— Rally of $3-5 live, $5-7 dressed. — Calves follow suit. Cattle feeders were still reporting major losses on cattle being marketed last week, however, the extent of those losses narrowed significantly as live cattle brought $3-5 more than two weeks ago, and dressed cattle were $5-7 stronger. Most market sources cited a forecast for stronger beef demand leading up to Labor Day as the primary reason for the fed market turn around. Trade was said to be mostly completed by the end of business Wednesday, as just over 216,000 head had traded. In Nebraska, feedlots sold 65,000 head of cattle for $81-82.50 live, $130 dressed. In Kansas and Texas, trade ranged between $82-82.50 on 29,000 and 40,000 head, respectively. The most obvious bullish market indicator last week was the continuation of extremely large volumes of boxed beef being moved out of packers’ storage facilities. The first three days of last week all showed 400-plus loads being traded on the spot cash market. Last Wednesday marked the seventh straight business day that over 400 loads had been moved on that market. Between July 19 and Aug. 3 there was only one business day when fewer than 400 loads of boxed beef were moved on the spot cash market. The Comprehensive Boxed Beef Report for the week ending July 29 said that 8,729 total loads of boxed beef were moved, including formula and forward contracted beef. Analysts said that was a record week for total beef movement. A lot of that extra beef distribution was said to be the result of retailers picking up their beef featuring activity through the last few weeks of August to meet what is expected to be increased demand leading up to the Labor Day holiday weekend. In addition, grinding product was said to be in greater demand by processors that supply hamburgers and other ground beef products to the growing number of fairs, expos and other outdoor extravaganzas that pop up leading up to school resuming. “Firesale” prices were also cited behind the jump in beef movement to retail and other outlets, sources said. However, the recent jump in boxed beef movement did help spur a rally in boxed beef prices last week. As of midday Thursday, Choice boxed beef was at $129.40 per cwt and Select was bringing $122.09. The week-to-date gain for Choice was $4.68 and $4.22 for Select. Despite the jump in both price and activity for boxed beef, packers were still reporting negative processing margins, and that was keeping fed cattle prices from gaining even more. As of last Thursday, the packer margin index was estimated at minus $25 per head. Several market analysts said that last week’s market turnaround is probably a temporary “blip on the radar” and that the seasonal price low may still be around the corner. “Cattle are still extremely abundant and are very heavy, particularly in the southern Plains,” said Jim Robb, chief analyst at the Livestock Market Information Center. “Beef demand hasn’t turned around that much—a lot of the movement has to do with retailers liking the price they are paying for product.” On the weight side of things, Robb said the average live weight for southern Plains fed cattle was within four pounds of the record two weeks ago and eight pounds short of that record last week. For the week ending July 29, the average live fed cattle weight in Oklahoma/Texas panhandle was 1,248 pounds, 26 pounds heavier than the same week last year and 37 pounds heavier than the previous five-year average. “That’s a lot of extra tonnage being put on the beef supply,” said Robb. “But packers must be getting some forward buys in place, and that is why they are paying more for that extra weight.” Robb and several of his colleagues all said they wouldn’t be surprised if once the push for Labor Day product subsided, fed prices would fall back below $80, possibly getting down around $78. “I don’t think we’ve hit the seasonal low quite yet,” Robb said. He was particularly concerned with the possibility that weekly cattle weights, and associated beef tonnage, would well eclipse record levels, particularly since that peak usually hits around mid-September, even into early October. Slaughter volumes last week continue to run at levels that exceed current beef demand levels, which analysts said should result in softer prices once processing cattle for post-Labor Day beef demand starts up in late August. For the week ending July 30, 644,000 head of cattle ran through packing plants, approximately 20,000 head more than current beef demand dictates. Last week’s daily volumes averaged around 119,000 head, which means another week of 625,000 head or more is likely. Calves, yearlings climb higher Prices and demand for feeder and stocker cattle trended up last week despite still significant per head losses on fed cattle and continued bearish crop reports from the Corn Belt. In most markets, an easing of temperatures and last week’s negative BSE test result were cited as primary reasons for both buyers and sellers to get back into the game. Those two items, along with an upward bump in futures prices and significant increases in movement and price on the retail side, seem to have helped prices across the board. Throughout the southern tier states, prices were on the rise with a $2-5 bump noted in most markets. On the supply side, producers seem to be taking advantage of the firmer market and are unloading their calves fresh off the cows. A continued lack of moisture across the central U.S. was partially to blame for an increase in loud lots being offered which were being discounted by buyers, particularly in Oklahoma and Missouri. However, both supply and demand for backgrounded calves were described as steady to good in all markets across all weight classes with particular interest in lightweight calves. Northern tier states are marketing very few calves. In spite of a price increase across the region last week, most markets were reporting light supply and not enough feeders for a market test. Regardless, most sales indicated at least a firm undertone. Buyer turnout and subsequent demand was described as good across the region. Late last week, both temperatures and rain started falling across the central Plains and Inter-mountain West regions. While it was not enough in most places to ease dry conditions or help suffering crops, particularly corn, where crop ratings continue to slide, it may serve to improve prices at least slightly for the coming week. When combined with very high movements of boxed beef and a slight steadying of the fed cattle markets last week, these factors will serve to provide continued price support in the feeder cattle market. A downward trend in corn prices was also noted last week, and that gave cattle feeders even more money to use towards purchasing replacement feedlot cattle, sources said. The Chicago Mercantile Exchange feeder cattle index last Wednesday was at $108.95, compared to $108.54 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.  

Through the rest of the year, livestock identification in Texas is moving from the drawing board to field conditions to test identification devices, equipment durability and reliability. Using USDA cooperative agreement funding, the Texas Animal Health Commission (TAHC) has awarded contracts to four manufacturers of radio frequency eartags (RFID), five makers of tag “reader” devices, four computer software providers and a data trustee to maintain the computer records. Tag readers and computers are set up in several livestock markets, and customers of these facilities will be issued RFID eartags for cattle that will be marketed through the livestock markets. Two cattle firms that purchase from the three markets also will be equipped to record and report movement information as cattle are sorted and shipped to feedlots in the Texas Panhandle. “We solicited proposals through the state’s purchasing process in March, and had an industry committee review submissions and help select the participating companies,” said Kenny Edgar, animal identification coordinator for the TAHC. “Now, like a number of other states that are conducting field trials, we have awarded contracts for equipment so we can see how well ear tags stay on, the readability of eartags, how well equipment holds up in livestock markets under everyday use, and how accurately and efficiently data can be captured, stored and used.” About 80,000 of the radio frequency eartags, known as RFID tags, are being provided by Allflex USA, Farnam, Temple Tag Company and Y-Tex. Tag readers, supplied by AgInfoLink, Allflex USA, Farnam, Temple Tag Company and Y-Tex, will be tested for speed and durability in “real-life” conditions. “Computer software is needed for managing the eartag information and movement records. Services are being provided by eMerge Interactive, Micro Beef Technologies, Texas Dairy Herd Improvement Association 032, and the Beef Information Exchange/AgInfoLink. The data “trustee,” or company that will hold all the records is the Beef Information Exchange, and this service will be evaluated with an exercise to trace animal movement. The results of the field tests will be reported back to the committees working on the National Animal Identification System, so the glitches with computers, ear-tags or readers can be fixed before they are put in use across the county.” “Regulatory agencies do not need or want production data; but we must be able to locate animals that have moved from a premises within 48 hours or less,” said Edgar. “The age and class of an animal, as well as movement information, is critical for locating potentially infected or exposed animals during a disease situation. In our field experiment, we are working only with cattle, sheep, goats and horses.” commented Edgar. “Every state now is getting on board for premises and animal identification to speed up livestock movement tracing,” commented Edgar. “In Texas, HB 1361 will be in effect Sept. 1, providing the TAHC authority to implement the animal identification program in Texas that is consistent with the National Animal Identification System. Edgar reported that, nationally, about 90,000 premises have been identified, with about 2,200 of those in Texas. “According to the national strategic plan, premises identification will be required by January 2008, and so far, about 1 percent of Texas’ estimated 200,000 premises have been identified.” “This premises identification number is a unique seven-character alphanumeric identifier assigned to ranches and other sites where livestock or poultry are maintained or moved. One number will suffice, even if the owner raises several species of livestock and poultry on a place,” said Edgar. Registering for a premises identification number is easy, and the application is simple to complete, he said. Producers can call for an application, or they can go on the internet to register. To obtain a paper copy or schedule a presentation, call the TAHC at 800/550-8242. The TAHC’s home page at www.tahc.state.tx.us has a link to the premises identification application. — 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.  

The number of confirmed cases of bovine spongiform encephalopathy (BSE) in U.S.-born cattle is still at one after USDA last week announced that confirmatory testing came back negative on a suspect cow sample. According to John Clifford, deputy administrator of USDA’s Animal and Plant Health Inspection Service, both the National Veterinary Services Laboratory, Ames, IA, and the international lab from Weybridge, England, came back with negative results on a “non-definitive” sample tested late last month. “The initial non-definitive result was caused by artifactual (artificial or untrue) staining and, while this staining did not resemble BSE, we felt the prudent course was to conduct the additional tests,” Clifford said. The sample in question was collected in April from a cow that became non-ambulatory after experiencing calving problems. The veterinarian that collected the sample had packaged it with some preservative and then inadvertently left it in a refrigerator before finding it last month and sending it to a lab for preliminary testing. The location of the ranch and other specifics of the suspect animal were not released. Clifford reiterated last week that USDA’s ongoing stepped-up BSE surveillance program is effective and that the animal did not represent any threat to the human, livestock or pet population in the U.S. “The carcass of this animal was destroyed, therefore there is absolutely no risk to human or animal health from this animal,” Clifford said. “I do want to emphasize that the most important protections for human and animal health are our interlocking food-safety protocols. Our enhanced surveillance program is designed to provide information about the level of prevalence of BSE in the U.S., which by any measure is extremely low.” By regulatory rule, non-ambulatory cattle, also called “downers,” aren’t currently allowed into the human or animal food chains, and the carcasses of tested animals are held back until test results come back negative for the disease. Through July 31, USDA had tested 426,164 at risk animals with only one sample being confirmed to be infected with the disease. That positive case was announced June 24, seven months after the sample was originally collected from a 12-year-old Texas cow that was delivered to a pet food plant. — Steven D. Vetter, WLJ 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.  

— Senate action wanted before Sept. 30. — House approved five-year extension. Among the first livestock industry issues expected to be addressed by the Senate upon getting back from summer vacation at the end of August, is the pending sunset of current mandatory price reporting (MPR) legislation. The current program is slated to come to an end September 30, and livestock industry leaders are pushing for the Senate to approve a five-year reauthorization of the program. The House of Representatives approved such an action on July 27, prior to adjourning for its month-long summer recess. A large majority of Senators, however, are awaiting a review from USDA’s Office of Inspector General (OIG) regarding the program’s successes and failures and whether or not it is worth reauthorizing for another five years. The call for that review was in addition to a June 22 hearing on the issue, which featured testimony from industry participants, market analysts and officials with USDA’s Agricultural Marketing Service, which administers the MPR program. Washington, DC, lobbyists said last week, it is likely the Senate will approve a limited one-year reauthorization and then take some time to look over OIG’s review and make a determination on a five-year reauthorization next year. Staffers with the House Committee on Agriculture told WLJ last week, that there wouldn’t be much opposition to a one-year reauthorization. The issue would still have to go through a conference committee to come up with a bill that is suitable to both houses and then be voted on by both the full Senate and House. Lobbyists said that because there will only be a month left between the Senate resuming its session and the reporting program’s deadline, action is expected on the issue within the first week to 10 days of September. When the House reauthorized MPR last month, they did so with only a few changes being made to a couple of the hog reports. Cattle and sheep reports were untouched, sources said. Senate concerns also appear to revolve around the hog reports, however, there could be some modifications made to reports on all species. Western state senators have expressed some concern that final daily reports are compiled and released too early in the day, and that producers aren’t given an opportunity to see the most up to date information that may help them make a marketing decision. MPR was first implemented in 1999 following demands from livestock producers that there be more price discovery and market transparency. MPR requires the largest packers to report live, carcass, grid, formula and boxed beef trades to USDA on a daily and weekly basis. The daily reports are accumulated three times a day, but the final report from a given business day isn’t released until the next morning. — Steven D. Vetter, WLJ 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.  

A range utilization study conducted by Dr. Derek Bailey, professor of Animal and Range Sciences at New Mexico State University, may have broad impact for ranchers grazing cattle, specifically those on public allotments. Researchers and cattle grazers have been looking for ways to encourage even distribution of forage utilization across the entire range area, while easing the heavy use of riparian areas. Under traditional range conditions in the West, as much as 30 percent of an allotment gets very little grazing due to its slope, elevation, and distance from water, said Bailey. As a result, cattle stick to grazing in stream-side areas, particularly under drought conditions, which can create conflicts with land managers and users of public lands, and may ultimately lead to a reduction of the number of cattle permitted or available grazing days. As producers are aware, a reduction in grazing ties directly to significant increases in expenditures. In a series of studies, conducted under a variety of pasture conditions, researchers fitted cows with global positioning satellite (GPS) collars to track movement and turned them out on parcels up to 100,000 acres in size. The study showed positive results under moderate late fall and early winter grazing conditions in the Montana foothills. Prior to the study, cattle were introduced to a low-moisture block supplement in penned, dry-lot conditions similar to those experienced during the calving season. After cattle had become familiar with the supplement, they were fitted with the collars and turned out into grazing allotments spanning a wide range of conditions and quality. Researchers found that animals that were conditioned to the blocks were more willing to travel farther away from water sources and stay away longer when “rewarded” with the supplement. Several different protocols were followed and researchers found that supplement stations provided to preconditioned cattle caused them to voluntarily travel farther from water sources and stay away longer than just a straight mineral supplement. When combined with late morning to early afternoon herding the researchers found the best results. “What we determined is that cattle would willingly travel up to a mile or more horizontally and 300-400 feet vertically, up steep slopes to get to the supplement. Once there, they tended to stay in the area to graze for several hours,” Bailey said. Researchers believe that once the cattle had traveled the distance to the supplement, their “reward,” staying and grazing the grass within several hundred yards of the station was not an inconvenience. Researchers also attempted similar studies using cake and liquid supplements. The team determined that neither cake nor liquid supplement under range conditions was effective. With cake, the cattle tended to only stay in the area for an hour or so after it was gone before moving back toward water. “They definitely knew when it was gone. We were feeding 150 pounds of cake at a time. After feeding, the cattle were leaving fewer than 30 grams of feed behind.” Bailey said. Liquid supplements yielded grazing results similar to a low moisture block, but due to increased levels of consumption and higher labor costs, the scientists determined that liquid supplement was not a cost-effective measure. Bailey believes that because the cattle knew there was still more supplement remaining, in both the block and liquid trial, the cattle would remain in the area longer. This particular study showed researchers that when combined with herding, dehydrated molasses protein supplements could by used to easily move cattle away from riparian areas and into areas which were not being optimally grazed, for instance, areas containing dry forage away from water and less palatable grassland along ridge lines. “What we found was that cattle were willingly driven away from hay quality pasture in riparian areas toward dry fescue ridges. The cows frequently trotted the last few hundred yards to the supplement barrels and stayed within 600 yards for quite some time,” Bailey said. Continuously moving the supplement station, a few hundred yards every couple of weeks, creates an even grazing pattern which generates better utilization of the resource. Grazing distributions are dependent on a variety of factors, including the slope of the terrain, availability of water, breed of the animals, palatability of forage and other environmental issues. Numerous studies have been conducted to determine how those factors influence animal impact on forage and how producers can manipulate their animals to create a better herd, all in an effort to prevent the overgrazing of riparian areas. Previous findings suggested manipulating grazing preferences required fencing or other labor and cost intensive features. However, the use of supplement blocks appears to be both cost and labor effective even when combined with herding. Bailey’s studies, combined with the research of a number of agricultural economists, showed increases in labor and supplement cost were offset by better forage utilization and a subsequent increase in available grazing days. Bailey also noted studies in which researchers made culling decisions based upon what range areas certain cows tended to graze. Further studies showed that certain breeds of cattle actually tended to prefer higher more arid slopes. Tarentaise, Charolais, and Piedmontese were more adaptable to climbing higher above and farther from their water sources. Bailey believes that because the cattle were originally bred to forage in the high mountains of Europe, they are better suited to the high range conditions of many western states. Under mountainous conditions, incorporating these genetic lines may also provide a performance improvement for cattle producers willing to try something new. Melvin Armstrong, a Cardwell, MT, rancher and former U.S. Forest Service range analyst, has been using the low moisture blocks for eight years and has had good results improving grazing utilization. Prior to utilizing the blocks, members of the grazing association to which he belongs were having difficulty working with land managers because the cattle were over grazing the bottom land. “In my opinion this is the only thing that will pull them out of the bottoms,” Armstrong said. He estimates that the product and labor involved with purchase and placement of the blocks costs him between $2-3.50 per animal unit month; his records show that the return has been worth the effort. “They pay for themselves, plus, we see an additional 10 pounds on the calves and it’s been putting weight on the cows too,” he said. On the return side, producers participating in the Montana studies have seen an average return of an extra 10 percent of previous allotment cuts. Land managers have also been receptive to restoring allocations when these products are used to alleviate overgrazing concerns. “While it may not be the answer to all problems, it is a good place to start. Guys who are using it are seeing an improvement in utilization,” said Bob Welling, research support manager for Ridley Block Operations. “Producers still have to consider costs.” Bailey said, but he believes that these types of management techniques will benefit grazing operations in the future. “I foresee a day when land managers will actually pay ranchers to graze the land,” he said. Bailey thinks that targeted grazing to create fire breaks, clear land and control noxious weeds will benefit land, public and private. The tools studied by Bailey could provide a start toward that future without the need for costly and intrusive fencing. While they may not benefit all grazers, the management techniques being studied by Bailey and other range scientists may warrant a look by ranchers hoping to better distribute forage utilization under range conditions. — 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.  

University of Georgia (UGA) scientists have developed a method for eliminating the harmful E. coli O157:H7 pathogen in cattle watering troughs. An estimated 73,000 cases of E. coli O157:H7 in humans are reported each year in the United States. Studies have shown that the pathogen can be transferred from one cow to another through the animals' drinking water. "Cattle drinking water is often contaminated with cud (rumen content)," said Michael Doyle, a UGA microbiologist and director of the Center for Food Safety in Griffin, GA. "Cattle water can also have manure in it, and together, this leads to E. coli contamination." In the past, disinfectants like chlorine have been ineffective at removing E. coli O157:H7 from cattle drinking water. With funding from the American Meat Institute Foundation, Doyle led a project that focused on identifying practical treatments for eliminating E. coli O157:H7 in cattle drinking water. The UGA scientists first screened various chemicals in search of an effective control. "We knew right away that chlorine and ozone treatments had little to no effect," Doyle said. "But we were able to ultimately identify two chemical combinations that are highly effective." The best treatments were a combination of lactic acid, acidic calcium sulfate and caprylic acid and another combination of lactic acid, acidic calcium sulfate and butyric acid. "Both treatments include a base chemical, acidified calcium sulfate, or Safe2O," Doyle said. "This chemical has a very low pH, less than 2, which makes it very acidic." Doyle's laboratory studies found that the two chemical formulations not only eliminated E. coli O157:H7, but also killed other enterohemorrhagic E. coli which are related to E. coli O157:H7. But what do the cows think of this new power-drink? UGA animal scientist Joe West fed the treated water to a group of test cows. "We use Calan doors, which are electronically controlled doors," he said. "Each cow has a transponder that works as the door's key." In this way, West can monitor how much water a cow truly consumes. For the study, he measured how much water the cows drank over the seven days and compared that to what they normally drink. He found that the cows drank 19 liters per day of the lactic acid water, compared to 30 liters per day of non-treated water. "They'll drink the treated water, but obviously, they're reluctant to drink it," he said. "So it's not suited for continuous feeding." West said cows could survive on the reduced water intake. But when a cow's water or feed intake is reduced, her growth and milk production also decline. To keep from reducing cows' water intake, the scientists recommend farmers periodically treat their water tanks with the chemical treatment. "A farmer could treat his tanks for 20 minutes and basically sanitize his watering system," Doyle said. "He could treat the holding tanks and the troughs, then flush and refill them with clean water. This would kill the organism and then provide fresh water for the animals." Adding the chemical to his cattle's water supply would be an added task and, for now, a voluntary action for the farmer, Doyle said. "Until someone down the line gets serious about controlling E. coli at the source, this is just a control method available to farmers," he said. "If on-farm controls should be mandated, we have a treatment available that will work." Adding the chemicals to cattle drinking water shouldn't be cost-prohibitive for farmers. "The material is fairly dilute, and we've determined that a very dilute combination can still be effective" Doyle said. — Sharon Omahen, College of Agricultural and Environmental Sciences, University of Georgia © 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.  

— Weather improvement needed. — Yields of 130 bushels could create $3 corn. Recent slides in feeder cattle prices have been more the result of domestic market fundamentals than a heavy influx of cattle coming in from Canada, according to several market analysts. One of the primary domestic market indicators pressuring prices lately has been forecasts for higher corn prices. During mid-July, USDA commodity reporters forecasted that this year’s corn crop would yield an average of 145 bushels per acre, 15 bushels smaller than last year. However, independent market analysts called USDA’s projection pretty optimistic, with most forecasts ranging between 135-140 bushels per acre. At 145 bushels per acre, USDA said corn prices should stay between $1.70-2.10 per bushel, however, Jim Robb, chief analyst at the Livestock Marketing Information Center said even that lofty of an average yield should keep corn around $2 per bushel. “I think that’s pretty optimistic right now,” said Robb. “This year’s corn crop is at a critical stage right now, particularly in Iowa, Ohio and other eastern portions of the Corn Belt where temperatures haven’t moderated to help the tasseling and pollination of this year’s crop.” Robb and several colleagues said it wouldn’t be surprising to see average yields drop below 140 per acre. He added that if summer temperatures didn’t start to cool down, 130 bushel yields might be possible. “If that happens, it’s likely $3 (per bushel) corn could be seen, even as the new crop is harvested,” Robb said. “With calf and yearling prices where they’re at right now, that could be devastating to feedlots’ breakevens and any opportunity for profit into next year becomes even more unlikely.” One thing that could help keep overall corn production higher-than-average this year is a half-to three-quarter-of-a-million acre increase in corn acres planted. Last year, farmers planted a total of 80.93 million acres in corn, with about 73.63 million of them being harvested for grain. This year, estimates are that 81.59 million acres were planted in corn with 74.37 million to be harvested for grain purposes. Last year’s corn crop was the largest in U.S. history, with 11.8 billion bushels being harvested in total. At an average yield of 140 bushels on 73.5 million acres, this year’s crop would be only about 10.3 billion bushels. At 130 bushels per acre, total production would be approximately 9.55 billion bushels. Market analysts said that corn carryover into next year would be severely hampered because of significant production drops, increased demand for corn in the North American ethanol industry, and projections for higher exports, particularly to overseas markets that are suffering through drought right now. USDA’s Foreign Agriculture Service has already projected a double-digit percentage increase in corn exports for the rest of this year, and first half of 2006, to Australia, which is really struggling to maintain any semblance of a cattle feeding industry due to drought. “A slide in production, and kick up in demand could start to weigh on the cattle industry,” said Robb. “We will know more come mid-August when the impact from weather becomes more clear.” If corn does get up to $3, most sources said that breakevens on fed cattle for the very late fall and winter market could theoretically jump to $94 or higher. Currently, breakevens on those cattle are hovering around $90. — Steven D. Vetter, WLJ 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.  

Canadian calf program concluded The Feeder Calf Set-Aside Program in Canada ended late last month now that Canadian cattle are moving across the U.S. border. The Canadian Agriculture Ministry said that producers are free to market their calves as they see fit, and there are no slaughter restrictions. A notice to industry on July 15 also announced that auctions under the Fed Cattle Set-Aside Program were suspended. Cattle registered in the program will be released as scheduled, though producers who want to voluntarily withdraw some lots from the program before their scheduled release date may do so with preauthorization from their provincial program administrator. Producers that remove cattle from the program without permission will be subject to administrative penalties that may include forfeiting any program payments owed to them. Canadian ground beef recalled Ground beef distributed by Westfair Foods Ltd. of Calgary, Alberta, is being recalled by the Canadian Food Inspection Agency on suspicion that the beef may be contaminated with E. coli O157:H7. The suspect beef was sold through four British Columbia supermarkets, Real Canadian Superstores of Duncan and Burnaby; Real Canadian Wholesale Club of Burnaby; and Extra Foods of Vancouver. Most of the products were sold in early to mid-June. To date, no illnesses have been reported linked to the contaminated meat. More BSE reported in France One new case of bovine spongiform encephalopathy (BSE) was announced Friday, July 22, in central France. The infected cow is a Charolais, born in 1995 to a herd of the French Vienne department. It is the eighth BSE case detected in the department since 2001. A dozen potentially infected cattle will be euthanized and destroyed in conformity with the current rules under government control. New Canadian plant moves ahead A farming cooperative in northern Alberta is going ahead with plans to build its own meat processing facility. Members of the Peace Country Tender Beef Co-op say they’re not deterred by the long-awaited reopening of the American border to Canadian cattle. The co-op was conceived during the protracted border closing that started after BSE was first confirmed in the province in 2003. It has grown to about 600 members. The co-op is converting a curling club in the small town of Berwyn into a meat processing plant set to open this fall. The organization is also working with the Canadian Food Inspection Agency on plans for a new slaughter house for 2006. French accented burger served This summer, White Castle is serving up the classic flavors of French onion soup on a bun. Until August 13, the Columbus, OH-based chain is offering the French Onion Cheeseburger, which features White Castle’s classic hamburger topped with French onion cheese and French onion sauce. In-store merchandising, along with broadcast and radio advertising, will support the product’s introduction. A 30-second TV spot titled “French Maid” plays up a man’s fantasy as he eats the new burger. Hormel plans plant addition Hormel Foods Corp. is planning a $6 million expansion of its meat processing plant in Rochelle, IL. The Austin, MN.-based food company will build a 27,500-square-foot addition to manufacture a new line of microwaveable entrees. Hormel also plans to remodel about 25,000 square feet of the existing facility. Processors participate in SD program Through their checkoff dollars, South Dakota beef producers will help train in-state meat processors in the specifics of the new South Dakota Certified Beef program that guarantees consumers they are buying beef born, raised and processed in the state. Directors of the South Dakota Beef Industry Council voted to help fund training, materials and research for the program during their quarterly meeting. About 18 processors are expected to participate in the pilot phase through the fall, with general enrollment in the program to begin around the end of the year. Blood test for BSE Adlyfe, Inc., a privately held biotech company headquartered in Rockville, MD, has announced the development of a sensitive blood test for the protein folding diseases that could provide earlier diagnosis of BSE, according to its press release. The test is designed to detect misfolded proteins that cause neurological diseases, including BSE. Alan S. Rudolph, CEO, said the test is based on using small, synthetic peptides that mimic protein folding. Adlyfe has 11 patents pending on the technology. The test has been under development for three years under the support of the Defense Advanced Research Projects Agency and the National Institutes of Health. Dumeco gets USDA approval Six companies in the Dumeco Group (Dutch United Meat Company) have been inspected and approved by USDA to sell meat. A spokesman for the company said the approval offers an excellent opportunity to sell products directly into the U.S. market, such as spare ribs and other barbecue products. © 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.  

— 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.  

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.