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Thursday, December 20,2007

West Coast market buys Superior Livestock Auction

by WLJ
It was disclosed last week that Superior Livestock Auction has sold the nation’s largest livestock video auction. The sale will include Superior Livestock Auction, Superior Stampede, the Internet marketing division and Superior Productions, which produces purebred sales and other special events. Superior was sold to Dwight and Helen Mebane of Woody, CA. The closing is to be completed sometime prior to June 1. It was announced that Richard Stober will become the new general manager for the company. The Mebanes are a third generation ranching family with operations in California and Oregon. They are also partners in a Friona, TX, feedlot and own and operate Western Stockman’s Market in Famoso, CA. Stober has extensive experience in all phases of the livestock industry. He has managed several livestock auction markets and is also an auctioneer. Both Mebane and Stober said that they are excited about the future and are proud of Superior’s accomplishments in the past. Superior and Mebane assure that the transition will be smooth and that no changes in personnel or business practices will occur. Jim Odle, Buddy Jeffers and John McKinley will attend the special summer auctions to assist the new owners in the transition.

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Thursday, December 20,2007

More federal land access proposed

by WLJ
for. April 11, 2005 Many producers are seeking access to federal land when burdened by drought or lack of private land for expansion. Other producers feel their state property taxes are too high. Congressman Chris Cannon, R-UT, addressed both of these issues by introducing H.R. 1370, the Federal Lands Asset Inventory Reform Act (FLAIR). FLAIR would require the Secretary of Interior to perform a comprehensive inventory of all federal land assets. Cannon believes this will assist with better federal land management and also identify surplus, unneeded or vacant properties that the government would no longer have any interest or reason to own and transfer this surplus to the state. This type of a national movement is long overdue in Cannon= s opinion, since nearly one-third of the land in U.S., more than 670 million acres, is designated as federal land. Cannon said that the Bureau of Land Management alone has more than three million acres that have been identified as surplus and suitable for disposal. From a tax perspective for the state, Cannon said that this means states that host the government have a severely diminished tax base and cannot fully meet the demands of the federal government to fund law enforcement, environmental compliance, health care and education, as well as other mandates. Cannon did note that the federal government compensates the loss of tax revenue through the Payment in Lieu of Taxes program (PILT), but he said Congress has consistently failed to fully fund the program. For example, this year= s PILT funding request of $200 million is $26 million less than last year and is $150 million short of full funding. Last year was the highest ever funding for PILT, and the program was still over $100 million short, according to Cannon= s estimates. A The result is taxpayers pay more in local property taxes to make up the shortfall,@ said Cannon. If the FLAIR Act is approved by both the House and the Senate, then states would be able to disperse taxes across a broader land base, thus reducing property taxes. President George W. Bush= s 2006 budget contains a proposal that is in line with Cannon= s agenda. The proposal asks for a review of federal lands in the District of Columbia to determine if they would have more value if owned by the District. A I applaud the president for initiating an inventory of surplus federal land to be taken over by the District or the private sector,@ said Cannon. A Especially in the private sector, such real estate can produce jobs and generate tax revenues for the District.@ Cannon illustrated his theory of lost revenues using D.C. as an example. He said, in the District, where 26.3 percent of the total acreage is owned by the federal government, an estimated $400 million to $1.1 billion a year is lost in tax revenue to federal ownership of these lands. And, Cannon said, D.C. is a small problem compared to the western states. In Cannon= s home state of Utah, federal ownership runs approximately 66.5 percent. Utah and eleven other western states rank above D.C. in percentage of federal land ownership. Cannon noted that Nevada is 90 percent federally owned, while California is approximately 50 percent federally owned and nearly two-thirds of New Mexico and Arizona are owned by the federal government. Cannon is chairman of the Congressional Western Caucus. The Congressional Western Caucus is a bicameral organization of nearly 60 members of Congress from the West who want to sustain a vibrant Western economy for present and future generations. From a management viewpoint, the congressional supporters also hope the FLAIR Act will help the federal government gauge its land holdings. A The federal government really does not have an accurate assessment of what it owns, so it is tough to believe that the government can effectively manage the land if they don= t know where they are at or what they are being used for,@ said Cody Stewart, executive director of the Congressional Western Caucus. Cannon agreed, saying that the fire hazard has gotten out of control due to lack of management and that federal grazing lands are in terrible shape, as compared to privately owned lands. Cannon also said, A The president should ensure that the federal land inventory he ordered last year is completed and that ownership of surplus and under-utilized land is transferred to the states. This will bolster Western economies by giving them more tax revenue and job-creation opportunities.@ In the meantime, Cannon is asking that the president support a fully funded PILT program, so that rural communities can begin to support the services for which they rely on these payments. To complement this legislation, Stewart said the Western Caucus is also supporting a bill that would set up a mechanism whereby the government would attempt to acquire additional lands in a state that has more than 25 percent in federal ownership and a bill, which is yet to be introduced, that deals with the impacts that federal land has on education. Stewart encouraged producers to contact their congressmen and express support for these pieces of legislation. C Sarah L. Swenson, WLJ Associate Editor © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.

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Thursday, December 20,2007

Fed cattle market remains strong

by WLJ
Cash fed cattle trade was moderate in the northern Plains by mid-day last Thursday and light in the south Plains ahead of an expected severe winter storm. Compared to the previous week, dressed sales in Nebraska and Colorado traded steady at $160 with a few as high as $161. Live sales were mostly steady to $1 lower with the prior week at $99-100. Prices last week were well above year ago levels despite the slight dip with live and dressed cattle prices approximately 20 percent higher than a year ago. In the southern Plains, prices were mostly $1 lower at $99, despite a strong surge in the boxed beef market last week. A slip in the Chicago Mercantile Exchange (CME) futures market may have contributed to some feedlots accepting lower prices despite expectations of higher cash trade this week. When the cash market moved lower, so did the contract trade. CME live cattle issues fell 257 on the spot month to close last Thursday at $97.35. June lost 215 points and August lost 220 points, closing at $92.47 and $90.70 respectively. Despite the slip in cattle cash and futures prices last week, prices for boxed beef moving into the higher demand months of spring continues to make big gains which, in turn, are improving packer margins and fueling hopes for higher cash trade in the weeks ahead.  Prices for Choice beef surged nearly $5 last Wednesday to $171.96, while the Select product gained $2.43 to trade at $159.23. The following day, both Choice and Select product continued to gain, moving up nearly 50 cents each during morning trading to $172.44 and $159.64 respectively, light demand and offerings. Packers were in the black last week as a result of those gains in the beef trade. HedgersEdge.com estimated a positive return of $39.80 per head for packers last Thursday. Those gains helped packers ramp up harvest levels over the prior week’s levels. For the week through last Thursday, packers had harvested 475,000 head, 2,000 more than the prior week and 31,000 more than the same week a year earlier. There are some mixed expectations for the USDA’s cattle on feed report, set to be released April 20. Pre-report estimates from the Livestock Marketing Information Center are for a 2.1 percent drop in the number of cattle on feed as of April 1. Placements are expected to be 4.2 percent ahead of March 2006 and Marketings 4.4 percent below year-ago levels. The numbers, if they come in as expected, will be supportive of near term price increases for the fed cattle market. The placement pattern of last fall, combined with the continued lingering effects of winter weather, is expected to be supportive of beef prices for the next several weeks as consumer demand grows going into the warmer spring months ahead. Already, there is much talk of feedlots pulling cattle forward as they continue the aggressive marketing stance in an effort to take advantage of the currently strong market. Another significant bright spot for the beef trade is the current run-up in cow prices.  Despite a dairy herd buyout and continued higher than normal cow slaughter, the cow beef cutout values remain quite strong. The cow cutout value last Thursday gained $2.90 in the morning trade to reach $113.19, well above last year’s price of $104.61. Meanwhile, the 90 percent lean rose nearly $3 to trade at $139.53 compared to last year’s price of $128.12. The 50 percent trim also continued to trade well at $98.29 in comparison to year earlier levels of $45.03. Those strong retail values have continued to support the cull cow market well past seasonal highs, traditionally reached early in the year. Current cull cow prices should have producers headed to town with any remaining cull cows to take advantage of the current situation. Feeder cattle Feeder cattle continued their upward trend as they sold for higher prices at auction markets across the western region. Again, cattle producers remain optimistic about turning cattle out on grass as we continue into spring, in spite of a spring snowstorm that swept across the western states late last week. Dr. Derrell Peel, extension livestock marketing specialist at Oklahoma State University, says although states like Oklahoma are average for total precipitation, more rain will be required. “At the current time, it appears that conditions are favorable for more summer stocker production and for renewed heifer retention and herd rebuilding,” he said. As of last Wednesday, the CME index was up from $108.02 the previous week, closing at $109.40. Even though the May 2007 corn futures increased again last week to $3.55/bu., it seemed to have minimal effect on the feeder cattle market. Peel says that total planting intentions of various crops is above 5.5 million acres this year. He says that many of those acres are currently in pasture. “It is not clear yet exactly what we are trying to do, let alone what Mother Nature is going to let us do,” he said. He says the livestock markets will be subjected to a lot of uncertainty in the coming months stemming from crop production and weather patterns as well as the day-today marketing concerns which include beef demand and trade. “In general,” said Peel, “cattle prices are fundamentally strong now and likely to remain so, but the potential for market volatility is enormous.” In Billings, MT, feeder steers and heifers were steady to $2 higher. Steers weighing 510 to 570 lbs. sold between $125 and $129.50. The heavier steers weighing between 740 and 790 lbs. were worth $95 to $99. Heifers that averaged 525 lbs. sold for $114 and females weighing 830 lbs. were worth $97. Huron, SD, had over 3,000 head consigned last week. Feeder steers and heifers sold steady to $3 higher when compared to the previous week. Demand was good with many load lots in the offering. Some of the cattle were carrying mud. Several high quality 700 lb. heifers sold as replacements. Steers averaging 591 lbs. called for an average price of $125.39. The steer offerings went well into the 900 lb. range. Nine weight steers were still worth $102.04. Heifers weighing an average of 529 lbs. sold for $117.50. Females of replacement quality weighing 731 lbs. sold for $107. In Riverton, WY, feeder cattle sold mostly steady with instances of $1 to $2 higher. Steers over 600 lbs. were mostly steady to $1 to $3 higher. Feeder heifers of similar weights were steady with instances of $1 to $5 lower on heifers weighing 750 to 800 lbs. Demand was good to moderate. To the east in La Junta, CO, all weights of feeder steers and heifers were mostly steady with quality a determining factor. Yearling feeder steers were steady to $1 higher. Steers averaging 530 lbs. sold for $134.25 and heavier steers weighing 820 lbs. called for $106. Feeder heifers averaging 605 lbs. sold for $107.50. Further east in Creighton, NE, feeder cattle trended 43 to 44 higher. The overall quality of the cattle was good, with strong buyer attendance and demand. Steers averaging 540 lbs. sold for $120.50; those weighing an average of 831 lbs. called for $105.54. Heifers weighing 525 lbs. sold for an average of $112.71 and the heavier females, weighing an average of 820 lbs., were worth $100.88. At the Oklahoma Stockyards, feeder steers were once again $1 to $3 higher. Stocker steers remained steady while feeder and stocker heifers were unevenly steady. Demand for feeder steers was very good and moderate to good for heifers and stockers. Steers averaging 532 lbs. sold for $132.86 and those averaging 832 lbs. were worth $106.49. Five weight heifers were worth $117.75 and the eight weight females called for $95. In Amarillo, TX, feeder steers and heifers were steady to $2 higher. Trade and demand were moderate. Steers weighing 540 to 565 lbs. were worth $125 to $132.50. Their heifermates sold for an average of $114.

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Thursday, December 20,2007

Johanns highlights conservation side of Farm Bill

by WLJ
Agriculture Secretary Mike Johanns last week highlighted the administration’s Farm Bill proposals related to conservation. Johanns pointed out that a key theme throughout the conservation title is simplification and streamlining of programs, while increasing funding for conservation by $7.8 billion over 10 years. “In the area of conservation, we heard during our Farm Bill forums broad acknowledgment of our successes, but also suggestions to make the programs more user-friendly,” said Johanns. “We are proposing to do just that and to bolster our commitment to conservation through the largest increase in funding for any title within our farm bill proposals.” Under current law, there are six cost-share programs, all of which have separate eligibility requirements, sign-up periods, regulations and applications. They include the Environmental Quality Incentives Program (EQIP), the Wildlife Habitat Incentives Program, the Ground and Surface Water Conservation Program, the Agricultural Management Assistance Program, Forest Land Enhancement Program, and the Klamath Basin Program.  The administration proposes consolidating all six into one program under the EQIP umbrella which can address multiple resource issues. This would include a new Regional Water Enhancement Program. Funding for this newly structured program would be increased by 30 percent, or an additional $4.25 billion over 10 years. The Regional Water Enhancement Program would allow producers to use a broad range of conservation tools to address water quantity and/or quality issues on a regional scale. Mandatory funding of $175 million annually would be available to coordinate conservation solutions for working agricultural landscapes, including crop, pasture, grazing and orchard lands. The administration proposal supports re-authorizing the Conservation Reserve Program (CRP) at its current acreage level. CRP would continue to focus on retiring lands that provide the most significant environmental benefits. However, priority would be given to the enrollment of whole fields that qualify to produce perennial biomass crops for cellulosic energy production. Continuous CRP enrollment and the Conservation Reserve Enhancement Program would also continue. The Conservation Security Program (CSP) would be simplified by creating two tiers of conservation achievement, instead of three, by removing base, maintenance, and cost-share payments. CSP would be enhanced to provide incentives for higher levels of conservation practices. Under the proposal, CSP enrollment would expand from 15.5 million acres to an estimated 96.5 million acres over 10 years. CSP would also be offered nationwide on an annual basis, instead of in select watersheds. Funding for the program would increase $500 million over 10 years, which would take the program to $8.5 billion during FY 2008-2017. The three existing easement programs for working lands—the Farm and Ranchland Protection Program, the Healthy Forest Reserve Program, and the Grasslands Reserve Program—would become one new Private Lands Protection Program with a shared goal of protecting farmland and open space. Funding would be increased by $900 million over 10 years. Conservation compliance provisions would be broadened to discourage the conversion of grassland to crop production. Between 1982 and 2002 acreage in non-federal grasslands fell by 24 million acres. A ‘Sod Saver’ provision would help retain private grass and rangelands by making its conversion to crop land ineligible for farm price and income support. The Wetlands Reserve Program (WRP) would be enhanced and expanded. The enrollment cap would expand from 2.3 million acres to 3.5 million acres with an annual goal of enrolling 250,000 acres. The easement function of the Emergency Watershed Program and the WRP would be combined into one WRP. Mandatory funding of more than $2 billion would be added to the program. Likewise, the Emergency Watershed Protection Program and the Emergency Conservation Program would become one new Emergency Landscape Restoration Program. This would create a one-stop source for landowners and communities in need of emergency conservation assistance following a catastrophic event. To encourage participation in conservation programs by beginning and socially disadvantaged farmers and ranchers, the administration proposes designating 10 percent of conservation financial assistance to these groups. This will enable beginning and socially disadvantaged producers, who typically farm smaller acreage, to more effectively compete for conservation dollars. Lastly, to spur the development of ecosystem service markets that would establish a value for agriculture and forestry conservation practices, the administration would invest $50 million. These funds would be used to develop uniform standards for quantifying environmental services, to establish credit registries, and to offer credit audit and certification services. Ultimately, producers could earn credits for conservation efforts which, in turn, could be sold to achieve environmental goals such as sequestering carbon, protecting endangered species, and other measures that enhance the nation’s environment.

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Thursday, December 20,2007

BEEF talk

by Kris Ringwall, North Dakota State University
Life does not come easy Perhaps the absence of sunlight may be dragging the day down. However, the knowledge that this will pass and brighter days are ahead certainly should reinforce the positive. Tramping through snow (dearly needed moisture), while attempting to get an assessment of the current calving scenario, is never easy. There are times when reports of twins and triplets certainly boost the available calf numbers, but the loss of any calf is always significant. The greatest impact is standing over a lifeless calf wondering what else could have been done. This business we call the cow business and our struggles to come out to the good, despite all that Mother Nature can throw at us, can weigh heavily on our shoulders. Some of the more dramatic scenes in many of the popular medical shows on TV capitalize on our human emotion as the scene goes to the ultimate degree to keep life going. The gallery, not only those watching, but all who are present in the scene, add to the impact of the lost hope, agony and ultimate defeat, as the doctor looks at the clock and says, “Let’s call it.” For those out saving calves, the audience is pretty sparse unless one counts the snowflakes. If one is lucky, the ranch cat or dog is not far away. However, more than likely, it’s just you, the cow and the dead calf. The cow, even though she soon will be ready to take on an orphan calf, ponders what is wrong with the lifeless calf as this not so welcome human intercedes. Life must go on, but that does not make the job easy. The masses, all those pending consumers, never get the point that somewhere, sometime, someone brought a life into this world that ultimately provides our tomorrow. A great moment, but not all the moments are great. If one is not careful, the whistle in one’s voice that is so prevalent when the first calves hit the ground is long gone. The smell of soiled coveralls, the feel of perpetual dampness and the ultimate stickiness of things best never served on a plate tend to grind on even the most optimistic producer. One certainly does wonder just what is good and what is bad. If we turn to some typical commercial herds that are involved with Cow Herd Appraisal Performance Software and the North Dakota Beef Cattle Improvement Association, the percentage of calves that die, based on the number of full-term calves born, is 3.35 percent. In other words, for every 10,000 calves, 335 die. One could say that is acceptable, if one accepts that death is inevitable, at least at some time. If one looks back on the last five years, the percentage of calves that died prior to weaning was 3.80 percent in 2001, 3.48 percent in 2002, 3.57 percent in 2003, 3.04 percent in 2004 and 2.85 percent in 2005. Granted, most of these calves died during calving and that is, what it is. The bottom line, one can’t despair, but nevertheless, for every 10,000 calves born, there are 335 returning to Mother Nature sooner than we would like. The 10,000 calves would be a couple of good sale days at a typical livestock auction in the fall. As the trucks line up to haul the calves off, it would take, given a typical weight of 562 pounds around weaning time, 112 trucks loading around 50,000 pounds of calf to haul the calves to their next destination. As for the 335 dead calves, four trucks would remain empty. Chin up, the calves that make it will have a good start on fresh grass. Life does not come easy.

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Thursday, December 20,2007

Ethanol plant emission rules relaxed

by WLJ
The Environmental Protection Agency (EPA) took a major step to stimulate ethanol production by issuing a rule last week allowing ethanol plants to operate with fewer environmental rules and less air pollution equipment. The agency rejected pleas by clean-air advocates and increased the amount of nitrogen oxide, sulfur dioxide and other pollutants that will be allowed before an ethanol plant is considered a “major air emitter,” a category that requires more stringent regulation. The change will increase the threshold for installing the best air pollution control equipment from 100 tons of pollution annually to 250 tons. It will also allow ethanol plants to avoid counting emissions from vents and other minor plant sources when tabulating those thresholds. The new rule would not apply in urban areas already dealing with air quality problems. EPA spokeswoman Jennifer Wood said the rule was designed to make sure that all forms of ethanol production and the distillation of alcohol for human consumption “are treated equally under the Clean Air Act.” Up to now, most ethanol plants have been treated like chemical manufacturers for purposes of air pollution regulation. The ethanol industry and its backers in Congress pushed hard for the new rule and the White House, a staunch supporter of biofuels, helped make the case for the change. National Corn Growers Association said the rule is beneficial to his members and a reflection of a trend toward larger plants. Many local and state air-pollution officials opposed the change. They said the new rule will make their tasks more difficult in controlling pollution both from new ethanol plants and current plants that will be able to expand without installing pollution-control equipment. Missouri Gov. Matt Blunt was one of two governors who formally endorsed the rule change in a letter to the EPA. The second was South Dakota Gov. Mike Rounds.

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Thursday, December 20,2007

Fed trade steady to $1 lower

by WLJ
Trade was slow getting started last week, despite expectations that short-bought packers would come out early to fill demand. As of last Thursday, however, there was only light trade reported in Nebraska and western Iowa at $98 live and $154-156 dressed, although there was not enough volume to call a trend for the week. Offers remained at the $100 mark for live cattle. In the beef, feedlots were asking $158-160 for their show lists. Most analysts were expecting cattle to trade steady to $1 lower than the prior week at $97-98 live and $155-157 dressed basis. The USDA’s monthly cattle on feed report was expected to show an uptick in the number of cattle placed in feedlots for the second consecutive month. That news is likely to have little impact on the near-term market picture which remains positive for cattle feeders.  Tight front-end ready supplies and a short-fall in Choice product has led to fed cattle prices which remain well above year-ago levels. Although the cattle which suffer the impact of severe winter storms are mostly moved through the production chain, there are not enough Choice grading cattle available to fill improving demand ahead of the summer grilling season. Cattle feeders are also pulling cattle forward in an effort to capitalize on the current price level, which has added to the situation. So long as feedlots are able to maintain their current marketing situation, the picture should remain positive for the next six weeks or so. After that, increases in available cattle should ease some, perhaps moving prices lower as indicated by the current contract prices on the Chicago Mercantile Exchange (CME). Looking even farther ahead, cow slaughter remains well ahead of normal and heifer retention levels have failed to increase as expected. According to Glenn Grimes and Ron Plain at the University of Missouri, as of the week ending March 24, total cow slaughter was up 15.1 percent from a year ago. Beef cow slaughter was up 17.1 percent from 12 months earlier and the slaughter rate has increased as producers move into spring. “For the four-week period ending March 24, total cow slaughter was up 19.4 percent, dairy cow slaughter was up 14.6 percent and beef cow slaughter was up a whopping 24.9 percent from the same four weeks last year,” they said. “There is no question that the expansion made in the cattle herd a year ago has stopped in 2007.” Beef cut-out values continued their pull-back from the prior week’s highs. Heavy offerings of boxed beef from packers have swamped demand, pushing prices lower. Last Thursday, Choice cuts were down $2.32 in morning trade to $164.93. Select dropped $1.53, to trade at $153.45 during the day. There was expected to be more downward price pressure as packers continued to harvest cattle at levels higher than week-ago or year-ago rates. As of last Thursday, the week to date harvest was estimated by USDA at 495,000. That figure was 20,000 more than the prior week and well ahead of the same period in 2006 when packers slaughtered 476,000 head. Analysts said last week that the cutout value would require additional movement downward before packers would be able to move the significant quantity of product piling up in cold storage warehouses. Consumer demand will need to improve as well if packers hope to continue the just slightly positive margins they were enjoying last week. With warmer weather predicted for much of the nation in the week ahead, consumers may begin breaking out the grills, spurring retail product movement and higher cutout values. Price movement on CME last week was mostly downward. Some early week across the board gains on Monday and Tuesday erased some of the prior week’s losses, however, Wednesday and Thursday, the contract trade turned lower with more across the board losses. In last Thursday’s session, April live cattle contracts shed 67 points, closing at $96.45, while June contracts gave up 10 points to close the day at $92.72. August and October contracts were down 27 and 25 points to close at $90.82 and $94.67 respectively. Feeder cattle Prices for feeder cattle varied regionally last week. In spite of the CME index falling to close at $109.22 last Thursday, many of the western states reported increased feeder prices. However, in some western states with large sales, such as Oklahoma and Missouri, cattle prices softened. “There are several reasons why prices went down last week,” said Mark Harmon from Joplin Regional Stockyards. “We’re still running pretty heavy. We are selling a lot of cattle.” Harmon said some of the reasons for the decreased prices were large runs, poor weather, late frost, and the substantial number of new crop cattle among last week’s offerings. “The new croppers are starting to run and that brings the averages down,” he said. Cattle referred to as new croppers are cattle that come into the auction market with extra flesh. Most of them are newly weaned and have had few, if any, shots. “You can still sell a grazer awfully good but if they’re new croppers, they’re just not going to sell as well,” said Harmon. “These calves are just not ready to be turned out on grass, packing all that fat. Cattle buyers are still looking for thin cattle ready to go to grass.” He continued to say, “Yearlings are still selling well and the heifer thing is a little better than it has been.” Harmon also said that the area has had a hard winter, as have many of the western states. Recent storms across Oklahoma, the panhandle of Texas, and even in the state of Missouri, have caused many problems for farmers and ranchers. “We’ve had a hard winter and there was a bad freeze Saturday (Apr. 14),” said Harmon. “Any corn that was planted is gone and the wheat, which had already come up, is broken. Weather has definitely been a factor in our feeder cattle markets.” Cattle that are ready to go to grass and in thin condition are still in high demand across the western states. In spite of recent winter storms, increased cash and future corn prices, and the decrease in the CME index, producers and cattle buyers remain optimistic about spring grasses. With over 1,200 receipts in Davenport, WA, last week, feeder cattle sold steady to $3 higher. There was active trade and good demand at the sale. Steers averaging between 400 and 500 lbs. sold between $115 and $122 and heavier steers weighing between 700 and 800 lbs. were worth $102. Five and six weight heifers sold between $100.50 and $105 while those weighing in between 700 and 800 lbs. were worth $93.50 to $95.50. To the east in Fargo, ND, lighter steers weighing under 650 lbs. sold $1 higher when compared to the previous week. Heavier steers weighing 650 to 950 lbs. were $2 to $3 lower. Feeder heifers sold unevenly steady. There was good demand, especially for lighter weight cattle. Steers averaging 525 lbs. were worth an average of $119.91. One lot of 750 lb. thin steers called for $106.75. Another lot of heifers averaging 582 lbs. sold for $107.74 and females weighing 807 lbs. were worth an average of $93.19. In Riverton, WY, feeder steers under 500 lbs., higher undertones were noted on a light offering and those over 550 lbs. remained steady. Steers weighing 650 to 750 lbs. sold $4 to $5 higher. Feeder heifers were unevenly steady with lower undertones for those under 550 lbs. Heifers weighing between 645 and 690 lbs. were $3 to $5 higher. Demand was good and trade was active. One package of steers averaging 533 lbs. sold for $135. Heavier steer calves weighing between 715 and 755 lbs. sold between $105 and $110. Heifers weighing between 510 and 595 lbs. called between $105 and $114. A set of heavier females, of replacement quality, averaging 810 lbs., sold for an average of $98. East of Wyoming in McCook, NE, steers and heifers sold steady to $3 higher. The higher prices were on the heavier cattle. One set of steers, averaging 520 lbs., sold for an average of $134.16. Almost 200 head of steers averaging 723 lbs. called for an average of $115.69. Five weight heifers averaged $119.43, with the heavier females, averaging 783 lbs., selling for $101.82. In Salina, KS, feeder steers weighing between 400 and 550 lbs. were lower with fleshy unweaned calves hard to move. Steers weighing 550 to 700 lbs. were steady and those weighing between 700 and 1,000 lbs. were $2 to $3 lower. Feeder heifers weighing 350 to 550 lbs. were $1 lower, 550 to 700 lbs. remained steady, and 700 to 800 lbs. were $2 lower. Steers averaging 475 lbs. sold for an average of $130.54 and their heifermates called for an average of $129.12. Heavier steers averaging 825 lbs. were worth $103.50 and heifers of a similar weight sold for $102. Over 9,500 head were sold in Oklahoma City, OK, last week. Feeder cattle and calves were $3 to $5 lower. Demand was moderate, at best, for all classes. Muddy conditions in the region affected demand. Also, the recent losses in CME futures has placed pressure on the prices. One set of 475 lb. fleshy calves sold for $130. Slightly bigger steers that were thinner in type, weighing 527 lbs., sold for $137. Steers averaging 634 lbs. sold for $119.85. Another set of heifers averaging 431 lbs. were worth $118, while fleshy heifers averaging the same weight sold for only $113. One lot of replacement quality females averaging 825 lbs. called for $94. Further to the east in Joplin, MO, 6,500 head of cattle were sold last week. Steers and heifers under 600 lbs. were $2 to $5 lower with most of the decline on new crop calves. Calves over 600 lbs. remained steady. Demand was moderate for thin grazing calves and feeders and moderate to light on new crop calves. Steers weighing between 500 and 600 lbs. sold between $114 and $126 and thin steers at the same weight were worth $121 to $131. Heavier steers weighing between 700 and 800 lbs. sold for $100 to $109. Heifers that weighed an average of 550 lbs. averaged $106.75 and thin females at the same weight called between $102 and $114. South in Dalhart, TX, feeder steers under 600 lbs. remained steady and those over 600 lbs. and all feeder heifers were firm to $1 higher. Trade was active and demand was good. One package of steers weighing 417 lbs. sold for $150. Steers weighing between 600 and 700 lbs. averaged $115. Heifers weighing between 500 and 600 lbs. called for $122.50 and seven weights averaged $106.25.

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Thursday, December 20,2007

Investigators find no threat in Washington cattle deaths

by WLJ
After conducting a detailed investigation into the deaths of 50 to 60 cattle at a former dairy in Addy, WA, state investigators have found no serious animal diseases or toxic contamination of the animals’ feed that could have caused the fatalities. “During this investigation, we have found no threat to the health of people or other animals,” said Washington State Veterinarian Leonard Eldridge. “We have not been able to identify a common cause of death of these animals. Frankly, we may never know specifically what killed the animals that died before the start of this investigation.” When Washington State Department of Agriculture (WSDA) veterinarians visited the farm on March 8, they immediately established that the death of the animals had occurred over several months. The dairy’s owner reported to investigators that between 50 and 60 cows had died. During this first visit to the farm, investigators found no symptoms of contagious foreign animal disease in any living animals.   At that time, the farmer reported concerns about heavy metals contamination of the animals’ feed source as a possible cause of death. Due to these concerns, the dairy owner made a decision not to ship milk off the farm since December 2006. The animals were eating alfalfa hay, as well as haylage, grown in Addy in Stevens County. Investigators took feed samples at the farm and at the site where the hay was grown. The feed samples were tested for heavy metals and a nutritional analysis was conducted. The heavy metals testing on the feed was conducted by the Washington Animal Disease Diagnostic Laboratory (WADDL) in Pullman, WA. The laboratory has determined that no elements analyzed were present at excessive concentrations in comparison to recognized reference ranges. In other words, WADDL investigators have determined that the feed is safe to give to cattle. Nutritional testing on the feed was conducted at WSDA’s laboratory in Yakima, WA. The hay samples would have provided appropriate nutrition for adult cows that are not being milked. Milking cows generally require a feed supplement that provides additional vitamins, minerals and calories to ensure proper nutrition. On March 21, WSDA investigators returned to the farm. The herd owners volunteered three animals to be sacrificed to aid in the investigation. The animals were autopsied at WADDL where further pathology, microbiology and toxicology analyses were conducted. Again, the lab investigators found no remarkable concentrations of any of the heavy metals included in their analysis. The liver, kidney, blood, hair and hoof samples did not appear to contain excessive concentrations of any of the elements tested. Furthermore, other tests found no presence of foreign animal disease, bovine spongiform encephalopathy or any other potentially fatal diseases. WSDA’s Eldridge has advised the herd owners of the results of the investigation. Eldridge suggested that the owners take steps to improve the general sanitary conditions on the farm and seek consultation on herd health management and nutrition. Eldridge also advised that a veterinarian should immediately examine any additional dead animals.

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Thursday, December 20,2007

Registration open for BIF meeting in Colorado

by WLJ
The Rocky Mountains provide the backdrop for the annual meeting and 40th anniversary celebration of the Beef Improvement Federation (BIF). The meeting will be held June 6-9 in Fort Collins, CO. It will focus on the future of genetic evaluation and improvement, with a variety of presenters from around the country. The meeting will take place at the Hilton Fort Collins. To register and for program details, go to www.beefimprovement.org under the conventions tab. Pre-registration is due May 15. For information, contact Willie Altenburg, 970/568-7792, willie@rmi.net or Mark Enns at 970/491-2722, Mark.Enns@Colostate.edu. “The BIF meeting is a great opportunity for cattlemen from around the country and the world to come together and discuss genetics and how to improve our industry,” says Altenburg, Colorado planning chairman. Mark Enns, Colorado State University (CSU) and program chair, states: “As we put together speakers and topics for this BIF annual meeting, the committee wanted subjects that would get beef producers thinking. And, to capture those thoughts, we will be using an audience response system throughout the meeting and building discussions off the group.” The meeting will kick off with Colorado Welcome Reception on Wednesday evening, June 6. The history of Artificial Insemination will be the focus of the National Association of Animal Breeders Symposium that evening as well. On Thursday, June 7, participants will discuss “Performance Programs at a Crossroads” as speakers talk about the current performance programs’ cost and benefits and gather the audience’s views on the direction for future genetic improvement initiatives. Awards for the Commercial Producer of the Year will be presented and committee meetings will be held in the afternoon. Thursday also has a spouse/family tour to Estes Park and the historic Stanley Hotel, plus a trip to Rocky Mountain National Park. That evening, the group will experience “Foam on the Range” at the CSU Equine Center for an evening of great conversation, a steak dinner, tasting the products of Colorado-produced ale, and viewing cattle from area seedstock producers. Friday focuses on “Challenges to Conventional Wisdom.” Presenters will lead the discussion on uses of genetics technology and changes seen in the quality grades of cattle. The Seedstock Producer of the Year will be named, and committee meetings will be held that afternoon. Friday evening, attendees can head up to Old Town Fort Collins to enjoy the local restaurants. Producer tours will visit many Front Range locations throughout the day on Saturday, June 9. Two tours are offered. The first tour, “Beef Industry Players,” has stops at Kuner Feedlot, Five Rivers Cattle Feeding, Safeway’s Distribution Center and Aristocrat Angus. The “Seedstock Alliances” tour features Walter Farms, Inc., Five Star Cattle Systems, Kuner Feedlot and Five Rivers Cattle Feeding. The BIF Annual Research Symposium and Annual Meeting is hosted by CSU, Colorado Livestock Association, Colorado Cattlemen’s Association and BIF.

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Thursday, December 20,2007

Corn, cattle create new paradigm for producers

by WLJ
When feed prices double, cattle producers think twice as hard about management options. Common responses include cutting expenses, increasing efficiency, and finding ways to get paid more for the saleable product, calves or carcasses. “We’ve really come into a different paradigm with predictions of $4 (per bushel) versus $2 corn,” says Mark McCully, Certified Angus Beef LLC (CAB). “We’ve also come into a different paradigm when we look to a $20 Choice/Select spread, versus a $6 spread.” That widening spread refers to the difference in boxed-beef cutout value per cwt. between USDA Choice and Select grade. The price spread between Choice and CAB brand product also has widened significantly. McCully, CAB supply development director, says producers need to focus on cattle that better use their resources, yet produce calves that achieve premium quality, to deal with the changing markets. Duane “Doc” Warden, of Council Bluffs, IA, started his Angus seedstock business in 1964 and began testing for feed efficiency 18 years later. “The thing that costs the most with cattle is feeding them,” he says. “If you can improve their feed efficiency, you obviously are going to make more money.” That’s only if you stay with the other strengths of the Angus breed, Warden adds. “Increasing feed efficiency does not affect quality grade,” he says. Warden recently fed out 40 steers that didn’t make the cut as breeding stock. They went 98 percent Choice and 50 percent CAB, with no Yield Grade 4s. “The most efficient bulls weren’t always the ones I’ve kept,” he says. “I very consistently keep birth weights down and try to keep everything else in balance on other traits.” For more than 25 years, Warden has been tracking efficiency and says he’s improved it by at least 10 percent in his herd. His top bull, “4 point 8 of Ironwood,” is named for his 4.8 pound feed/gain ratio, finishing first in feed efficiency in the Circle A Sire Alliance during its test year. “Efficiency is hard to measure,” Warden says. “You can’t see it. It’s very hard for people to get a handle on what they have.” Missouri Beef Extension Specialist Bob Weaber notes selection is also a challenge. “There has been an interest in feed efficiency for a long time,” he says. “We just don’t have many tools to get at it.” Producers can be encouraged by how easily it’s passed on to offspring. A heritability of 0.35 to 0.4 puts feed efficiency in the moderate-high range. “That’s basically the same as the birth or yearling weight, which is good because it means there’s a lot of opportunity to make progress with selection tools if we had them,” Weaber says. McCully developed a model to look at the effect corn price has on the dollar value of efficiency. His theory sorts calves into two groups, “average” and “best.” His numbers are based on a 650- pound feeder calf, fed for another 650-pound of gain. “What kind of impact do these new economic dynamics have on value differentiation of cattle in the feedlot?” McCully asks. “A big difference, if you run some numbers.” In this scenario, “average” cattle gained three pounds per day (ADG) and had a 6.4 ratio of feed pounds required to gain a pound of beef (F/G). “By moving those numbers to a 3.8 pound ADG and a 5.9 F/G, better cattle would save $26 in feed cost per head with $2 corn,” says McCully. “The reality is, corn is not $2 anymore.” The same numbers with $4.20/bu corn show a $52 cost difference between the average and the best cattle. “This new situation doubles your performance value differential,” he says. Warden says that might push people to pay more attention to efficiency. “The increased price of corn is just a way to bring this to mind a little more,” he says. “It’s always important.” Cow/calf producers who don’t retain ownership through the feeding phase may not see a direct benefit from this focus, but Weaber says there are advantages in the cowherd. “If we make the calves more efficient, that will probably make the cows more efficient,” he says. In addition, by selecting for smaller mature size and lower milk production, maintenance energy requirements of cows could be improved indirectly. “In our maximal production economy, it isn’t a real popular thing to do. But, if a guy sits down and goes through the worksheet, frequently the smaller, lower-milk cows generate more gross revenue on a fixed forage or nutrient supply base than the high-input cows,” Weaber observes. “Especially at $4 corn.” Since all growing cattle eat, gain and therefore have F/G numbers, widespread improvement would have an enormous impact on the entire industry. Weaber says if every fed beef animal converted at 6.5 today and improved to 6.1, the feed savings to cattle feeders with a ration priced at $170/ton could be over $635 million. An upward adjustment in percent Choice could also put dollars in a producer’s pocket, and it can happen concurrent with those performance improvements. “When you take this same idea and compare a $6 Choice/Select spread to a $20 one, you can see that more dollars in the system magnify a modest improvement in quality grade,” McCully says. With a $6 Choice/Select spread, a pen of cattle achieving 60 percent Choice and 16 percent CAB and Prime would receive around $35 per head in premiums. That’s about $25 per head behind a pen that goes 90 percent Choice or above with 40 percent of those qualifying for CAB and Prime. “The value difference in our market is compressed with a $6 spread. Higher spreads amplify it,” says McCully. Those groups have a $58 per-head difference when a $20 Choice/Select spread is applied. Andy Gottschalk, veteran market consultant with HedgersEdge.com, says that $20 spread is not unlikely. “We’ve seen a general widening in the Choice/Select spread over time,” he says. “The consumers have clearly voted with their dollars. They are willing to pay more for high-quality beef. “All other things being equal, that will tend to drive the Choice/Select spread to even wider levels than we have seen in the past,” Gottschalk says. Cattlemen who haven’t yet found merit in aiming for quality might reconsider now, McCully says. “We’re trying to illustrate to producers that in these times we’re entering, an investment in better genetics, managed properly, can align their cattle to take advantage of the market,” he says. Gottschalk says there are economic signals that favor Choice beef production. “As it continues to move, the Choice/Select spread will pay cattlemen for the quality product they produce,” he says. “That’s what the system should have been doing all along and for many years, but it didn’t do that. I believe that was a contributing factor to a 19-year decline in the demand for beef.” Even when the Choice/Select spreads narrows seasonally, as it often does in the summer and late winter months, Gottschalk says it’s a worthy goal. “Over the longer period, we see the consumer’s willingness to pay more for high-quality product,” he says. “That’s what producers need to stay focused on, and not become overly concerned with what is usually shorter-term oversupply.” McCully says the combination of higher corn prices and increasing premiums for quality beef bring bull-buying decisions into full light. “If you equate all of these value differences between the average cattle and best cattle back to an individual bull, the discrepancy is astounding,” McCully says. If a bull produces 60 calves in his lifetime, there could be a $6,630 overall difference between those that perform and grade at the above-average level and those that are merely average. “Theoretically, you could pay at least $6,000 more for the best bulls than you could for the average bull with these new economics,” he says. “Of course, that assumes the cow/calf producer is able to market those value-added genetics.” Not all the value of grade and gain will get back to the farmer or rancher, but there are ways to realize benefits. McCully suggests participating in the AngusSource program and using the marketing documents, or retaining at least partial ownership throughout feeding. “Feedlot managers understand these value differences, but I’m not sure they have fully adjusted their feeder-calf procurement orders to this new mindset,” he says. “I’d encourage them to pay what the good cattle are worth and further discount the cattle that don’t work in the yard or in the packinghouse.” McCully says historically, a $5/cwt. premium was considered the top end for the best 600-pound feeder steer. “This new paradigm—with top efficiency and grade working on $4 corn and a $20 Choice-Select spread—suggests the premium should be three times that,” he says. “To make progress, we need to eliminate the idea of letting the superior cattle subsidize the poorer ones. Grid marketing is getting fed cattle on track but we still need to rethink how we assess value on feeder calves.” The astute producer must evaluate how each area of this fast-paced, ever-changing market affects the bottom line. “We’re putting everything in a pressure cooker right now,” McCully says, “and the true value will show itself where performance and quality are concerned.”

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