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Monday, March 12,2007

Landowners counter sue in fight over sage grouse

by WLJ
Three prominent organizations filed to intervene in litigation, brought primarily by environmental groups, to list the Gunnison sage grouse under the Endangered Species Act (ESA). The Colorado Cattlemen’s Association (CCA), Partnership for the West (Partnership), and the Western Conservation Coalition (WCC) will represent the interests of agriculture, landowners, and industry in the suit in the U.S. District Court in Washington, D.C. Colorado producers, landowners, and business owners have been struggling with lawsuits such as this one, filed by special interest groups, to list species under the ESA. The Gunnison sage grouse inhabits primarily southwestern Colorado, northern Arizona and New Mexico, as well as eastern Utah, and was added as an endangered species candidate in 2000. “Since then, we have been diligently working with the U.S. Fish and Wildlife Service (USFWS), the Colorado Division of Wildlife (DOW), and other key parties to find alternative solutions to the potential endangered species listing. Producers, land owners, and businesses have stepped up to the plate to volunteer in the process. The agreements allow ranchers and landowners to continue to use their land, while providing benefits for the grouse,” said CCA President Mark Roeber. According to DOW, Gunnison sage grouse numbers are on the increase. “The collaboration has worked at the local level; the bird’s population has improved, and it will continue, as our conservation efforts continue,” said Roeber. Many of CCA’s members have placed their own lands under conservation easements and entered into conservation agreements with DOW to benefit Gunnison sage grouse. “Landowners faced with civil and criminal penalties under the Endangered Species Act will find it more difficult to enter into these agreements that currently benefit all parties, wildlife, public, agriculture, etc.,” said Roeber. The ESA was signed into law in 1973 and was designed to bring endangered species back from the brink of extinction. Over the past 32 years, according to USFWS, only 10 of over 1,300 species on the ESA’s list have recovered. “Study after study shows the ESA simply doesn’t work,” said Paul Poister, executive director of the Partnership. “Less than 1 percent of all listed species have ever been recovered, and the regulatory straight-jacket of the ESA simply gets in the way of good conservation work,” Poister added. The Partnership is a nonprofit alliance of more than 600 companies, associations, coalitions and individuals who support a common-sense balance between economic growth and environmental conservation. “The grouse was petitioned for listing before it was even recognized as a species,” said Joe Puchek of WCC, a nonprofit coalition of landowners, realtors, agricultural producers, contractors, and businesses. The coalition supports local and state conservation efforts, high scientific standards, private property rights, agriculture, and a strong economy. The WCC commissioned a review of the Gunnison sage grouse that questions its status as a species separate from other sage grouse. The groups are represented by Kent Holsinger, of Holsinger Law, LLC, based in Golden, CO. “The people most impacted by a listing should have a voice in this process,” said Holsinger.

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Monday, January 29,2007

Trade awaits cattle on feed report

by WLJ
Despite increasing harvest levels in packing plants, the standoff between packers and cattle feeders continued into late last week. Meanwhile, feeders struggled with rising costs of gain and packers awaited the cattle on feed report due out last Friday. Ask and offer prices last Thursday remained several dollars apart, with feedlots looking for $89-90 live and $138-$142 dressed for their cattle. Most analysts expected trade to develop at levels steady to $1 lower than the previous week’s trade of $87 in the south and dressed sales in Kansas at $138-139. In the north Plains, live sales traded $86-86.50 and dressed sales traded at $139-140. In the western Corn Belt, live sales traded at $87-87.50 and dressed sales at $140. Packers were taking advantage of the downward fed cattle price movement to slaughter larger numbers of cattle and capitalize on positive margins for the week. HedgersEdge.com estimated packers were earning $16.05 per head last Thursday. Despite the week-over-week increase in harvest, slaughter through the week remained below normal. Last Thursday’s harvest was estimated at 125,000 head, 10,000 more than the prior Thursday and 1,000 fewer than the same day in 2006. For the week-to-date kill through Thursday, packers had slaughtered 485,000 head, 17,000 more than the prior week and 4,000 fewer than the same period last year. However, despite the lower than year-ago kill levels, the boxed beef market continued its multi-week decline for much of last week due to weak movement at the retail and wholesale levels. Middle meats were under pressure for most of last week and only a few of the end meats, such as the chuck complex, were propping up prices to prevent an even lower downward trend. In Thursday trade, Choice boxed beef cutout values were trending 75 cents lower to trade at $148.82. Select dropped 11 cents, trading at $137.66. Both Choice and Select values were well below the prior week when Choice boxed beef traded at $153.54 and Select at $141.22. Mike Roberts, commodity marketing agent at Virginia Tech, said last week beef demand for the past few months hasn’t been particularly good, which is adding some uncertainty to the beef market. “Pork and poultry seem to be competing for consumer red-meat dollars for beef at the retail level. Overall demand for beef is not seen as particularly strong over the past few months. Packers are expected to keep slaughter rates down while bidding cash cattle lower hoping to keep margins in the black,” Roberts said. He encouraged cash cattle sellers to push marketings if feedlots are able to get them “out of the pens at the right weights. It is still wise to consider protecting a portion of third quarter 2007 marketings at this time. Corn users should hold off pricing more near-term corn inputs now. Corn users may want to protect against rising prices over the next few weeks,” Roberts said. On the international trade front, according to USDA’s Foreign Agricultural Service (FAS) published U.S. red meat trade data for November 2006, the latest numbers available, U.S. exports of beef and veal cuts and beef variety meats during November totaled 58,644 metric tons, nearly unchanged from the previous month but 11.2 percent higher than November 2005. Exports of fresh, chilled product rose 4.2 percent over the previous month to 25,655 metric tons. Mexico remains the largest beef trading partner, accounting for beef exports totaling 339,039 metric tons, 32 percent greater than a year ago. Overall, total year-to-date U.S. beef and veal exports equaled 597,985 metric tons, 39.6 percent higher than the corresponding period a year ago. U.S. beef and veal imports during November equaled 77,886 metric tons, up 1.5 percent over October, but down 1.6 percent from November 2005. Overall U.S. beef and veal imports from were 14 percent less than the same period a year ago, amounting to 923,092 metric tons. Australia was the largest supplier, shipping 271,122 metric tons to the U.S., down 1.5 percent from 2005. The U.S. also imported 23,053 metric tons of beef from Canada, down 10.6 percent from the previous month. Year-to-date beef imports from Canada were 21.7 percent less than last year, totaling 267,100 metric tons. On the Chicago Mercantile Exchange (CME) last week, the trend was mostly higher as a result of large fund traders moving money out of the up-front February contract. Firms were moving money to deferred months, accounting for much of the very light volume in the live cattle issues. The movement helped prices slightly and live cattle contracts ended the day higher across the board as the market awaits news of cash trade and the pending USDA cattle on feed report. February issues were up 27 cents, closing the day at $90.12. April gained a nickel to finish at $92.97 and June contracts gained 32 cents during the session to end at $89.42. Feeder cattle The upward movement in the live cattle pit was a benefit to feeder cattle contracts on CME. Combined with some weakness in the grain market, it was enough to allow contract gains across the board in last Thursday’s trade. Nearby January gained two points to close at $94.72, while March and April both added 60 points, closing at $94.30 and $95.95 respectively. However, despite higher contract trade, prices in the country were not nearly as optimistic. The CME cash feeder cattle index on Jan. 23 was $94.79, nearly $2 lower than the prior week. Rising cost of gains, along with the currently spotty conditions in feedlots throughout the central U.S., is keeping a lid on feeder cattle prices. Utah State University Agricultural Economist Dillion Feuz said last week that the current price situation is likely to persist and create problems for cow/calf producers in the year ahead. “Between the rising corn market and this winter’s weather, cattle producers in Kansas and Nebraska, as well as other areas of the Midwest, have been hit with a big double negative as far as net returns are concerned,” said Feuz. “Feedlot cost of gains are likely over $75/cwt. for most pens of cattle now. For those cattle that were purchased with an expectation of a cost of gain around $60/cwt., feedlots are likely looking at a sizeable loss when they market those cattle.” Those losses are likely to be passed along to cow/calf producers who have held on to calves from the 2006 crop and will also carry over to impact the 2007 calf crop as well, he said. “Cow/calf producers are seeing the price for calves dropping with each new surge in the corn market. For those producers who held their calves until after the first of year, they probably are looking at losses on that decision,” Feuz said. “Likewise, cow feeding costs will be higher this winter as more supplemental feed is being purchased, at a relatively high cost, to supplement winter grazing. Cow/calf producers may see their costs increase by $50 per head and their revenues decrease by $50 per head relative to 2006. That is a large swing and may alter the expansion plans that some producers may have had in place prior to the new corn market and this winter's storms.” Last week’s feeder cattle trade in the southern Plains was very lightly tested as a result of the poor weather conditions for the prior two weeks. Runs of cattle in large markets were just a fraction of their year ago numbers. In Oklahoma City, OK, fewer than a thousand head were sold, just 10 percent of year ago numbers. However, market reports indicated that the undertone was lower than the sale two weeks earlier. In West Plains, MO, compared to the previous week, steers under 650 lbs. were $3-5 higher, those over 650 lbs. were weak to mostly $2 lower. Heifers under 500 lbs. sold $2-4 higher, and those from 500-600 lbs. were, at best, steady. Heifers over 600 lbs. were called steady to $2 lower. The day’s supply was called light, with a high percentage of weaned calves on the market, especially those heavier calves weighing 600-750 lbs. Demand was called uneven, with moderate to good demand on steers under 600 lbs. and heifers under 500 lbs. and light to moderate on heavier weights. Strongest demand continues for higher quality, lighter weight weaned calves in a “quick start” start condition, with all their shots. Farther north, in areas which have been spared the winter storms which ravaged the central and southern Plains, prices were no better last week. In Sioux Falls, SD, last week, feeder steers sold mostly $2-4 lower. Feeder heifers sold mostly $4-6 lower despite good buyer demand for lots on offer. In Mandan, ND, a run of more than 3,600 head of feeder steers and heifers sold steady to $1 lower then the previous week. Buyer demand was called good for all classes of offered cattle. To the west in Billings, MT, feeder steers under 500 lbs. were called steady to $2 lower, while those over 600 lbs. were $5 lower in a light test. Feeder heifers sold steady to $3 higher. Buyer demand was called moderate to good for cattle under 600 lbs. and light for cattle over 600 lbs. On the West Coast in Famoso, CA, higher corn prices and lack of rain lowered calf prices $3-5 and feeders $2 last Monday. Demand for stockers was called good on the quality greener kinds as a result of stocker operations being forced to stockpile calves in grow lots on higher priced feed compared to grass. Demand for feeder cattle was called excellent, especially for the 650-725 lb. quality steers and heifers.

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Monday, January 29,2007

Property rights case headed for Supreme Court

by WLJ
NCBA, Public Lands Council, state affiliates unite in fight for rancher’s rights. Among ranchers, one of the most passionately held principles is the defense of property rights. That’s why the National Cattlemen’s Beef Association (NCBA), the Public Lands Council (PLC), the Wyoming Public Lands Coalition, the Oregon Cattlemen’s Association, and the Nevada Cattlemen’s Association have joined in filing an amicus brief with the U.S. Supreme Court in the case of Wilkie v. Robbins. The central issue for NCBA and PLC is the right of private property owners to deny federal access to their property and the legal options available to property owners for holding federal officials accountable for inappropriate actions. “We’re fighting for individuals against government abuse,” says Jeff Eisenberg, NCBA’s director of federal lands and executive director of PLC. “There needs to be checks in place to prevent federal officials from abusing their positions and violating the civil rights of property owners.” Harvey Frank Robbins owns the High Island Ranch near Thermopolis, WY. A dispute between Robbins and the Bureau of Land Management (BLM) began over ten years ago when Robbins purchased the ranch. The 80,000 acres involved in this case are partly public and partly private lands, and at issue is whether Robbins had a right to deny BLM access to his property. In court cases over the past decade, Robbins won two preliminary victories in the U.S. district and circuit courts. “We’ve heard many stories of government officials failing to respect the Fifth Amendment rights of people in ranching communities,” says Eisenberg. “But what really strikes a chord with us in this case is the blatant abuse and harassment of Mr. Robbins at the hands of federal officials.” In response to Robbins’ refusal to grant a right-of-way across his property, BLM reportedly refused to maintain the road providing access to his property, cancelled his right-of-way across federal lands, stated they would “bury Frank Robbins,” cancelled his recreation use permit and grazing privileges, brought unfounded criminal charges against him, trespassed on his property, and interfered with his guest cattle drives. The harassment eventually forced Robbins to shut down his dude ranch business. “NCBA and PLC are deeply concerned about the brazen disrespect for private property and the extent to which the federal government can improperly intimidate private citizens. This issue strikes a blow against the most fundamental principles under which ranchers and westerners exist,” says Eisenberg. “Our western producers interact extensively with government officials and we want to put the government on notice that continued abuses of this kind will not be tolerated.” NCBA and PLC plan to submit briefs Feb. 21, and oral arguments are scheduled for March. “Protecting private property rights is one of the founding principles of NCBA dating back to 1898,” says Eisenberg. “Our involvement in this case is based on our respect for property rights principles and the need for checks on conduct by government officials. We’re proud to be part of this effort.”

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Monday, January 15,2007

Boxed beef prices jump

by WLJ
Harvest cutbacks and storm market provide boost. Packing plants last week greatly reduced kill levels as a result of poor weather which has been hampering the Plains since mid-December. That weather caused mud, ice and significant weight loss in feedlots and prevented cattle shipments from making their way to packers. As a result, there were reports of dark plants, including National Beef, and last week’s kills were very light. Last Monday’s harvest was only 86,000 head. Last Thursday’s harvest was estimated by USDA at 123,000, bringing the weekly total to 433,000 head, which was well below the same week in 2006 when 475,000 head were slaughtered. As a result of the cutbacks in kill level, boxed beef cutout values gained rapidly last week, moving packer margins above the breakeven level last Thursday. HedgersEdge.com estimated packers were earning $11.40 per head. Despite the lower kill levels and stress-related weight loss in fed cattle, beef production last week remained very close to year ago levels because of high carcass weights. Total beef production for the week ending Jan. 6 was 405.9 million lbs. That compares with 406.1 million lbs. a year earlier. Average live weights, however, have increased from 1,279 lbs. in 2006 to 1,300 lbs. last week. Likewise, dressed weights have grown from 776 lbs. on average a year ago to 788 lbs. for the week ending Jan. 6, 2007. The lower volume of market ready beef drove boxed beef prices sharply higher last week. Choice boxed beef traded at $154.05 last Thursday, moving $1.14 higher during the day’s trade. The Select cutout rose 63 cents to $130.09. In comparison, the week prior Choice cutout was $147.10 and Select traded at $132.06. Because of the reduced kill level, packers appeared in no hurry to buy cattle last week with ask and offer prices remaining well apart in most areas as of Thursday. There were a few thousand head traded in Iowa and Nebraska, last Wednesday and Thursday, at $140-142 dressed basis. Prior to that trade, the last established prices were set the week of Jan. 1 when cattle traded at $90 live basis in the Texas Panhandle; in Kansas, live sales traded at $89 and dressed sales traded at $142. In the north, live sales traded at $87-88.50 and dressed sales at $140-142. The cow beef market was also rallying last week, largely as a result of an upswing in demand for ground product and the weather issues affecting the fed cattle market. Retail movement of ground beef has been reported to be fairly strong and with reduced product available, the prices for 90 percent lean and 50 percent trim have also gained. Last Thursday, 90 percent lean traded at $136.39, while the 50 percent product was selling for $53.13. That compares with last year's price of $133.47 for the 90 percent lean and $56.79 for 50 percent product. The overall cow beef cutout value last Thursday was up 27 cents to $110.17, compared to $105.69 on the same day last year. The futures market was wildly unpredictable last week as commodities traders on the Chicago Mercantile Exchange (CME) attempted to out guess the cash market and the weather. Last Tuesday, the market sold live cattle contracts sharply lower on improvements in the weather forecast and corn market strength. However, during Wednesday's trading session, the market move sharply higher and erased the prior day’s losses. In fact, the February contract made new highs during the session. Last Thursday, as the CME traders awaited word of cash trade, the market drifted sideways and up front contracts lost ground, while deferred months made small gains. The February contract dropped 35 points to settle at $93.60 and April was 42 points lower, closing at $94.35. August and October live cattle contracts gained 22 points, closing at $87.95 and $90.20 respectively. Feeder cattle Demand for feeder cattle remains moderate in the face of winter weather and higher corn prices. Feedlots are dealing with significant mud and ice problems and, as a result, are delaying deliveries of cattle until weather conditions moderate somewhat. Corn prices last week rallied on analyst expectations that USDA would revise corn usage numbers and ending stocks. If last Friday’s report shows numbers as low as expected, it would mean numbers lower than 1995/1996 when corn topped $5 per bushel. USDA’s Chief Economist Keith Collins said last week during Congressional testimony that corn to be utilized for ethanol production could increase to 1.0 billion bushels in 2007. In 2006, an estimated 1.6 billion bushels of corn were used to produce ethanol. The December 2006 USDA Supply/Demand report estimates that in 2007, corn usage for ethanol will be at 2.15 billion bushels which equals an increase of 550 million bushels. However, since the report, Collins has made a statement suggesting that in 2007, corn usage for ethanol could increase by another 450 million bushels. This makes the total bushels of corn expected to be used to produce ethanol 2.6 billion. As a result, it is expected that corn prices will exceed $5 per bushel. In addition to the rising costs of corn. The western coast is experiencing a drought that is lowering feeder cattle prices “We are having a bad feed year,” said Betsy Noell of Producers Livestock Market in Madera, CA. “We just haven’t had any rain. On the West Coast, cattle are quite a bit lower. It's just so dry here.” Cash prices at auction markets across the western region were mostly lower. Last Thursday’s CME cash index declined 20 cents to settle at $98.94. Oklahoma City, OK, feeder cattle remained steady to $2 lower. Demand was moderate to good for feeder cattle with the best interest for steers over 800 lbs. Some feeders are currently going into growing yards as feedlots to the north and west continue to dig out from the recent storms. Many of the feedlots are not in a position to receive new cattle. Steers averaging 530 lbs averaged $114 to $122 while heifers at the same weight averaged $97.50 to $107.25. However, steers that averaged 833 lbs. called $95 to $100 on average. In Lexington, NE, comparable offerings compared steady to weak from last week's sale. Demand in Lexington was light to moderate where 5 weight steers averaged $125.93 and heifers of the same weight averaged $104.81. The number of cattle sold was down by 2,000 head when compared to last week. Abilene, TX, feeder steers sold higher while heifers sold steady to firm. Feeder steers weighing under 500 lbs. averaged $4 to $7 higher while steers over 550 lbs. averaged $1 to $3 higher. Heifers weighing over 500 lbs. sold $3 to $6 higher. Trade and demand were labeled good. Steers that weighed between 500 and 600 lbs. sold for $98 to $107. Their heifermates sold for $94 to $104. In Madera, CA, feeder cattle prices continue to drop as the state continues to feel pressures made by drought. Feeder cattle sold at steady to $2 lower when compared to the previous week's sales. Steers weighing 500 lbs. averaged $92 to $100 and heifers of the same weight averaged $85 to $94. Joplin, MO, had feeder steers and heifers open steady while demand and supply remained moderate. Steers weighing 600 to 700 lbs. sold for $97.25 to $105 while heifermates sold for $93.75 to $97. Steers over 800 lbs. sold for $94.25. In Billings, MT, there was little comparison but the demand was good for all classes of feeders. Five and one-half weight steers averaged $112 and heifers of the same size averaged $100. Steers weighing 700 to 760 lbs. called for $93 to $94.50 while heifers at 720 lbs. averaged $87.

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Monday, January 8,2007

Cutout rises on harvest dip

by WLJ
Fed cattle trade remained at an impasse last Thursday as cattle feeders held out for higher money, despite larger showlists. Bid prices last Thursday were at $89 live and $145 dressed. Most analysts expected that packers would have to pay at least $90 live and $143 dressed basis to get cattle purchased. Last established market was Dec. 29. In Nebraska, live sales traded at $87-88 and dressed sales at $140; in western Corn Belt, live sales traded at $87-88 and dressed sales at $138-140; in Texas, live sales were at $89; in Kansas, live sales traded at $88-88.50 and dressed sales at $140-140.50; and in Colorado, live sales traded at $87-87.50 and dressed sales at $138-140. Packers last week had significantly reduced kill levels and for the week through last Thursday, had harvested only 347,000 head as a result of the holiday-shortened week. That total was 4,000 head more than the previous week and 36,000 head less than the same week in 2006. The reduction in harvest helped packers move the cutout values higher last week, a key to the higher asking prices at feedlots. Last Thursday as a result of the lower kill, Choice cutout values moved $1.46 higher to trade at $147.01. Select was up $1.14 to trade at $131.90. Those prices were nearly $8 below last year’s prices during the same week. Some of the downward price pressure has been a result of the continued increase in carcass weights. According to USDA, steer carcass weight continues to rise and the increase is adding to beef production. According to Utah State University Agricultural Economics Professor Dillon Feuz, the downturn in carcass weights has not occurred as expected this year. “The price of corn at Omaha, NE, is now over $3.50 per bushel; feedlot costs of gain are higher than they have been in 10 years; and cattle were placed into feedlots at lighter weights in the last few months. Normally, I would think those factors would all tend to reduce fed cattle slaughter weights,” Feuz said. “Yet, feedlot weights are at record levels. The 882 pounds for this past week is the largest weekly average on record. This past year, the five-market steer weight averaged 851 pounds, which was 16 pounds above 2005 and 25 pounds greater than the 2001-2005 average. Late this fall when weights typically decline, they did not.” Feuz attributed the increase to the fact that it may still be profitable to feed to higher end weights, especially for those selling on a carcass weight basis, despite the higher cost of gain. Secondly, he said, in an effort to minimize the losses being experienced by feedlots, cattle feeders spread that loss over more weight at the time of sale. Finally, with the future market at a premium to cash as it has been late this year, there was incentive to hold cattle longer in the hope the cash market would rise from week to week. “Ultimately though, this added weight results in added beef in the marketplace. This year, for every 34 head of cattle sold, there was the equivalent carcass weight of 35 head,” said Feuz. “Essentially, for every potload of cattle sold, one more head of total weight was sold.” He said unless packers shift the upper end of acceptable carcass weight, cattle feeders might be at or near the point when they start getting penalized for heavy carcasses. “With an average steer weight of 882 pounds, there had to have been more than a few steers that exceeded 1,000 pounds of carcass weight and many that exceeded 950 pounds. Most packers use one of those two weights to start applying steep discounts to prices,” Feuz said. “When feedlots experience those sharp discounts, it is no longer economical to push higher weights.” The added carcass weights meant a 5.7 percent increase in total beef production in 2006 over 2005. That is despite an increase of 3.9 percent in total harvest from 31.8 million head in 2005 to 33.1 million head in 2006. On the Chicago Mercantile Exchange (CME) last week, prices were mixed after five days without trade. Last Wednesday, prices were higher throughout the session. February live cattle contracts closed up 60 points at $93.10, while April moved 50 points higher to $94.27 and June gained 30 points, closing at $89.60. On Thursday, however, prices fell, correcting their overbought condition in sharp early session losses. At the closing bell, February contracts were off 87 points at $92.22. April was down 67 points at $93.60 and June live cattle shed 75 points to close at $88.85. Feeder cattle Like live cattle, feeder cattle contracts also dropped in last Thursday’s trading session despite weakness in the grain market last week. March corn contracts on the Chicago Board of Trade fell 8.2 cents per bushel during the day, closing at $3.62 per bushel last Thursday. However, feeder cattle failed to rally on the news. January feeder cattle contracts closed down 37 points at $99.47, while March closed 40 points lower at $98.60 and April contracts dropped 7 points, closing at $99.32. The CME feeder cattle index settled at $99.14, up $1.18 from the prior day. Meanwhile, as a result of the holidays, many livestock auction markets were closed last week. Several others cancelled sales in the Plains as a result of the weather that imperiled cattle across the central Plains. Transportation was difficult, if not impossible in some areas, and many producers chose not to transport cattle in those conditions. Feedlot buyers were also waiting out the weather rather than bringing in new feeder cattle to icy, wet and muddy conditions commonly reported in the areas hit by the storm. In the markets where cattle were sold, trends were mostly steady to slightly higher. In El Reno, OK, last week, feeder cattle were lightly tested and the few steers on offer sold steady to firm. Feeder heifers were not well tested, but steer and heifer calves sold for prices steady to $2 higher; heifers had the most advance. Demand was reportedly moderate to good for all classes, with the auction full of buyers and sellers ready to see what the new year will bring to the markets. In Clifton, TX, feeder steers and heifers were called steady, with some instances of $1-3 higher. Trade was called active and demand good on all classes of feeder cattle. In Joplin, MO, compared to the previous sale, steers and heifers were $1-3 lower on a light test. Demand was reported to be moderate with a light supply. Expectations of a heavier run were curtailed by the winter storm and producers in western Kansas and the Texas panhandle did not make the sale. In Bassett, NE, there was no trend available, however, market reports said a firm undertone was evident at last week’s sale. There was limited buyer attendance, but the established order buyers put in an appearance with good demand. Overall cattle quality was good, with the majority of offerings being long-time weaned calves carrying average winter condition. In Billings, MT, feeder cattle were lightly tested with steady to higher undertones noted during the sale. Demand was called very good for all classes and weights.

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Monday, January 8,2007

Southwest ranch properties remain affordable

by WLJ
—Prices appreciating, but buyers can still find good values. Property values in the Southwest continue to climb, despite rising interest rates and challenging conditions for producers. According to many real estate professionals in the region, sales have picked up after a slowdown last summer. Properties in the Southwest region still represent one of the best values available on the market. Lower than average operating costs, combined with reasonable land costs, have made the area a destination of choice for many ranchers who are looking to take advantage of rising property values to expand or relocate their operations. Arizona According to Harley Hendricks of Harley Hendricks Realty in Marana, AZ, the demand for ranches in the region is strong. “We are showing properties four days a week right now,” he said, although according to Hendricks, the type of ranch in demand has shifted from large deeded parcels to properties which will run a good number of cows on mostly leased land. He said the highest demand in recent months has been for properties with small deeded parcels. “It used to be that a ranch with 2,000 deeded acres and 30,000-50,000 leased acres was the norm. Now, the best demand is for ranches with small deeded acreage and large leased allotments,” he said. “I had a property listed which had a large Forest Service lease and only 50 deeded acres. That property generated the most interest and sold the fastest of any listing lately,” Hendricks said. He said inventory in the state was pretty good, with most offered ranches tending toward the small side. “We need bigger ranches. There is a good demand for the larger parcels, but there just aren’t very many out there right now in this area.” There are still good values to be found in the Southwest U.S. despite a population boom. Hendricks said the region’s growth was understandably attractive, particularly for producers in what he called “cold country.” “Down here, cattle ranchers are amazed to hear that they won’t have to put up any hay or feed any hay. It takes them awhile to believe it, but once they do, they can’t believe how easy the living is down here,” he said. Hendricks said ranchers from “cold country” are a driving factor in the market right now. Of course there is a trade off; carrying capacity in the Southwest is greatly reduced from other parts of the country. Hendricks said in some areas, properties might be able to maintain 16 cows per section. “In others, it might be one cow per two sections. It just really depends on the area and how much rainfall they get during the year,” he said. According to him, the spring rains in 2005 were very good for producers in the region and forage production was outstanding. So far this winter, he said precipitation has been a little below normal, however, he expects that it won’t take much to make this spring’s grazing season a great one. That kind of optimism, along with the climate, has moved Arizona to the top spot on the list of fastest growing U.S. states, edging out neighboring Nevada which held that title in 2005. “Arizona’s now the fastest growing U.S. state. There’s a lot of money flowing in here from everywhere,” Hendricks said. “That means that a lot of these ranches that used to be remote are now right on the outskirts of a city. Instead of being three hours from a hardware store, now they are just 45 minutes from one. That’s both good and bad.” He said land in the state has been gaining in value, making it both a good investment and an attractive buy for both ranchers and recreational buyers alike. In fact, according to USDA data, in Arizona last year, average agricultural land values rose 43.8 percent from 2005, reaching an average of $3,350 per acre. “There’s nothing less than $1,000 an acre in Arizona now. In fact, deeded land is now closer to $10,000 to $20,000 an acre in the area around us,” Hendricks said. Even pasture value in the area is experiencing explosive increases. According to the same USDA survey, pasture value rose 72.3 percent last year, reaching $1,120 per acre. However, compared to some neighboring states, that’s still a very good bargain. In California, pasture value is nearly double Arizona’s rate at $2,160 per acre. In Utah, pasture prices average $1,160 per acre. New Mexico value However, one of the best land values to be found anywhere in the country still exists in neighboring New Mexico. Tim Gipson, a broker with United Country Professional Realty in Tularosa, NM, said the state, particularly the portion he deals with, has been overlooked by buyers searching for “trophy” ranches. “The Sacramento Mountains in northeast New Mexico are often overlooked by people looking for a high quality ranch property. People think of New Mexico as mostly desert, but we have mountains, trees, water, and really good quality mule deer and elk hunting. So buyers who are looking for property for either ranching or hunting are able to find those kinds of ranches here,” Gipson said. Like many other parts of the country, inventory of ranch real estate in New Mexico is in short supply, according to Gipson. That has led to a very good sellers’ market for properties in the area. “We are always looking for good quality listings in the mountains. It seems like right now, there are a lot more buyers than there are listings, and I always tell people, the higher the altitude, the higher the price,” he said. “Because 85 percent of the region we work in is government owned, there is a shortage of deeded land. The inholdings in the forest are rare and they come at a higher price than land down on the desert floor. If you can find a piece of deeded land in the Sacramento Mountains for under $1,000 an acre, that’s a good price. Most are closer to $2,000 to $3,000 an acre.” According to Paul Taylor, a real estate agent based in Roswell, NM, land in the state represents one of the best values available in the ranch real estate market today. “For us, 2006 was a strong sales year and we anticipate that the year ahead will also be very good for both buyers and sellers in New Mexico,” Taylor said. “Buyers from all over the country are taking advantage of the property appreciation in their markets, selling and relocating to New Mexico. Property values are rising here too, but it is still one of the best values around.” According to USDA, property values in New Mexico rose 44.4 percent from 2005 to 2006 to an average of $520 per acre. Property value for pasture land saw an even bigger increase in valuation. Last year alone, prices rose 60 percent, to average $400 per acre across the state. That was the second highest percent jump in valuation in the U.S., second only to Nevada. “People from both Texas and Arizona have seen their property increase in value and are taking advantage of that to purchase large tracts of land here in southern New Mexico,” Taylor said. He said that buyers in his particular market have a wide variety of interests and are all looking for different attributes when considering a purchase. “There are a number of people looking for recreational properties. We also see a large amount of 1031 exchange money. There are also a number of investors and ranchers in the market for ranch land in southern New Mexico. What makes a good piece of ranch real estate really varies, depending on the buyer and what they intend to use it for,” Taylor said. “However, the highest demand is for the large tracts of deeded land.” According to him, there has been a limited supply of ranches meeting that criteria available on the market in recent months. “It seems like whenever one of those large deeded ranches comes on the market, it’s sold very quickly. There is a lot of demand right now.” Texas/Oklahoma According to Bill Bowen, president of Southwest Ranch and Farm Sales located in McKinney, TX, the ranch real estate market in both Texas and Oklahoma is also very strong. He said the majority of his market is working cattle ranches, while 10 percent is in the form of hunting properties. “The east and southeast Oklahoma and northeast Texas region receives an average of about 40 inches of rain a year,” Bowen said. “That makes for a pretty good cow ranch. Down here, we are able to run one animal per three to seven acres. When you compare that to any other area, I think we probably have the best cost per animal unit of any area in the country.” He said the highest demand for ranches in the area is for those that will run 200 to 1,500 head of cattle. “About 90 percent of our clients are working on a 1031 exchange. We have buyers from a lot of outside areas such as Arizona, Florida, California and Nevada. We have had them from as far away as Oregon,” he said. “Buyers in other areas are taking advantage of the rise in land prices by selling out and moving down here where they can still find a good working cattle ranch that is easy to operate.” According to USDA, the average property values in Texas rose 24.3 percent between 2005 and the middle of 2006. Pasture value now averages $1,080 per acre, according to the most recent report. Farm real estate value is slightly higher, averaging $1,250 per acre, a 21.4 percent increase over 2005. In Oklahoma, farm real estate values are slightly lower, averaging $970 per acre, a 7.8 percent rise over 2005. Pasture costs were $760 per acre in 2006, an 18.8 percent increase over 2005 in the Sooner state, according to USDA. Bowen said that much of the savings in operating costs is the result of a low feed bill for producers in the area. While ranchers still have a need to feed hay, the requirements are much lower than in other states farther north. “The rule of thumb around here is one to two round bales per cow per winter,” he said. Despite normally good rainfall, stories of drought over the past two years hurt the region slightly, according to Bowen. However, since early fall, the area has received good rainfall and has recovered from the drought nicely. “We have had good rains since fall and I think we ended the year about six inches of rain below normal this year,” Bowen said. “The drought the previous two years was the second worst in our history, but things have recovered well and this year is looking better already.” Bowen, who started his professional career as a cattle buyer and formed Southwest Ranch and Farm Sales 21 years ago, said the strong market the past several years has led to a shortage of listings in his area. “We normally carry about 40 to 45 listings at any given time, but right now, we are down to something like 25 properties in our inventory,” he said. “Inventory is short, which is pretty much the case everywhere. There is strong demand for good working ranches.” — John Robinson, WLJ Editor

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Monday, January 1,2007

Cattle trade remains slow as another storm pounds region

by WLJ
The last significant fed cattle trade was a week ago Friday when the market was established at $85 and $135 on limited trade prior to Christmas. Heavy winter weather in much of the feeding states has slowed trade significantly. At midday Thursday, just a handful of cattle traded at steady levels with the prior week. Slaughter was much slower last week with the holiday-shortened schedules. For the week through Thursday, 343,000 head passed through packing plants, which was 30,000 lower than the same week a year ago. Daily slaughter was lower, which makes one wonder if Swift has been able to staff up after their immigration incident. Only 116,000 head were processed last Thursday. Packers were able to squeeze out a little profit on this week’s cattle; the packer index showed them earning $7.50 a head. In the week ending Dec. 23, there were only 615,000 head processed which is respectable for this time of year. With one more week to go, year-to-date beef production was at 25.3 billion pounds, up 5.7 percent from a year ago. It took 32,525,000 head to produce that much beef. Actual cattle slaughter was 3.9 percent above last year’s number. Beef markets have been very slow this past week with very small load counts on boxed beef sales. The Choice cutout was trading a little stronger at $144.94, and Select at $128.65. The Choice Select spread was at $16.45. Carcass weights reached a new record last week with average steer carcass weighing in at 851 lbs. The lean beef markets are a bit softer with 90 percent lean at $128.01 and the 50 percent trim trading at $32.33. The cow beef cutout was at $102.68, also relatively steady. Futures markets were quite active this past week which surprised many analysts who were not expecting any serious trade to start until after the new year. However, the commodity funds charged in and were buying cattle aggressively. Many deferred contracts have gained enough ground to offer feeders a hedging opportunity. The April live cattle went to $93.87 and February traded to $92.55. Jim Robb at Livestock Marketing Information Center (LMIC) said the bullish tone in the futures markets is providing some good opportunities for producers. With the April board at $93.87, we can place heavy feeders and forecast an $88 breakeven. He also said some feeders are starting to use their corn supplies to attract customers to feed with them by fixing the price of feed for the feeding period. Andy Gottschalk at Hedgersedge.com said that the storm markets are having a big influence on the futures. The big funds are pouring money into cattle with the weather markets in mind. Gottschalk said they are expecting mother nature to develop a new weather pattern that producers should pay attention to. Long-term weather forecasters are indicating that we could have a tumultuous winter which will produce a storm every week to ten days. If these patterns develop as we think they will, this market will be volatile. The cattle on feed report that came out Friday, Dec. 23 was considered nurtural by most market analysts. Bob Price at North American Risk Management said the Dec. 1 report came in on analysts’ expectations with both placements and marketing a little above the trade averages. The marketing number showed good movement for November and whittled down the computed carry over slightly. However, light trade at basically steady will mitigate some of the excitement from the good marketing number. USDA estimated there were 11.97 million head on feed Dec. 1, which was up 2.1 percent over last year and 4.6 percent above the 2002-05 average and is the largest Dec. 1 number in the current data series going back to 1996. November placements were down 7.6 percent over a year ago but down just 1.7 percent below the five-year average. Only November ‘04 saw a lower level of placements since the data set started. The weight ranges of cattle placed were under 600 lbs., 555,000 head vs. 660,000 head for the same month last year; 600-699 lbs. were 565,000 vs. 650,000; 700-799 lbs., 404,000 vs. 420,000; and over 800 lbs. were 365,000 vs. 315,000. The heavy weight placements has increased the number of cattle placed against March. Earlier placement patterns indicate that significantly more cattle were placed against December, fewer against January and February, more against March, and fewer against April. Marketings are the numbers that everyone should like. November marketings were up 5.9 percent over last year and 7.2 percent above the five-year average. Price said, “Very good marketings over the past few months have helped whittle down the computed carryover by nearly half a million head since the record large Aug. 1. However, it appears that carryover could grow during December but should be back to year earlier levels by the end of the first quarter if cattle feeders keep up a brisk pace on marketings. The 120-day supply remains record large.” Gottschalk watches the 120 numbers closely and illustrates the 120-day supply at 130 percent above the five-year average. He doesn't show the volume of cattle supplies that have been in the feedlot longer than 120 days to decline until February which he forecasts to be 125 percent of the five-year average. Supplies will start to show significant reduction until March and April when they come down to 113 percent of the five-year average. They will be just 2 percent to 5 percent above last year’s supply for March and April. One of the elements to remember about comparing the first quarter supplies to last year is the calf placements in 2006. Dry winter grazing conditions on wheat forced a large number of cattle into feedlots much earlier than normal, distorting cattle supplies to some degree. Feeder Cattle Feeder cattle markets were stronger on limited holiday trade. Many auction markets were closed but those that held sales found good demand. The feeder cattle index was not calculated last week but had a price on feeders at $99. Southern plains markets were showing the market stronger by $2-3 and compared to the week before Christmas, feeder steers under 600 lbs. and heifers under 500 lbs. were $1-3 higher. Heavier weight calves and short yearlings sold weak to mostly $2 to $3 lower. A limited supply of yearling cattle sold steady to $2 higher. Buyers continued to be in fairly hot pursuit after the 350-550 lb. steers and 300-500 lb. heifer calves in weaned-out condition last week, as though they had grass cattle on their minds. And perhaps they do. With the higher cost of corn, spring grass could play one of its bigger roles. A series of winter storms have put a lot of demand pressure on the market. The storm before Christmas was huge and producers are still digging out. Placements into feedlots were nonexistent in many areas. Another good size storm followed and continued to keep cattle and buyers away from the markets. Many markets were closed for the holidays anyway. There appears to be good interest in the heavy feeder cattle to place against the April markets and as usual, the light weight calves to go to wheat in the Midwest and southern plains and native pasture on the West Coast.

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Monday, December 25,2006

Storm brings market to a grinding halt

by WLJ
A severe winter storm that spread ice and snow across the southern Plains early last week before moving northward into the central U.S. and Rocky Mountain region, put the lid on any early cash trade last week as transportation was mostly at a standstill on Tuesday and Wednesday. As a result, there was little to no activity to determine a trend, although packers were expected to perhaps raise bids in an attempt to secure cattle close-by last week rather than face production cuts due to a shortage of cattle. What few sales had been reported to USDA as of last Wednesday trended toward the top end of steady at $85.50 live and $135 dressed basis. However, it wasn’t enough volume to call the trend for the week. The storm, however, was expected to lend some support to boxed beef cutout values as retailers scrambled to get product on their shelves in advance of the holiday. Prices for quick-ship products were lending some support to the market and Choice values rose 58 cents to $143.38 in Wednesday’s trade. Select prices were slightly lower at $126.45, down 18 cents from the previous day’s trade. Cow beef cutout prices were sharply higher, gaining $1.16 in last Tuesday’s trade, to $103.23. USDA estimated last Wednesday’s slaughter volume at 119,000 head, 1,000 less than the prior week, but even with the same day in 2005. For the week to date total through last Wednesday, packers had harvested 363,000 head, 5,000 below the prior week and 2,000 fewer than the same week in 2005. Meanwhile, average steer weights at 1,325 lbs. continued their slight downward movement last week, following the seasonal trend. Those numbers were encouraging for the market because despite the strong volume, prices remained stable for both fed cattle and at the wholesale level. The middle meats were seasonally softer last week, however end cuts continued to sustain the markets, and packer margins, as estimated by HedgersEdge.com, remained just below the breakeven point, just $8.55 in the red. Also adding strength to the markets last week was the expectation that the upcoming cattle on feed report, to be issued by USDA on Dec. 22, would be very supportive of a stronger market. Total numbers of cattle on feed were expected to be close to year ago numbers, while November placements were anticipated to be well below 2005 and marketings significantly higher. The average of analyst estimates placed the Dec. 1, 2006, on feed number 1.9 percent above Dec. 1, 2005. Placements in November were expected to be 8.9 percent low 2005. Marketings are expected to be 4.6 percent ahead of November 2005. When coupled with growing expectations that USDA’s Jan. 1 cattle inventory numbers could show a decline or, at most, very small growth, the news added hopes of at least short-term improvement in the markets last week. That sort of bullish thinking helped fuel live cattle contract trade on the Chicago Mercantile Exchange (CME) last Wednesday, which coupled with the storm ravaging the central U.S., spurred contracts higher across the board. December contracts were pushed 57 points higher, to close the day at $87.37. February was up 27 points to $90.35 and April was up 37 points, ending the day at $92.17. According to Virginia Tech commodities marketing agent, Mike Roberts, cash sellers of fed cattle are encouraged to push marketings while avoiding weight and quality discounts on already expensive cattle. “It may be wise to consider protecting a portion of first quarter ’07 and 2nd quarter ’07 marketings as spring prices are expected to plunge into the low 80s. Corn users should consider pricing more near-term corn inputs now,” Roberts said. Feeder cattle Poor weather across much of the central and southern U.S. forced an early end to an already short feeder cattle marketing week last week. The weather hampered shipments to auction markets and demand was light for offered cattle in any event. Despite those factors, however, the buyers last week paid mostly higher prices for cattle on offer. In Belen, NM, in a light test of the feeder cattle market, feeder steers and heifers were $1-3 higher on active trade and good demand. Farther east in Oklahoma City, OK, where ice and blizzard conditions made transportation a difficult endeavor at best, feeder cattle and calves were mostly $2-4 lower on moderate demand at best for all classes, with the best demand for weaned and value added calves and cattle. In Joplin, MO, compared to the prior week, steers under 650 lbs. and heifers under 500 lbs. were steady, while steers over 650 lbs. and heifers over 500 lbs. were called $1-2 lower. Demand was reportedly moderate, with supply moderate to heavy. Market reports said much of the offering was weaned and in medium to thin condition, while yearlings were reported in mostly medium flesh. Conditions north and west of there, however, were much worse with heavy ice followed by heavy snow and blizzard conditions in Colorado, Nebraska, Kansas and parts of Wyoming. In Loup City, NE, light offerings made it difficult to determine a market trend, however, offered cattle appeared to sell mostly steady with the prior week’s sale on moderate demand from a short list of buyers on the seats. Quality was reported to be good, although some calves were said to be carrying some excess flesh. In Mitchell, SD, feeder steers and heifers sold steady to $2 higher, with the best demand on cattle that had been weaned with a full complement of vaccinations. In the Northwest, where weather continues to pose a problem for producers on the coast, prices were generally lower. At Davenport, WA, feeder cattle were called $3-4 lower on a seasonally light run. Farther south, in Oakdale, CA, stocker and feeder cattle were steady with the previous week in a very light test. Steers in the 500 lb. class sold in a wide range of $96-121, while heifers sold in a range of $82-95. Six-weight steers sold between $85 and $94, while heifers in the same class sold from $80 to $93.50. Steers in the 700 lb. class brought $79-84. There was no test for heavy weight heifers. In seasonally light action on CME last Thursday, feeder cattle contracts closed in a narrowly mixed range as traders waited for direction from the grain markets which traded sideways for much of last week. January feeder contracts closed 15 points lower at $98.85. March 2007 feeders were 10 points higher at $96.75, and April contracts were 5 points lower at $98.10. According to Virginia Tech Commodities Marketing Agent Mike Roberts, bearish corn and soybean trade last week contributed to support for feeder cattle. The CME Feeder Cattle Index also added support with the latest data placed at $100.71/cwt., off 10 cents/cwt. “Forecasts for low placements were expected to show up in last Friday’s USDA Cattle on Feed report,” Roberts said. “This, too, was supportive of feeder cattle prices because traders are thinking that supplies may be tighter than expected.” Roberts encouraged cash sellers to push feeder cattle sales. He also advised hedgers to consider protecting a portion of first quarter ’07 and second quarter ’07 marketings. “Corn users should consider pricing more near-term corn inputs now,” said Roberts.

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Monday, December 18,2006

Feds dip

by WLJ
Fed cattle trade began earlier than normal last week in the northern Plains and sales trended $1-2 lower in most states despite a slight improvement in the boxed beef. In Texas and Kansas, fed cattle traded hands at $84-85.50. In Nebraska, feds traded at $133.50-135 dressed basis and $84-85 live basis last week. There was some early week trade last Tuesday, but packers quickly backed away from bids upon news of the immigration raids at Swift & Co. Once it was determined that the raids would have little lasting impact, offers were renewed and full-fledged trade resumed last Thursday in most areas, although volume was still relatively light. Boxed beef cutout values were improved last Thursday as a result of strong post-holiday purchases from retailers who are predicting improved demand at the retail level. However, some seasonal weakness in the rib and loin complex was tempering price increases for cutout values. Most retailers are booking value cuts to fill meat cases after the holidays so the more expensive middle meats are, for the time being, losing ground to some of the lower priced end meats. In last Thursday’s trade, Choice moved up $1.45 to $144.12 and Select was 12 cents higher at $125.47. Slaughter volume last week was down slightly as a result of the decreased production at the four Swift & Co. Beef plants which were raided early on Tuesday. Production was halted completely for several hours by federal officials and when it finally resumed late Tuesday, it was at greatly reduced chain speeds. There were nearly 1,300 employees detained and the result was a dip in harvest for the week. Although Swift officials said the decline would be short-lived, it was expected to continue to impact the harvest volume for at least a week. Jim Robb, director of the Livestock Marketing Information Center, said that near-term, he doesn’t expect much impact to prices for the fed cattle market. However, he said last Tuesday if the federal government widens the scope of its investigation or decides to raid other large-scale packing plants, the effects could be wide ranging and severe for the industry. Last Thursday, the slaughter volume was 118,000 head, 6,000 below the previous Thursday and 10,000 fewer than the same day in 2005. For the week to date as of last Thursday, packers had harvested 486,000 head. That number was 17,000 head below the previous week and 13,000 fewer than the same week in 2005. Most of the difference in volume last week came on Tuesday, when packers harvested only 118,000 head, which was below the prior Tuesday. The good news last week was delivered by Jim Gill, market director for Texas Cattle Feeders Association, during their annual meeting. In his outlook session, Gill said producers, feeders and consumers could look forward to 2007 prices remaining steady with those this year. Retail prices were slightly lower in 2006 than in 2005, he said, and consumers should also expect steady prices in the year ahead. “Fed cattle prices during 2006 averaged near $86 per cwt. with a range from $78 to $98 during the year,” Gill said. “Fed cattle prices were pressured by record-setting slaughter weights combined with higher-than-expected cow slaughter due to the extended drought. Slaughter weights in 2007 will likely trend lower in response to higher feed costs.” According to Gill, those higher feed costs will be driven by high corn costs as ethanol demand continues to fuel the grain complex. “Since mid-September, corn prices have increased more than $1.10 per bushel on the futures market,” Gill said. The increase is driving cost of gain higher in feed yards, Gill said, and if any winter weather develops in the next several months, cost of gain could go higher yet. For 2007, Gill issued quarterly price outlook for fed cattle. In the first quarter of next year, he expects fed cattle to trade in a range of $78 to $86. Second quarter prices should trade in the $82-86 range. In the third quarter, Gill predicts a range of $84-90 and fourth quarter predictions are for $86-95 fed trade next year. Feeder cattle For the past several months, feeder cattle prices have felt the negative effects of the increased prices in grain. However, last week, the cash feeder cattle prices were higher, which was mostly a result of the decrease in corn prices The Chicago Mercantile Exchange feeder cattle index increased to $101, up nearly $1 from the prior week. The December crop corn contract on the Chicago Board of Trade settled last Thursday at $3.58 per bushel, down from $3.90 the previous week. Additionally, March corn futures declined to $3.71 per bushel. The good news is that feeder cattle prices are expected to increase in the upcoming year. In addition to his comments on fed cattle, Gill said supplies will continue to tighten over the next several years as ranchers retain heifers. “The cow herd expansion that started several years ago has slowed or even stopped this year due to the drought,” he said. Despite last week’s increase in feeder cattle prices in most areas, West Coast feeder calf prices remained soft simply because of basis concerns due to transportation costs. In Davenport, WA, feeder cattle were steady to $2 lower and most of the decline was on 500 lb. heifers. Feeder steers between 500 and 600 lbs. averaged $94 to $99, while their heifer mates averaged $81.50 to $85.50. Steers in the 600 to 700 lb. range sold for $93.50 to $97 while the heifers at the same weight brought $80 to $85.75. The demand in the northern plains was high this week, particularly for calves that had been vaccinated. In Jamestown, ND, feeder steers and heifers under 600 lbs. sold $1 to $2 lower than last week. Steers and heifers over 600 lbs. were mostly steady as the large fall runs have come to an end. Steers between 400 and 600 lbs. averaged between $101 and $124 while their heifer mates called between $95 and $126. In Huron, SD, steers sold steady to $4 higher and heifers sold steady to $1 higher. Again, the best demand was for cattle that had been weaned with a full complement of shots. Demand was good and there was an active market. Ogallala, NE, was able boast a $3-7 increase on steers and heifers compared to last week and the trends were active on all weights of cattle. Five- to six-weight steers averaged $110 to $119 while heifers averaged $99 to $105. In Salina, KS, 400 to 600 lb. steers were $2 to $3 higher while 600 to 750 lb. steers were called $1 to $2 lower than the previous week. However, some of the greener 600 to 750 lb. steers were $3 higher than the previous week. The feeder heifer market decreased some as 550-700 lb. heifers were sold at prices that were $1 to $2 lower. Demand in Salina for feeder cattle was good and trade was active. In Oklahoma City, OK, feeder cattle were $1 to $3 higher with broad demand. The best action was on cattle that will finish in April. Steer and heifer calves that were under 500 lbs. were steady to $2 higher. Calves over 500 lbs. were steady to firm. The weather probably was a factor as it was much improved from the last couple of weeks. Large lots of calves that were tagged as value added, certified as preconditioned, vaccinated and weaned at least 45 days, and/or age and source verified, brought a significant premium. In Graham, TX, steers under 500 lbs. were $3 to $5 lower and over 500 lbs. were steady to $2 lower. Feeder heifers under 500 lbs. were steady to firm but larger heifers were $1 to $2 lower in comparison to the previous week.

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Monday, December 11,2006

Senate fails to pass ag appropriations

by WLJ
— Drought aid delayed until at least early 2007. The U.S. Senate last Tuesday failed to pass the Fiscal Year 2007 Agriculture Appropriations budget. Instead, it passed a continuing resolution to fund agriculture needs at current levels until February 2007. The amendment, which required 60 votes to pass, failed by a vote of 57-37. Several spending bills have been delayed as the current Republican Congress prepares to hand over the reins to Democrats in January of next year. Several senators, particularly those from ag states, vowed to continue the fight to secure disaster aid for producers even after repeated threats from the White House to veto the bill if it passes without spending cuts in other agriculture programs. The White House Office of Management and Budget last Tuesday issued a “Statement of Administration Policy” on the bill. “The Administration strongly opposes the Senate’s agricultural assistance proposal, the cost of which could exceed $4 billion,” the statement said. “If the president is presented with a bill that includes this agricultural assistance proposal, the president’s senior advisors would recommend that he veto the bill.” Several producer groups expressed their disapproval with the veto threat last week, including the American Farm Bureau Federation (AFBF). “The American Farm Bureau is disappointed that the Senate failed to pass the disaster assistance bill for America’s farmers and ranchers. Agricultural producers in many parts of the country faced difficult times this year due to various natural disasters. Farm Bureau will continue to look for opportunities during the 110th Congress to pass this important legislation,” said AFBF President Bob Stallman. Several senators said the measure will be a top priority when congressional members return to Washington, D.C., next month. “Disaster assistance must be the top priority when Congress reconvenes in January,” said Sen. Chuck Hagel, R-NE. Sen. Mike Enzi, R-WY, said following the vote that farmers and ranchers are facing their own, new version of the Dust Bowl, which Americans endured during the early part of the last century. “The effects of this years-long drought are not as sudden or dramatic as a hurricane or a raging flood, but there are people suffering and losing their livelihoods in the West and they should get the same consideration and assistance those affected by other types of disasters in other parts of the country have received,” Enzi said. “I agree our budget and appropriations system is in need of major overhaul, but that was not a choice with this amendment. The question was do you support drought aid for Westerners or not? I do. This is emergency funding for an agricultural emergency and it’s included in an ag appropriations bill, which is appropriate. This amendment increases the aid currently in the bill and helps cover more 2006 losses, which is most pertinent for Wyoming.” The disaster assistance amendment, sponsored by Kent Conrad, D-ND, if passed, would cover crop losses in both the 2005 and 2006 production years for producers who lost at least 35 percent of a specific crop; provide funds to cattle producers in disaster counties for increased feed expenses; provide funds for the Emergency Conservation Program; and provide for additional personnel for the Farm Service Agency county offices to implement the disaster assistance program. — John Robinson, WLJ Editor  

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