor in determining prices into next year as the domestic economy treads water and consumers direct grocery dollars to lower priced competing proteins. Ahead of last Friday’s cattle on feed report, analysts across the board were predicting on feed numbers would continue below year-ago levels while placement numbers and marketing volumes were expected to be significantly stronger than last year. Average estimates for numbers of cattle on feed were expected to be down about 3.5 percent from Aug. 1, 2007, while July placements were predicted to be 6 percent to 7 percent higher than a year earlier. Marketings were estimated 2 percent higher during July than in 2007. Some of that expectation was already priced into the futures markets last week, which were showing some strength. August futures were up 65 points at mid-day last Thursday at $101.35 while October was up 80 points at $105.80 and December traded 60 points higher at $106.95. The higher prices on the Chicago Mercantile Exchange came despite the higher placement expectations and surging corn markets. The belief that USDA’s corn forecast was off the mark, to the high side, added strength to the grain markets last week as crop tours got underway to examine actual crop conditions in the field across the major growing regions. Export sales last week continued to be very supportive of beef prices with net sales of 20,200 metric tons reported by USDA’s Foreign Agriculture Service. South Korea has jumped back into the market as a major player despite reports in the press that demand was weak. Last week, the Koreans were the largest foreign buyers of U.S. beef, with shipments totaling 8,500 metric tons, besting Mexico, the former heavyweight, by 800 metric tons. Cow and bull prices have been one of the highlights during the first half of the year, however, prices were under pressure last week as focus shifted to other meats as a result of the higher prices being paid at the consumer level for ground beef and cow cuts. However, despite the backward slide in the market, prices remain very strong as a result of demand and a lack of significant imports of lean beef for blending from foreign producers. Last week’s cow beef cutout stood at $139.62, compared to just $117.86 a year ago. The 90 percent leans last week was also sharply higher than 2007 levels, trading at $175.08, nearly $30 higher than the same date last year. The 50 percent trim market last Thursday was more than double year-earlier prices at $100.16. — WLJ

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Friday, August 22,2008

46BeefTalk

by Kris Ringwall, North Dakota State University
Now that hurts! The hay yard is empty for many producers and the traditional June hay was scarce or nonexistent. As the staple for cattle, the amount of hay one wanted to make has been replaced with the amount of hay needed to sustain the herd. Early indications suggest an upward shift in prices. Last year’s hay was abundant and visible from the road, at least in the case of the Dickinson Research Extension Center. A quick check of the records confirmed that the center purchased 318 tons of hay at an average price of $61.65 per ton. That will change this year. The "Ringwall" approach to hay inventory figures says one large, round bale per cow per month for every cow one is planning on feeding. Nutritionists want to know the bale weight and have a quality analysis. Veterinarians note the need for nitrate testing and monitoring any other health concerns with poorly prepared hay. For a generic starting point, it works. Generally, the bales come in pretty heavy and there seems to be enough extra weight on the bales to make sure there is some hay for the calves, bulls and a few horses. If we try to maintain 350 cows at the center through the anticipated November-to-April feeding period, we need 2,100 bales. For a large part of the upper Midwest, these dates coincide with the period when forage does not grow. Last year, the center supplemented raised feed with approximately 500 purchased bales that weighed 1,300 pounds. This year, the tables are turned and the center only is anticipating putting up approximately 400 bales. This means there is a need to purchase 1,700 bales. Current price puts the value of much of the hay at approximately $90 to $100 per ton. Through verbal discussions, the price range is somewhere between $60 and $150 per ton. The alfalfa market for dairy cow hay would be significantly higher and the later cut grass hay should be available near the lower end of the price range. So stop right there, take a deep breath and mutter, "now that hurts." Many times, changes tend to arrive in different packages for the typical needs versus wants list. However, the bottom line is that it makes no difference. The impact is the same. Placing wants ahead of needs can put an operation in financial jeopardy. Likewise, as the wants turn up on the needs list, the financial impact is just as devastating. Last year, our hay purchases here at the center were almost $20,000. This year, those 1,700 bales are estimated to total $110,500. Let me repeat my statement. "Now that hurts!" That means 1,105 tons at $100 per ton for a total cost of $110,500. Even worse, we haven’t paid any trucking fee yet. "Now that hurts even more!" There is no fairy godmother that will wave a wand to feed the cows. Only money and a lot of hard labor will do that. There might be a fairy godmother for the winter weather and maybe she will shorten the winter feeding period, but I never have found her very dependable. If one was to be honest, the tooth fairy is more dependable, but usually quits by the time one is actively involved in the beef business. Adding up the per cow purchased hay cost, the center spent around $60 a cow last year. This year, it looks like the center may need to budget more than $300 per cow for hay. "Oh, that hurts!" Even if the tooth fairy would help, she simply doesn’t deal with that kind of money. However, we do need to take a time out to see if any money was saved by not putting up our own hay. More next time. I need to go buy some tissues. — Kris Ringwall (Kris Ringwall is a North Dakota State University Extension Beef Specialist, director of the NDSU Dickinson Research Center and executive director of the North Dakota Beef Cattle Improvement Association. He can be contacted at 701/483-2045.)

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Friday, August 22,2008

USDA-NRCS announces ranch economics conference

by WLJ
USDA-NRCS announces ranch economics conference Landowners, ranchers and producers are invited to attend the Blackland Prairie Ranch Economics Conference which will be held at the Fletcher-Warren Civic Center located in Greenville, TX, on Sept. 19, 2008. The cost of the conference is $5 per person. Registration starts at 8:00 a.m. and the workshop will be held from 8:00 a.m. through 3:30 p.m. at the civic center. Lunch is planned for all registered attendees. All attendees will receive valuable information about ranch economics and profitability from presentations by conservation professionals. Additionally, three hours of pesticide applicator’s license continuing education units will be offered during the conference. The USDA Natural Resources Conservation Service (NRCS) will present discussions regarding getting started with stocking rates, economical alternatives to inorganic fertilizers, and federal assistance through Farm Bill programs. Other conservation presentations include maintaining profitability in forage-based production systems, economics of forage fertilization and hay production, and adding value and marketing beef cattle. "The goal of the conference will be to address very timely issues and provide Blackland Prairie ranchers and landowners with the economic tools to help make ecologically sound decisions while remaining economically feasible," said Jeff Goodwin, NRCS rangeland management specialist in Corsicana, TX. To end the conference, a rancher’s panel will discuss staying profitable in your ranch operation. The panel will include Chip Merrill, who operates the XXX Ranch in Tarrant County, Kenneth Braddock, manager for Rosewood Ranches in Navarro County, and Jim Russell, owner of Jim Russell Hay and Sprig Farm in Hopkins County. Sponsors for the Blackland Prairie Ranch Economics Conference include NRCS, The Samuel Roberts Noble Foundation, Texas AgriLife Extension, Texas GLCI, Blackland Prairie GLCI, Upper Sabine Soil and Water Conservation District, and Hunt County Farm Supply. For those who plan on attending the conference, please RSVP by Sept. 12, 2008, at 903/455-6212 Ext.3. For more information, please contact Jeff Goodwin at 903/874-5131 Ext.3, or Randy Henry at 817/467-3867. GLCI information can be obtained at www.glci.org and www.tx.usda.nrcs.gov or contact your local NRCS service center for details. — WLJ

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