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Monday, September 5,2005

Canadians close “over-30-month” probe

by WLJ
The Canadian Food Inspection Agency (CFIA) last week said it has concluded its investigation into the over-30-month bovine animal that entered the U.S. and was processed as if it was an under-30-month animal. The agency announced it has suspended the accreditation of the veterinarian who inspected the suspect animal and that it will suspend issuing any more export certificates to the exporter that shipped the animal. Names of the veterinarian and the exporter were not released. Accredited private-sector veterinarians who act on behalf of the CFIA in this program and exporters are being reminded that there will be zero tolerance by the CFIA for any non-compliance with U.S. import requirements. “We are exploring ways to minimize incidents of non-compliance in the future, including enhancing the tools that we use to monitor the performance of accredited veterinarians in fulfilling their important roles,” a CFIA statement said. The inadvertent entry and slaughter of the suspect animal has not resulted in any interruption of Canadian cattle coming into the U.S., and USDA officials said they are still looking into inspection protocol on their side of the border to ensure a similar incident doesn’t happen again in the future. Through the week ending Aug. 20, the U.S. has seen 66,109 total head of Canadian cattle 30 months and younger cross its border, including 34,022 feeder cattle going to certified feedlots and 32,075 head of animals going directly to U.S. processing facilities. The U.S. started allowing Canadian cattle to cross the border July 18. — Steven D. Vetter, WLJ Editor © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.

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Monday, September 5,2005

Preconditioning premiums growing

by WLJ
Preconditioned calves averaged a premium of $20-plus per head over the previous 10 years, according to a recent Colorado State University (CSU) study. Conducted on behalf of Pfizer Animal Health, the study showed that higher prices consistently go to calves enrolled in value-added preconditioning and animal health programs. CSU catalogued and examined data from more than 2.7 million lots of cattle sold through the Superior Video auction since 1995. The information was examined for factors such as calf color, breed, size, sex, lot uniformity, location and selected preconditioning program to determine which factors drive the sale price of a lot. Mike Amos, spokesman for Pfizer, said the study shows that buyers are increasingly willing to pay a premium for backgrounded calves, and seek them out. In fact, many cattle buyers, including those who buy for large cattle feeding operations, will only purchase preconditioned cattle. “What we saw at first was a premium paid for calves in a preconditioning program. Now that it has become standard practice, it looks like buyers may actually be penalizing producers for not being enrolled in some kind of vaccination program,” he said. As time passes, more producers are prescribing to a management practice that includes a solid preconditioning program. In 2004, a survey of cattle sold through Superior Video Auction determined that approximately 74 percent of calves marketed in the video auction were enrolled in some such program. That is a significant increase when compared to 1994 when more than 40 percent of cattle sold had no documented vaccination program prior to sale. Studies of cattle sold through traditional auction markets indicate a lower rate of preconditioning. However, the number is definitely on the increase, said David Lalman, Oklahoma State University extension specialist. Preconditioning programs add per-head costs to producing cattle and the costs are widely varied by the price of inputs, such as feed, and the cost of the selected vaccination program. Numerous studies have been conducted in the past decade to analyze the cost/benefit ratio to determine whether or not the added costs are regained at the time of sale. The answer appears to be yes. As more producers participate in preconditioning programs, the premiums are growing both at the video auction and the local sale barn. In fact, many buyers now target sales featuring certified preconditioned cattle. Lalman believes the premiums offered by buyers will continue to increase. His studies, conducted over several years, show the premium returned to producers averaged approximately $20 per head each year, with a top end of $50 per head premium being paid for cattle that are properly backgrounded. Lalman’s surveys show the producers who aren’t participating in some sort of preconditioning program tend to be the smaller producers. “A person weaning 20 calves is less likely to want to include the additional labor and costs associated with preconditioning for $20 a head. If the premium was $50, then it might be a different story,” he said. Amos has also found that producers may be more likely to consider skipping the vaccinations in years when the market is good, particularly in the last two years. “Some ranchers might consider selling without preconditioning, particularly in an up market, to take advantage of the cost savings, however, studies have shown there is no correlation between calf price and the additional percentage in the premium paid for cattle,” he said. Amos said cattle participating in Pfizer’s program were subject to an extra vaccination cost of $3-4.50 per head beyond normal inputs. The price variance depends on what type of vaccination program is selected by the producer. The CSU study determined that cattle enrolled in Pfizer’s pre-sale vaccination program brought an added $21 per head premium during the first years of the study. “That premium topped out last year (2004) at $41 per head,” Amos said. For feedlot buyers, there is a strong draw to feeder calves which have been subjected to a solid preconditioning program. Calves which are preconditioned have proven to be less prone to stress- related illness and experience lower pull rates and death loss which will reduce the feeder’s cost and improve carcass performance down the line. “Studies have shown that cattle not treated in the feedlot have10-15 percent better carcass performance than cattle pulled for one or more times,” said Lalman. Despite the many factors in favor of preconditioning calves prior to sale, many producers still choose to send their calf crop to market without the benefits of a preconditioning program. A 2003 Oklahoma State University study found that of 323 cow/calf producers surveyed, fewer than13 percent participated in a preconditioning program. Of the producers who do not precondition their cattle, more than half cited a lack of time and added labor as the primary reasons. A lack of available facilities and know-how also played a factor in the decision. As more cattle buyers make preconditioning a condition of sale, the premiums will begin to evaporate and producers may find themselves penalized for not preconditioning calves, thereby making the practice much more important. — John Robinson, WLJ Associate Editor   © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.

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Monday, August 29,2005

BEEF BITS

by WLJ
Swift plant hikes wages Employees at Hyrum-based meat packing plant, E.A. Miller, will soon see more money in their paychecks thanks to a recent announcement by the plant’s parent company to hike wages. Officials with Swift and Company announced Aug. 19 a 21-percent hike in starting wages, in an effort to restaff key areas following the reopening of the U.S.-Canada border to calves 30 months of age and younger. New employees will make $10 an hour, up from $8.25, while current employees will see up to a $1.75 hourly rate increase. Staffing levels at the Hyrum plant waned six percent since May 2003, when USDAS closed the border to Canadian cattle. The company employs nearly 1,200 people in Hyrum, and Swift spokeswoman Missy Lucas said the pay raises were unique to the plant. Rancher’s Beef already selling beef One of Canada’s newest packing companies has started processing beef and will start operating its own cattle processing facility early next year. Construction of the Ranchers’ Beef plant located just a few miles of Calgary is expected to be completed by next spring, said company president Tony Martinez. About 300 head of cattle younger than 30 months are currently being slaughtered daily at Sunterra Meats in Innisfail, Alberta, with the carcasses being trucked to a facility on the new plant site for processing. The plant is also prepared to handle custom kills for smaller groups interested in marketing their own brands. The plant has also achieved export licensing for shipping boneless cuts to the U.S. and Mexico. Being able to move into export markets helps sell cuts that have less value in Canada. Cow tramples man to death A 72-year-old ranch foreman near Christoval, TX, was trampled to death by a cow while he was feeding cattle the morning of Aug. 17. Eugene Barber suffered severe injuries to his chest, said Russell Smith, Tom Green County justice of the peace. “It’s not uncommon,” Smith said of the incident. “Once in a while you have a cow that is cantankerous.” The cow turned on Barber as he was feeding it, then it bowled him over, said ranch owner Mary Lee Butts, who witnessed the attack. Butts did not know what would happen to the cow. Creekstone proposes expansion Creekstone Farms Premium Beef, Ark City, KS, recently announced plans to expand its ground beef operations, which could mean a second shift and 280 additional employees by next year. However, a few things have to fall into place first, officials said. “Most of this will be dependent on an international market, specifically Japan,” said Dean Hanish, Creekstone’s chief financial officer. He said that regardless of whether Japan reopens its borders to U.S. beef products, Creekstone will expand by adding more domestic beef products. But expansions for the domestic market would be done incrementally. The expansion is dependent upon a bond agreement between the company and city commission. Aussie exports hit record value The value of Australian beef and veal exports reached a record $4.88 billion for the 2004-05 financial year, according to the Australian Bureau of Statistics. That figure was 24 percent, or almost $1 billion, more than the value of exports in 2003-04 and 13 percent above the previous record set in 2001-02. The rise in value of beef exports in 2004-05 was due to a combination of both higher export volumes and prices, reflecting the exceptionally strong demand for Australian product in overseas markets. Approximately 91 percent of the value of Australia’s beef exports came from three destinations—Japan, 50 percent, the U.S., 30 percent and Korea, 11 percent. While the volume of Australia’s beef exports to the US was virtually unchanged in 2004-05, the value of exports had increased nine percent, to $1.45 billion. HMD in Mongolia Mongolian veterinary authorities imposed restrictions following a hoof-and-mouth disease (HMD) outbreak in cattle. The latest outbreak is in Bayantumen county, Dornod province, in the eastern part of the country. The incident involves a herd of 118 cattle, and the area around the outbreak has been quarantined. The veterinary authorities are carrying out a program of stamping out the diseased cattle and have imposed animal movement controls in the area. The authorities are also carrying out a program of disinfection and zoning to control the disease. Mongolia last reported an outbreak of the disease in February last year. Flanders recalls ground beef Flanders Provision Co., Inc., Waycross, GA, voluntarily recalled approximately 900,000 pounds of frozen ground beef patties that may be contaminated with E. coli O157:H7 last week. The suspect product codes are 05052, 05053, 05055, 05060, 05062, 05066 and 05069. All of the products bear the establishment number “EST. 9145,” inside the USDA seal of inspection. The products were distributed to retail stores nationwide. The products were processed and produced by the company back in February. The product codes correspond with the day they were produced — for example, 05052 means the product was produced in the year 2005 on the fifty- second day of that year. © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.

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Monday, August 29,2005

Canadian import rules violated

by WLJ
A shipment of 35 live cattle from Canada which contained 8 pregnant heiferettes, including one animal more than 30 months of age, were slaughtered by a U.S. packing facility earlier this month. The shipment and subsequent processing of the cattle violated USDA rules concerning cattle imported from north of the border. According to USDA officials, the animal’s age was questioned after the Canadian Food Inspection Agency (CFIA) noted a wide range of ages on a load of cattle approved for shipment to Green Bay Dressed Beef, Green Bay, WI, a subsidiary of American Foods Group (AFG). USDA’s Food Safety and Inspection Service learned about the suspect animals as a result of a Canadian audit of the health certificate accompanying the animals. Prior to slaughter, the animal’s health certificates, completed by a certified Canadian veterinarian, were presented to the packer and upon review, the certificates appeared complete and accurate. However, a subsequent audit of the information by Canadian officials found discrepancies between the information on the certificate and producer records. The cattle in question were delivered to the plant Aug. 2. The animals were sent through the processing chain Aug. 4, according to Jim Mulhern, spokesman for AFG. At slaughter, eight of the animals were found to be pregnant, one of those cows was determined to be more than 30 months of age. The fetuses were removed and destroyed in accordance with USDA rules. USDA and AFG officials continue to emphasize the fact that the food chain safety was not compromised by the incident. “There were 35 animals on the load, and an audit after the fact indicated that one of them was actually 31 months of age, instead of 30 months or younger,” said Mulhern. “The mistake was made by a certified veterinary technician in Canada and the investigation was initiated by CFIA. We took action upon being notified by USDA of the concern that an over-30-month animal might have been processed.” CFIA officials, responsible for ensuring compliance with USDA import regulations, have decertified both the veterinarian who inspected the cattle prior to shipment and the Canadian export company which sent the cattle across the border. AFG, upon being notified of the incident on Aug. 19, issued an immediate recall announcement on all 1,857 pounds of boxed beef that may have included meat from the older-than-allowed animal. There is a possibility that some of the vertebral column from the suspect animal was part of the product. “Specified risk materials are to be removed from all animals, regardless of their age, however, the extent of the vertebral material to be removed from animals under 30 months of age is much less than what needs to be removed from animals over 30 months,” Mulhern said. “Because the animal came in with the appropriate documentation, it was handled as an animal 30 months or younger.” The recall, according to USDA and AFG, was designated “Class Two,” meaning there are minimal health and safety concerns about the beef in question. “The recall is simply a reaction to a violation of our rule restricting any cattle from Canada that are over 30 months of age,” said Jim Rogers, spokesman for USDA. “It’s a paperwork snafu and nothing else. Yes, the animal is over 30 months of age, but the health and safety of the product from that animal isn’t considered a threat to consumers or the U.S. livestock industry.” It’s likely that most of the recalled product has already been distributed. “The amount of beef in question is 37 boxes,” said Mulhern. “It most likely all left the plant within 10 days of the animal being processed (Aug. 4).” Rogers told WLJ last week that there are no USDA plans to suspend the importation of cattle or beef from Canada. He added that although the USDA is reviewing import safeguards, any changes to the regulations would have to go through the federal rulemaking process. “We trust the Canadians and have full faith in their certification process, but, if it’s a day over 30-months, it violates the rule,” said Rogers. While USDA and AFG said that the product is safe, R-CALF United Stockgrowers of America, which stands against the reopening of the border to Canadian cattle, said the incident is proof that BSE prevention measures are not stringent enough. “This incident shows a failure of several key BSE firewalls USDA claims exist for Canadian cattle imports,” said Leo McDonnell, president of R-CALF. “USDA is trying to argue this cow was just one month over the age limit, but how many other Canadian cattle have come into the U.S. in violation of the age constraints, and how much past 30 months of age are they?” McDonnell also indicated that this situation strengthens his group’s resolve when it comes to reinstating the ban against Canadian cattle and beef entering the U.S. In early July, a temporary restraining order, which was requested by R-CALF, was overturned by the Ninth Circuit Court of Appeals, Seattle, WA. “Not only do we have to wonder whether some Canadians are falsifying their age certificates, but we also have to be concerned with USDA’s ongoing trail of repeated failures to assure compliance with its own BSE rules, which is resulting in unnecessary and avoidable risks to both U.S. consumers and the U.S. cattle herd,” said McDonnell. “USDA convinced the Ninth Circuit that the U.S. was protected from the possibility of contaminated tissue entering the U.S. food supply because the U.S. had ‘created a virtually impenetrable barrier to the introduction or spread of BSE,’ and obviously, USDA was wrong.” R-CALF also indicated it will work even harder toward getting mandatory country of origin labeling implemented immediately for meat and meat products. “Only with a label can U.S. consumers make informed decisions on their own, without having to rely exclusively on the mistake-prone actions of USDA,” McDonnell said. “Consumers who would rather not accept any risks associated with a particular country’s beef could, with a country-of-origin label, choose to purchase only beef born, raised, and processed in the country of their choosing. This should be a fundamental right for U.S. consumers. Under the current system, consumers have no such right.”— Steven D. Vetter, WLJ Editor © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.

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Monday, August 29,2005

Heat stress shortens summer, fall gestation

by WLJ
A two-year study by Oklahoma State University professor Bob Wetteman shows that heat stress can significantly shorten gestation length in early fall calving cows and heifers. Wetteman monitored gestation length for a group of 50 Angus-Hereford cross “early” (August) and “late” (October) fall-calving cows. Wetteman found that when subjected to the stress of hot days in late summer, cows tended to have shorter gestation lengths than cows bred to the same bull due to calve later in the fall. The average maximum temperature for the early calving group was 93 degrees during the week prior to calving. Wettemann found that cows in this group calved an average of three days early, an average gestation period of 280 days. Cows in the second group were subjected to average maximum temperatures of 66 degrees during the week prior to calving. Wetteman found this group had an average gestation length of 283 days. “Early parturition is a result of maturation in either the brain of the calf or adrenal stimulation. We aren’t sure which of these factors causes the shortened gestation, but I believe it is likely the adrenal stimulation of the fetus, brought on by heat stress,” said Wetteman. Despite the combination of added stress and early birth, calves in the study had a survival rate of 100 percent. Cows in the study experienced similar success in their re-breeding rates. Cows in the early calving group bred back at 93 percent, while the late group experienced a re-breeding rate of 96 percent. Both sets of cows were AI bred and allowed 35 days of exposure to a clean-up bull. Wetteman attributed much of the cow and calf success to the availability of good forage in the period leading up to the calving and the following breeding season. Cows who have better quality forage available exhibit better body condition prior to calving. That improved condition contributes to better calf health and survival and ultimately earlier breed-back times. Glenn Selk, extension cattle specialist for Oklahoma State University, who has participated in similar gestation studies, also discovered differences between “early” and “late” fall calving cows. Selk and fellow researchers found that in addition to shortened gestation, another difference between early and late fall calving periods was a lighter birth weight for calves sired by the same bull. “Early fall calves averaged about 4.5 pounds less than spring calves,” said Selk. Selk attributes the decrease in birth weight to the physiology of the cow. “On hot days, blood flow of the cow is directed toward the skin and outer extremities, reducing blood flow to the calf, which lowers average birth weights,” he said. Wetteman has been working with cow-calf operations in the state to convince producers to calve first calf heifers in the fall. “We have had good success calving heifers in the fall, we pull a lot fewer calves than in the spring,” he said. When anticipating fall calves, both Wetteman and Selk stressed the need for producers to keep an eye on the calendar. “Ranchers who have a target calving date of Sept. 1 can find as much as a third of their calf crop on the ground by that date when temperatures are high,” Selk said. Studies by both researchers has shown that producers should start their routine herd checks at least a full week ahead of time when high temperatures prevail before the calving period. — John Robinson, WLJ Associate Editor © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.

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Monday, August 29,2005

Market finds strength

by WLJ
Fed cattle trade was much stronger last week on good cash sales volume. Trade broke lose Thursday at noon. Southern feeders established trade at $82-82.50 and northern dressed trade was $3-5 higher at $127-130. The Labor Day rally allowed some recovery on beef and prices, but late week trade at $2-3 higher was a surprise to most market watchers. Packers needed more cattle than many analysts expected. Cattle feeders held their ground and packers were aggressively buying cattle to fill early September features. However, analysts still expect large front end supplies of fed cattle to continue to keep pressure on the market. Packers were seeing positive margins in the $15 per head range and slaughter volume was reflecting the margins and the inventory buildup for Labor Day, the last big beef weekend for the summer season, but this latest buying spree of 130,000 head on Thursday won’t have much impact on Labor Day offerings. Packers processed 661,000 head the week ending Aug.19 and were continuing to process large numbers at the beginning of last week. Mid week slaughter started to decline and through Wednesday packers were 8,000 head behind the pace from a week earlier, then they turned up slaughter toward the end of last week. Boxed beef markets were strong leading into the holiday buying and were expected to start a small decline late last week and early this week. The Choice cutout was at $133.06 and Select at $124.04 reflecting the best Choice Select spread in quite some time. Beef production year to date is just nine tenths of a percent below year-ago levels. However, cattle slaughter is 2.8 percent lower than a year ago. Heavy carcass weights are making a huge negative contribution to beef tonnage. The rule of thumb is that each additional pound in average carcass weight reduces slaughter by 7,000 head to produce the same tonnage. Thursday’s carcass weight report did show that steer and heifer carcass weights were starting to moderate. Beef demand is starting to weigh in on the market. The rapid rise in energy costs is starting to force consumers into purchasing lower cost proteins; discretionary spending has suffered which, to a great degree, impacts beef sales. Cracker Barrel and Applebee’s restaurants were reporting that their customers where selecting lower cost menu items. Both restaurant chains have a large number of stores along interstate highways. Feeder Markets The market for feeder and stocker cattle was much improved last week with significant price increases attributed to a favorable on-feed report and continued good weather across much of the country. As rain and moderate temperatures improve grazing conditions across the Plains, buyers are showing more interest in lightweight calves for winter grazing. Likewise, the cattle on feed report gave feeder buyers a reason for optimism, with data indicating the possibility of a decent winter and spring market. That combination boosted calf prices higher across most of the southern tier. The Joplin, MO auction sold a good run of steers and heifers under 700 pounds at prices $4-6 higher than the previous week. Heavyweight steers were also steady to $2 higher. Buyer attendance and participation was called very good. Prices across Oklahoma markets were also good although it was noted wet weather decreased the number of cattle offered. Regardless, attendance and demand were solid with buyers pushing the 7,600 head of cattle offered $2-3 higher than the prior week. Texas prices were somewhat mixed this week. Lightweight steers and heifers under 500 pounds sold as much as $3-10 higher in several markets, however, there were some scattered reports of lightweight prices being down as much as $2-5. There is still little activity in the northern tier markets, although the few sales reporting a significant supply of feeders indicated that demand was strong, leading to steady to slightly higher prices. The Superior Video Auction in Sheridan, WY offered 121,000 head and resulted in fairly strong trade across all classes of cattle. Results for participating producers depended largely on quality, delivery date and vaccination program. Northern tier calves brought prices $5-7 higher than similar lots in the southwest which were $2 lower to $4 higher. Some of the representative sales from Superiors’ sale were: McFadden Enterprises, Victory TX, sold some red and black Angus steer calves weighing 400 pounds for $151.50 and the 380 pound heifer mates sold for $140.00; Cayuse Livestock, Cody, WY, sold some 425 pound black Angus certified natural, vac 34 steers for $162, 575 pound steers for $132.25 and the 410 pound heifer mates for $149.50; River Run Ranch, Lakin, KS sold 775 pound English exotic cross bred steers for $114.10; Morrill Weston and Sons, Cokeville, WY, sold some 750 pound black steers, $118.25, for October delivery; and Gaylen Ranch, Charles, SD, sold some 940 pound Angus, Limousin cross steers for $107.35.

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Monday, August 29,2005

Recalled Products

by WLJ
The beef products that have been recalled from Green Bay Dressed Beef, a subsidiary of American Foods Group, are: • Five boxes (243 pounds) of vacuum pouched packages of “American Foods Group, NECKBONE UNTRIM’D, USDA CHOICE OR HIGHER” with the case code of 77333; • One 50-pound box of vacuum pouched package “American Foods Group, SHORTLOIN 2X2, USDA SELECT OR HIGHER” with the case code of 75231; • One 60-pound box of vacuum packaged “American Foods Group, SHORTLOIN 2X2, USDA CHOICE OR HIGHER” with the case code of 75060; • Five boxes (258 pounds) of vacuum packaged “Dakota Supreme Beef, SHORTLOIN 0X11/4, USDA SELECT OR HIGHER” with the case code of 75442; • Sixteen boxes (811 pounds) of vacuum packaged “American Foods Group, BLADE BI N/O CHUCK, USDA CHOICE OR HIGHER” with the case code of 75955; and • Nine boxes (435 pounds) of vacuum packaged “American Foods Group, BLADE BI N/O CHUCK, USDA SELECT OR HIGHER” with the case code of 75952. Each box bears the establishment number “410” inside the USDA seal of inspection. The products were produced on Aug. 4, and were distributed to wholesale distributors in Pennsylvania, Florida, Illinois, Maryland, Minnesota and Wisconsin Consumers with other food safety questions can phone the toll-free USDA Meat and Poultry Hotline at 888/MPHotline (888/674-6854). The hotline is available in English and Spanish and can be reached from 10 a.m. to 4 p.m., eastern standard time, Monday through Friday. Recorded food safety messages are available 24 hours a day. — WLJ © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.

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Monday, August 29,2005

On-feed reactions varied

by WLJ
Market analysts were split on what USDA’s Aug. 1 Cattle-on-Feed Report meant for the near term fed cattle market. Although marketings were within the range of pre-report estimates, whether or not the numbers were favorable was questioned by analysts last week. However, analysts were in agreement that July placement numbers were small enough to support next spring’s fed market. USDA’s National Agriculture Statistics Service said July marketings were 1.92 million head, slightly below 2004 and 16 percent below 2003. The USDA report noted July’s marketing figure was the lowest since the current on-feed data started being collected. “Based on the number of slaughter days in July, feedlots marketed 95,900 head, compared to 91,700 head last year,” said Robb. “That is a 4.6 percent increase in the daily marketing rate this year, compared to last year.” Greg Wagner, cattle market analyst with E-Hedger, Chicago, IL, told WLJ that when all is said and done “the marketing figure is probably a wash.” Instead, Wagner focused on the fact that the market continues to be fairly steady amidst a myriad of negative influences. “The market has weathered BSE, the Canadian cattle trade situation and several other outside forces, and amidst it all, we haven’t seen any major softness the past several weeks,” Wagner said. “I don’t see the on-feed data, particularly marketings, having that much impact in the broad scheme of things near-term.” In addition, Robb said that last month’s marketing rate was enough to reduce the rate at which animals on feed 120 days or more are accumulating. “As of July 1, the number of cattle on feed more than 120 days was 10 percent higher than a year ago. However, as of Aug. 1, that figure was only 8 percent more than last year,” said Robb. “We still have a lot of heavy cattle out there, but it’s not as bad as it could be.” The Aug. 1 number of cattle on feed more than 120 days was 3.071 million head, compared to 2.836 million head last year. Despite the 120 day supply being smaller than a month ago, Reed Marquotte, M&Z Livestock Analytics, said the front-end supply of cattle is a problem. “We are talking about one-and-a-half weeks worth of fed cattle being pushed on the market right now,” said Marquotte. “We are already near See On-feed on page record finishing weights, and we still have another couple of weeks before the normal peak happens. In addition, beef demand is still lackluster. The combination doesn’t appear to bode well for prices the next few weeks.” Andy Gottschalk, analyst with HedgersEdge agreed, saying if marketing deficits aren’t corrected, the problem will lead to a record front-end fed cattle supply by Oct. 1. Placements good news While there were differing opinions on the meaning of July marketing figures, analysts were more consistent in their optimism concerning feedlot placements. NASS said that placements during July totaled 1.68 million head, two percent below last year and 16 percent fewer than 2003. The July number is the lowest placement figure for the month since the on-feed data series began in 1996. “With extremely hot, dry weather affecting the southern half of the country last month, it was conceivable for placements of heavier cattle to have been a lot larger than they were,” said Robb. Marquotte said that the unexpected slide in heavy weight placements was a direct result of cattle feeding margins being $100 or more per head in the red. “Yes, prices for feeder cattle remain at a very high level historically. However, a lot of that has to do with cattle being forward bought for delivery later this year.” said Marquotte. During July, placements of cattle and calves weighing less than 600 pounds were 400,000, 600-699 pounds were 338,000, 700-799 pounds were 465,000, and 800 pounds and greater were 475,000. Cattle futures markets last week weren’t showing a lot of movement either way, which meant last week’s on-feed report was largely neutral, analysts said. “When looking at it in retrospect, we will probably see this report as being not even a blip on the radar when it comes to market activity or movement,” concluded Wagner. — Steven D. Vetter, WLJ Editor © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.

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Monday, August 29,2005

Worldwide meat consumption growing

by WLJ
World meat production and consumption are continuing to grow. Total meat production reached an estimated 258 million tons in 2004, two per cent higher than the previous year, according to the Worldwatch Institute’s report, Vital Signs 2005. Meat and Livestock Australia (MLA) said the report shows that meat production has more than doubled since the 1970s, due to increased demand and the introduction of large-scale production processes. The UN Food and Agriculture Organization (FAO) estimates in their Food Outlook that world production will increase to 265 million tons in 2005. World meat consumption, especially in the developing world, has also continued to rise. According to the FAO, the average person consumed 40.5kg of meat in 2004. This is projected to increase to 41.7kg in 2005. MLA said that by 2020, the International Food Policy Research Institute estimates that people in developing countries will eat more than 36kg/person of meat on average – twice as much as in the 1980s. In contrast, people in industrial countries will consume the most meat – nearly 90kg/person by 2020. According to the Worldwatch Institute, as production and consumption of meat continue to increase worldwide, the methods of production are also changing. Industrial animal agriculture is the most rapidly growing production system for pigs, chickens and cattle, with more than half of the world’s poultry and pork, and most beef, produced using these intensive methods. The Institute noted that environmental and public health concerns about meat production and consumption are also growing and, consequently, farmers, business owners, chefs, and consumers are thinking differently about their food choices. For example, MLA stated that after McDonalds asked suppliers to discontinue antibiotic growth promoters in animal feed in 2003, consumers are also demanding more grass-fed meat, milk, and eggs for health reasons. – WLJ © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.

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Monday, August 22,2005

Beef Bits

by WLJ
Alberta group has big beef plans A group of Alberta ranchers plans to purchase an existing beef plant in Alberta, and open a new 1,400-head-a-day slaughter facility in Manitoba. Canada Farm Direct has already raised $20 million of the $30 million through private investment it will need to obtain a large, unidentified beef processing plant in Saskatchewan. If that deal goes through, Canada Farm Direct would then move to construct a new Manitoba-based slaughterhouse capable of processing up to 1,400 fed cattle a day. Canada Farm Direct is hoping to open the new facility somewhere in western Manitoba along the Saskatchewan border in the next few years. The group maintains its processing plant will not operate in competition with the proposed Ranchers’ Choice Beef Co-op plant slated to be constructed in Dauphin, Alberta, later this year. For a minimum $10,000 investment, investors get a guaranteed dividend on net profits and can have 50 head of cattle processed at the facility each year. South Dakota beef backed by Gov. South Dakota Gov. Mike Rounds recently announced his support of the South Dakota Certified Beef program. He said the program is an opportunity for the state to market its beef as “the finest anywhere” and also generate higher earnings for producers who participate in the program. Rounds said consumers will be willing to pay more for the certified beef, the result of producers following certain steps, including detailed record-keeping that includes birth and immunization dates. Many producers already are taking many of those steps anyway, the governor said. “If we produce the best beef, let's get paid for it,” Rounds said. Jack in the Box profits jump San Diego-based hamburger chain Jack in the Box Inc. recently announced profits for the third quarter totaled $23.9 million, compared to $20.7 million a year ago and ahead of earlier projections for the quarter. The company raised its projection for year-end net profits to approximately $2.52 per share, up from the earlier forecasted $2.46. Last year, the company earned $2.02 per share. For the first three quarters, sales increased to $1.9 billion, compared to $1.7 billion a year ago. Jack in the Box now operates 2,033 restaurants, about three-quarters of them owned by the company. Red Robin CEO dismissed Michael J. Snyder has been dismissed as chairman, chief executive and president of Red Robin Gourmet Burgers after an internal probe revealed he misused charter airplanes and corporate expense accounts. A special committee investigation by the Greenwood Village, CO-based company identified various expenses by Snyder that were inconsistent with company policies or “lacked sufficient documentation.” Snyder took control of the company after merging his Snyder Group Co., which controlled 14 Red Robin franchises, with the parent company in 2000. The publicly-traded company, known for its wide array of specialty burgers, owns and franchises more than 260 restaurants in the U.S. and Canada. Sysco earnings up for Q4, year Restaurant food distributor Sysco Corp., recently announced net profits edged up 1.5 percent in the fourth quarter, to $284.7 million. Sales for the Houston-based firm were $7.98 billion in the fourth quarter. For the year, sales reached $30.3 billion, up 3.2 percent from a year ago, while net profits rose 6 percent to $961.5 million. Richard Schnieders, Sysco's chief executive, said that increased distribution efficiencies more than offset rising fuel costs, and that the company's investments in specialty food distributors is paying off. Bob Evans sees sales increase Processor and restaurant chain Bob Evans Farms has seen a rise in sales of 23 percent in the first quarter of the financial year. Sales rose to $395.6 million compared to $320.6 million in the same quarter last year. The company said the increase is primarily thanks to the acquisition of Mimi's Cafe in July 2004. Net income for the quarter was $7.2 million, compared with $14.2 million a year ago. The decline has been put down to lower same-store sales and operating margins at Bob Evans restaurants, partially offset by improved results in the food products segment. Same-store sales for the quarter fell by 1.9 percent at the company’s restaurant division, and average menu prices were down by 0.1 per cent from a year ago. At Mimi's Cafe, same-store sales went up by three percent, with average menu prices up by 2.3 percent. During the first quarter, the company opened six new Bob Evans restaurants, bringing the total to 593. However, the company is reducing the number of Bob Evans Restaurant openings to around 20 this year, from 37 in the 2005 financial year, as it focuses on improving results at existing outlets. FSIS proposes to raise fees Food Safety and Inspection Service (FSIS) announced through a USDA press release a proposed rule that would create four incremental annual fee increases for voluntary inspection, overtime and holiday inspection services, identification and certification services, and laboratory services. For example, the fee for providing meat and poultry voluntary inspection, identification and certification services is proposed to increase from $43.64 per hour per program employee in 2005 to $46.78 in 2006, $47.79 in 2007, $48.84 in 2007, and $49.93 in 2008. FSIS must pay for inspection during regular hours, but will charge when inspectors incur overtime or work during the holidays. To submit comments: Email to fsis.regulationscomments@fsis.usda.gov or www.regulations.gov; mail comments to Attention Docket Clerk, Docket No. 03-027P, USDA/FSIS, 300 12th St., SW, Room 102 Cotton Annex, Washington, D.C. 20250-3700 by Aug. 19. Montana slaughterhouse shuttered Ranchland Packing Co., a Butte, MT, meatpacker, was closed by USDA inspectors who discovered an infestation of rodents and insects in the building. The plant was ordered closed on Sunday, and the owners have until the end of the day Wednesday to prepare a plan to correct the situation. The company told the Associated Press that the infractions were minor and limited to the office areas and that the company has operated for over 30 years without a single food-safety complaint. © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.  

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© Crow Publications - Any reprint of WLJ stories, except for personal use, without permission, written consent and appropriate attribution is prohibited. 2008 Crow Publications. All rights reserved.