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Thursday, December 20,2007

State meat inspection bill introduced

by WLJ
A bill introduced in the U.S. House of Representatives last week would allow state-inspected processing plants to ship beef across state lines just like federally inspected plants. Reps. Earl Pomeroy, D-ND, and Roy Blunt, R-MO, introduced H.R. 2315, the New Markets for State-Inspected Meat and Poultry Act of 2007, along with 15 other cosponsors.   Federal law requires USDA to inspect all meat products. In the 1960s, Congress created state inspection programs that are mandated to be “at least equal to” the federal inspection program. Perishable products—including milk and other dairy items, fruit, vegetables, and fish—are freely shipped across state lines after state inspection. But standard meat products, like poultry, beef, and pork, are prohibited from interstate commerce despite decades of meeting or surpassing the federal inspection standards. This bill would remove that prohibition. “It’s unfair that smaller beef producers are not able to ship and sell their products outside their own state when interstate sales of other food products aren’t restricted at all,” says Colin Woodall, National Cattlemen’s Beef Association’s executive director of legislative affairs. “This outdated policy hurts many of our country’s small businesses who deserve an equal right to compete in the national market.” Currently, state-regulated inspection programs exist in 28 states. These programs serve about 2,000 small or very small establishments. Blunt says the existing law penalizes smaller companies while companies from 30 foreign nations are permitted to sell meats freely in any state. “If my family in Texas enjoys safe, delicious beef from a local, state-inspected business in Amarillo, why can’t a family in Oklahoma buy the same beef?” asks Woodall.

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Thursday, December 20,2007

USDA clears swine for processing

by WLJ
Human health risk assessment updated. Testing confirms that meat from swine fed rations supplemented with pet food scraps containing melamine and related compounds is safe for human consumption, prompting USDA to allow swine held on farms to be released and approved for processing. Testing of meat from swine exposed to the feed in question confirms that melamine and melamine compounds do not accumulate in pork and are filtered out of the body by the action of the kidneys. The testing also bolsters the conclusions reached by a human health risk assessment that there is a very low risk of human illness from the consumption of meat from animals exposed to the feed in question. Swine known to have eaten this feed appear healthy, which will be confirmed as these animals undergo the rigorous inspection that USDA’s Food Safety and Inspection Service (FSIS) provides for all meat and poultry prior to processing. There were approximately 56,000 swine that consumed the feed in question and were held on farms in California, North Carolina, South Carolina, New York, Kansas, Utah and Illinois. USDA will provide compensation to producers for certain additional costs incurred as a result of voluntarily holding the animals. Approximately 100 million swine are processed each year in the U.S. The process for testing meat from swine was validated by FSIS. Human health risk assessment The human health risk assessment announced by the Food and Drug Administration (FDA) and USDA last week has been updated. It still concludes that there is very low risk of harm to humans from eating food containing low levels of melamine or related compounds. The updated risk assessment concludes that in the most extreme risk assessment scenario, when scientists assumed that all the solid food a person consumes in an entire day contained melamine and the melamine compound cyanuric acid at levels potentially present in the meat, the potential exposure is about 250 times lower than the dose considered safe. Translated to consumption levels, this means that a person weighing 132 pounds would have to eat more than 800 pounds per day of pork or other food containing melamine and its compounds to approach a level of consumption that would cause a health concern. Previously, the agencies reported that the potential exposure was about 2,500 times lower than the safe level. The initial human risk assessment assumed that tests of swine meat detected melamine and its compounds. The testing validation process, completed on May 12, revealed that while the swine meat test detects melamine, it cannot detect melamine related compounds. The updated assessment calculates risk based on the new updated laboratory information that accounts for the presence of melamine and cyanuric acid, a melamine related compound detected in the contaminated feed. In addition, the original risk assessment assumed that testing could detect levels of melamine and related compounds as low as 10 parts per billion (ppb) in pork. The new assessment assumes that testing can detect levels only as low as 50 ppb in pork, a more conservative assumption, and an even higher level of 100 ppb is assumed in order to account for the potential presence of cyanuric acid, in addition to melamine. FDA and USDA are in the process of identifying scientific experts who would be charged with reviewing the updated risk assessment. They will be asked to provide their views to FDA as quickly as possible, with the intent of finalizing the risk assessment within several weeks. Update on other affected products Approximately 80,000 poultry continue to be held at USDA’s request at farms in Indiana while a validated test for detecting melamine in poultry meat is developed. That test is expected later this week. FDA is continuing its investigation into the presence of melamine and its compounds in fish feed manufactured by the Canadian company Skretting. The company is recalling all fish feed from all commercial fisheries and fish hatcheries that may have received it, including those in the U.S. FDA has confirmed there are two U.S. commercial aquaculture establishments that received the feed. The fish in those two establishments are on hold and samples of the fish and the feed are being tested for melamine levels. Based on the human risk assessment, there is very low risk from eating fish that consumed feed containing melamine. USDA and FDA continue to conduct a full and comprehensive investigation. As additional information is confirmed, updates will be provided and decisions will be made using the best available science to protect the public’s health.

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Thursday, December 20,2007

Holiday pushes fed market up

by WLJ
Fed cattle trade got started mostly $1 higher last Thursday. Trade occurred at $126-127 dressed in the north and a few live sales at $79, steady with the previous week. Packer demand increased as they upped the harvest level and were looking to procure cattle to fulfill the Memorial Day demand. Packers came out early in the week offering $74-75 live and $124-126 dressed. However, projections for packer margins at a positive $60 per head, combined with good boxed beef trade and lighter fed cattle weights, helped feedlots gain the upper hand last week. Support was added to fed cattle trade by the Chicago Mercantile Exchange (CME) which traded mixed last Wednesday, with June closing up seven points at $77.72 and August closing lower at $78.77. Thursday, CME trade in the live cattle pit was higher across the board with a gain of eight points on the June contract, which closed at $77.80, and a gain of 32 points on the August contract, closing at $79.10. Markets have been gaining strength on solid retail demand. Last Wednesday, retail movement of boxed beef was near 700 loads. That movement pushed the Choice cutout value slightly higher to $145.05. Select cutout values were 70 cents lower, at $124.71, at the end of last Wednesday. The Choice/Select spread continues to hover near $20 as a result of limited Choice product availability. Movement of boxed beef weakened slightly on Thursday although volume was still considered good at 548 loads on moderate demand and offerings. Beef trim was sharply lower on moderate demand and very heavy offerings. Last Thursday’s Choice value declined 44 cents to $144.61, while Select closed the day down 55 cents, at $124.16. Packers were doing their best last week to take advantage of the good demand and higher cutout values in an effort to move through some of the front-end ready supply of fed cattle. Harvest levels for the week were estimated by USDA at 708,000 head last Thursday. That number is well above the previous week’s estimated harvest of 627,000 head and the previous year’s harvest of 654,000 head. The higher kill level is good news for cattle feeders who need to work through large numbers of fed cattle in an orderly and rapid fashion to avoid a backlog of slaughter-ready cattle as a result of heavy placements over the past several months. The cattle on feed report due out last Friday was expected to shed light on the state of the industry. Pre-report estimates were for another monthly record number of cattle on feed for May 1. Prior to the release of the USDA report, Andy Gottschalk at HedgersEdge.com estimated the May 1 cattle on feed numbers at 11.512 million head, 8.2 percent ahead of May 1, 2005. If his number is correct, the May 1 number will be 342,000 head above the previous May record set in 2001. Gottschalk estimated placements would be 6.6 percent lower than May 1, 2005 and marketings, with one fewer marketing days than the prior year, would be 1.9 percent below 2005. Last week’s higher cash fed trade could be difficult to sustain once the Memorial Day demand is met. According to Mike Roberts, commodity marketing agent at Virginia Tech, most traders expect these markets to top out soon as Memorial Day buying is completed among lower-than- expected exports. Roberts said U.S. cash cattle are expecting pressure for the rest of the year because of plenty of meat supplies in general, with beef carrying a large portion of the increase. Feeder cattle CMA and auction market feeder cattle trade shrugged off reports of continued dry weather, record high temperatures and higher commodity corn prices last week to trade mostly higher across the country. Last Thursday on the CME, feeder cattle traded in a narrowly mixed range. Nearby May and August contracts closed five and two points lower, settling at $103.50 and $106.45 respectively. September gained 25 points to close last Thursday at $106.12. Much of the positive trade was attributed to a lower close for the day’s corn market, which slid to close the day at $2.85 a bushel on the December contract. At feeder cattle auctions across the country, cattle prices moved decidedly higher last week. Even in drought stricken Texas, markets gained momentum after some locally heavy rains fell across the southern portion of the state alleviating problems slightly. In Abilene, TX, feeder steers and heifers under 500 lbs. sold $2-3 higher; those over 500 lbs. sold $4-6 higher last week. In Oklahoma City, OK, much of the spring run of feeder cattle has already been marketed, although last week’s auction saw good numbers of cattle in good condition. According to market reports, two weeks of good precipitation in the area added optimism and brought buyers back to the market. That optimism helped move prices higher last week. Feeder steers and heifers sold $2-4 higher, while stocker steers and heifers moved $5-10 higher last week. Yearlings and short yearlings coming off of wheat that was rapidly maturing are actually carrying less flesh than the runs that occurred a month ago, according to reports. In Missouri, at Joplin Regional Stockyards, buyers seemed content last week with the current weather pattern, as it was not a major topic of conversation among those on the seats. It was noted, however, that most purchased cattle were loaded on trucks bound for pastures farther north. Feeder steers over 500 lbs. sold steady to $3 higher with those weighing under 500 lbs. selling $3-5 higher. All weights of feeder and stocker heifers traded $2-4. Demand was called good for all classes with competitive bidding on every weight group. West of there, in Dodge City, KS, lightweight steers and heifers from 350-600 lbs. were in short supply and no comparison was available although a higher undertone was reported. Heavyweight steers from 650-1,000 lbs. sold $1-4 higher, with most up $2-3. Heifers from 650-900 lbs. were called firm to $2 higher. In Bassett, NE, 3,000 head of mostly light to moderately fleshed fall calves were met with good demand, although no recent comparable sales allowed for a trend. Market reporters noted very strong demand for 500- 650-lb. cattle in grass ready condition. At Sioux Falls, SD, last week, feeder steers and heifers sold $2-4 higher. Demand was called very good on all classes, with several load lots of high quality steers in the offering. It was noted last week that dry conditions throughout the central and southern Plains were contributing to a sell-off of cows in areas which won’t currently support grazing through the summer. This sell-off could slow national herd growth, which will have an impact on both cow slaughter and the cattle cycle as a whole. How significant the impact, and how long it will last, is unknown. However, if drought persists in many areas, buyers are likely to increase the number of cattle headed to northern pastures during the summer.

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Thursday, December 20,2007

Cattle on feed report supports prices

by WLJ
USDA’s May 1 cattle on feed report showed that the number of cattle being placed on feed in the Corn Belt states continues to grow, while feedlots in other areas, particularly Texas, cut back on the number of cattle being fed. According to USDA’s National Agricultural Statistics Service (NASS), cattle on feed as of May 1 totaled 11.3 million head. The inventory number was 2 percent below May 1, 2006, but 6 percent above May 1, 2005. This is the second highest May 1 inventory since the series began in 1996. Placements in feedlots during April totaled 1.57 million, 3 percent below 2006 and 5 percent below 2005. Net placements were 1.47 million. During April, placements of cattle and calves weighing less than 600 pounds were 375,000, 600-699 pounds were 263,000, 700-799 pounds were 430,000, and 800 pounds and greater were 505,000. Troy Vetterkind, cattle analyst for Ehedger LLC, said the report showed a friendly placement pattern for the market from the October through first of November time frame. “I think we will continue to see a level of placements below year ago levels through August,” he said. However, after that, the picture may not be as rosy for the fed cattle markets into early 2008. “Where I think the problem is going to be is the number of cattle that have been sent to grass because of the improved grazing conditions across the West,” Vetterkind said. “The problem is that the placement of lightweight cattle is declining because of the high cost of gain. When the cattle come off grass in August and September for placement into a late fourth quarter, early first quarter harvest slot, it is going to create a situation were we have a really large supply of slaughter-ready cattle.” He said last Thursday that situation, combined with current December 2007/February 2008 contract prices, created a very good hedging opportunity for fed cattle. “It’s something that needs to be monitored and considered,” he said. Overall, in addition to the decline in lightweight placement, there was also a shift in the placements of cattle in some major feeding states. Numbers in portions of the five-state feeding area were well below year ago levels. Texas, in particular, showed a significant decline. Placements there were 16 percent below year-ago levels. Much of the decline is a result of much improved grazing conditions, however, analysts noted that a short supply of feeder cattle in the southern Plains, along with rising corn prices, also played a role in the decline. Kansas and Iowa placements dropped 5 percent from last April, Nebraska saw placements fall 9 percent, and New Mexico feedlot placements fell 23 percent from last year as grazing conditions in the state improved. The placement pattern also suggests that a shift in where cattle are fed is underway as many analysts expected. The rising price of corn and the ready supply of distillers grains in the Corn Belt region has prompted some operations in that area to ramp up their cattle feeding efforts. What is not clear is how many smaller cattle feeders, those under 1,000 head capacity, are also feeding cattle now. States which don’t report cattle feeding activities to USDA may also hold a large supply of cattle. Those cattle add to the uncertainty in the industry. Cattle in small lots or those owned by farmer-feeders are typically marketed at heavier than average weights in the late summer or fall and have, in the past, caught the industry by surprise, greatly impacting fed cattle prices. It remains to be seen if that may be the case this year, although several analysts believe it is a significant possibility. Vetterkind said the marketing number was very positive for the industry in the nearby period. “That marketing number looked awfully good; it shows that feedlots are very current with their marketings,” he said. “If you look at the current basis of $4-5, it is a wonderful situation for guys who were hedged earlier this year. It has provided a big incentive for feeders to pull cattle forward and I think we’re seeing a lot of that right now.” According to NASS, marketings of fed cattle during April totaled 1.82 million, 2 percent above 2006 and 1 percent above 2005. Much of that increase was the result of one additional slaughter day during the month of April this year, however, the marketing rate for the month was also positive. “The fact that cattle feeders have remained current through the spring means that this market is probably going to remain a little better than a lot of analysts, including myself, predicted even just a few months ago,” Vetterkind said. “I was predicting a summer low in the low- to mid-$80 range. Now, I expect that we will probably see a summer low in the mid- to upper-$80s.” Looking ahead into next year, USDA's Economic Research Service released its first estimates for U.S. herd projections. The picture remains mostly unchanged for next year. The report predicted that heavy cow and calf slaughter, early placement of cattle in feedlots, probable reduced heifer retention due to poor forage and high grain prices from ethanol, will all combine to keep the U.S. cattle herd steady through 2007. More specifically, for cow/calf producers and feedlots alike, it means that similar, or perhaps improved, market conditions can be expected next year. Continued improvements in the export market or the domestic retail market will only serve to further boost profitability well into 2008. — John Robinson, WLJ Editor  

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Thursday, December 20,2007

Beef talk

by Kris Ringwall, North Dakota State University
In the process of developing the weekly BeefTalk column, new thoughts came to mind. Lots 4425, 5478 and 6270 from the Dickinson Research Extension Center produced sound scientific data. This week’s column summarizes three years of feedlot performance from a set of smaller- framed, crossbred Lowline steers. Lot 4425 arrived Nov. 5, 2004. These 22 head of 2003 spring-born, grass steers (long yearlings) had an average pay weight of 945 pounds and an average frame score of 4.4. The lot averaged 85 days on feed with 2.85 pounds of average daily gain (ADG), a feed efficiency of 7.6 and a harvest weight of 1,186 pounds. On the rail, lot 4425 was 0 percent Prime, 36 percent upper Choice, 41 percent Choice and 23 percent Select. The yield grade (YG) distribution was 32 percent YG 2, 55 percent YG 3 and 14 percent YG 4. The hot carcass weight was 4.5 percent 550 to 649 pounds, 90.9 percent 650 to 850 pounds, 0 percent 851 to 950 pounds and 4.5 percent 951 to 999 pounds. The ribeye area distribution was 9.1 percent less than 11 square inches, 90.9 percent 11 to 16 square inches and 0 percent more than 16 square inches. The value on the rail was $1,093. Lot 5478 arrived Nov. 11, 2005. The 26 head of 2004 spring-born, grass steers had an average pay weight of 996 pounds and an average frame score of 4.7. The lot averaged 95 days on feed with 2.73 pounds ADG, a feed efficiency of 8.4 and a harvest weight of 1,297 pounds. On the rail, lot 5478 was 8 percent Prime, 68 percent upper Choice, 24 percent Choice and 0 percent Select. The yield grade distribution was 16 percent YG 2, 60 percent YG 3, 20 percent YG 4 and 4 percent YG 5. The hot carcass weight was 0 percent 550 to 649, 64 percent 650 to 850 pounds, 32 percent 851 to 950 pounds and 4 percent 951 to 999 pounds. The ribeye area distribution was 4 percent less than 11 square inches, 96 percent 11 to 16 square inches and 0 percent more than 16 square inches. The value on the rail was $1,223. Lot 6270 arrived at the feedlot on Aug. 23, 2006. The 36 head of 2005 spring-born, grass steers had an average pay weight of 823 pounds and an average frame score of 4.8. The lot averaged 110 days on feed with an ADG of 3.03 pounds, a feed efficiency of 6.4 and a harvest weight of 1,179 pounds. On the rail, lot 6270 was 0 percent Prime, 49 percent upper Choice, 19 percent Choice and 32 percent Select. The yield grade distribution was 41 percent YG 2, 57 percent YG 3 and 3 percent YG 4. The hot carcass weight was 3 percent 550 to 649 pounds, 87 percent 650 to 850 pounds, 11 percent 851 to 950 pounds and 0 percent 951 to 999 pounds. The ribeye area distribution was 8 percent less than 11 square inches, 87 percent 11 to 16 square inches and 5 percent more than 16 square inches. The value on the rail was $1,074. The data shows that producers need to keep an open mind, to ask more questions and to probe deeper into various available options. This analysis will help producers utilize all the tools that are present within their toolboxes to improve their operation. The question the center set out to probe was simple. Would smaller-framed cattle (as represented by the Lowline breed) help lower calving problems in typical northern Plains first-calf heifers and lessen the labor requirement, yet produce a calf that was marketable in today’s market? The answer is yes. Before the phone rings too much, yes, there are other very good tools called expected progeny differences (EPDs) to aid in selecting bulls for calving ease. Yes, EPDs also work.

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Thursday, December 20,2007

Market slips back before holiday

by WLJ
Trade was active at midweek last week in the northern Plains with Nebraska feeders trading cattle $2-3 lower at $150-151 dressed and live trade down to $94-95 on moderate trade. Southern Plains feeders were slow to trade and appeared that they would be waiting until late week before serious trade. Beef cutouts have held their own, with the Choice cutout holding strong at $161.35 and Select at $149.09. Trade volume was good and there was a solid amount of trade in the ground product. The Choice/Select spread last Thursday was $12.26, and the packer margin index showed packers earning $20.60 a head. The market for ground beef has been especially good up to this point. Good trade in the boxed beef grind and the cow beef markets are very strong. The 90 percent lean beef was trading at $152.14, very near record territory, and the 50 percent trim was at $69.07. The cow beef cutout, which represents the same cuts as the boxed beef cutout, was trading at $120.75. You can see these markets trickling down to the auction market trade. Many markets have reported the price for slaughter cows at very strong levels. In Montana, high dressing cows were selling for as much as $58, on the West Coast $55, Wyoming $60, and in Joplin, MO, $63. This may be the strongest the slaughter cow market has ever been. One northern Plains auctioneer said he has never sold cows this high. Another element adding to the value of fed cattle is the drop credit which, last week, was $10.44. This market has been stuck in the $8 range for quite some time and has seen some very good movement in recent weeks. The $2.50 up tick in this market adds $32.50 to a 1,300 lb. animal. Mike Roberts, extension economist at Virginia Tech, said that, “Cash cattle and boxed beef prices are seen as declining into early summer now that the Memorial Day meat buying by retailers is seen as done. Only time will tell. USDA on Monday put Choice beef cutout values at $166.49/cwt., up 54 cents/cwt. Packer margins were pushed further into the black. August/June spreading by funds was noted as lifting the August contract. Cash sellers are strongly encouraged to get cattle sold again this week. It is suggested to hold off pricing more short-term corn needs at this time.” The export picture is starting to have some impact on the markets. Ron Plain, economist at University of Missouri, said beef and veal exports during March were up 14.9 percent with the increase at 20.6 percent for the first three months of 2007 compared to a year earlier. Japan’s purchases are up sharply, percentage-wise, but are still quite small compared to 2003 before bovine spongiform encephalopathy. For January to March of 2007, Japan’s imports of beef from the U.S. were only 13 percent of the first quarter of 2003. Beef exports were up 32 percent to Canada, down 8.2 percent to Mexico, up 15.4 percent to the Caribbean, up 54.4 percent to Taiwan, and up 151.3 percent to other for the first three months of 2007 compared to 12 months earlier. Beef imports for January to March were down 8.6 percent from a year earlier. Our purchases were down 13.8 percent from Australia, down 8.3 percent from New Zealand, about the same from Canada, down 13.3 percent from Brazil, down 51.7 percent from Argentina, up 19.9 percent from Central America, down 13.3 percent from Uruguay, and up 29 percent from Mexico. The U.S. net import of beef as a percent of production declined from 10.2 percent in 2006 to 8.0 percent in 2007 for the first three months of the year. This is the major reason for the stronger demand for live cattle rather than beef. Feeder cattle Feeder cattle prices across much of the country remain strong as a result of good pasture and forage conditions in most areas and a continued shortage of available cattle. Last year's drought conditions had many producers culling deeply and the winter stress on cow herds means that in some areas, this year's calf crop is smaller than normal. There have been reports that some producers lost half or more of their calves this spring. The result is a U.S. herd which is expected to be stagnant to just slightly larger in terms of growth this year. That translates to a shortage of feeder cattle and strong prices through most of this year. Feeder cattle prices are expected to strengthen some through the summer months, despite the fluctuations in the corn market, which will likely limit any substantial upward price moves in feeder cattle contracts on the Chicago Mercantile Exchange (CME). Derrell Peel, professor and livestock marketing specialist at Oklahoma State University, said the corn crop, now that it is mostly planted, will continue to impact feeder cattle prices through most of the year. “I think the feeder cattle market will continue to be very sensitive to corn prices,” he said. “However, for the time being I don’t foresee many changes, but it hinges on a lot of factors.” One of those factors was evident in the most recent cattle on feed report, which showed the trend toward the placement of heavier cattle in feedlots. The cost of gain is causing feeders to reduce the number of days on feed in an effort to remain profitable. "I think we are starting to make a transition in the feedlot industry to increasing the weight of placements,” Peel said. “There is a trend toward heavier placement weights, more yearlings instead of weaning age cattle.” Adding to the tight supply of feeder cattle is the improved forage situation which, in many parts of the country, has herd owners starting to think about heifer retention. “There isn’t any data yet to indicate that, but I expect that more heifers are being retained this year, tightening the supply even farther,” Peel said. He also expects the U.S. will see a decline in the total number of cattle being imported to the U.S. Already, USDA data shows that feeder cattle imports from Mexico for the first three months of the year were down 29.5 percent from the same period in 2006. Imports from Canada were up 8.3 percent over last year, however, the import totals from either side of the border are down more than 11.2 percent from the first three months of 2006. If those numbers remain at current levels, the prices being paid by feedlots for available cattle is set to increase substantially, adding to breakeven prices already pushed higher by rising feed and fuel costs, spelling rough times ahead later this year. However, the same scenario holds a much different outlook for cow/calf producers who can expect good prices into the fall. CME feeder cattle futures prices for September, October and November 2007 contracts remain strong, despite some losses across the board last Thursday. September dropped 70 points last Thursday to end at $111.50, while October lost 95 points, closing at $110.45 and November lost 102 points, closing the session at $109.97. In cash markets last week, the trade was widely mixed with lightweight cattle headed for grass selling sharply higher in many cases. Heavier weight cattle also sold well, heading for short feeding periods. In Salina, UT, feeder steers were mixed last week with weights under 400 lbs. and cattle in the 600-750 lb. range $4-5 higher. Cattle in the 400-600 lb. class were reportedly $1-2 lower. Feeder heifers were also mixed with weights under 400 lbs. called $6-8 higher. Heifers in the 400-650 lb. range were mostly steady. Those over 650 lbs. were $1-2 lower, except 750 lb. cattle moving $1-2 higher. At Belen, NM, compared to the previous week, feeder steers sold $2-4 lower, while heifers were reportedly steady. Trends across much of the Intermountain region, from Idaho and Montana, through Wyoming and Colorado were difficult to determine due to the lack of feeder cattle being marketed at this time of year. Light runs meant that most auction markets did not have enough cattle for accurate comparisons. Farther east, however, runs continue in good numbers from the Dakotas through Oklahoma. For example, at Hub City Livestock Auction in Aberdeen, SD, feeder steers and heifers sold steady to $2 higher with large consignments of high quality backgrounded calves making up the bulk of the offering. Feeders under 600 lbs. were reported to be lightly tested at the market. Farther south in Ericson, NE, compared to the most recent feeder sale of three weeks ago, good quality, grass type calves under 600 lbs. trended $6-8 higher, while weights over 600 lbs. trended fully steady. Overall cattle quality was good, with very aggressive demand. In Dodge City, KS, last week, feeder steers in a wide weight range of 300-750 lbs. and heifers from 300-700 lbs. were not sold in a high enough quantity to determine an accurate market. However, a steady undertone was noted at the sale. Steers from 750-1,000 lbs. were reportedly steady. Heavyweight heifers, from 700-850 lbs., were called weak to $1 lower; those in the 850-950 lb. class sold for steady money. To the east in St. Joseph, MO, compared to the prior week, yearling feeder cattle and all weights of steer calves sold steady in active trading, but demand was light for heifer calves under 600 lbs. as they traded weak to $7 lower. Receipts were fairly light but the offering included several large drafts of heavy yearlings which were not fully tested at the previous sale. The market for most classes was well supported but the price spread between lighter weight steer calves and their sister mates was much wider than normal. Farther south, at the auction market in McAlester, OK, last Tuesday, steer and heifer calves under 400 lbs. sold $3-5 higher. Those in the 400-600 lb. class were reported to be steady to $3 higher. Feeder cattle were called mostly steady on limited trade. There was good attendance of buyers, an increase in the number of fleshy new crop calves along with more plain quality cattle noted in the day’s run. In Three Rivers, TX, feeder steers and heifers were called steady to $3 higher. A special replacement sale combined with the regular weekly sale made trade excellent with excellent demand. — WLJ  

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Thursday, December 20,2007

State approves expanded loan forgiveness for vet students

by WLJ
Veterinary students who agree to work with farm animals in parts of rural Missouri would be eligible to have some of their student loans excused under legislation sent to the governor last week. The bill would allow six vet students at the University of Missouri-Columbia to get an $80,000 loan. It would forgive $20,000 for each year the students work in a rural area and focus on treating farm animals after they graduate. Tuition for veterinary school in Missouri costs about $60,000 over four years. The measure was approved 157-0 in the House and 33-0 in the Senate.   Sponsoring Rep. John Quinn, R-Chillicothe, said Missouri has a shortage of veterinarians and the bill is needed to entice more veterinary students to focus on large animals rather than pets. Across the country, farmers and veterinarians have complained that there are not enough new large-animal practitioners to meet increasing demand and replace older vets who are starting to retire. But even as legislators consider a loan incentive, veterinarians and educators acknowledge that part of the solution is attracting more veterinary students. The state’s sole veterinary school on the Columbia campus admits fewer than 100 students each year, of whom about half in 2005 and 2006 said they wanted to work in Missouri. John Dodam, associate dean for academic affairs for the College of Veterinary Science at the University of Missouri-Columbia, said the department found that over the last two years, about 30 percent—or roughly 22 students annually—said they wanted to work with large animals. Congress and several states around Missouri, including Kansas and Oklahoma, have proposed scholarships and other programs to recruit veterinarians to the farms. The American Veterinary Medical Association predicts that nationwide, demand for food-supply veterinarians will increase by about 12 percent through 2016. But current increases in new vets foretell an annual 4 percent or 5 percent shortfall. Those figures count all food-supply veterinarians, from those who work with farmers to those in federal regulatory agencies and those who inspect butchered meat. But the group’s president, Roger Mahr, said there is a particular need at the ground level.

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Thursday, December 20,2007

Operating committee recommends 2008 Beef Board budget

by WLJ
The Beef Promotion Operating Committee has recommended a $48.87 million Cattlemen’s Beef Board budget for fiscal year 2008, reflecting a sharp 9 percent decrease from the $53.28 million budget for fiscal 2007. The budget for the Beef Board, which administers the national checkoff program, includes projected revenue of $45.7 million for fiscal 2008, plus money to be available from programs costing less than originally estimated in fiscal 2006. “While getting better at estimating costs is most definitely a good thing,” said Cattlemen’s Beef Board Chief Executive Officer Tom Ramey, “it does result in a decrease in the budget for next year because the contractors spent a higher percentage of their budgets.” The breakdown of the budget recommendation, which must be approved by the full Beef Board and USDA before any funds are expended, includes the following budget elements: promotion ($22.7 million); research ($7.4 million); consumer information ($6.2 million); industry information ($2.4 million); foreign marketing ($5.15 million); producer communications ($2.27 million); evaluation ($240,000); program development ($125,000); USDA oversight ($210,000); and administration ($2 million). The 2008 fiscal year begins Oct. 1, 2007. “We faced a substantial challenge in determining where to decrease expenditures to meet the smaller budget in the coming year,” said Ken Stielow, a producer from Kansas and chairman of the Cattlemen’s Beef Board which met May 17. “Many of us arrived in town early to spend the week with state beef council executives and leaders of the checkoff’s joint program committees as they developed strategies for investing the limited checkoff dollars in the most efficient manner possible in fiscal 2008,” Stielow said. Stielow said that making the cuts in the promotion area was particularly difficult. “It is, of course, the most visible area of checkoff investments, but we also understand that areas such as research and foreign marketing are extremely important as we try to stay ahead of disease and pathogen challenges and tap international markets where the majority of our growth potential lies.” In the coming stages of the fiscal 2008 budgeting process, the full Beef Board will be asked to approve the budget at its meeting in Denver in July. Joint industry advisory committees and subcommittees also will meet in Denver to prepare recommendations for specific program proposals that are funded with that budget. Those proposals will be considered by the Operating Committee in September, before the Oct. 1 beginning of the fiscal year, and must finally be approved by USDA before any checkoff dollars may be spent. Funds from the Beef Board for national checkoff programs will be augmented by about $10.5 million in voluntary contributions from state beef councils to their national Federation of State Beef Councils, a division of the National Cattlemen’s Beef Association.

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Thursday, December 20,2007

Beef Talk: Reduce summer stress on calves by developing a vaccination program

by Kris Ringwall, North Dakota State University
May is always a busy time. The fun of the approaching summer, the warm air, occasional rain showers, and cows and calves strolling through the thick, green, cool-season grasses makes one appreciate rural life. At this time of the year, grass and calves grow at astonishing rates. Unfortunately, we all can relate to those days when all the calves didn’t bounce up like they should. After arriving at the pasture, a calf is missing. How does one know? It’s easy because the missing calf is the biggest, fattest, shiniest one in the whole pasture and stands out like a pillar of stone. The calf is spotted in an awkward position. From a distance, the odds look bad. The calf should be up. The producer already knows the outcome. Approaching the calf, the producer sees that the calf is dead, laid out flat. The producer’s heart sinks. The pride of the pasture is gone, succumbed to overeating too much of a good thing or perhaps an off day. The reasons are many, the result is the same. This example is one of many key reasons for the need to vaccinate calves. In this case, there is a group of clostridial diseases. Overeating is a common name for this example. The diseases are fairly common, so a routine vaccination is certainly highly recommended. The various programs are predefined by years of practical experience, knowing the cows and the environment where the cattle are going. The time spent now processing the calves for a summer of grazing needs to take priority. For some, the calves are worked in smaller groups at very young ages. Each group is moved to a cool-season pasture as they are worked. For others, the calves are not worked until all the calves are born and a major workday scheduled on the calendar. The workday often coincides with the available work force. The workday commonly is called branding, and the work force is more likely family and friends sharing time to get the work done. All this activity is very important because the work is hard, but more so for planning for the very near future. That very near future means the life of the calf or perhaps even the cow. Once cattle are turned out to summer pasture, the opportunity to catch up with the cows and calves is very limited. The equipment and labor needed seldom are available again until fall. The vaccinations that the calves, and perhaps cows, receive are the start of building a strong immune system through the summer program and possibly the rest of their lives. This is not unlike getting our children ready to start school. We can all relate to the many trips to the doctor’s office or county health nurse making sure that all the children have the required vaccinations prior to comingling as they start preschool, kindergarten or first grade. In fact, those vaccinations for children are so important that many are required by law. Our children simply are not allowed into group settings until they have received these required vaccinations. Perhaps the word required is a bad word to use because the industry is facing many issues regarding the long-term tracking of cattle. However, in this sense, the necessity of the vaccinations is very real. The consequences of not vaccinating are heavy on the pocketbook. The programs vary, so contact your local veterinarian and don’t skimp on vaccine. A dead calf simply is not a desired outcome. Visit and compare notes for the region and pick the right program for your area. If the conversation is short, start discussing the clostridial diseases and then build a program.

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Thursday, December 20,2007

Consumer demand supports market

by WLJ
Slaughter numbers last Thursday were estimated by USDA at 698,000 head, 10,000 below the previous week, but still well above 2005’s harvest of 661,000 during the same week. Despite the higher harvest, boxed beef values remained strong most of last week as order buyers were busy filling demand with immediately available Choice rib cuts bound for holiday barbeques. That demand created a strong rise in the Choice/Select spread last week. On Wednesday, the Choice product added $2.30 to trade at $147.48. Select cutout values rose 95 cents to close the day at $126.17. Thursday trade was steady for Choice, Select; Select traded 60 cents higher to $126.77. Despite strong retail demand for steaks, the 50 and 90 percent boneless markets were showing weakness last week as cow processors were having no trouble filling production chains with cull cows from drought afflicted areas. This over abundance of available grind product put pressure on the market causing a decline of more than $1 on the 90 percent lean last week. The rise in available beef supply in the months ahead is likely to cause a similar pressure on the boxed beef complex as packers and feedlots attempt to work through fed cattle supplies in a timely manner. Regardless, through the summer, packers are likely going to have the upper hand as the market begins to soften, even if export markets are opened in the next 30 to 60 days as expected. Feeder cattle Feeder cattle contract trade on the CME last week moved higher, helped in part by strength in fed cattle contracts and a positive tone to cash feeder cattle trade. According to Virginia Tech Commodities Marketing Agent Mike Roberts, feeder cattle prices were nearly neutral in movement from last Monday. Feeders were supported at the beginning from lower corn prices on the Chicago Board of Trade then held onto gains despite a rally in corn. Several traders noted no market enthusiasm on the floor. Roberts said cash sellers should still consider being forward priced to protect some third quarter marketings. He said hedgers could think about some protection but could hold to a “wait-and-see” attitude while staying ready to take action. Meanwhile in auction markets around the country, good runs of spring cattle in many areas are being met with strong demand. In California where spring runs delayed by excess moisture are in full swing, buyers are pushing calf prices upward. At Western Stockman’s Market in Famoso, CA, last Monday’s sale brought prices as much as $4 higher than the prior week. Stocker cattle met excellent demand. Feeder cattle also saw big demand with many lots selling to out of state buyers. Feeder steers in the 600- 700-lb. range sold in a wide range from $90-114.50. Feeder steers in the 825- 900-lb. range sold for $80-97. In Salina, UT, feeder steers from 350-600 lbs. traded $5-6 lower, with heavier weights trading downward $2-3. Feeder heifers under 600 lbs. traded $3-4 lower, while those over 600 lbs. were $1-2 higher. Feeder cattle trends were difficult to find last week farther north where calves are scarce this time of year, however, in West Fargo, ND, offered lots sold for prices steady to $2 lower than the previous week. Demand was reportedly strong for thin-fleshed lighter-weight feeders suitable for grass in the area as a result of abundant moisture. In Hub City, SD, compared to the prior week, feeder steers and heifers sold $2-3 higher. Farther south, in Joplin, MO, the cattle on feed report released on May 19 had little effect on the nation’s largest livestock auction. Feeder cattle and calves sold firm to $4 higher. Demand was good for all classes, but best for yearlings as the full advance was just as evident on 8 weights as it was on the 4 weights. Calves were plentiful and mostly unweaned but discounts were minimal. In Oklahoma City, OK, temperatures in the region soared above 90 degrees last week and the weather wiped any moisture gains from the past few weeks away and threatened crops and pasture once again. Despite the decline in the moisture conditions, feeder cattle traded $1-4 higher. Stocker cattle and calves were steady, except 600-lb. steers which dropped sharply to trade $4-8 lower. Demand was called good for all classes on moderate demand, at best for heavier weight unweaned calves. Market reports told of numerous cows in the area headed to town as producers begin to cull in the face of the drought. In Texas, reports of culling were numerous and reported auction numbers indicate a number of cattle are being culled to save grass for the best of the herd. Several auction markets did not report feeder numbers as a result of large cow sales. However, in Coleman, TX, feeder steers and heifers under 500 lbs. were called steady, those over 500 lbs. were also steady. Yearling feeders were steady to $1 higher.

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