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Monday, August 1,2005

Feds pressured by oversupply

by WLJ
— Beef demand still lagging. — Northern trade $2 softer. Early week thoughts of a steady fed cattle market last week went by the wayside come Wednesday afternoon as reports of another possible BSE case raced across the U.S. In addition, domestic market fundamentals, not Canadian cattle imports, were cited for some of the bearishness seen late in the week. As of midday Thursday, just a trickle of cattle had traded hands in Nebraska at mostly $122 dressed, $77 live. Those prices were mostly $2 softer than prices the week prior. Cattle feeders in Texas and Kansas were still holding out in an effort to try to get steady money. Packer bids, as of press time, were mostly $76-77, while asking prices hovered mostly around $80. The market pressure was not said to be the result of Canadian cattle coming back into the U.S. Between July 18-26, only 2,910 head of Canadian fed cattle had been shipped to U.S. packing facilities. That figure is only about two percent of one business slaughter day in the U.S. “It’s more a psychological thing, rather than a realistic determinant,” said Jim Robb, chief analyst with the Livestock Marketing Information Center. The boxed beef market continued to fall last week, with Choice getting down to $124.91 last Thursday morning and Select being reported at $118.36. Choice began the week just over $127, while Select had been at $120.83. Boxed beef volumes were very large last Tuesday and Wednesday, with 748 and 567 loads of cuts and grinding product moved, respectively. That active movement, however, didn’t result in packers processing any more cattle than the previous week. The national slaughter volume between last Monday and Thursday, was ???,???, compared to ???,??? two weeks ago. For the week ending July 24, slaughter totaled 653,000 head, 1,000 head more than the previous week and 7,000 head more than the same week a year ago. Analysts continue to say that only around 625,000 head of cattle are needed to meet current demand levels, both domestic and export markets combined. Finishing weights of cattle continue to be a concern to market analysts, as it takes fewer cattle to meet current beef demand. For the week ending July 24, USDA’s average finishing weight for marketed live cattle was 1,291 pounds, 30 pounds heavier than last year. The average carcass weight for fed steers last week was 840 pounds, three pounds more than a year ago. Packers continue to bleed red ink, and that was keeping their interest in paying even steady money very muted. Through most of last week, packer margins ranged in the minus $12-18 range, analysts said. Packer demand was also considered down due to the extremely active trade volume the previous week. For the week ending July 24, approximately 240,000 fed cattle traded on the spot cash market. That was the largest weekly movement in several months, analysts said. The number of cattle that have been on feed for longer than 120 days, as of July 1, was 3,318,000, called 10 percent above last year and seven percent more than the five-year average. Feeders slide While there were a few exceptions in the feeder cattle market last week, the overall trend was $2-5 softer. Price fluctuations occurred due to a wide range in quality and longer-weaned calves were selling at a premium, compared to calves that had just been pulled off the cows. A moderating in the heat wave for some parts of the country and some rain early in the week in the central U.S., helped prices in isolated areas. Overall supplies of feeder cattle were very light. Buyer demand was listed at moderate to good in most locations, as buyers sidelined by the uncertainties the previous week jumped back in the game. Southern tier states showed better results overall with select markets in Texas and Missouri rising $1-3 higher for lightweight calves, with one report of $3-6 higher. Most markets reported a significant decline in the number of offerings for the week. The few heavyweight cattle being offered were purchased at a discount by feeders facing increasing per-head losses in the fed cattle market. Little activity was reported in northern-tier feeder cattle trade, despite moderate buyer demand in most areas. Analysts believe that feeder calf marketing is being artificially suppressed by the psychological effect of renewed Canadian live animal imports, despite the fact that only 1,105 feeder cattle had crossed the border between July 18-26. The USDA’s report of a “non-definitive” BSE test reported in the middle of the week is likely to drag on the market until a conclusion is reached by the USDA. Until then, prices are likely to remain stagnant and offerings few, despite analysts urging to “sell ‘em if you’ve got ‘em.” Many analysts feel that prices will continue to slump as market concern continues in the face of pending BSE results, a possible spike in corn prices and softening fed cattle markets leading to increasing feeder losses potentially lasting through the end of the year. The Chicago Mercantile Exchange feeder cattle index was down to around $109 last Wednesday, compared to over $111.30 the previous week. — WLJ © 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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Monday, August 1,2005

EPA takes over Idaho feedlot inspections

by WLJ
In a letter dated July 14, the Environmental Protection Agency (EPA) informed the Idaho State Department of Agriculture (ISDA) that the agency will be resuming federal compliance inspection and enforcement responsibilities for the state’s feedlots. The EPA is concerned that ISDA is not inspecting feedlots at a level conducive to ensuring producer compliance with federal laws. EPA is particularly focused on statutes regulating Concentrated Animal Feeding Operations (CAFO) under the Clean Water Act. ISDA, along with the Idaho Department of Environmental Quality, has been tasked with feedlot inspections since early 2001. In January of that year, the state signed an agreement with EPA, known as The Idaho Beef Cattle Environmental Control Memorandum of Understanding. The memo, also signed by the Idaho Cattle Association (ICA), outlined specific responsibilities for each agency and recognized the ISDA as the lead inspection and enforcement agency, with the remaining groups playing a support role in the process. Lloyd Knight, executive vice president for the ICA, reiterated his organization’s support for the agreement. “The ICA supports the memorandum and has no plans to walk away. If the EPA wants to end the program, they are going to have to file the divorce papers,” he said. Knight believes the EPA’s criticism of state inspection programs is unfounded. In the past, he says, EPA sent general inspectors, not CAFO inspectors, from the regional office in Seattle, WA, to perform aerial reconnaissance of some of the state’s feedlot operations followed by seven to ten days of “blitz” type inspections once or twice a year. “The state of Idaho has eight or nine guys working here every day,” he said. The state’s agreement with EPA was originally set to span a four-year period ending in early 2005, unless an annual extension was agreed upon by the parties. As meetings between the state and EPA progressed, EPA expressed a multitude of concerns about the inspection program. Representatives of EPA claim that despite ISDA assurances to the contrary, no improvements were made to the program, causing the federal agency to allow the agreement to lapse. Mark MacIntyre, an EPA spokesman, said the agency attempted to remedy the differences and met with the ISDA multiple times over the previous two years to lay out their concerns. Particularly disconcerting to EPA was the nadequate number of inspectors the state had committed to the inspection process. “We have a dairy inspection program in Idaho we are happy with. If we saw the same level of performance on the beef side, we wouldn’t have ended the agreement,” MacIntyre said. The July 14 letter, addressed to Idaho State Department of Agriculture Secretary Pat Tagasuki, claimed that despite a number of meetings and letters, in which EPA expressed serious concerns, the state had not taken sufficient steps to address “serious program deficiencies.” Mike Bussell, director of regional compliance and enforcement for EPA, who worked at length with ISDA to improve the inspection program, also expressed frustration with the lack of cooperation from the state. When the initial agreement was signed, ISDA committed to completing a certain number of inspections annually, a number Bussell said was in the hundreds. To date, the state has only been able to complete a fraction of the agreed to number each year. Of greater concern to EPA is the fact that while the state has attributed the absence of enforcement action to high levels of compliance, follow-up inspections by EPA officials have not upheld that conclusion. According to Bussell, during spot-checks, EPA found “concerning violations” related to wastewater run off into sensitive stream systems. Instead of high levels of compliance, Bussell attributed the lack of enforcement action by ISDA inspectors to a “broad reluctance to levy fines.” Animal feeding operations have been receiving widespread attention recently and state and federal agencies may be feeling the heat when it comes to inspection issues. On July 20, ISDA, in cooperation with other state agencies, announced that it had levied a number of citations against a feedlot operation in Oakley, ID, for alleged violations of waste handling regulations and state water rights laws. The citations stem from a May 23 inspection of the facility during which state inspectors allegedly found several environmental violations including the improper handling of solid waste and surface water runoff. Additionally, inspectors allege the feedlot was irrigating 549 acres for which the operators had no water rights. ISDA confirmed owners of the feedlot have scheduled a compliance meeting with state regulators, but sources estimate fines of $600,000 are possible. While some familiar with Idaho’s investigation at the feedlot believe the investigation and resulting fines are related to EPA pressure, others say that isn’t the case. Knight, speaking for ICA, said,“The state started their investigation in May, and the Department of Ag has been waiting for other agencies to wrap up their investigations. They (ISDA) probably could have issued the violations a month ago.” In a press release related to the investigation of the CAFO facility, producers from across Idaho spoke in support of the state’s investigation, and roundly criticized the owners of the feedlot and their operating practices. In any case, the expiration and subsequent cancellation of the cooperative memorandum between EPA and ISDA will, in effect, divide the responsibility for feedlot inspection between state and federal agencies. While EPA has always retained the right to inspect livestock facilities, the expiration of the memo means feedlot operators are more likely to be visited by inspectors from both departments, a move that the EPA says could begin at any time. — John Robinson, 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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Monday, August 1,2005

USDA announces ‘non-definitive’ BSE test

by WLJ
—Sample bound for England for confirmatory testing. — Sample first collected in April. USDA announced July 27 a non-definitive test result for a brain tissue sample tested at an Animal and Plant Health Inspection Service (APHIS) lab. The sample, which was tested at least three months after being collected, was sent to USDA by an independent veterinarian who had been called to a remote undisclosed farm in April 2005, to care for an animal experiencing calving difficulty. Little was known about the specifics of the case as of press time last Thursday, including the origin or type of animal involved. USDA officials confirmed that they have traced the animal back to its herd of origin, and they have also confirmed that the animal was more than 12 years old, born prior to the feed ban which took effect in 1997. The herd of origin has not been quarantined, and USDA officials indicated any decision about a quarantine or further herd testing would hinge on the test results. During a technical briefing conducted by USDA Chief Veterinarian Dr. John Clifford, indications were the animal was born in the U.S. USDA officials also confirmed that the animal was destroyed after it died on the farm while giving birth. No part of the cow made it into either human or animal food chains. “It is important to note that this animal poses no threat to our food supply,” said Clifford. The veterinarian removed samples of brain tissue from the animal and treated them with a formalin preservative, consistent with proper protocols at the time. The delay between sampling and testing occurred when the veterinarian forgot to forward the samples to the USDA. Sources for USDA said, while “not optimal,” the delay posed no threat to the food chain, and hailed the success of the enhanced surveillance procedures put in place in to prevent such an animal from being processed for consumption by human or animal. To date, more than 419,000 tests have been conducted with an “extremely low” incidence of BSE said officials. Results from the test, conducted by a USDA lab, were non-definitive, suggesting the need for further testing. Samples can yield different results based solely on the tissue being tested. In this case, Clifford said, staining on the brain tissue samples indicated the presence of prion proteins, indicative of BSE, but the staining pattern was not typical and warranted confirmatory testing. Shortly after the USDA made their statement last Wednesday, a spokesman for the department confirmed that officials were in the process of booking flights to transport a tissue sample to both the APHIS Lab in Ames, IA, and the international reference lab in Weybridge, England, for further testing. Results were expected within four to seven days of the sample reaching the labs. Because the tissue samples had been treated with a preservative in preparation for an immunohistochemistry (IHC) test, scientists in both Ames and Weybridge will be limited solely to the IHC test instead of a combination protocol utilizing both IHC and the Western Blot test. Scientists say the Western Blot test cannot be performed on samples adulterated by preservative. — John Robinson, 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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Monday, July 25,2005

Beef Bits

by WLJ
China owns world’s largest cow herd China, having the largest beef cow herd in the world at 65 million head and growing, produces 12% of the world’s beef supply with 27% of the world’s beef cows, according to Cattle-Fax research. Brazil ranks second, producing 14% of the world’s beef supply from 47.5 million cows. The U.S. beef industry, third with 33 million beef cows, produces 23% of the world’s beef, and is identified as the world’s most productive. Argentina ranks fourth, the European Union fifth, and Australia sixth in the beef cow inventory category with 12.5 million cows. Mexico is seventh with 11.5 million head, and Canada tenth with 5 million beef cows. Plant in South Dakota moves ahead A Ridgefield Farms executive recently said the company will move forward with plans for a beef processing plant in Huron, SD. July 10 was the deadline for investors to withdraw money from the project. But Ridgefield officials said most of the money that had been committed remains intact. Last month, Ridgefield announced a change in its business plan which required officials to give investors a 30-day rescission period. Under the new plan, Ridgefield would spend about $20 million on a fabrication and cold storage facility. A slaughtering plant would be added later. Executives leave Iowa Quality Beef The top two officials at Iowa Quality Beef Supply Cooperative have resigned from the farmer-owned venture that owns the now-closed meatpacking plant in Tama, IA. Gene Rouse, president of the co-op, and Ed Greiman, who was in charge of cattle procurement for the Tama plant, both resigned their positions effective July 31. Rouse will continue in a special projects position for the co-op after Aug. 1, including a source-verification project that will track cattle from the farm to the slaughter plant. The co-op is continuing to search for a partner that would operate the Tama plant. It closed last August when American Foods Group of Green Bay, WI, dropped out of its joint venture with the farmer cooperative. In the meantime, the co-op is selling 1,000 cattle a week to Swift and Company. Brazilian exports jump January-June Beef exported from Brazil during the first six months of 2005 reached $1.46 billion in value, up 30 percent from a year ago, and they exported another $676 million in leather from cattle. According to the Brazilian Meat Exporters Association, the increases came from increased production, not higher prices. Russia was Brazil’s single largest customer, at $200 million, an increase of more than 100 percent. Exports to Arab countries, particularly Egypt, were rising sharply and should surpass exports to the European Union within three years. McDonald’s Q2 profits jump McDonald’s Corp. recently announced its second-quarter results handily beat Wall Street’s estimates as longer hours and new products continue to lift sales. McDonald’s released figures showing that its sales growth pace accelerated in June and said operating earnings will surpass analysts’ expectations by three cents per share. The company reported 3.8 percent growth last month in global same-store sales, or sales at restaurants open at least one year, compared to 2.8 percent for the full second quarter and 3.7 percent year to date. U.S. same-store sales climbed 5.4 percent in June, 4.8 percent for the quarter and five percent so far this year. McDonald’s got an additional boost from an appellate court ruling overturning the ban on imports of Canadian cattle. Chile reopens to U.S. beef Agriculture Secretary Mike Johanns last week announced that Chile lifted its ban on U.S. beef and beef products from animals less than 30 months of age. In 2003, the U.S. exported $5.3 million worth of beef and beef products to Chile. Chile imposed a ban on U.S. beef and beef products on Dec. 24, 2003, after a case of BSE was confirmed in Washington state. Burger King grows in Brazil Burger King Corp. has opened its first freestanding Burger King restaurant in Sao Paulo, Brazil. The new restaurant is the company’s fifth store since entering the country last November. The location can seat up to 260 people and has both covered and open-air parking, an outdoor patio, mezzanine and private party room. The fast-food chain also said the restaurant will be open late most evenings to accommodate people who frequent neighboring nightspots. The company said it has met or exceeded projections in Brazil, having already served more than 1.5 million guests in its four food court outlets. Those locations are in malls throughout Sao Paulo. Burger King said more restaurants will be opened in Sao Paulo in the near future. © 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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Monday, July 25,2005

Calf market anxiety seen

by WLJ
— Canadian cattle, corn prices and ID top concerns. As summer continues its inexorable passage, cow/calf producers continue to be vexed by a number of questions about the market conditions they will face this fall. “Guys up here are concerned about a number of things including the reopening of the Canadian border, fluctuating corn prices and the status of the animal ID issue come fall,” said Steve Paisley, beef cattle extension specialist for the University of Wyoming. With good grazing conditions prevalent in a number of northern tier states, cattle producers are faced with a decision to either market calves early, taking advantage of more favorable markets, or leaving the calves on the cows until later in the season hoping for a market gain in the face of increasing Canadian feeder cattle imports, uncertain corn prices and a number of export markets closed to U.S. beef. “Right now they have a good calf crop and enough grass to leave the calves on the cows until November or early December if they have to,” said Paisley, about Wyoming producers. Current feedlot breakevens are expected to exert some pressure on fall contracts as cattle feeder losses rise well above the $100 per head mark. Jim Robb, director of the Livestock Marketing Information Center, indicated that imports of Canadian cattle are not expected to exert much pressure on calf prices until the fourth quarter. “We don’t see significant imports of cattle for at least the next two months,” he said. Presently, Robb predicts good feeder pricing conditions will continue until near the end of the third quarter, with prices in the $113-$120 per cwt range for the southern tier and a couple of dollars higher in the northern states. Robb cited corn prices as the most critical issue facing producers as sale time draws near. “We are facing a very uncertain situation in the corn market. A national harvest average below 130 bushels per acre could send the corn market well above $3 per bushel, while a harvest of 145 bushels per acre should result in a price closer to $1.90. That’s how volatile the market is right now,” he said. As evidence of the corn market’s importance, Robb noted the historical correlation between price fluctuations in the corn and feeder cattle markets. “For every 10-cent-per-bushel increase in the cash corn market, there is a corresponding $1 per cwt, or larger, drop in feeder cattle,” he said. The time frame for implementation of a National Animal Identification (NAID) system continues unresolved and will remain a question for producers as they prepare a marketing strategy for fall. The National Cattlemen’s Beef Association (NCBA) announced on July 6 that the organization had selected a technology partner in an effort to create a privatized system for NAID by October 2005. The NCBA claims the privatized system will balance the needs of producer confidentiality and cost effectiveness with the government mandated 48-hour trace back capabilities. On the same day, R-CALF filed comment with the USDA critical of privatization efforts and in support of governmental oversight. While the USDA evaluates possible options, the two primary industry interest groups continue to work at opposite ends of the NAID issue in an attempt to balance the needs of all stakeholders in a very complex situation. - John Robinson, 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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Monday, July 25,2005

Feds, feeders stagnant

by WLJ
There wasn’t a lot to talk about in the fed cattle markets last week as early week trade was at $79 live, $125 dressed, with very light volumes reported. Many cattle feeders were waiting packers out. Producers’ offers were mostly $83, against packer offers of $77. Southern plains feeders were inactive. The news about the Canadian border reopening was on everyone’s mind, particularly what impact it would have on the market. At this point, fed cattle are trading lower because of fundamental market conditions in the U.S., not because of pressure from Canadian cattle, analysts said. Boxed beef ranged lower, with Choice at $128.97 last Thursday. Live cattle futures were slightly lower, at $78.13 on the August contract. And, there are still plenty of ready cattle in feedlots, with steer carcass weights being up another 8 pounds last week at 822 pounds. Beef demand has been called “tenuous at best,” even though many retailers have beef features running, which appears to be keeping slaughter volume strong. Packers were reportedly losing $21 per head last week, but were still moving large numbers through slaughter plants. For the week ending July 16, 652,000 head were processed and slaughter was running 5,000 head more last week compared to the week prior. To date, there have been only a handful of cattle cross the border, and the Canadian cattle on feed report shows on-feed numbers to be around 800,000 head. Analysts said that figure is in line with slaughter capacity. The U.S. July 1 Cattle-on-Feed Report, being released last Friday, was expected to show on-feed numbers 102 percent of a year ago, placements at 105.3 percent and marketings at 99.9 percent. Most analysts referred to pre-BSE trade to establish benchmarks for their projections. There are several items that will effect the flow of cattle from Canada, analysts said. There is plenty of feed throughout western Canada; Southern Alberta has had good moisture and good grass; slaughter capacity is larger, placing greater demand on their fed supplies; and the Canadian dollar is 20 percent stronger than a year ago and trucking is in limited supply. Lethbridge auction operator Bob Balog said, “The only thing we have in over supply is slaughter cows and bulls. Fed cattle and feeder cattle are in pretty tight hands.” He also said he sold some 770-pound steers in last Wednesday’s auction that brought $120 Canadian—with an 83-cent Canadian dollar, that converts to $100 per cwt U.S. The feeder markets appeared to have equalized and the difference is the cost of a truck ride. Balog also said they had a very active aggressive sale last week, and that buyers were there that haven’t been at a sale in eight months. He also said there are lots of feeder cattle already owned by American companies. Mike Sands, market analyst at Informa Inc. (formally Sparks), said that it’s not the Canadian border weighing on the market at this point, but that the “dog days of summer” are here and the fundamentals are dragging on the market. He is especially concerned about beef demand. Sands expects to see 150,000 head of fed cattle come down from Canada weekly for the balance of the year. He said that is not an overwhelming number compared to past years. Darrell Mark, extension economist at the University of Nebraska, said that history shows weekly feeder cattle imports hit a seasonal low during the summer months and increase into the fall and winter, peaking in February. The average August to December feeder cattle imports from 2000 to 2001 was about 100,000 head, or about 4,800 head per week. These numbers, however, are somewhat inflated by the unusually large feeder cattle imports in 2002, of 557,000 head. That year there was a severe drought in Canada. Fed cattle imports are seasonally highest in the third and fourth quarters. The average August to December fed cattle imports is 340,000 head, or 16,000 head per week. The average 2002-2003 cattle imports from Canada accounted for about three percent of U.S. commercial cattle slaughter during those months. As a result, a negative price impact of roughly $3.50 may be expected based on a current $80 fed cattle market. But, it isn’t expected to happen because of a different set of market dynamics. Mark said that feeder cattle prices are likely to fall more than fed cattle prices partially because of Canadian market conditions. However, further impending losses by cattle feeders and the prospects for higher corn prices will tend to reduce over all prices in the U.S. and Canada. Feeder cattle sales last week were very light, with many producers holding calves back. Market weakness occurred mostly due to concern over the resumption of cross border trade with Canada and hot dry weather that was favoring buyers. Northern tier auction reports indicated a slightly weaker market with moderate to good demand on very light supplies. Although few comparisons were available, auction yards across the northern states reported an undertone of steady to slightly lower prices for the few feeder calves that were marketed. It appears that a sharp decline in per head profits for cattle feeders in the southern tier is weighing heavily on auction yards, with moderate demand and some significantly lower prices reported in key states. Notable declines were reported in Texas and Oklahoma where cattle slumped at least slightly across the board, with significant drops of up to $5 reported in the heavier weight classes. An exception to the trend occurred in Nebraska where buyers offered firm prices and strong interest for heavy nine-weight steers. Softer markets were reported in the remainder of the southern tier with most markets reporting at least moderate demand and light supply. A number of producers have already marketed their fall calf crops via either video auction or direct sales to their advantage. Early last week, as Canadian cattle were primed to start rolling into northern states, buyers started to lose interest and direct prices being offered declined slightly while producers held firm. Overall volume for the week was half or less than year-ago numbers for most states. As the week progressed, buyers developed a wait and see attitude while hoping the border picture would clear up some. A number of analysts believe that quantities of cattle crossing the border will remain low for at least a couple of months due to the rigorous requirements with which producers must comply prior to shipping Canadian cattle over the border. As of press time last Thursday, only a handful of trucks had crossed over the border, creating only a psychological effect on the markets. In the few northern tier states where enough cattle were sold to make a comparison, the trend was reported steady to $2 lower, with demand moderate to good. Feeder cattle futures contracts through last Thursday had regained about two-thirds of the losses reported the previous Friday, which was the day after the Ninth Circuit Court of Appeals had overturned the injunction banning live Canadian cattle from entering the U.S. As of midday Thursday, August feeder cattle contracts were at $107.70 per cwt, while September was at $106.10, and October was at $104.65. The CME feeder cattle index last week was hovering around the $112 per cwt mark, compared to $113 most of the previous week. — WLJ © 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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Monday, July 25,2005

Grizzly delisting likely

by WLJ
— Proposal possible before end of summer. Ranchers in and around Yellowstone National Park and the Northwest could be allowed greater control over their predator problems if the U.S. Fish and Wildlife Service (FWS) moves ahead with plans to propose delisting the grizzly bear from the Endangered Species Act (ESA). Grizzly bears are thought to have originally numbered more than 100,000 in the continental U.S. When the grizzly was added to the endangered species list in 1975, the bears numbered fewer than 200 and appeared well on their way to extinction. Due to the conservation of grizzly habitat and protection of the Endangered Species Act (ESA), the bears have rebounded to approximately 1,000 and reside throughout the Greater Yellowstone Area and the northern Rockies, along with an isolated population in Northern Idaho and Washington state. At present, there are more than 1,800 plants and animals listed as endangered or threatened by FWS. It is estimated that 41 percent of listed populations have stabilized or improved since the inception of the ESA, however, only 11 species have been delisted due to recovery. Livestock growers across the west have long been waiting for a decision to remove the grizzly bear from the list. It now looks like that process may be initiated before the end of summer. The leader of the grizzly bear recovery effort for FWS said the agency’s office in Washington, DC, currently has the proposal, and that it will take at least a few weeks to implement any final plan to delist the species. Livestock groups including the National Cattlemen’s Beef Association and the Montana Stockgrowers Association (MSGA) have been widely supportive of the removal of the grizzly, one of the ESA success stories, from the list. Steve Pilcher, executive vice president of MSGA, said, “The association has long been in support of delisting the grizzly bear in favor of more local management.” Pilcher agreed with studies that conclude the total bear population in the Greater Yellowstone ecosystem is adequate to support the genetic diversity necessary to sustain the bear population. FWS estimates the current population in the area between 400 and 600 animals. “We need to be able to manage the grizzly bear as a resource and bring the decision-making ability home,” he said. Foremost on stakeholders’ minds is the issue of human/bear conflict and the predation of livestock by grizzlies that stray outside of the proposed buffer zone surrounding Yellowstone National Park. Of particular concern to Livestock producers in Wyoming is the Upper Green River area. Jim Magagna, executive vice president of the Wyoming Stock Growers Association, stated, “Our overall preference is that the habitat be held to the primary conservation area in which the bears have already recovered.” The Upper Green River area was cited by FWS as being socially unacceptable for reintroduction due to the high likelihood of conflict between humans and bears. In spite of that, it has been included in the recovery zone because it is a critical corridor for bear traffic. Indeed, within the last two weeks, two bears have been relocated from the Upper Green River area back to the primary conservation area after killing domestic livestock. Currently, the conservation group, Defenders of Wildlife, has a compensation fund to reimburse ranchers for losses due to bear and wolf predation. The group has stated that if the grizzly is delisted, they will re-evaluate whether or not the program will remain in place. According to the group’s Web site, they have reimbursed producer losses in the Yellowstone and Northern Continental Divide Recovery Areas in excess of $110,000 since the fund’s inception. The group also provides partial funding for pro-active measures taken by producers to reduce losses due to predation. However, Pilcher noted that although there is a compensation fund, producers are often unable to monitor grazing lands thoroughly enough to prove losses due to predation. “The reality is that the program is just not that effective,” Pilcher said. — John Robinson, 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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Monday, July 25,2005

Stem cells make older cows young again

by WLJ
Scientists may have found a literal “fountain of youth” which could result in older, proven cows regaining their younger production levels. Researchers at Advance Cell Technology, Worcester, MA, recently concluded a study in which 10- to 13-year-old cows were injected with cloned stem cells harvested from the livers of embryonic calves. The results of the study, published in the June 2005 issue of Cloning and Stem Cells, showed the treated animals reverted back to their younger form, particularly from a reproductive and mammary standpoint. In the study, scientists treated older cows with a small dose of embryonic stem cells, the equivalent of a tablespoon. Prior to injection, the cells were tagged with a genetic marker to enable tracing as the cells moved through and interacted with the body. Stem cell traces were later detected throughout the study animals in new “giant” colonies of white blood cells and regenerated blood vessels in the cows. This cellular growth is consistent with very young cells, and not found in animals of this age class. “The cells are so competitive and youthful that they just take over,” said Robert Lanza, of Advanced Cell Technology, who conducted the study. This research could have a future impact on the livestock industry as more researchers study potential seedstock applications for the technology. At present, most experts feel that stem cell treatment is far too expensive for agricultural applications and research has been limited primarily to government-funded medical research programs. The benefits of using stem cells to treat a range of human diseases are well known by scientists. Doctors have been studying the use of stem cells to treat illnesses from arthritis and genetic diseases to cancer for more than 14 years. Scientists are interested in stem cell therapy because the cells have a remarkable ability to transform themselves into other types of tissue cells found in the body and can actually regenerate tissue as demonstrated in this study. Additionally, stem cell transplants do not present the same risks associated with conventional treatments, such as bone marrow transplants, which require the use of harsh drugs to suppress the recipient’s immune system in order to prevent rejection of the transplanted marrow. Although the methodology used in this experiment is not consistent with current protocols used for human studies, the results are being viewed as a positive step toward understanding the interactions of stem cells in large animal models. — John Robinson, 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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Monday, July 25,2005

Post-drought grazing management starts now

by WLJ
— Forage problems loom. With drought receding across much of the west, producers are being urged to start reviewing management strategies in an effort to minimize losses from problems not seen since the onset of the drought. It is also the time to take steps to plan for future low water years by preparing a drought management plan. When reviewing operating procedures, it is important to look at the big picture and make decisions that will place the ranch on a solid footing for future low water seasons, rangeland specialists said. Sources noted that building herd size slowly and maintaining proper stocking rates may be the most important step in drought recovery. “Keep in mind the forage base has been stressed; rebuild slowly and don’t put pressure on too fast,” said Doug Powell, rangeland management specialist for the Society for Range Management. “Remember, that’s the way it happens in nature. It takes several seasons for wild ungulates to repopulate following a drought.” Powell also suggested allowing a rest period for water sources that have been used heavily during dry years. “Wells or springs should be closed off and alternate sources such as refilled reservoirs and ponds should be utilized.” Potential herd health concerns were cited as a reason to closely monitor animals at the end of a drought. Although diseases like grass tetany, caused by a lack of available magnesium in forage and more prevalent in wet years, have not been a widespread concern this season, producers should be aware they could become a problem, particularly in older lactating cows. When a drought breaks, it is common for it to end with a period of above average precipitation, Powell said. Ground that has become barren due to drought or overgrazing is susceptible to increased surface runoff and soil loss, which can lengthen recovery time. To reduce runoff damage, range scientists suggest replanting with perennial grasses because they have deeper root systems and higher drought tolerance. This measure will help soil absorb and hold water much more effectively. Grasses that recover quickly from drought stress will also prevent noxious weed infestations in areas where grasses are weak and can’t compete with fast growing weeds. Resting grasslands with slow growing forage and replanting bare areas with native grasses conducive to water retention will provide better drought resistance in future dry seasons. Producers need to take a good look at their pasture to determine the vigor of forage before making long term decisions. “Desirable grasses have grown better than average, but total productivity has been reduced,” said Jerry Voleski, range and forage specialist with the University of Nebraska. “Good rains throughout June have helped, but some rain in July would really maximize production.” Voleski also noted the importance of a good rotational grazing plan and stressed varying the grazing season for each pasture so animals can better utilize both warm and cool season grasses. Pairing the nutritional requirements of animals with the availability of range forage can also increase a producer’s ability to weather a drought situation. Range production can vary greatly over the course of the year and it is in a rancher’s best interest to match the nutrient needs of the herd to the production of forage. Producers should evaluate the herd’s cyclical nutritional needs to ensure the production cycle is synchronized with the growth cycle of the available pasture. The best time to prepare a drought management plan and make necessary changes is while the grass is green. Taking time to design a plan now, in preparation for the future, will ensure a greater likelihood for long-term success, according to both Voleski and Powell . — John Robinson, 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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Monday, July 18,2005

Beef demand pulls feds $2 lower

by WLJ
After a couple weeks of steady prices, feedlots nationwide were starting to feel the pressure and traded cattle $1-2 lower than the prior week. Through last Thursday, northern Plains cattle feeders sold 55-60,000 head at mostly $127 dressed. Southern Plains and Southwest feedlots finally pulled the trigger Thursday afternoon at $80-80.50 live, compared to mostly $82 the previous week. Texas feeders sold 35-40,000 head, while Kansas trade totaled 45-50,000 cattle. Beef demand was significantly softer the week after the Fourth of July weekend, which was considered strong for beef sales. Retail sources were skeptical whether it would pick up until Labor Day weekend in early September. However, retailers have several big beef features scheduled for the second half of July. Andy Gottschalk, analyst with HedgersEdge.com, said that the current struggle in the market is seasonal and that market pressure has been exacerbated because of weaker-than-normal beef demand. “There’s definitely a demand problem when packers are losing money at these slaughter levels. This time of year, packers generally are well into good margins, earning $30-50 per head, and now they’re losing $7.50 per head.” Boxed beef movement last week was very strong, however, prices were declining as packers were trying to clear inventory. The choice boxed beef index was at $132.99 midday Thursday, compared to $135.14 at the beginning of the week. Select product was down to $128.81 Thursday, compared to $131.22 Monday. Three of the first four days of last week saw well over 450 loads move, with one 600-plus day noted among them. Gottschalk said the beef movement last week could be positive for the cattle market later this month or early August when beef featuring at the retail level is expected to resume. Cattle slaughter picked up last week, but that was following a holiday shortened week. Through Thursday 487,000 head were processed, compared to 500,000 during the same time frame last year. Analysts were still speculating that weekly slaughter could end up over 625,000 head, which is still more than what is needed to meet current beef demand, both domestic and export. For the week ending July 2, 652,000 head were processed, about 30,000 head more than current beef demand. Finishing weights of fed cattle continue to escalate, and that is adding to beef supply pressure. The average weight of all cattle processed for the week ending July 2 was 1,249 pounds, compared to 1,245 the week prior and 1,236 a year ago. Carcass weights were at 767 pounds, compared to 764 the previous week and 761 last year. The USDA reported last Thursday that fed steer live weights averaged 1,322 pounds live, and 841 pounds dressed, compared to 1,266 and 837 pounds two weeks ago. “The holiday shortened week left a lot of ready cattle in feedlots, those cattle were fed an extra week and are now coming out at a very heavy weight, thus hurting the market,” said Reed Marquotte, M&Z Livestock Analytics. “A 1,275-pound steer that missed the packing house because of Fourth of July, probably tipped the scales between 1,300-1,310 pounds, which is a lot of extra weight, when beef demand is already slumping.” Gottschalk added that the weight jump can be attributed to three things—high replacement cattle costs, cheap feed costs and high breakevens on cattle currently being fed. “Feeders feel it is cheaper to feed cattle currently in the lot right now, instead of buying a replacement animal and feeding it,” he said. Feeders, stockers struggle Losses of $100-plus on a lot of fed cattle last week started to weigh on feeder cattle prices. Across the country, heavy weight cattle were bringing $2-4 less than the previous few weeks. In addition to cattle feeders losing money, prospects for beef trade with the Pacific Rim appeared to be delayed even further to very late this year or early 2006. As a result, cattle feeders need fewer cattle to meet marketing slots in the fall and winter, analysts said. The CME feeder cattle index for 600-850 pound steers was around $113 last Wednesday, compared to $116-plus the previous week. Calf prices last week were very mixed with a wide range of prices reported even within the same weight divisions. Steers ranged between slightly softer to slightly firmer, while higher quality heifers were $3-5 stronger. The best demand was from stocker operators on replacement type females that were bought to go back on grass, and sold next winter. Superior Video Auction’s “Week in the Rockies” sale July 5-9, offered over 250,000 head during the five-day event. There were several instances where 400- to 500-pound steers brought $155 or more. There were also instances of 500- to 600-pound heifers bringing $145 or more. Some of the highlights at Superior’s sale were: a set of 450 lb. certified Natural Angus steers for $154, October or November delivery; Barbara Jolly & Sons, Kit Carson, CO, sold a set of 465 black and red Angus certified natural steers for $157 for October delivery; Dragging Y Cattle Co., Dillon, MT, topped the sale with a set of 425 lb. Charolais and Angus sired steer calves, VAC 45 and VASE, for $165; the top yearlings were some 850 lb. Red Angus and Red Angus cross steers from Lonnie Frimann, Minatare, NE, that sold for $113.10; and some 935 lb. steers for $108.85, for August delivery. Western Video Auction also held one of its special sales in Reno, NV, offering over 187,000 head. Some of the highlights from that sale were: a split load of 55 steers weighing 485 lbs. and heifer mates at 470 lbs. from Corder Farms, Ft. Benton, MT, that sold for $131.50 and $126.50, respectively; 83 black steers weighting 600 lbs. from Boone and Crockett Ranch, DuPuyer, MT, that sold for $120; 90 head of heifers weighing 650 lbs from L. Johnson, Great Falls, MT, that sold for $126.50 cwt; 250 Angus-Charolais cross steers, weighing 580 lbs. from Yribarren Ranch, Bishop, CA, that sold for $120.85. On the steer side, a $6-8 premium is being paid for those cattle that are sold with a preconditioning program behind them, are certified as being “naturally raised,” or have been fitted with some sort of source verification mechanism. Superior did sell a group of 420-pound steers for $168 per cwt, and another group of 450-pounders for $162.50. However, for the most part, prices on steer calves were called mostly steady. – WLJ © 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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© Crow Publications - Any reprint of WLJ stories, except for personal use, without permission, written consent and appropriate attribution is prohibited. 2008 Crow Publications. All rights reserved.