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Thursday, December 20,2007

U.S. red meat export value increased through July

by WLJ
U.S. red meat exports posted increases in value through the first seven months of this year compared to the same time last year, according to the latest statistics compiled by the U.S. Meat Export Federation (USMEF) and provided by the U.S. Department of Agriculture. U.S. beef and beef variety meat exports worldwide increased 27 percent in value to $1.42 billion, and 16 percent in volume to 425,394 metric tons (937.8 million pounds), while U.S. pork and pork variety meat exports were up 5 percent in value to $1.7 billion, but declined 5 percent in volume to 704,138 metric tons (1.55 billion pounds). Through July, Mexico continued to be the leading market for U.S. beef and beef variety meat exports with a volume of 202,500 metric tons (446.3 million pounds) valued at $670.8 million. Mexico, still the second-largest destination for U.S. pork and pork variety meat, posted a 27 percent decline in volume to 154,410 metric tons (340.4 million pounds), and a 22 percent decline in value to $248.2 million. However, export volume in July was 21,389 metric tons (47.1 million pounds), a 12 percent increase from the prior month. Canada, although not an area where U.S. red meat marketing takes place, was the second-largest export market for U.S. beef and beef variety meat. Volume through July increased 31 percent to 69,716 metric tons (153.7 million pounds), and value was up 33 percent to $315.6 million. USMEF reports the increased volume is partially attributed to a 12-percent increase in slaughter cattle imports and a 17-percent increase in feeder cattle imports. Meanwhile, Canada is ranked third for U.S. pork and pork variety meat exports with a volume of 77,228 metric tons (170.3 million pounds) valued at $260.1 million. The strengthening Canadian dollar, along with higher feed and labor costs, are other dynamics driving trade, according to USMEF. Moving from North America to Asia, the fourth-largest market for U.S. beef and beef variety meat exports was Japan with a volume of 5,387 metric tons (11.9 million pounds), the largest volume since the market reopened in late July last year. Through July, beef export volume to Japan was 26,025 metric tons (57.3 million pounds) while value was $132.8 million. Japan remained a lucrative market for U.S. pork and pork variety meat exports as volume increased 7 percent through July to 209,591 metric tons (462 million pounds) and value increased 13 percent to $667.8 million, almost three times the value of the next market, Mexico. USMEF reports the Middle East continued as an expanding area for U.S. beef and beef variety meat as export volume through July increased 15 percent to 55,658 metric tons (122.7 million pounds) valued at $62.1 million. USMEF also notes that U.S. beef and beef variety meat exports to the Caribbean in July set a new monthly record at 1,898 metric tons (4.1 million pounds). USMEF works extensively with Caribbean chefs, introducing new ways to use a variety of U.S. beef cuts which provide the high quality and taste that tourists and islanders alike are looking for. And for U.S. pork and pork variety meat exports, volume to Australia went up 39 percent to 20,353 metric tons (44.8 million pounds) through July, and value increased 47 percent to $62.8 million. The Australian pork industry continues to struggle with high feed prices and the strengthening Australian dollar. According to a recent report, Australian pork producers are losing around A$30 per pig sold.

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Thursday, December 20,2007

Montana sheep quarantined over bluetongue concerns

by WLJ
Sheep producers in Musselshell County, MT, are not allowed to transport sheep anywhere within or beyond county lines for the next 30 days because of a recent possible outbreak of bluetongue. State Veterinarian Dr. Marty Zaluski authorized the hold order Monday, Sept. 10, in an effort to reduce potential transmission of the virus.   About 100 sheep in Musselshell County have died within the past two weeks. Several initially tested positive for the virus in a screening test and when whitetail deer were tentatively diagnosed, too, Zaluski decided to protect other livestock with the hold order. “I implemented this hold as a general precaution after the state laboratory provisionally diagnosed bluetongue in a flock,” Zaluski said. “The sheep from this flock had clinical signs and death loss that is consistent with bluetongue, but we still need to confirm that diagnosis. Also, several deer in Musselshell County tested positive for bluetongue.” Confirmation of the test results are expected this week. Bluetongue, epizootic hemorrhagic disease and other diseases look similar on screening tests so more specific tests are required before bluetongue can be confirmed. “Samples from the infected Musselshell deer have been taken to the National Veterinary Services Lab in Ames, IA, and they are working on identifying this particular serotype,” Zaluski said. Sheep, whitetail deer and antelope are especially susceptible to bluetongue; the virus often causes death if these species are exposed. Cattle, goats, mule deer and elk also can contract the disease, but rarely show symptoms and are a much lower risk in spreading the disease, said Zaluski. Humans are not susceptible. Bluetongue commonly spreads by biting gnats, especially in late summer and early fall. Zaluski wants to limit movement of infected sheep so gnats will not have the opportunity to bite an infected sheep and then bite a healthy sheep, spreading the disease. Vaccines have been developed for bluetongue, but no antibiotics exist for the virus. However, infected animals often develop secondary bacterial infections and those infections can be treated with antibiotics. Once the national lab identifies the specific serotype in this potential outbreak, Musselshell County sheep producers might have the opportunity to vaccinate their sheep. However, the vaccination is not widely available and it takes two to three weeks before the vaccine effectively increases immunity. “We’re going to have a frost sometime soon and that would lower the risk of spreading the disease just as well this year,” Zaluski said. Common symptoms of bluetongue include a crusty, swollen muzzle, lesions or bleeding in the mouth or on the skin and, sometimes, lameness. In sheep, the mouth can become swollen and have bloody blisters inside. Those red or dirty blue-colored blisters give the disease its name—bluetongue. Livestock producers should look for the following signs of the disease: Depression with heavy breathing or panting; High fever; Open sores on the tongue, mouth, or nostrils; Redness of the skin, face, neck, and possibly body; Lameness accompanied by an engorged reddish–blue area around the base of the horns and on the coronary bands of the feet; Loss of condition and muscular weakness; Loss of wool. Livestock owners are the first line of defense against the spread of the virus. Producers should inspect their flocks and herds frequently for suspicious signs and report any such symptoms to their local veterinarian. For more than 25 years, the presence of bluetongue viruses in the U.S. has blocked the export of U.S. cattle, sheep, and goats to many major world markets, including Australia, New Zealand, and the European Union. Canada accepts U.S. cattle, but requires rigorous testing before the animals may cross the border. “Montana has not had a major outbreak in the 15 years that I’ve been here,” said Montana Veterinary Diagnostic Lab Director Dr. Bill Layton. “We’ve had serological evidence that it is out there, but this outbreak was a bit of a surprise.” Bluetongue was first recognized in South Africa in the late 1800s, but it was not until the early 1900s that it was described in detail. The disease was reported in Cyprus in 1943 and subsequently in Israel, Turkey, Spain, Portugal, Pakistan, India, and the U.S. during the 1950s. In the U.S., the disease is most prevalent in the southern and southwestern states.

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Thursday, December 20,2007

Holiday trade slow, prices steady

by WLJ
Trade last week was typically slow as it tends to be during the lull between the holidays. As of Thursday last week, there was little to report in the area of fed cattle trade. Packers were still low on their bids as feedlots held out for at least steady money. Weather was of little impact, which is a welcome change for feedlots after some very cold temperatures stressed cattle and increased cost of gains across much of the cattle feeding area. However, those same feedlots that were frozen and snow-covered are dealing with mud, which was reportedly a major factor as warmer weather prevailed across the intermountain west and Plains states for much of the week. As of Thursday, it was yet to be seen whether packers, who have slowed harvest in an attempt to regain positive margins, would gain any leverage over feeders or if they would simply end up paying more for cattle late in the week to keep chains full. Offers on Thursday morning were still at $95-97 and $155-157 dressed. There was some small trade in Iowa on Wednesday last week at $150, and some light trade in Nebraska at $151 on Thursday, although the volume was not enough to call it a trend. Bids in the South were at $92. Analysts expected trade to develop at $94-95 live basis and $152-153 dressed when it did finally occur in earnest. In terminal markets last week, south St. Paul, MN, slaughter steers and heifers sold $1-2 lower. Sioux Falls, SD, sold slaughter steers and heifers mostly $2 lower, with high Select/low Choice yield grade 2-3 steers selling at $89-90. Boxed beef cutout values for the week were slightly lower on light to moderate demand and offerings. Mid-day Choice cutout values were $158.15, down $1.42 from the previous day. Select traded lower at $143.67, down $0.92, which provided insight into the packers’ reluctance to pay higher money on the week. Despite the downward trend in the light boxed beef trade, last week’s prices were well above 2004 prices and nearly $30 higher than the five year average price of $130. Slaughter volume for the holiday-shortened week was well below the previous week at 376,000 head, versus the prior week volume of 486,000 head. The Dec. 1 cattle on feed report, which, as expected, contained some bearish news, went mostly unnoticed last week. Because the report fell mostly in line with expectations, the placement figure of 117 percent didn’t register with Chicago Mercantile Exchange (CME) traders. As of Thursday last week, live cattle contracts on the CME had traded unevenly but with an overall upward trend. Thursday trading last week closed 32 points lower to 30 points higher. Nearby December 2005 contracts shed the most points, falling 32 as traders liquidated contracts before they expired on Friday. Later summer 2006 and December 2006 contracts traded two to 30 points higher. There has been some speculation among cattle traders that large amounts of money being pumped into CME by large commodity index funds are skewing the market. With Lehman’s announcement last week that it will roll out a new commodity index fund early in 2006, there is speculation that CME will increase limits on speculative cattle futures which would allow further increases in holdings by commodity funds. Traders say increased fund holdings will further slant the cattle market as speculative money flows in. During 2005, a key measure of market activity, the “Open Interest Record,” nearly doubled, from 120,000 to 200,000 in the last month of the year. A CME spokesperson declined to comment on the speculation that CME would allow more fund speculation last week. Feeder cattle contracts on CME also traded unevenly on Thursday, despite a higher overall movement for the week. Nearby contracts of January 2006 through April saw selling pressure and fell two to 27 points on moderate volume. Most country markets were closed last week for the holiday with only a scattered few holding sales. The closures prevented any trend from being established, although the few markets that did hold sales called the light runs of feeder cattle steady. That is good news as seasonal marketings pick up after the first of the year.

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Thursday, December 20,2007

Fed market softens, feeders steady

by WLJ
Active trade got underway last Thursday in Nebraska at prices of $148-149 following steady packer bids of $147 as feeders held out for prices of $150. When trade finally developed, it was at good volume and prices steady to $2 lower than the previous week. Market analysts and feedlot managers said last week they were already focusing more on the week ahead than the current market week. In the southern tier, significant trade had not yet developed by the time WLJ went to press, however, feeders were holding out for $95-97 live basis in the face of packer bids in the $91-92 range. Most analysts expected trade to occur in the range of $94 even to slightly below week prior trade. One market analyst in Texas said last week’s large jump in the number of cattle offered for sale in Nebraska could make cattle owners there more aggressive sellers. If prices in Nebraska drop because of that selling interest, it could pressure fed cattle prices in the remainder of the five-state area, the analyst said. Boxed beef cutout values reported by USDA elicited different responses from market analysts. Last Wednesday’s midday report showed a jump in composite beef values, but the end-of-day report backed away from the midday price listings and some market analysts saw the moves as a market’s last gasps before a longer-term decline. However, one market analyst said the end-of- day report still showed a higher price quote for Choice product and only a small decline for Select beef cutout. This was stronger than many expected and could result in firmness in fed cattle markets. Urner Barry’s Yellowsheet last week reported that chuck rolls, shoulder clods, bottom round flats and knuckles are areas of opportunity for higher sales. Slaughter volume last week was well ahead of the prior week at 385,000 as packers moved more cattle through production chains in an effort to take advantage of last week’s rising Choice/Select spread. Last Thursday’s harvest volume was 12,000 head higher than the previous week, but 64,000 behind the prior year number. Reduced volume for the week was largely due to the New Year holiday. USDA reported the composite price for Choice boxed beef last Wednesday was up $0.97 at $157.28, while the value for Select product was down $0.26, at $140.82. Market analysts reported lackluster consumer demand coming out of the holiday as the reason beef buyers were pressuring prices lower. Chicago Mercantile Exchange (CME) live cattle trade Thursday saw futures close unevenly on the CME. The closing bell had nearby February and April contracts down 20 and 32 points respectively, while farther off June to December 2006 closed in a narrow range between 7 points lower and 10 points higher. Meanwhile, CME confidence readings remained stuck in neutral for the second straight week in last Thursday’s weekly survey of market participants. Live cattle responses cancelled each other in yielding a zero simple figure and only a minus one weighted number. “Those readings pretty much reflect what’s going on in the livestock pits so far this year,” said a prominent floor-based analyst and broker. The meter is a consensus of opinions compiled each week by a poll of futures floor traders and industry analysts. Respondents are asked to take a bullish or bearish stance on futures prices for cattle for the coming week. Usually, analysts and traders believe only extreme readings in the meter are successful contrary indicators of market movements for the following week. Fund activity is expected to place pressure on nearby live cattle futures in the days ahead as large funds roll money out of nearby contracts in favor of those farther off. Feeder cattle Higher grain prices put pressure on CME feeder cattle contracts in early week trade. Rising corn prices, which have posted significant gains in the last two weeks, are causing some traders to rethink current positions. If corn prices continue to climb, or remain at current levels, it could add pressure to the market. Thursday’s CME feeder cattle contracts closed higher across the board as a result of slight weakness in corn contracts. Feeder contracts closed the day five to 57 points higher. In spite of recent declines in feeder contracts, prices remain nearly $10 above year ago levels. In addition to higher grain prices, dry conditions across much of the country continue to cause problems for producers and stockers. First the winter wheat crop slump, and now a series of severe fires across Oklahoma, Texas and the southwest are compounding problems faced by producers in those areas. Reports of a lack of hay and water shortages in some areas are likely to pressure feeder cattle prices in affected areas. However, as of last week, seasonally larger runs of cattle in most markets were met with good demand from buyers and prices which were unevenly steady to slightly higher in most areas. In El Reno, OK, last week, feeder steers were mostly steady, with the exception of steers in the 800-lb. class which traded $1-2 lower. Feeder heifers were called steady to $2 lower, with the largest slide on heavier weight classes. Steer and heifer calves were steady. Demand was reportedly very good for most classes. The exception was for classes of cattle that will finish in June which sat at a discount of more than $7 to the April live cattle contract last week. In West Plains, MO, compared to the sale two weeks prior, steers were unevenly steady, although the better end of heavy 400-lb. steers sold $2-3 higher. Heifers under 500 lbs. were called $2-5 higher, with several 400-500 lb. steers $5-7 higher during the high time. Weights over 500 lbs. sold mostly steady, although 600-700 lb. heifers were $2-3 lower. The supply was called moderate, with uneven demand. In the northern tier, at Bassett, NE, compared to two weeks ago, the bulk of feeder cattle trended unevenly steady, with the exception of a few lots of fancy steers and replacement heifers that received premiums of $5 or more. Supply was called ample for 550-lb. feeders, with good demand from a broad buyer base. In Mitchell, SD, compared to two weeks ago, feeder steers 500-650 lbs. were steady and feeder steers 650-800 lbs. were $1-3 lower. Feeder heifers 400-600 lbs. were unevenly steady, and 600-800 lbs. were steady.

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Thursday, December 20,2007

Sale entries top prior year

by WLJ
The Red Bluff Bull and Gelding Sale, one of the most anticipated events of the year for western bull buyers and producers, is set for Jan. 24-28 at the Tehama District Fairgrounds in Red Bluff, CA. This year’s sale will feature an increased number of bull entries with more than 450 headed to the competition, up from 437 in 2005. As herd expansion continues amid record calf prices, this year's event promises to be among the most exciting ever. Last year’s bulls averaged $2,664 on 302 lots. This year’s event features bulls from 11 different breeds. Bull producers from Washington, Oregon, California, Idaho, Nevada, Montana and Texas have consigned their top calving ease, halter and range-ready bulls to the sale. The popular range-ready bull division continues to be a big driver of the event. Range-ready bulls are ready to work for producers. The range-ready category allows bulls to be evaluated in their working condition, giving a good idea of what they will look like in pasture and range conditions. The halter division is similar to those found at fairs and stock shows. All bulls are evaluated by a four-person sift committee, which includes the show veterinarian. The sift committee closely evaluates each class of bulls, scrutinizing phenotype, conformation, muscling, mobility and production records to ensure the bulls are eligible for the show. Following the sifting of bulls, a team of three producers judges the bulls. The outcome of the judging competition determines the sale order. This year’s sifting committee is comprised of Gordon Bruce, Los Molinos, CA; Buttons Dougherty, Vina, CA; John Owens, Red Bluff, CA; and sale veterinarian O.W. ‘Bill’ Hooten, DVM, Red Bluff, CA. The bull judging committee is comprised of Dave Peterson, Powell Butte, OR; Gary Giacomini, Bishop, CA; and Ken Hufford, North Powder, OR. Sifters and judges serve a three-year rotating term with a new judge and sifter on the team each year to replace the outgoing judge who has worked three consecutive sales. Along with the bulls, since 1990, the Red Bluff sale has included a commercial replacement female sale. This year, approximately 1,500 head of females, primarily spring and fall bred heifers, open heifers and first calf heifer pairs, will be sold at Red Bluff. Each heifer load lot will be evaluated on quality and consistency prior to the sale. Last year, heifer lots averaged $1,022. In addition to the show and sale activities, this year several added attractions will be offered to attendees including the popular Red Bluff trade show which will feature more than 150 vendors and an American Angus Association outreach seminar. This year’s event also features the ever popular equine and canine show and sales. Red Bluff has become known as a premier sale for working horses and stock dogs. The gelding sale at Red Bluff began in 1963 with a total of 22 horses. This year, approximately150 ranch-ready geldings and 7 mules will be sold. Last year’s sale produced an average of $6,048 for 113 lots. The high-selling lot went for $20,000 in the 2005 sale. The dogs are first evaluated by the sale committee veterinarian and then put through their paces in both indoor and outdoor competitions. The dog sale follows the final outdoor competition. Last year’s sale brought an average of $4,642 for the seven dogs offered and $2,562 for the four pups exhibited.

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Thursday, December 20,2007

BLM seeks pasture lease

by WLJ
Details of BLM’s requirements will be posted in solicitation NAR070052, which is available at www.fbo.gov. Applicants must be registered at www.ccr.gov to be considered for a contract award. The solicitation ends Feb. 8, 2007. BLM manages wild horses and burros as part of its overall multiple-use land management mission. Under the authority of the 1971 Wild Free-Roaming Horses and Burros Act, the Bureau manages and protects these living symbols of the Western spirit while ensuring that population levels are in balance with other public rangeland resources and uses. To achieve this balance, BLM must remove thousands of animals from the range each year to control the size of herds, which have virtually no predators and can double in population every four years. The current free-roaming population of BLM-managed wild horses and burros is about 31,000, which exceeds by some 3,500 the number determined by BLM to be the appropriate management level. Off the range, there are about 28,000 wild horses and burros cared for in either short-term (corral) or long-term (pasture) facilities. All animals in holding are protected by BLM under the 1971 law. After wild horses and burros are removed from the range, the Bureau works to place younger animals into private ownership through adoption. Since 1973, BLM has placed more than 214,000 horses and burros into private care through adoption. Under a December 2004 amendment to the 1971 wild horse law, animals over 10 years old, as well as those passed over for adoption at least three times, are eligible for sale. Since that amendment took effect, BLM has sold more than 2,200 horses and burros. For information about BLM’s wild horse and burro adoption program, see www.wildhorseandburro.blm.gov; for information about the agency’s sale of older wild horses and burros, see www.blm.gov/nhp/spotlight/whb_authority.

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Thursday, December 20,2007

Foreign demand presents opportunity

by WLJ
In 2007, the total value of U.S. farm exports is forecast to reach $77 billion. Exports account for one-quarter of all agricultural cash receipts annually. While addressing a conference during the AFBF’s annual meeting, Crowder acknowledged the importance of farm exports for the national economy. “Trade is fundamental for U.S. agriculture,” Crowder said. “And agriculture is fundamental for U.S. trade.” He listed a series of bilateral and multilateral farm trade negotiations undertaken by the administration in the past year to boost such exchange. Among other accomplishments, he cited the U.S. and trading partners implemented the Central American Free Trade Agreement—Dominican Republic pact, concluded trade treaties with Peru, Panama and Colombia, and also signed agreements with Ukraine and Russia. Crowder called on Congress to ratify such measures promptly. Once ratified, he declared, they “will help level the playing field by affording U.S. growers these markets.” National lawmakers must also extend the president’s trade promotion authority (TPA), a power that facilitates a clear, definitive vote on any new agreements negotiated by the administration. “We need to finish the job by passing them through Congress and getting them so that you can sell your products,” he said. “All trade negotiations ought to have TPA because of the importance of these agreements for agriculture and the U.S. economy in general.” Although talks in the World Trade Organization’s (WTO) Doha Round were suspended last summer, Crowder pointed out that work on an international framework of reciprocal trading rules has continued. “Despite the suspension of the formal talks, we never stopped communicating and we never stopped negotiating. We have a long way to go and we have a lot of differences, but we have not given up. We are just working harder as we go.” Much of the success of trade agreements involves the good faith implementation of their provisions by all signatories. “We will continue to push for fair, science-based import regulations with our partners,” Crowder said. He cited WTO’s rejection of the European Union’s—ban on biotechnology products as an example of how negotiation and effective representation of U.S. interests can achieve results. Other matters must also be addressed. “We know about your frustration with the EU,” he said. “We hear you when you say, ‘We can’t ship our poultry, we can’t ship our beef and we can’t ship our rice to the EU.’ One of our priorities this year will be to enhance our markets for poultry, beef, rice and other products.” Crowder predicted that the “WTO negotiations still hold the most promise for international economic growth and creating new markets for U.S. agricultural products.” He emphasized that the administration will closely assess the benefits of any new trade proposal for U.S. agriculture before agreeing to it. “We will not move until we see other countries come to the table to provide market access,” he said. Ultimately, the goal shared by farmers and ranchers, as well as U.S. negotiators, is to stabilize trading in farm commodities so that it operates on predictable terms. The change in party leadership in Congress as a result of last fall’s elections may not derail pursuit of new trade agreements, Crowder explained. “If we are doing the right thing in bringing these agreements home, I think the Congress will do the right thing to approve them. I am an optimist.” The ambassador repeatedly expressed his appreciation for the support AFBF members have given to U.S. agricultural trade negotiations. “There is a lot of opportunity,” he said. “Your involvement will be critical.”

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Thursday, December 20,2007

National Western names new livestock manager

by WLJ
Aside from serving as the NWSS yard manager for seven years, Angell has also been the area coordinator for the American Polled Hereford Association, head of field services for the Record Stockman newspaper, head of commercial exhibits for the International Arabian Horse Association, and marketing director for Superior Livestock Auctions. Angell’s new responsibilities include scheduling, serving as a liaison with breed associations, and participating in committee meetings and professional show managers’ organizations. Angell’s duties will also include overseeing the Catch-A-Calf contest and the entry process from processing to payout, managing superintendents and seasonal help, hiring judges, negotiating contracts, establishing program guidelines and procedures, and implementing animal care and use policies. “Working as the National Western livestock manager is a great opportunity, giving me new challenges in an industry that I have served in all my life,” Angell said. “I hope to continue the National Western’s tradition of providing a great environment for breeders and exhibitors.” When asked about any goals he might have for the livestock department, Angell responded he hoped to make the department more efficient by merging the stockyards and hill operations. “It is an exciting time in the livestock industry,” said Angell. “Prices are good, it involves good, solid people, technical innovations have exploded, the industry has been able to identify superior genetics and is producing better beef more efficiently.” Angell and his wife Donna, of 36 years, have three children and two grandchildren.

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Thursday, December 20,2007

Beef Checkoff research lays foundation for promotion, information

by WLJ
It isn’t as sexy as a beef ad that sizzles, but the market research that helps determine the success of that ad is just as important to beef producers. Along with research in human nutrition, food safety and product enhancement, market research is one of the research areas funded by the Beef Checkoff Program administered by the Cattlemen’s Beef Board. Market research projects are part of the effort to build beef demand and are managed and coordinated on behalf of the Beef Board and state beef councils by the National Cattlemen’s Beef Association (NCBA). Market research is the basis for program decisions and messages we need to be focused on with the beef checkoff,” according to Monte Reese, Beef Board chief operating officer. “And we’re blessed to have some of the best people in the business working on these challenges.” According to Rick Husted, NCBA executive director of market research, this research provides the “voice of the market” when it comes to decisions made by checkoff program managers. By providing that voice, he says, promotion and information program managers are more effective in reaching the right audiences with the right messages at the right time. After joint promotion and information checkoff committees have identified areas of opportunity and made recommendations, the research helps in the hands-on execution of strategies for checkoff-funded programs. The initial market research effort of any campaign can be crucial to a strategy’s ultimate success, Husted says. According to Husted, “We find out what program managers are trying to accomplish and then go about providing them with the information they’ll need to meet those objectives.” None of this research is conducted for the sake of research, he says; it must clearly support a program or initiative to be of any value. “We need to make sure managers have a good understanding of the market before making program decisions,” Husted says. “And to do that, we need to focus on what’s most important from a knowledge standpoint.” Husted points to beef promotion and advertising as a program area that benefits from market research. “We might start by talking to consumers to find out what it is about beef that they particularly like and to understand any concerns they might have,” he says. While the checkoff purchases several syndicated studies that provide insight into how often people eat beef, “it’s conversations like these that help us understand how people really feel about our product so the team can develop better messages about beef.” Focus groups and other forms of “qualitative” research can help provide the types of insights managers need, he adds. Combining extensive information from syndicated studies with more focused research, different advertising treatments can be created and tested with the appropriate target audiences, helping determine which might be the most effective. Research can also help measure effectiveness of the advertising, Husted says. After campaigns have run, a series of measures provide valuable insight into things like advertising awareness, recall and overall effectiveness. “We go full circle with market research,” he adds. “Depending on what a program needs to be successful we can support just about any effort, from up-front development to post-program assessment. We can also gain competitive insight by measuring how other proteins perform on similar attributes.” The Beef Board’s Reese says there’s another key benefit to conducting market research: It helps beef producers who volunteer on committees debating where checkoff money should be spent pinpoint areas that have the most impact. He points to market research confirming the importance of youth education as a good example. “This research awakened (industry) leaders to the need to address the youth market,” Reese says. “It told us that we need to begin now to communicate with the markets of the future.” In addition to consumer advertising and youth education, checkoff program areas that utilize market research include foodservice (restaurant operators and others in the away-from-home category), retail, nutrition and new product development – which has enjoyed many benefits from market research, according to Reese. Identifying and analyzing advantages seized by competitors is one way the research can be used. “Chicken has made many inroads in convenience and quick food with products like chicken nuggets,” he says. “We haven’t yet found the key to overcoming that advantage, but we will.” According to Husted, even areas with fewer resources understand the value of capturing consumer insights. The checkoff-funded veal program, for example, has been able to leverage checkoff funds effectively to provide insights into how consumers interact with their product. “Even though large-scale market research projects aren’t always an option for the veal program, relatively small budgets can still add considerable value,” Husted says. “It may not answer every question, but it can certainly provide good direction” for veal checkoff program leaders. However deep the research goes, Husted says, if designed and executed properly it should always be viewed as a worthwhile use of resources. “Market research is a relatively small investment when you consider what’s at stake,” he says. “Every program should consider the value of using sound, fact-based research to support decisions.” Getting information into the hands of everyone who will find value from it is important. That’s why the chairs and vice chairs of the various joint beef checkoff committees get together twice a year to evaluate recommendations for market research designed to support upcoming initiatives. This market research working group meets to discuss how research may impact their specific program areas. Market research results are also shared with state beef councils, which use it to help support in-state programs as well as coordinated programs with the Federation of State Beef Councils Division at NCBA. In addition, the information is often packaged and shared at state meetings and other venues with audiences that might include beef producers, who pay the $1-per-head checkoff assessment, or marketers who might use the information to help sell more beef. Dr. Bo Reagan, vice president of research and knowledge management at NCBA, says market research is “one of four legs of the research stool” on which other checkoff-funded programs sit. The other research legs are nutrition, safety and product. These programs are helping define change for the future of the beef industry, he says. “What we do in these research programs helps lead the change that’s talking place, rather than just react to it,” says Reagan. “Market research is a great example of how factual information can be used to set the stage for many demand-building efforts conducted on behalf of beef producers.” “Interpreting consumer behavior and attitudes is only the beginning,” according to Husted. “The end game is to make sure that decisions made on behalf of beef producers are based on fact and, most important, positively influence beef demand.” Reese agrees. “Obviously, the key to building demand for beef is persuading consumers to choose beef,” he says. “But the first step is to understand what is driving that meal choice. Market research is the underpinning of both the strategies of what we do and the tactics on how we do it.”

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Thursday, December 20,2007

Fed and feeder cattle trade unevenly

by WLJ
The cash feedlot trade got going last week after a big break on the Chicago Mercantile Exchange (CME) on Wednesday. Prices were trending mostly steady to $1 lower early, with a few packers actually having to pay 25 to 50 cents higher for cattle on Thursday in the five-state area, while in the south, trade last Thursday was called fully steady with the prior week. Texas cattle feeders reported selling 42,000 head in a range of $93.50 to $95. Kansas feeders moved 32,000 head in a price range of $93 to $94, or $147 dressed basis. Colorado feeders sold 5,000 head at $92 to $93.50 and $147 dressed. Nebraska cattle feeders sold 30,000 head in a price range of $92 to $93 and $148-149 dressed. Beef packers came out early last week bidding $92 for cattle, however cattle feeders were holding out for closer to even money until later in the week before trade finally developed on Wednesday. Once cattle feeders saw the break on the CME, they became more willing sellers of cattle, however, many stuck to their guns and in order to get enough cattle bought, packers had to pay up to $95 on Thursday. Trade volume was called good, with little further trade expected. Thursdays’ kill was estimated at 117,000 head, which was 10,000 head below the prior week and 6,000 head below the same day last year. Week-to-date harvest stood at 468,000 head Thursday compared to 385,000 head during the prior holiday-shortened week. Analysts last week said packers were slowing production chains in an effort to get back to positive territory. Andy Gottschalk at HedgersEdge.com said last week that packer margins were negative $39.35 per head although he said it is unlikely gains in boxed beef created by slowed chains will make up the negative territory. “It is unlikely that packers will be able to force values sufficiently on this advance to return margins to a positive position,” Gottschalk said. Several industry analysts said retail consumers were tending toward lower priced proteins in the wake of increased heating bills, holiday credit card payments and creeping gas prices. All of those factors were causing consumers to shy away from higher priced middle meats and creating a sag in boxed beef prices last week, a trend many expect will continue to cause packer losses for at least the next few weeks. The boxed beef market did trade steady slightly higher last week on light to moderate volume. Most trade occurred in the lower priced primals and there was a noticeable weakness in loin primals for most of the week. There was a slight pick up in volume of sales on Wednesday with 491 loads, but trade declined again on Thursday, retreating to a weaker 368 loads moved. At close of business Thursday, the Choice/Select spread settled at $13.63 with Choice trading up 44 cents at $154.47 and Select trading slightly higher, up 19 cents at $140.84. Heavy fund activity spurred by the “Goldman roll,” in which large commodity funds roll funds from nearby contracts to later deferred months, took its toll on the Chicago Mercantile Exchange fed cattle contracts last week. The market was mostly resilient until Wednesday last week, when it dropped as much as 280 points breaking through key support levels in the process and perhaps worsening its fall. Contracts rebounded well on Thursday however, regaining as much as 100 points of the prior day’s losses in the fed cattle contracts. Across the board on Thursday, fed cattle contracts closed in the black, a key measure of the market’s strength. Feeder cattle The feeder markets were mostly mixed last week as light weight feeder cattle and calves sold at prices steady to $2 higher in some instances while heavier cattle sold well below week prior levels. Losses on the CME Wednesday, along with some weakness in cash trade, pulled feeder cattle contracts into negative territory before contracts followed fed cattle contracts higher across the board on Thursday. The USDA crop report showed a significant amount of grain in bins across the country, which moderated some of the week’s gain in grain prices, which declined to $2.12 on Thursday last week and may have helped offset some of the feeder cattle commodity losses in Chicago. In auction market trade, feeder receipts last week were up in many areas which contributed to some slight price weakness. Gains in the corn market along with other grains, poor weather conditions and muddy feedlots in the northern tier also contributed to feeder cattle price weakness. In the southern tier, dry conditions were moderated slightly by some regionally heavy snowfall particularly in parts of Oklahoma, although it did little to abate the drought or help wheat pasture as reports continue to note large numbers coming off wheat grass, which continues to suffer. In Oklahoma City, feeder steers and heifers were called steady to $2 lower, while markets in El Reno, OK, sold feeder steers for $3-4 lower and heifer mates $2-4 lower. The bright spot came in the steer calf category which sold steady throughout the sale. In West Plains, MO, steer calves under 700 lbs. sold as much as $2 higher, while those over 700 lbs. sold steady to $2 lower on what was called uneven trade as buyers sorted through lots to get the cattle they wanted. However, as quality increased, so did the money being offered by the order buyers in attendance. Demand, particularly on the higher quality lots was called good. In Abilene, TX, markets were also mixed. Lightweight steers under 500 lbs. brought prices steady to $1 lower. Steers over 500 lbs. sold steady to $2 lower on good trade and demand. In the northern tier, unseasonably warm conditions have helped feedlots keep feed and health costs in control so far this winter. However, muddy conditions are causing a good number of problems for cattle feeders and in some areas, those problems are reportedly affecting demand for feeder cattle somewhat. However, in comparison to southern markets, those in the north experienced fairly steady sale prices last week The Northern Video Auction on Jan. 7, brought good prices for the more than 30,000 head offered at the Annual Diamond Ring Ranch sale. The offering consisted of top-notch Angus-influenced stockers, feeders and replacements and most were source and age verified. Demand for offered lots was called very good for the Montana, Wyoming and few Dakotas’ cattle. Medium and large 1 steers brought good money for offered lots. For example, 750 head in the 550-570 lb. range brought an average price of $146.25. Heavier steers also sold well, with 2,763 head in the 800-840 lb. range bringing an average price of $111.11. Replacement females also brought good prices for sellers, with buyers willing to pay a premium. Bred 3-6 year-old cows bred for March to May calving brought $1,400-1,500 each. Elsewhere across the northern tier, many auction markets held the first sale of the new year, so trends were still difficult to come by last week. Most noted good strings of quality cattle through the ring and good demand for offered lots. In Dodge City, KS, last week, steers 350-700 lbs. sold for prices called steady to $1 higher, while heavier 700-900 lb. steers sold $1-3 lower and 900-1,050 lb. steers dropped sharply selling $5-6 lower than the prior sale. In La Junta, CO, steer calves under 600 lbs. were called $3-5 higher while those over 600 lbs. sold for steady to $1 higher. Heifer calves also increased. Heifers under 600 lbs. sold $2-3 higher on good active trade and demand.

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