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Thursday, December 20,2007

Idaho cattlemen gather for annual convention

by WLJ
Bill Rawlings of Boise is the 2006 Cattlefeeder of the Year. He has been part of the Idaho cattle feeding industry for over 30 years, and a key part of one of the state’s largest feeders for over 27 years. A key member of the management team at Agri Beef Co., based in Boise, Rawlings has proved to be a stable voice of reason throughout the many changes in the Idaho feeding industry over the years. He has helped build one of the most dynamic and progressive companies in the industry, and has brought core values to his work—integrity, innovation, and leadership. Rawlings has generously volunteered his time with ICA since the merger of the Idaho Cattlemen and Idaho Cattlefeeders in 1984, including serving as a leader on several committees. He and his wife Lynda reside in Boise, and are the parents of two daughters. Dave Nelson of Mackay, ID, is the 2006 Cattleman of the Year. He is a past president of ICA, and has volunteered his time on numerous committees and leadership positions in the organization. Nelson has served as a key industry leader in responding to the reintroduction of wolves to Idaho, in calling for the scientific review of stubble height in range monitoring, and as a participant in trade negotiations with Canada. He currently serves as president of the Public Lands Council, a national organization that serves public lands ranchers across the west. Nelson, a native of Canada, came to Mackay to manage the San Felipe Ranch in 1973, and he and his family now operate ranches in Mackay and Dubois. Nelson is also a past recipient of the Governor’s Award for Environmental Stewardship. He and his wife Heather reside at their ranch in Mackay. Celia Tindall of Bruneau, ID, is the 2006 Cattlewoman of the Year. Tindall was born and raised in Bruneau, and is a teacher in the Rimrock School District. She and her husband Dave ranch in the Bruneau and Grasmere areas of Owyhee County. Tindall has been a lifelong member of the cattle industry and a tireless advocate for beef and the ranching lifestyle. Through her involvement with the cattlewomen organizations at the county and state levels, she has volunteered her time to help tell the story of beef and its importance to consumers and the local communities that rely on the cattle industry as an economic driver. ICA extends its warmest congratulations and appreciation to each of the 2006 award winners. Nominations for the 2007 award winners will be taken throughout the next year and information is available by contacting the ICA office at 208/343-1615, info@idahocattle.org or PO Box 15397, Boise, ID 83715. In addition to honoring some of the state’s finest producers, ICA members also elected new officers and board members during the convention. The following officials were elected during the annual meeting by the general membership. The ICA Executive Committee meets monthly with a particular focus on financial matters while the full Board meets at least quarterly to guide association activity on important cattle industry issues. The following is a complete list of the ICA Executive Committee and Board of Directors. Executive Committee: President, Jeff Faulkner, Gooding, ID; President-Elect, Jennifer Ellis, Blackfoot; Vice President, Kent Mann, Parma; Immediate Past President, Mike Webster, Roberts; CattleWomen Council Chair, Sarah Baker, Kuna; Cow/Calf Council Chair, Charles Lyons, Mountain Home; Feeder Council Chair, Jeff Johnson, Parma; Purebred Council Chair, Sam Shaw, Notus. Board of Directors: District I: Paul Schroder, Weippe; Linda Rider, Coeur d’Alene; Dennis Rowland, Cottonwood. District II: Nate Gilliam, Parma; Jim Eckhardt, Weiser; Jeff Knight, Grandview; Paul Miller, Boise. District III: Mike Telford, Malta; Bill Lickley, Jerome; Dave Rollheiser, Paul. District IV: Zac Skaar, Lewisville; Carl Ellsworth, Leadore; Norm Wallis, May; Richard Savage, Hamer. District V: Ralph Wheatley, McCammon; Curt Hoskins, Malad; Russ Boyer, Stone. ICA leaders are willing to visit with individual beef producers and speak at local or county meetings. ICA is a membership driven association representing almost 1,500 cattlemen and women across the state. To schedule one of these volunteer leaders or for more information, please contact the Idaho Cattle Association at 208,343-1615 or info@idahocattle.org.

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Thursday, December 20,2007

California cattlemen host 90th annual convention

by WLJ
The CCA convention had a little something for everyone, including two major fundraising functions. The kick-off function was a dinner and auction for the Livestock Memorial Research Fund (LMRF) and Protecting Our State’s Stewards, Economy and Environment (POSSEE) committees in which over $20,000 was raised. The Allied Industries Council hosted a wine and cheese social in addition to a bingo night on Thursday, Nov 16. Proceeds from this function went toward the Allied Industries Council Scholarship Program which, last year, paid out over $11,000 to California college students. Pfizer Animal Health once again hosted three Cattlemen’s College seminars. All three sessions focused on various aspects of the industry. The first session, held on Wednesday, Nov 15, allowed participants to tour the California Animal Health and Food Safety Lab at University of California Davis. Session two on Wednesday afternoon focused on the National Animal Identification System The final session on Friday, Nov. 17 was hosted by the California Beef Cattle Improvement Association (CBCIA). Dr. Tom Field from Colorado State University talked with the group about changes in the consumer market place and opportunities for the beef cattle industry. The CCA and CCW convention was also a time to conduct business and set policy that will be followed in the upcoming years. The following is a partial list of committees that met during the convention: Beef Quality Assurance and Care, Cattle Health, Livestock Identification, Marketing, Membership, Public Lands, Range Improvement, Land Use and Taxation, Water and Environmental Quality, Wildlife Management, CBCIA, California Rangeland Trust, Cattle PAC, Young Cattlemen’s Committee, LMRF, POSSEE and Nominating. CCW members will also be conducting their CCW board and business meetings. The annual awards banquet, held on Friday evening, honored CCA president K. Mark Nelson of Wilton and CCW president Gretchen Johnson of Los Gatos for their two years of service, and helped to welcome in Bruce Hafenfeld of Weldon and Judy Ahmann, Napa, to the helm of each association. The CCA officer team was announced including second vice president, Bill Thomas, Sacramento; second vice president, Kevin Kester, Parkfield; president, Bruce Hafenfeld, Weldon; second vice president, Carolyn Carey, Alturas; first vice president, Dr. Tom Talbot, Bishop; and treasurer, Myron Openshaw, Oroville.

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Thursday, December 20,2007

Improving sorting reduces outliers, improves quality

by WLJ
December 3, 2006 Sorting cattle helps eliminate outliers in a pen, but the extra effort may be rewarded by higher quality grades, too. A study by Certified Angus Beef LLC (CAB) shows the more sorts, the better the grades in most cases. “Our data says those cattle that were sorted three or more times have much higher CAB acceptance rates than cattle that were just sold as one group,” says Gary Fike, beef cattle specialist for the company. From 2005 to 2006, CAB tracked data from its 63 licensed feedlots in 15 states. Cattle that were marketed together had an average CAB acceptance rate of 23.3 percent. Cattle in two sort groups improved to 29.6 percent, compared to those sorted three times or more at 33.9 percent. That 10-percentage-point increase means more dollars for the seller. “That’s huge,” Fike says. “In a 100-head pen, that’s 10 more head that make CAB. You’re talking about roughly $40 per head, or $400 extra.” Marbling is the most limiting factor in Angus-influence cattle that don’t qualify for the brand. Dan Loy, Iowa State University animal scientist, says it makes sense that sorting can enhance overall marbling in a pen. Although there is little research into its impact on the share of USDA Choice grades, those would likely follow CAB acceptance-rate trends. “Sorting allows you to feed the remainder slightly longer than you would have otherwise,” Loy explains. “It’s a net benefit, but not the largest benefit.” The main reason for sorting is to avoid outliers that lead to discounts in grid marketing. “You’re trying to minimize problems by marketing sooner those cattle that may have issues with over-fatness or heavyweight carcasses,” he says. Kansas cattle feeder Allan Sents says he uses multiple marketings for both reasons. “We try to optimize the return on the cattle,” says the manager of McPherson County Feeders, Marquette, KS. “We do that by minimizing discounts from Yield Grade 4s and heavyweights, while giving more cattle the opportunity to advance in quality grade. We maximize that grade potential by feeding the light end a little longer.” Although it can be hard to measure, increased feed efficiency could be another benefit. “If we can get cattle out before we get them over-finished, that’s going to help our live performance, our efficiency,” Sents explains. Loy says labor and facilities are the two main obstacles to routine sorting finished cattle. At McPherson, a 9,000-head CAB-licensed feedlot, pen layout and design are essential to success, Sents says. Several years ago he built four 40-head pens, with concrete-floors and near the office. “That has made it really workable for us to hold small groups from week to week,” he says. “We’re less likely to tie up bigger pens with small groups of cattle. When we sort cattle, we may also move some of them to a smaller pen, so our wide variety of pen sizes is an advantage.” McPherson’s regular pens vary in capacity from 40 to 200 head. Feedlots that don’t have such flexibility may not maximize pen space all the time, but Fike says it’s not usually for long periods of time. “If cattle aren’t too far apart in weight starting out, unused pen space shouldn’t be a big deal,” he says. Just spreading marketing groups by as little as 14 to 21 days could mean an improvement. Loy suggests starting out with the method developed through Iowa’s Tri-County Steer Carcass Futurity. “Market a first draft when half the cattle are at approximately 0.4 to 0.5 inches of fat thickness, slightly more if you’re targeting higher carcass quality,” he says. “Then feed the rest of the cattle an extra five weeks.” Feeders can begin that way, Loy says, and then adapt the program to fit their needs. Whether by horseback or on foot, the last key is to have capable sorters. “We have some people who are very familiar with sorting and do a good job that way,” Sents says. “That’s a big help.”

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Thursday, December 20,2007

Study finds leukotoxins are main BRD concern

by WLJ
November 26, 2007 A new study conducted under feedlot conditions demonstrates that, despite improvements made in the quality of commercial vaccines against the bacterium Mannheimia haemolytica, those that don’t include a component to specifically stimulate protection against leukotoxin risk failure. Leukotoxin is a natural byproduct produced by infection with M. haemolytica. Believed to be only one of the pathogenic factors M. haemolytica produces—but the most important—leukotoxin destroys the calf’s white blood cells, preventing them from fighting the infection and the damaging inflammatory process in the lung. Adequate protection against the effects of leukotoxin is so important, for instance, that mutant M. haemolytica which do not naturally produce the toxin have been shown to cause little or no disease. The study, conducted by the independent Agri Research Center in Canyon, TX, randomly vaccinated 20 newly weaned and acclimated 352-pound-average heifers and steers against M. haemolytica, the most common bacterial cause of bovine respiratory disease (BRD), using one of two commercial vaccines. One contained a leukotoxoid to stimulate protection against leukotoxin (PULMO-GUARD PHM-1, from Boehringer Ingelheim Vetmedica) and one did not (Once PMH SQ, from Intervet). An additional 10 calves remained unvaccinated as controls. Following challenge by direct introduction of M. haemolytica into the respiratory tract 28 days following vaccination, the Agri Research Center researchers found: • Calves vaccinated with the leukotoxoid-containing vaccine had average temperatures significantly lower than either those vaccinated with the non-leukotoxoid vaccine or those not vaccinated at all. • Calves vaccinated with the leukotoxoid-containing vaccine had significantly lower lung damage scores than either the non-leukotoxoid vaccinated or the control calves. The study showed no statistically significant difference in scores indicating clinical disease, which included appetite, respiration rate, and eye and nasal discharge. “Producers and veterinarians who were in practice 20 years ago may remember the problems associated with many of the whole-cell Mannheimia bacterins that didn’t include protection against leukotoxins,” observes Dudley Smith, DVM, professional services veterinarian for Boehringer Ingelheim Vetmedica. “And today’s manufacturers have made a lot of progress in improving vaccines compared to those first-generation products.

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Thursday, December 20,2007

Pre-holiday fed market is higher

by WLJ
November 26, 2007 The rally in the boxed beef market last week of more than $4 was expected to help cattle feeders move prices higher. Analysts were calling for trade in the range of $147-$148 dressed basis in the north and $94 and higher in the south. The cutout values, which reached $148.06 on the Choice and $135.07 for Select last Wednesday, have helped boost packer margins closer to breakeven and a holiday-shortened harvest last week, along with a surge in demand for beef, drove beef prices to their highest point since early September. Although trade had yet to develop in significant quantity at mid-day last Wednesday, market watchers were anticipating trade at $1.50-2.50 higher than the prior week. Early trade was underway last Wednesday at $95 live in the south, $148 dressed basis in Nebraska, and $150 dressed in the Corn Belt. That compares to the prior week’s activity of fed cattle traded at $92.50-93.50 live in the south and at $93-94 live and $146-147.50 dressed in the north. Corn Belt trade came in at $91.50 to $92 live and $145 dressed basis the previous week. The week-to-date slaughter remained robust at 390,000 head, compared to 358,000 for the same period a week earlier and 386,000 for the same period a year earlier. However, despite the strong beef kill, it was nothing compared to the numbers being chalked up by hog processors, who last week scheduled the first Sunday slaughter since 1998, according to Jim Robb, director of Livestock Marketing Information Center. Robb said the pork market had reached a likely bottom and was set to rebound, which would benefit beef producers. “Pork and hog margins have been super strong, which in turn has helped the beef market,” Robb said. “Without the money being made by packers in the pork industry, beef would be trending lower than it has.” He said the overall market picture, with competing meats starting to climb and the export picture picking up, looks good as fed cattle supplies tighten. However, the U.S. economic picture poses a concern, particularly if consumers remain pinched as it looks like they will. “In the U.S., the economic picture looks okay. U.S. exports are strong and we have a strong overseas economy because of the weaker dollar, but U.S. consumers account for about 70 percent of all U.S. economic activity,” Robb said. “The fed cattle forecast prices are too high if we slip into a serious recession. The big question is can the strong world economy make up for it? So far, the answer has been yes.” He said the overall supply picture looks supportive well into next year. “We expect to see a year-to-year decline in the U.S. beef cattle herd when the Jan. 1 numbers are released and we expect to see declines in Mexico, Canada and Argentina,” said Robb. “So overall, the world supply side of the market looks to be very supportive ahead.” In the futures markets last week, that picture was evident with prices that were more reflective of actual market conditions, said Robb. At the close of business last Wednesday, December fed cattle contracts were 17 points higher, settling at $96.35, while February contracts gave up 7 points to end at $98.20 and April lost 12 points to finish the abbreviated trading day at $98.40. In the cow beef markets, at mid-day last Wednesday, cow beef cutout values were up slightly to trade at $103.17, while the 90 percent lean moved at $123.01 and 50 percent trim reached $53.66. Robb pointed out that cull cow prices have remained strong and he said they will remain so as slaughter volume drops off for the remainder of the year and into next year. Feeder cattle Limited supplies at auction markets around the country last week were partially due to the shortened holiday week as well as strong demand for feeders, which is currently outstripping supply in most major feeding areas. Derrell Peel, livestock marketing specialist for Oklahoma State University, said that the most recent cattle on feed report shows the dynamic feed environment which currently exists, and explains the high-demand situation. “Feedlots are beginning to take advantage of the available supplies of heavy yearling cattle coming off of summer grazing programs,” said Peel, who says demand for lighter-weight feeder cattle is somewhat less. “I suspect that some of the 600-700 pound feeders, and certainly most anything lighter than that, would have stayed on winter pasture if forage conditions were better in the country,” Peel said. “In Oklahoma, wheat pasture is limited, much of the state is quite dry and although considerable hay was harvested this summer, much of it is poor quality. All in all, it isn’t easy to put together a stocker or backgrounding program, but the incentives to do so continue to build.” Peel explained that the unusual feeder prices are occurring because of high demand for heavy feeders from feedlot buyers, and that the limited forage makes it difficult to put stocker programs together to meet the feedlot demand. “The market will continue to offer incentives for forage- based gains until enough producers respond,” said Peel. At the Joplin Regional Stockyards in Joplin, MO, last week, demand was moderate to good on the moderate supply of 3,600 head. Compared to the previous sale, steers and heifers under 500 lbs. were $2-5 higher, with weights over 500 lbs. steady. The best buyer activity was seen on light weight calves. Winter Livestock’s sale in La Junta, CO, last week saw a total of 1,353 head sell, with steer calves steady to $1 lower and heifer calves steady. In a light test, yearling feeder steers and heifers were steady, on moderate trade and demand. There was a total run of 1,405 head last week in Riverton, WY, at the Riverton Livestock Auction. There was lighter offering compared to the week prior, with feeder steers under 550 lbs. coming under pressure, with weights over 600 lbs. going $1-3 higher.

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Thursday, December 20,2007

Colorado Cattlemen’s Association wraps up successful 57th mid-winter confe

by WLJ
November 26, 2007 Colorado Cattlemen’s Association (CCA) held their 57th annual Mid-Winter Conference Nov. 14-16 at the DoubleTree Hotel in Colorado Springs, CO. With record attendance, CCA members and guests were able to come together on key issues affecting the beef industry. “We are a community of beef producers and Colorado residents dedicated to this industry and doing what is right,” said Kenny Rogers, CCA president. Representatives from across the state attended this annual event, sponsored by CCA and the Colorado CattleWomen (CCW), to share their commitment to improving Colorado’s beef industry. “As we move into the next legislative session, Colorado beef producers’ voices will be stronger than ever thanks to this year’s conference discussions and decisions,” Rogers added. Committees met Thursday, Nov. 15 to discuss key industry topics. CCA members at this event developed policies that will guide the future of Colorado’s cattle industry. Among the issues discussed among cattle producers in attendance was an endorsement of a ban on packer ownership of cattle for more than 14 days prior to slaughter, which passed unanimously, and a series of discussions on water rights. With growth all along the state’s Front Range region, producers are becoming more concerned about how urban and suburban water usage will impact their operations. CCA officers expressed their desire to involve as many cattle producers as possible in the process in an effort to present a more effective voice and a united front for the state’s cattle producers. CCA’s open and inclusive membership policy allows for anyone interested in the Colorado beef industry to join and become involved. “CCA works for ranchers and landowners on issues affecting the beef industry. Producers, consumers, land owners, businesses—we invite anyone concerned about the future of Colorado’s beef industry to join us,” Rogers said. During the awards banquet on Nov. 15, CCA and CCW gave special recognition to several members and state employees who have gone a step above their normal daily job descriptions and have shown an invaluable dedication to the beef industry. The award recipients included: Brand Inspector of the Year—Jack Haworth, Walden, CO; Law Officer of the Year—Deputy Larry Murphy, Colorado Springs, CO; Law Officer of the Year—Trooper Brian Williams, Lamar, CO; 2007 Commercial Producer of the Year—Jack and Dorothy Gilstrap, J.L. Cattle Co., Branson, CO; 2007 Seedstock Producer of the Year—Sam, Nita, and Skylar Houston, Aristocrat Ranch, Platteville, CO; Rookie CattleWoman of the Year—Christy Belton, Routt County CattleWomen; and CattleWoman of the Year—Rita Bay, Arkansas Valley CattleWomen. The Mid-Winter Conference ended with the Current Issues Breakfast Meeting on Friday, Nov. 16, where each of CCA’s affiliates reported on the activities and concerns in their areas. “The affiliate groups represent the core of CCA, and the Current Issues Breakfast Meeting is just one of many outlets CCA has to make sure every member’s voice is heard,” Rogers stated. To join CCA or to find out more information about becoming a member, contact the CCA office at 303/431-6422 or log on to www. coloradocattle.org.

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Thursday, December 20,2007

Boxed beef prices continue to drag

by WLJ
November 12, 2007 Fed cattle trade stalled last week as packers and feedlots battled back and forth to determine who would end up taking bigger losses on this week’s trade. There was little change in the market picture last week to alleviate the squeeze on either side of the equation despite packers’ cutback in harvest levels, which served only to prevent boxed beef prices from falling farther. As of mid-day last Thursday, packers and feeders were still several dollars apart and market analysts expected the week’s trade at steady money. The previous week’s trade in the southern Plains came at $92-93.50. Dressed sales in Nebraska and Colorado came in a range of $142-143.50, with live sales from $91-92.50. Live cattle in the western Corn Belt sold from $89-90, with dressed sales from $140-142. Heavy carcass weights continue to drag on the market. With weights averaging 794 lbs. and packers continuing to fight for market share by keeping slaughter levels higher than is prudent as they fight for market share, there is a flood of beef on the market at prices buyers have been unwilling to pay. Packers have had to mark beef lower to prevent a backlog of product from developing and the result has been a significant bleed of red ink. Last week, HedgersEdge.com estimated packer losses at $67.80 per head on Thursday. If that number is applied to the entire federally inspected slaughter, that could mean losses for last Thursday alone would have exceeded $8.5 million. For the week, if kill levels reached expectations, the losses would total $40-45 million. Regardless of the red ink, packers continued to push heavy cattle harvests. The week-to-date total through Thursday last week was estimated at 511,000 head, down just 3,000 from the previous week, but still 4,000 head above year-earlier numbers. The high chain-speed did little to help the boxed beef market. Choice product last Thursday was at $140.05, up 85 cents from the previous day on demand that was called fairly good and heavy offerings. Select cuts were also higher, moving up 29 cents to trade at $128.61 mid-day last Thursday. Oklahoma State University Livestock Marketing Specialist Derrell Peel noted last week that competing meats and the U.S. economy as a whole are pounding the beef industry and it doesn’t appear the situation is likely to change in the near-term, which spells bad news for feedlots and packers alike. “Already weak wholesale pork prices, especially hams, coupled with recent weakness in chicken breast and wing prices, is weighing on boxed beef prices. Pork production is up 3.1 percent for the year-to-date and the most recent week was 5.8 percent above last year,” Peel said. “The pressure is exaggerated even more by unexpectedly strong beef slaughter rates recently and heavy carcass weights, both of which are pushing up beef production. It appears that packers, already suffering from lousy margins, are making matters worse in the short run by jockeying aggressively for market share.” Unless things change for the better, either domestically in terms of beef demand, or abroad, the situation isn’t likely to change soon, Peel said. “The result is a vicious squeeze for feedlots and packers with a lot of pushing and shoving in the fed cattle market each week. There does not seem to be much relief in sight for packers. Beef demand will continue to be pressured the rest of the year with ample pork and poultry production,” he said. “With South Korea back out of the beef market until 2008, there is little chance that export demand will come to the rescue. Current boxed beef values do not support fed cattle prices above the mid $80s, yet packers are paying near $90 for fed cattle at this time.” Peel said feedlots are equally pinched by the high cost of replacement feeders and corn prices, which aren’t likely to moderate either. “Meanwhile, feedlots continue to sell fed cattle that were bought as very pricey feeders last summer, many of which have breakevens in the mid $90s, yet they have been able to sell fed cattle around $90 at best,” he said. “Both packers and feeders are taking punishment in the market and there seems to be little they can do about it for the time being except to battle each week to see how the losses get split between them.” The commodity markets last week were adding to the struggle with big swings from day-to-day as a result of uncertainty in the broader stock market and strength in the grains. On the Chicago Mercantile Exchange last Thursday, live cattle contracts were mostly higher with December moving up 52 points, closing the session at $95.40. February issues were up 30 points, ending at $98.35, and April gained 35 points to finish the day’s trade at $98.82. Feeder cattle Auction markets across the country took in large numbers of calves last week, while weaned, truly bunk-ready feeder steers and heifers become harder to find. Large runs of yearlings in the northern states over the past month have produced a limited offering of preconditioned feeder cattle, leading to steadily solid demand in most places. Brian Winter of Winter Livestock Exchange in Dodge City, KS, said that very few of the feeder cattle at their sale last week were weaned. “Of the approximately 2,500 head we sold, I would say that less than 400 of those cattle were weaned. It’s been that way for a little while in this area, where probably 75-80 percent of the calves are coming in straight off the cow with no weaning,” said Winter. “There’s still good demand for the calves because the margins are pretty good on them right now—it’s just at a lower price point than what is being paid for the yearlings and preconditioned cattle.” Winter explained that rain has been scarce in his area which, to some degree, has softened the price and caused a few of the calves to go elsewhere. “The market has definitely been a little weaker because of moisture concerns. If we would have had good moisture in this area over the past couple of months, I think prices would be $10-20 higher,” said Winter. “Most of the cattle in southwest Kansas are staying in the area and going to yards because of the lack of grass, but at our Riverton, WY, barn, we’re seeing a good number of those cattle head to feedlots in Nebraska, partially due to the same reason.” Walt Hackney of the Hackney Cattle Company writes that a number of farmer-feeders in the Midwest have come back to the sale barns and are keeping demand strong. “Since feeder cattle have dipped to a lower level, the interest has returned from Midwest buyers, who were basically sitting on the sidelines making a decision whether to sell corn to the ethanol plant or feed cattle,” Hackney said. “Now, with the combination of feeder cattle cheapening up some and the demand for ethanol corn tempering somewhat, the feeder buyers are finishing corn harvest and turning their attention toward filling empty pens.” Hackney said that although some corn growing areas experienced harvest challenges which may have decreased yield, the forecast of a record yield should remain. “Undoubtedly, with the extra acres planted, corn production will be a record, with over 13 billion bushels projected, and very possibly, the cattle feeder will find the procurement of corn for cattle feed to be easier since part of the bloom may have gone off the ethanol programs,” said Hackney. Limited wheat pasture continues to affect feeder cattle prices in the southern Plains states as wheat prices are too high for farmers to risk losing yield by grazing cattle. This trend continues to show up in auction markets where rainfall has been good for grass, but without wheat grazing opportunities, there is not enough acreage to handle the calf crop. At the Oklahoma National Stockyards in Oklahoma City last week, there were 9,665 cattle put up for sale where prices on feeder steers were found to be steady to $2 lower, with the largest decline found in steers under 800 lbs. Feeder heifers were steady in a light test. Overall demand was moderate to good with the best action seen on weights that will finish in April. Unweaned steer calves were steady, with heifer calves steady to $2 lower. Demand for calves was moderate to good, with the best demand on lighter weight calves suitable for the limited early wheat grazing opportunities. A group of steer calves averaging 624 lbs. brought $109.33 at the sale, while heifer calves weighing 626 lbs. were bringing $101.21. In Joplin, MO, last week, there was moderate demand on the supply of 5,000 head available for sale. Compared to the previous sale, steer and heifer calves were steady to $2 lower, with yearlings staying steady on a light test. The bulk of the calf offering was seeing the corral for the first time, with only a few being vaccinated or weaned. Six hundred-700 lb. steer calves were good for between $102-112, while heifer calves of the same weights brought $93.25-100. Further north in Bassett, NE, last week, there were 4,100 head sold, with feeder calves trending $1-3 higher compared to the previous sale. The quality of the cattle was good, with good demand for all classes and weights. Most consignments had received preconditioning shots and were fresh off the cow. Steer calves weighing an average of 624 lbs. brought $119.75 at this sale, with weaned feeder heifers just over 600 lbs. bringing $108. Torrington Livestock Commission’s sale in Torrington, WY, last week saw 2,800 head sell, with steer calves steady to $3 higher, with some instances of $4-5 higher. Heifer calves were steady to $2 lower. There were not enough comparable sales on steers and heifers over 700 lbs. for a good price comparison, but overall demand was moderate to good. Steer calves weighing an average of 616 lbs. brought $116.50, with heifer calves weighing 613 lbs. going for $103.54. In La Junta, CO, last week, there were 3,909 cattle sold, with steer and heifer calves steady to $1 higher, except for 550-600 lb. steers which were $2 lower. In a light test, yearling feeder steers were steady to $1 higher, with yearling feeder heifers being scarce. Six hundred-640 lb. steer calves brought between $106-110 at this sale, with 605-630 lb. heifer calves bringing $101.25- 102.75. There were 2,046 head sold last week in Billings, MT, where, compared to the previous sale, steer and heifer calves sold with steady to lower undertones, though there were not enough offerings for a complete comparison. Demand was moderate, with the overall quality not as attractive as the week previous. Buyers paid $103.50-107 for steer calves between 600-700 lbs., and $91.50 for heifer calves weighing 650 lbs. At the Toppenish Livestock Auction in Toppenish, WA, last week, there were 1,970 head for sale with feeder steer and heifer calves steady to $5 higher, with most consignments being certified as all natural. Trade was active and there was good demand. Six hundred-700 lb. steer calves brought $98-105, with heifer calves in the same weight range bringing $93-95.50. At the Western Stockman’s Market in Famoso, CA, last week, prices were $2 higher on the stockers and steady on the feeder cattle out of the 2,252 head available for sale. A good run made up mostly of stocker and feeder cattle was seen, with good demand on the feeders, especially quality steers and heifers between 700-800 lbs. Six hundred-700 lb. choice steers sold between $95-105 at this sale, with 625-700 lb. choice heifers bringing $90-97.50.

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Thursday, December 20,2007

Strong corn market takes its toll on feeder cattle

by WLJ
Fed cattle trade broke out earlier than normal last week. Trade and demand was moderate in the Texas Panhandle last Wednesday afternoon and Thursday. Compared to the prior week, live sales were .50 to $1 lower at $89-89.50. Trade was very limited in Kansas with a few early live sales at $89-89.50 and dressed sales at $141. Trading was moderate in central and western Nebraska with live sales mostly steady with last week at $89-89.50. There was also reportedly a light test of dressed sales at $138 in Nebraska. Trade in Colorado was also light with early live sales unevenly steady at $89.50. Trading was light to moderate in the western Corn Belt with live sales steady to $1 lower than the previous week, at $88, with a few dressed sales $1 lower at $137-139 compared to the prior week. The high cost of feeder cattle early in the year and skyrocketing corn prices have resulted in a rising cost of gain for feedlots. Higher breakevens have kept cattle feeders in the red for a good portion of the year. Packer unwillingness to raise offers last week indicates a standoff could be developing, despite a reportedly declining supply of market-ready cattle which should give feedlots the upper hand in the weeks ahead. Packers were reluctant to pay more money for cattle last week and early trade was expected to set the tone. The rise in beef cutout values has packers back closer to positive margins, although according to HedgersEdge.com, last Thursday they were still in the red, losing $10.35 per head despite a Choice cutout value above $148. Demand at the consumer level has been declining steadily and packers have been working hard to maintain product movement. According to Livestock Marketing Information Center Economist Erica Rosa, packers are working hard to overcome that demand issue. “The most recent third quarter demand index shows a decline. Not as severe as the second quarter decline, but it was still lower. That weaker demand will be a problem going into the first quarter of 2007,” Rosa said. She said efforts to maintain profit margins and cutout values going into the holiday season are important for packers who are trying to make up for losses early in the year. Part of that defensive strategy has been talk of cutbacks in slaughter volume. “Despite the talk, there hasn’t been much of a cutback in harvest,” Rosa said. Kill levels for last week totaled 125,000 head last Thursday, up 1,000 from the week prior and 121,000 in 2005. For the week to date last Thursday, harvest was 504,000 head, 6,000 ahead of the previous week and well above the 491,000 slaughtered in 2005. At those volumes, cutout values increased slightly last week. As of Thursday, Choice product was up 57 cents, to $148.27, and Select was up 23 cents, trading at $135.72 on moderate demand and offerings. According to USDA, Select and Choice rib, chuck, round and loin cuts were steady to weak. Beef trimmings were called generally steady on moderate demand and offerings. The cow beef cutout values were also lower on the week. Last Thursday, the 90 percent lean cutout value was $103.25, fully $3 lower than the prior week. Buyers last week at the wholesale level were actively buying rib and loin packages to fill upcoming holiday demand, which lent some support to those primals. Demand for end meats however, was weak. The boneless beef markets for the most part traded steady, with a softer tone to the 90 percent lean cow beef market. Imported beef values were called firm due to a lack of supply coming into U.S. ports. Rosa said much of the weakness in the retail beef market was directly attributable to the competing proteins. Chicken, in particular, continues to be a strong market competitor and the low cost has been a difficult factor to overcome in the market. “Boneless/skinless breast prices continue to fall. Supply has been the main issue in the chicken market and producers are cutting back on egg sets in an effort to improve wholesale prices,” Rosa said. On the Chicago Mercantile Exchange (CME) last Thursday, live cattle contracts were mixed. December live cattle settled at $86.75, a loss of 80 points. February live cattle settled down 57 points at $90.10 and the April contract was down 20 points at $89.75. Feeder cattle In the feeder cattle market, the strength of corn was the news of the week and big gains in the December new crop corn on the Chigago Board of Trade last Wednesday and Thursday resulted in a beating for the feeder calf market. On CME last Thursday, feeder cattle declined sharply across the board. The November contract closed off 242 points at $101.95. January and March contracts both shed 300 points, closing at $98.42 and $97.17, respectively. April was down 292 points at $97.17 and May gave up 275 points, closing at $97.27. Cash feeder cattle prices were also lower across much of the country last week as prospects of weather related illness in newly purchased calves and the steep rise in corn prices kept demand for calves at a minimum. Demand in most markets was much higher for long-weaned calves with at least one round of vaccinations. In fact in some instances, the only steady prices to be found were for calves meeting that set of criteria. Out west in Vale, OR, the calf market last week was $1-3 lower on weaned calves and $2-5 lower on loud lots fresh off the cow. The largest decline was on calves carrying heavy flesh and body fat. In Madera, CA, stockers and feeders were steady to $2 lower than the prior week in a light test. In Clayton, NM, compared to a week prior, feeder steers and heifers under 600 lbs. were mostly steady; those over 600 lbs. were $1-2 lower. Trade and demand were called active. Farther to the southeast in Texas, weather conditions have generated rain showers and in parts of the state, grass pastures have rebounded some from the poor conditions faced for much of the past year. Wheat grass grazing in the south is reportedly spotty, but pasture conditions are allowing for at least some stocking although prices continue to trend lower in some markets. In San Angelo, TX, compared with the prior week, feeder steers and heifers under 600 lbs. were firm to $1 higher; calves over 600 lbs. were weak to $1 lower. In Crockett, TX, last week, feeder steers and heifers were $2-3 lower, with instances of $5 lower, on strong trade and demand. Reports from Oklahoma indicate wheat pastures there are in need of additional moisture in order to allow for any decent grazing prospects. Grazing prospects there got off to a good start, but a lack of significant precipitation has caused crop stress and in some areas, the need for reseeding of fields. According to USDA, the wheat crop in Oklahoma is rated 7 percent excellent, 39 percent good and 33 percent fair. Twenty-three percent of the crop was rated poor or very poor. The El Reno, OK, market was one of the few bright spots in the country last week. Feeder steers and heifers trended steady. Demand was called good for feeders despite the sharp advances made in the corn futures last week. Steer calves were steady and heifer calves steady to $2 lower. Demand was moderate to good for calves. In Dodge City, KS, compared with the previous week, steers from 300-650 lbs. were in light supply and trended $1-4 lower. Cattle in the 650-1,000 lb. range were $2-4 lower. Heifers 300-450 lbs. traded $2-4 higher and those in the range of 450-800 lbs. were called weak to $4 lower. In La Junta, CO, compared with the previous sale, steer and heifer calves were mostly steady with some instances of $1-2 higher except for 600 to 650 lb. steers, which traded $2 lower. Yearling feeder steers and heifers were lightly tested. In Riverton, WY, compared to the prior week, feeder calves from reputation outfits, known for quality, were unevenly steady with lower undertones noted for most classes. Heifer calves were trading with higher undertones for those in the 350-450 lb. range. Heifers over 450 lbs. were under pressure with instances of $3-6 lower. Yearling steers traded steady to instances $1-2 lower. Yearling heifers were steady with instances of $1-4 higher on the better kinds. Weaned, preconditioned calves were in high demand. In Billings, MT, last week, steer and heifer calves were steady, with lesser types selling with lower undertones. These types were too lightly tested on Thursday to make an accurate comparison. Demand was called good on larger packages of high quality black-hided calves, with lighter demand for other types offered in couple head lots and small packages.

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Thursday, December 20,2007

Higher fed prices look likely

by WLJ
October 29, 2007 Feedlots, helped by an on feed number which shows tight supplies ahead, dug in their heels last week in their efforts to increase fed cattle prices. Trade was at a standstill as packers looked for any available bargain cattle before coming to the table in earnest, something that looked to be a Friday affair last week. The previous week, the tactic worked in favor of feeders who pushed trade as much as $4 higher. The last established trade in the southern Plains was in a narrow range of $94-94.50. Live sales in Nebraska sold from $93-93.50 and dressed trade was at $145. Colorado live sales were in the $93-93.50 range and dressed trade was at $145. Fed cattle in Iowa and Minnesota sold from $90-92 with dressed sales at $143-145. EHedger.com analyst Troy Vetterkind said last week that while higher prices were likely for the week, the weeks ahead could be difficult for cattle feeders. “Next week concerns me a little bit as not only will October go off the board next Wednesday, but packers will be able to draw off of November contract and formula cattle,” Vetterkind said, pointing out that those supplies could be used to leverage cash prices lower after the first of November. Packer margins continue to be a source of concern for the industry. Packers are chasing Choice beef right now and too much competing protein has prevented packers from pushing beef cutout prices high enough to sustain the higher cattle prices being commanded in the country. End meats continue to drag on the cutout values as warm temperatures and low-priced pork and poultry cut into demand. Last Thursday, the mid-day cutout values were lower again with Choice boxed beef dropping another 52 cents to $143.56, while Select shed 92 cents to trade down to $130.36 on light to moderate trade in the midst of moderate to heavy offerings by packers who are continuing the practice of fire sale trade in an effort to move any significant quantity. One of the few upsides for packers is the drop value, which is trading at all-time highs. Last week, the by-product drop value was trading near the $10 per cwt. level, helping to ease the strain. Some of the problem is the result of heavy slaughter numbers by packers who are harvesting record-heavy carcasses for this time of year. The week-to-date harvest through last Thursday was estimated at 517,000 head, compared to 516,000 for the same period a week earlier and 502,000 head for the same period a year earlier. Last week, average live weights were seven lbs. heavier than the previous year’s record weights. That is contributing to an enormous amount of beef production, which is meeting with sub-par consumer demand. Coupled with the difficult nature of the current export situation, it amounts to a bad situation for the packing sector which remains caught in the middle and is bleeding red ink as a result. The picture doesn’t appear likely to change in the near future with tight supplies of fed cattle likely to continue into 2008 and a retail consumer which is, arguably, unwilling or unable to pay more for higher priced beef cuts. That market scenario is likely to make achieving, let alone sustaining, fed cattle prices in the high-$90 to low-$100 levels difficult this winter or next spring barring any significant changes in the U.S. economy or international trade picture. The cow beef markets have regained some footing over the past two weeks and prices have stabilized despite increases in harvest as fall culling sends more cattle to town. Cull cow prices have been steady at the mid-$40 to low-$50 level for much of the fall. Meanwhile, the cow beef cutout value was steady at $104.50 last Thursday and the 90 percent lean was trading at $123.80, while the 50 percent trim sold at $47.93. Those prices are only slightly lower than last year’s levels despite gloomy predictions of a market decline until the Canadian border issue is resolved next month. The consensus among analysts is for the possibility of a short-term price impact on cull cow prices once the border opens to older Canadian cattle. However, there are likely to be fewer cattle shipped south than many expect and the impact should be minimal and short-lived as those cattle work their way through the supply chain. Meanwhile on the Chicago Mercantile Exchange last week, live cattle contracts were trending lower as the end of the month forced fund liquidations of long contract positions and basis adjustments took their toll on prices, Vetterkind said. “We continue to see long liquidation in the front month live and feeder cattle issues as open interest in these contracts continues to decline on the down days. Technically, the market is starting to look a little tough with December live cattle closing under its 200-day moving average at $96.25 and April taking out the low set two Wednesdays ago,” Vetterkind said. “I believe the live cattle futures market is in the process of adjusting the basis in December-April futures as we have been carrying a pretty hefty premium in those contracts for the last several months. If we were to trade some $95 cattle this week and come back next week and trade some $93-94 cattle, then December should find some support at $94-95 by the first part of next week.” Feeder cattle The cash trade for feeder cattle gave up some, if not most, of the strength it gained the previous week and in areas of the country, weather is still the motivating factor for most buyers. Grain prices and the low availability of wheat pasture continue to keep feeder cattle prices depressed, although feeder cattle placements begin to look like a more viable option as feedlots continue to look for cattle to fill pens, artificially bolstering cash feeder cattle prices in some areas. Western Video Market offered 13,000 head on video in a sale which recently concluded on Oct. 18 and owner Ellington Peek said that despite severe drought in many western regions, the prices paid for feeders seems to remain slightly above actual demand. “The prices we’re seeing are really not too bad, considering the drought that people are suffering through in a lot of areas out west,” Peek said. “There’s not a bit of feed in California, and the same goes for most of Nevada where they are really short on grass after a tough summer, and hay prices are through the roof. There’s a pretty large area out here where the absolute worst hay is going for $150 per ton,” said Peek. Peek explained that some of the better deals to be had right now are for lighter heifers, assuming you have a place to put them. “Right now, you can buy a lot of good heifer calves for $95, which compares pretty favorably to some of the steers. Probably the top 4-5 weight steers are bringing $1.28 or so, and the top natural steers are bringing $1.14 for a 6-7 weight. That’s still better than $1.38 or $1.25 for those same steers not too long ago,” Peek explained. Peek also says that a stronger undertone would probably be felt if some areas could receive enough rain to satisfy ranchers for at least a short time. “If we would get a few good rains to drop in this fall, I think the market would get stronger for two to three weeks, but as it is now, every week is a little bit worse than the last,” said Peek. “There’s some good-looking calves out there, but there’s simply no place to put them where you can afford to feed them through the winter.” Last week at the Oklahoma National Stockyards in Oklahoma City, OK, steer and heifer calves were uneven to mostly steady, some going for $2 lower than in the last sale. Of the 9,282 head offered at last week’s sale, a large amount of the supply consisted of large frame 1-2 calves with numerous Brahman crosses. A group of feeder steers weighing an average of 575 lbs. brought an average of $115.98 at this sale, with feeder heifers of similar condition weighing 581 lbs. bringing $108.38. Just to the east at the Joplin Regional Stockyards in Joplin, MO, 3,914 head were offered last week and compared to the last sale, steer and heifer calves were $2-4 lower, with most yearlings steady. Demand was good for yearlings, but only moderate for calves on moderate supply. A load of 800 lb. steers brought $111.25 at this sale, reflecting the desire of buyers to search for full loads of heavier cattle to place in feedlots. At Winter Livestock Inc. in La Junta, CO, last week, 4,689 head were offered for sale where more of the thin steer calves under 600 lbs. were selling for $1-2 lower than compared to the previous sale. Cattle in full or fleshy conditions were $5 lower, and those over 600 lbs. were steady to $1 lower. Smaller heifer calves of under 450 lbs. sold $5 lower and heifers over that weight were steady to $2 lower. Trade was moderate to active with the bulk of the offerings being in full and fleshy conditions, with moderate to good demand. Buyers were paying $103-107 for 650-700 lb. steers, and $96-99.50 for heifers weighing 650-680 lbs. At the Five States Livestock Auction in Clayton, NM, last week, there were 1,972 head offered for sale, with feeder steers and heifers under 500 lbs. $2-4 lower, with cattle over 500 lbs. steady to $2 higher on active trade and demand. A group of 616 lb. steers brought $113 at this sale, with buyers paying $105 for heifers weighing 633 lbs. At the Stockland Livestock Auction in Davenport, WA, there were 1,875 head offered last week with feeder steer and heifer calves steady to $3 lower compared to the last sale. Most of the declines were on heifers, with yearlings not being well tested. Trade was moderate to active with moderate to good demand.

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Thursday, December 20,2007

Colorado cattlemen team up to earn two GridMaster Awards

by WLJ
October 22, 2007 North Dakota Stockmen’s Association (NDSA) members gave the beef industry’s 21-year-old research, promotion and education program a vote of support at their 78th annual convention in Bismarck, ND, Sept. 29. Members approved the Beef Checkoff Program resolution which celebrates the success of the checkoff in building beef demand and supports the four structural changes recommended by the Industry-Wide Beef Checkoff Task Force last year. “The beef checkoff already has a long list of accomplishments for our industry—from turning around falling beef demand to maintaining consumer confidence during what could have been the BSE crisis,” said NDSA President Mark Huseth of McLeod, ND. “We are looking for more great things in the future as our industry works to improve its position in an increasingly competitive market.” NDSA members have been contemplating their position on the checkoff recommendations, which include increasing the per-head assessment to $2, establishing a system for a periodic checkoff referendum, expanding the criteria for eligible checkoff contractors, and increasing the understanding of the Federation of State Beef Councils, for the last year. At the 2006 annual convention, they directed staff and leaders to find out more about the recommendations and present those findings to them so they could make up their own minds. NDSA issued two member surveys soliciting input on the topic and highlighted the implications of each recommendation at the NDSA Spring Roundups and again at this year’s convention. John Huston, the former National Live Stock & Meat Board and National Cattlemen’s Association executive who served as moderator of the Industry-Wide Checkoff Task Force, led the convention discussion to offer an insider’s perspective to the proposed changes. Huston explained that task force members proposed the increased checkoff investment based largely on inflation since the assessment has not been changed since it was first initiated. It takes $1.90 in 2007 to equal the buying power of $1 in 1986. Task force members suggested that some of the additional funds could be invested to build demand, increase exports and re-establish an advertising presence on network television, Huston said. For the average North Dakota producer, the change would mean an estimated $85 more per year, based on the average herd size in North Dakota. All but the recommendation to increase understanding of the Federation of State Beef Councils would require a federal law change and a producer vote. At the NDSA convention, members also voted to oppose the sale of hunting, recreational and other access rights that effectively sever those from the surface of the land. “Severing certain land-use rights can have a long-term negative impact on a landowner’s or a lessee’s ability to manage his or her operation,” Huseth explained. “Consider the problems when a livestock producer and another who owns the recreational access rights to a parcel, for instance, have competing access needs. And consider when the person who owns the recreational access rights passes away and wills those rights to succeeding generations, and those generations will the rights on to their succeeding generations. Before long, dozens of people could be fighting for access to the same piece of property at the same time. Who decides then who can be on and when? It could make for a very messy situation.” Access rights have become a top-of-mind issue since they were brought up in the House and Senate Natural Resources Committees during this year’s state legislative session. Unable to reach a consensus on the issue, legislators opted to gather more input and study it further during the interim. NDSA will be presenting its Access Rights resolution to the interim committee when it meets sometime in the year ahead. NDSA officers will also be presenting members’ Country-of-Origin Labeling (COOL) and National Animal Identification System (NAIS) resolutions to legislators before the programs are developed and implemented. NDSA’s COOL resolution supports an efficient, accurate and least burdensome program that requires all cattle to be born, fed and processed in the U.S. to receive the USDA grade stamp. It also calls for all live cattle imported into the U.S. to be branded or identified with their country of origin and the balance assumed as U.S. product. Members renewed the resolution, which first passed in 2004, in the wake of the looming COOL implementation day next September. “The policy reiterates our belief that COOL doesn’t have to be a complicated, cumbersome program in order to give consumers the information they want and producers the opportunity to brand their product as American,” Huseth said. NDSA favors the COOL program outlined in the U.S. House’s version of the Farm Bill—a much closer match to its COOL resolution—over what is outlined in the impending rule. “With the COOL rule, the devil is in the details,” Huseth explained. “It requires third-party verification of origin, opens up producers’ records to other industry segments, and exempts key beef products, such as those offered through foodservice, from the labeling requirements.” Huseth is hopeful the U.S. Senate maintains the essence of the House’s version of COOL when it marks up the Farm Bill and adds the other few components NDSA members outlined in their resolution. The NAIS resolution is another policy members renewed at the September convention. “It re-emphasizes the NDSA’s belief that any animal identification program be market driven and incorporate the brand programs that have served as viable traceback systems for nearly eight decades,” Huseth explained. Adequate cell phone coverage is an issue that has emerged over the last decade. At the convention, NDSA members also adopted a new policy encouraging wider-spread cell phone coverage in rural areas to address the needs of rural-based businesses. “A strong communication system is necessary for economic development and maintaining a strong business climate,” the resolution explains. State-of-the-art beef research is also necessary to maintain a strong livestock industry, members maintain in the North Dakota State University (NDSU) Research Facility Construction resolution. In it, members direct university officials to take “quick and decisive action” to replace the condemned Beef Research Laboratory on NDSU’s main campus. The North Dakota Legislature authorized $80,000 for the project and spending authority of $1 million during the 2007 session. Additional funding may also be available through USDA’s formula funding if applied for soon, Huseth said. “A new facility can help move our industry forward by meeting current and future research needs,” he said. A complete list of NDSA’s newly passed and renewed resolutions will be available soon in the 2007 NDSA Resolutions Book. For a free copy, call 701/223-2522 or e-mail ndsa@ndstockmen.org.

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