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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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Monday, August 22,2005

BSE rule violations cited

by WLJ
— USDA says processing safeguards working. Last week, in response to a Freedom of Information Act request made by a private citizen, the USDA released statistics regarding the incidence of Specified Risk Material (SRM) contamination in meat. Records show there have been 1,036 noncompliance reports filed by federal inspectors in the 17 months that have passed since the USDA ordered the removal of all SRMs from meat products for human consumption. Food Safety Inspection Service (FSIS) spokeswoman Amanda Eamich said the agency encourages inspectors to file reports when they find violations of the SRM ban. SRMs are tissues that typically contain the proteins or prions associated with bovine spongiform encephalopathy (BSE) in an affected animal. SRMs include the skull, brain, eyes, tonsils, trigeminal ganglia, spinal cord and dorsal root ganglia of all cattle more than 30 months of age, and the distal ileum (portion of small intestine) from cattle of all ages. Eamich said when an inspector witnesses a violation, FSIS guidelines require immediate action to remedy the situation. “Depending on the plant, the lot or the entire days’ product would be reinspected,” she said. “The program is working; no banned materials have made it into the human food chain,” said Eamich. Response from consumer groups has been less optimistic. “Frankly, we are not surprised,” said Michael Hansen, senior scientist for the Consumers Union, producer of Consumer Reports magazines. “The USDA doesn’t take the testing program seriously,” he said. Speaking on behalf of the Consumers Union, he said the group hopes this information will spur the agency to take this disease more seriously. See Violation on page “This shows the USDA is more concerned with the meat industry, than public safety,” Hansen said. The American Meat Institute had a decidedly different take on the information. In a press release, AMI Foundation (AMIF) president James H. Hodges said, “When considering the public health risk posed by BSE, it is essential to maintain perspective about this animal disease. BSE’s notable impact on humans is the ability to generate emotion and overreaction to an extremely low risk.” Hodges equated the likelihood of BSE posing a risk to the public with the odds of being hit by lightning and winning the lottery in the same day. The USDA records show that in the period since the SRM ban was put in place, there have only been 1,036 incidents of noncompliance. Over that same time period, a total 46 million cattle were slaughtered under federal inspection, resulting in a noncompliance rate of less than one-tenth of one percent. Hodges said, “With inspection records indicating a better than 99.9 percent compliance rate with rules designed to protect humans from BSE, this is a success story that should instill confidence in American beef consumers.” AMIF and other livestock industry groups are concerned that certain opponents of the USDA and livestock producers will use the information to paint a negative picture of USDA protocols. In his statement, Hodges urged the public to consider the positive side of the equation, “Some groups will no doubt attempt to use this information as evidence of possible operational problems and even a food safety concern, when nothing is further from the truth,” he said. Last week, Japanese officials announced they would seek information about the SRM violations. Reports from Japan indicate the recent revelations could harm negotiations as the U.S. struggles to resume beef exports to East Asia. — 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 22,2005

Corn, hay harvest declines projected

by WLJ
— Spike in feed costs possible. USDA’s National Agricultural Statistics Service (NASS) released a much anticipated crop production report Aug. 12. The report, which projects yields for a variety of crops, held bearish news for livestock producers across the nation. Crop estimates for corn and hay, two of the most widely used feed inputs for producers, lag behind previous year harvest levels. Corn crop yields, which were initially hampered by wet weather during planting season, have also been hurt by record heat and dry conditions across the Corn Belt. The 2005 corn harvest is expected to fall 12 percent below the record harvest level of 2004. Based on conditions through Aug.1, NASS estimated crop yields to average 139.2 bushels per acre, down from an average of 160.4 bushels per acre last year. NASS estimated the total number of acres harvested in 2005 will rise to 74.4 million acres, one percent more than 2004. Despite the increase in acreage, actual yields are predicted to be lower in 29 of 33 corn producing states. The largest declines are expected in Missouri, Kansas and Illinois. Extended hot, dry weather across Illinois has lowered yield estimates from 180 bushels per acre in 2004, to 125 bushels per acre this year. That also resulted in a disaster declaration from USDA Secretary Mike Johanns, paving the way to relief payments to producers in the state. Similar yields are expected in Kansas. Missouri, although less publicized, is suffering much lower yield estimates. The Missouri corn yield in 2004 averaged 162 bushels per acre. This season, the average estimate has been reduced to 99 bushels per acre. Although the report is considered by many as only a guideline, it provides a glimpse into what corn buyers could be facing come fall and winter. Prior to the report being released, analysts estimated that a yield below 140 bushels per acre would spell an increase in the corn market prices, by some estimates pushing corn to more than $3 per bushel. However, since crop reports were released, corn futures have dropped to $2.14 per bushel by last Thursday, a decline of approximately 16 cents per bushel from pre-report prices. Some analysts speculate that the decline was due to over purchasing by buyers who expected a more pessimistic crop report. The same environmental conditions that hit the corn crop are also negatively impacting the 2005 harvest estimates for alfalfa and other types of hay. Despite a two percent increase in the number of acres harvested, alfalfa production is expected to decline two percent from last year for an estimated total harvest of 73.8 million tons. Production of other types of hay, where harvested acres have declined by two percent, is expected to decline to 76.1 million tons, down eight percent from 2004 levels. Across the Intermountain West and central Plains, hay yields have declined for the 2005 growing season due to poorer-than-average growing conditions. NASS noted that North Dakota was the single bright spot for hay yields, where a mild spring and above normal summer precipitation were delaying harvest efforts. However, the report also noted that, at present, harvested yields are running above national levels and exceeding the prior year harvest by more than a half-ton per acre. Statisticians for NASS surveyed more than 27,000 producers from all sectors of agriculture to compile the report, which will be updated each month through the end of harvest. Early crop reports are generally viewed as preliminary and until harvest, each report carries a varying degree of accuracy based on environmental circumstances. Cooler, moist weather is anticipated across the central and northern Plains for the next few weeks, and while it may help the last cuttings of hay, it is likely to be too late to affect the corn crop this year, sources said. — 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 22,2005

Packer profits keep feds steady

by WLJ
— Dressed prices fall $2-3. — Seasonal low still possible. Despite packers reporting double-digit profits most of last week, cattle sellers weren’t able to reap much of the benefits. Cattle market analysts said that if it wasn’t for packer profits last week, the fed market would have seen across-the-board declines. The spot cash fed cattle market traded at mostly steady with the prior week on a live basis, and $2-3 softer in the dressed market. Trade in northern feeding areas started Wednesday afternoon and Thursday morning at mostly $79 live, $125 dressed. The percentage of cattle that traded on a live basis last week in Nebraska was 10-15 percent larger than normal, market analysts said. Through Thursday noon, a total of 65-70,000 head were sold by Nebraska feeders. Southern Plains trade was slower to develop. Through noon Thursday, Kansas feeders had sold 45-50,000 head at mostly $79-79.50. Texas trade was still trying to get started, with only 10,000 head trading at mostly $79. There were also a few pens of cattle in Oklahoma that moved at $80. Most Texas feedlots were holding out for at least $80, and some analysts said trade might happen at that level on Friday. The packer margin index ranged mostly between a positive $13-16 per head last week, and most sources said they would keep slaughter volumes at a moderate pace in order to maintain positive margins. The boxed beef market was starting to soften up after an 11-day rally. As of noon last Thursday, Choice boxed beef was at $134.39, while Select was at $126.49. Boxed beef sales volumes last week were considered moderate. Packer inventories were tighter, compared to previous weeks, in an effort to maintain higher boxed beef prices. Slaughter volumes last week were up slightly from the previous week, and a little larger than current beef demand levels. Through Thursday, last week slaughter volume was 493,000 head, 8,000 larger than the week prior. For the week ending Aug. 13, 629,000 head of cattle were processed. Analysts said that a slaughter level of only 615-620,000 head was required to meet weekly beef demand. There has been only one week since the Fourth of July, that cattle slaughter was under 625,000 head. That was the week ending Aug. 6, when 616,000 head were processed. Market analysts were eagerly anticipating USDA’s Aug. 1 Cattle-on-Feed Report to see whether cattle feeders had been aggressive in their marketing efforts throughout July. Pre-report estimates for July marketings ranged between 99-102 percent of last year. Most market analysts said that even a 102 percent marketing figure wouldn’t be good, because that happened with one extra marketing day, compared to last year. Most sources said that one marketing day accounts for 4.5-5.5 percent monthly slaughter. Comparing the same number of marketing days in July this year with last year, marketings were only 95-96 percent, sources said. Andy Gottschalk, analyst with HedgersEdge.com, told WLJ that last week’s steady market was solely the result of packers being in the black, financially. “Contrary to popular belief, when packers make a profit they spend it on fed cattle,” he said. “They weren’t willing to pay more for cattle, but they sure bought more cattle at the same money compared to the previous week.” Over the next few weeks, analysts aren’t very optimistic on the fed cattle market, unless packers are able to move product at a higher level. “Cattle weights are still abnormally heavy for this time of year, and still have yet to hit the normal peak in finishing weights,” said Gottschalk. “We also have yet to pull any cattle forward to get out of the front-end supply situation that is building up.” Reed Marquotte, analyst with M&Z Livestock Analytics, said the drop in dressed beef prices indicated the continued trend of heavier-than-normal cattle. “Steer carcass weights are averaging around 850 pounds, 20-30 pounds heavier than normal for this time of year. A lot of that extra weight is from cattle in southern feeding states, where near-record hot temperatures should have curtailed (weight) gains,” said Marquotte. “The only logical conclusion is that cattle are being held back a few weeks more than normal, which is certainly pressuring total cattle supplies.” Feeder markets Action in the feeder market last week depended mostly on the location of the market. Prices in most markets were somewhat mixed, but mostly trended higher on better quality with demand called steady to good. Across the northern tier, feeder calf marketings are starting to pick up as the number of loads increased enough for a market test in some states. Montana markets reported the first large volumes of the season which was met with good demand. In the Dakotas, auction yards noted good attendance. Prices in South Dakota were steady to $2 higher for most offerings. As receipts continue to increase, buyer attendance should go up, leading the way for buyer competition and hopefully, higher prices. In the southern tier, prices varied greatly between states. Reports of increased moisture and greener pastures have brightened the outlook considerably. Buyers in the southern tier were primarily interested in yearlings able to finish before the end of the year. Optimism is based on projected improvements in the late fourth quarter fed market and the prospect for feedlots to move back into the black at the end of the year. Prices for steers over 800 pounds were $2-3 higher in most markets, while lighter classes of steers and heifers were divided between steady to $2 lower for 700-800 pound steers and $2-5 lower for 450-700 pound offerings. The outlook for the feeder market seems to have improved considerably in the past two weeks. Increased moisture conditions along with below normal temperatures have served to brighten moods which some believe has been pushing prices higher. Supplies of yearling feeder cattle continue to be tight in most markets as heifers are retained for replacements. Friday’s cattle on feed report will provide some direction for the feeder market in coming weeks. The report is expected to show placements into feedlots at 2% more than a year ago. Analysts guesses ranged between 98% to 104% of a year ago August. If the heavy placements are larger than a year ago, it could put pressure on the fed market, but light cattle should maintain some strength. — 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

USDA food safety appointment

by WLJ
Agriculture Secretary Mike Johanns today announced he has appointed Dr. Curt J. Mann to serve as Deputy Under Secretary for Food Safety. “Curt Mann brings a wealth of experience, knowledge and dedication to food security, food safety and bio-defense that will assist our efforts to protect the public health from contamination of meat, poultry and egg products,” said Johanns. “We are glad to welcome him back to USDA to serve in this important role and continue our commitment to safeguarding the public health.” Dr. Mann will begin his new duties at USDA August 22nd. Previously he served with the Biological and Chemical Defense Policy Directorate of the White House Homeland Security Council as the Director of Food, Agriculture, and Water Security. In this role, he was responsible for planning, developing, formulating, evaluating, and advising Presidential led programs related to bio-defense of agriculture, food and water systems. Dr. Mann was instrumental in the development and drafting of Homeland Security Presidential Directive-9 “Defense of United States Agriculture and Food” signed by the President in January of 2004. Prior to his White House service, Mann was a special assistant to the Secretary of Agriculture where he focused on coordinating the Department’s role in Homeland Security following the events of September 11th. Dr. Mann has also practiced as a clinical veterinarian, served as a professional staff member to the U.S. House of Representatives Committee on Agriculture and as executive director of the Association of American Veterinary Medical Colleges. “Dr. Mann’s experience and expertise will nicely compliment our strong food safety leadership team,” said Dr. Richard Raymond, Under Secretary for Food Safety. Dr. Mann studied microbiology at Montana State University and the University of Wyoming. He received his veterinarian degree from Kansas State University and has practiced as a large and small animal clinical veterinarian. He has one daughter and lives in McLean, Virginia.—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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© 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.