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Monday, April 2,2007

American Meat Institute pushes for China trade

by WLJ
Negotiations to resolve the protracted Chinese ban on U.S. beef should be part of the formal agenda for the upcoming strategic economic dialogue meeting set to occur in mid-May, said American Meat Institute (AMI) President and CEO J. Patrick Boyle in testimony submitted to Congress. “The U.S. has demonstrated its trustworthiness in food safety and animal health matters in accordance with internationally accepted scientific principles and should have access to the Chinese market,” he told the Senate Committee on Finance. Boyle noted that the ban on U.S. beef has frustrated the beef industry and has stymied the ability to get quality U.S. beef into the hands of increasingly affluent Chinese consumers. “As their economy has grown, diversified, and generated greater household wealth, Chinese consumers have become some of the best new customers for the members of AMI,” he noted. According to a recent McKinsey and Company report, it’s estimated that 700 million Chinese households will migrate from poor to middle class in the next 10 years. China was the ninth largest market for U.S. beef in 2003 with sales in excess of $27 million before the ban was put into place. “But the real value of this market is their rapidly growing middle class. The average Chinese consumer’s largest expenditure is food,” he said. In 2006, China imported more than $575 million in pork and poultry products, a 55 percent increase over 2005 values. For 2007, they are already importing 121 percent more pork and poultry products by value than at this same time in 2006. Only four years ago, their exports of pork and poultry were approximately $100 million annually. On March 12, 2007, a World Organization for Animal Health (OIE) expert panel recommended a preliminary designation for the U.S. of a “Controlled Risk” country for bovine spongiform encephalopathy (BSE). “This designation affirms the U.S.’ proactive and effective commitment to preventing BSE and controlling it should it occur. Under such a designation, U.S. cattle and products from cattle of all ages can be safely traded in accordance with international guidelines, due to our interlocking safeguards,” Boyle said. He told the committee that the facts are indisputable, and no nation has acted with as much forethought as the U.S. to prevent a disease, detect it if it existed and control and destroy it if it occurred. “It is imperative that the U.S. and China abide by the OIE’s international animal health guidelines to facilitate trade between both nations,” he said. Boyle told the committee that Congress’ passage of permanent normal trade relations for China and their accession to the World Trade Organization (WTO) has compounded the country’s economic emergence and its integration into the global economy. “As a member of the WTO, it is critical for China to appreciate the importance of trade based on adherence to the internationally developed and accepted guidelines of the World Animal Health Organization,” he added. “Despite the overwhelming scientific evidence supporting the safety of U.S. beef, more than 17 years of controls, and a preliminary expert panel designation, the ban persists,” said Boyle. He reiterated that the strategic economic dialogue coming up in May would be a good opportunity to discuss the ban on U.S. beef.

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Monday, April 2,2007

Letters

by WLJ
  Mandatory COOL is the solution To the Editor: In response to John Robinson’s March 19 column, have all the facts on hand before you write such a commentary. On the $1.99 ground beef, there is no mention of the USA cull cow and bull beef market. I hope this is just an oversight. The real crux of this letter to the editor lies within the next several paragraphs of your commentary. Labeling and COOL: well over 90 percent of the consumers of this country believe that beef products carrying the USDA label comes from only cattle born and raised in the USA. “Mandatory COOL is the solution.” Since ground beef’s already mentioned, let’s use it as an example. Remember a DNA test conducted on one pound of ground beef done recently? I sure do! I believe the sample contained over 80 different foreign cattle DNA. Which beef do you honestly think the consumer will buy? Furthermore, there is no comparison to the quality of beef born and raised in the USA, period! Yes, let’s let the consumer decide. Your comments on “Aussie” beef are un-American, you’ve insulted me as well as every other USA cattle producer active or retired. In closing, your comments on seafood labeling are off by 180 degrees. This next sentence is quoted from Mark Vinsel, executive director of the United Fishermen of Alaska. “Alaska salmon used to [be] eligible for trade adjustment assistance because of import competition, but fresh salmon prices have gone up so much under the labeling program that many fishermen no longer qualify for payments.” Also, the Southern Shrimp Alliance says it continues to support mandatory labeling and that the program “works hand in hand” with their marketing programs. Sincerely, Kurt Cleek Spearfish, SD Back on track Dear Editor, My family was one of the many Nevada ranching families who suffered severe financial losses due to the mismanagement and abuse of power by now-resigned director Don Henderson and current state brand inspector Jim Connelley in the Nevada Department of Agriculture. These men conducted their unlawful activities with the blessing of the Board of Agriculture Chairman Benny Romero and Vice Chairman Deloyd Satterthwaite. I would like to take this opportunity to thank Gov. Jim Gibbons for changing the leadership of this “chaotic, out-of-control” agency, in his efforts to set it back on the right course. The livestock business in Nevada is of major importance to the economy of the state. Between direct and indirect impacts, Nevada’s agriculture generates nearly $2 billion into the State’s economy annually. That’s the lifeblood of rural Nevada. The governor’s leadership will help make the vital functions of the Department operate efficiently and lawfully to serve the taxpayers of Nevada as well as the agriculture industry. Sincerely, Ben Colvin Goldfield, NV  

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Monday, April 2,2007

Public Lands Council cooperating withrecreation groups on public land access

by WLJ
Representatives from the livestock industry and several motorized recreation organizations met to discuss mutual goals for use of public lands. Attendees of the meeting agreed to form the Partnership for Livestock and Motorized Recreation on Public Lands, a group that will work “to ensure that motorized recreation and livestock production on public lands exist in a mutually compatible and beneficial manner.” The meeting was hosted by the Public Lands Council and the Blue Ribbon Coalition. Representatives from the Bureau of Land Management, U.S. Forest Service, National Association of Counties, Western Governors’ Association, Tread Lightly!, Americans for Responsible Recreational Access, Colorado Resource Advisory Councils, American Sheep Industry Association, Western States Sheriff’s Association, Colorado Cattlemen, American Farm Bureau Federation, Stewards of the Sequoia, and National Off-Highway Vehicle Conservation Council were in attendance to advise the partnership. The partnership will continue to work cooperatively with stakeholder groups and agencies to implement education efforts, promote multiple use awareness, and facilitate communication between the various organizations. The partnership agreed to continue expanding its membership with stakeholders from motorized recreation, the livestock industries and like-minded advocacy groups. Jack Welch, president of the Blue Ribbon Coalition, described the new partnership as a “huge step toward improving our relationships on public lands with our partners.” Brenda Richards, a rancher from Reynolds Creek, ID, said of the partnership meeting, “This group is very supportive of multiple uses on public lands. We look forward to working together to protect public lands resources into the future.” The common goals of reducing conflict and promoting more successful resource management on public lands are important to all stakeholders in the partnership. The partnership working committee is developing educational messages and communication strategies. Stakeholders will continue to meet in the future and further develop partnership efforts.

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Monday, April 2,2007

Market continues to trade lower

by WLJ
Cash fed cattle trade got underway early last week at prices lower than the previous week. Trading was light to moderate in all feeding regions last Wednesday. Compared to Tuesday, live sales in the southern Plains sold in a narrow range from $95-95.50. There were more than 35,000 head traded in Kansas at $95-95.50 live basis and $152.50 dressed. Compared to the prior week, live sales were $1-1.50 lower in Nebraska where 29,639 head had been traded as of Thursday and in Colorado, cattle traded in a range of $96-97.50. In the western Corn Belt, dressed sales were called $2-2.50 lower at mostly $96. Dressed sales in the northern Plains and western Corn Belt were $1-3 lower from $153-156. The cattle on feed report issued by USDA on March 23 showed market support for the next few months in the form of lower cattle on feed numbers and a reduction in the number of front-end ready cattle in feedlots. Cattle feeders have done a good job moving cattle over the course of the last two or three months and the current state of feedlots should help support the market in the mid-$90 range or better, according to market analysts. Interestingly, the report did show a shift in the placement pattern, with northern tier feedlots placing larger numbers of cattle than southern states. High corn prices have fueled a debate about whether cattle feeding areas would shift to the north in favor of cheaper and more readily available corn supply. Although it remains to be determined whether the shift will be long-lived, it will certainly add a new dynamic to the markets over the next few years. This could be the beginning of several new opportunities for the northern Plains region. Meanwhile, beef product movement remains soft and is expected to remain so for the near-term. However, as spring weather begins to warm things up across the nation and buyers begin to seek beef products for grilling, retail sales should pick up again. Once that begins to occur, many market analysts expect fed cattle prices to move from the mid-$90 range back toward the $100 level by mid- to late-April. Last week, boxed beef prices were showing the signs of some of that market weakness as poor weather conditions spread across the nation. Choice boxed beef lost $1.47 to trade at $152.63 by mid-day last Thursday. Select was trading $1.05 lower at $143.51. Packers were reporting fairly good boxed beef movement, with 468 loads of cuts, trim and grind shipped on heavy offerings of product. Despite the slow movement of beef out of warehouses, packers had not reduced kill levels much from prior week or prior year levels. Last Thursday, packers harvested 120,000 head. That number was 4,000 head fewer than last week and last year. For the week to date total through last Thursday, packers had harvested an estimated 484,000 head, down from 499,000 the previous week, but above the year-ago tally of 482,000 head. The cow beef market also worked its way lower last week, losing $1.01 last Thursday to trade at $104.54. The 90 percent lean was selling at $124.46, down $1 from the previous day and the 50 percent trim was trading at $55.68. Continued heavy slaughter of cull cows has pressured prices lower. Prices are now well below last year’s levels when the cow cutout value was over $114 during the same week. The 90 percent lean was nearly $20 below last year’s level, while the 50 percent lean was above last years price of $45.24. On the Chicago Mercantile Exchange (CME), trade last Thursday closed mostly higher with the exception of April and May 2008 contracts, which closed down slightly. The up front contracts were slightly higher, with April adding 20 points to close at $96.37. June was up 52 points, closing at $93.95 and August posted the session’s largest gain, closing up 70 points at $91.72. Feeder cattle It’s easy to appreciate the sight of pastures greening up in the spring, especially after a long and hard winter. It’s even better for many cow/calf producers as the coming grass and a variety of factors continue to positively influence the feeder cattle market. This is good news for producers who have some fall calves to sell. The demand for cattle ready to go to grass remains very good. Thin cattle brought significantly more money at auction markets across the West when compared to their heavier conditioned counterparts. “These thin cattle are worth quite a bit more to me as the pastures around here are beginning to green up,” said Roger White, northeastern Colorado cattle producer. “I plan to turn out several hundred head and graze them through the summer. At least that's the plan.” In addition to the bout of spring fever that is hitting the western regions as many areas are already making it to 70 degrees, the corn futures dropped sharply last week. May corn futures settled at $3.91 per bushel. This is a decrease of almost 40 cents since the beginning of March. The CME feeder cattle index also increased last week from $104.71 to $105.54. “I’m sure with the decrease in corn futures and the optimistic outlook regarding the fed cattle market, cattle buyers are given a little more money to work with,” said White. “These feedlot owners can finally pay a little bit more for these feeder cattle and not take so much risk. From a cow/calf standpoint, this sure is nice to see.” In Galt, CA, feeder steers and heifers were $2 to $3 higher. Steers averaging between 500 and 600 lbs. ranged between $107 and $118.50. Their heifermates sold between $100 and $109.50. Heavier steers averaging between 700 and 800 lbs. sold for $90 to $99 while heifers of a similar type and kind sold between $86 and $94.25. There were several heavier weight heifers. Those weighing between 900 and 1,000 lbs. sold between $72 and $86.25. In Billings, MT, the overall quality was less attractive than the previous week and feeder steers were $2 to $4 lower. However, on thin fleshed five weight steers, there were instances of $4 higher. Feeder heifers were steady to $4 lower. There were instances of thin fleshed 500 lb. heifers being $4 higher. Demand was good for thin fleshed, high quality cattle. There was less demand for plain types. Steers averaging 535 lbs. called for $126 and thin heifers averaging 512 lbs. sold for $116.50. In Fort Collins, CO, stocker steers and heifers sold with a firm undertone noted. A lower undertone prevailed on feeder steers and heifers over 650 lbs. Buyer demand was good on grazing classes and moderate to light for cattle entering the feedlot. Steers averaging 522 lbs. sold for an average of $119.25 while those weighing 695 lbs. sold for $105. Five weight heifers sold for $108 and the heavier females weighing 686 lbs. called for $92.25. Just to the south in Dalhart, TX, feeder steers and heifers were mostly steady except for 500 to 700 lb. heifers which sold mostly for $1 to $2 lower when compared to the previous week. Trade was active and demand was good. Steers weighing between 500 and 550 lbs. sold for an average of $130. Similar females averaged only $107. Oklahoma City, OK, had another large run last week with 7,330 head. Feeder steers were $1 to $3 higher and heifers were lightly tested but were $1 higher. Stocker cattle and calves were $4 to $6 higher. Demand was very good for all classes. There were many consignments of thin cattle offered with weighing conditions attractive to cattle buyers with grass cattle orders. Steers averaging 519 lbs. sold for $131. Fleshy steers at a similar weight only sold for $123 while thin cattle weighing 508 lbs. called for $139.50. Heifers weighing 524 lbs. sold for $115 while females averaging 625 lbs. sold for $111.75. In Lexington, NE, over 2,400 head of steers and heifers trended mostly steady to $3 higher. Offerings with low flesh scores brought a significant premium. Thin steers averaging $524 lbs. sold for $139.93 while fleshy steers weighing 577 lbs. averaged $131.80. Heifers averaging 526 lbs. sold for $121 and heavier weight, fleshy heifers weighing 748 lbs. sold for $97.50. To the north in West Fargo, ND, feeder steers weighing 650 lbs. and less sold $1 higher while heavier steers weighing 650-900 lbs. sold $2 to $3 lower. Feeder heifers sold unevenly steady. There was good demand, especially for lighter weight cattle. Five weight steers averaged $119.91 while those weighing 750 lbs. were worth $106.75. Heifers averaging 480 lbs. sold for $109.75 and the heavier females, which averaged 807 lbs., sold for an average of $93.19.

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Monday, March 26,2007

COMMENTS

by WLJ
Prioritize what’s important It was a great week last week because I was able to take the entire week off and go to bull sales, get out in the country, and visit with you all. Bull sales are, for the most part, quite strong. Cattlemen are being a bit more selective about the bulls they buy, but the discussions are still focused on moisture and snowpack which is now concerning western producers a great deal. Many producers in California never received their winter rain, which grows the bulk of their feed. There is speculation that cowherds will be culled very hard this year. Speaking of cows, the comment period for the Canadian cow import rule is closed. Although, USDA will need some time to review the comments and make their decision, it seems pretty clear that they will elect to open the border to this class of cattle trade. The big question on many producers’ minds is what will the market impact be when these cattle start to enter the U.S.? Other than hearing a lot of country speculation, we haven’t heard much. I spoke with market watcher Andy Gottschalk last week and he said we need to focus on the volume that we already slaughter in the U.S., which is around 4.8 to 5 million head of cows. The volume of cattle expected from Canada is around 600,000 head, which will be beef and dairy cattle and aren’t going to come at once. However, on the other hand, the Canadian feed ban doesn’t necessarily bestow any confidence that the feed ban protocol has been effective. But, then again, we’re talking about just a few head and it does seem that we may need another lesson on the real threat from bovine spongiform encephalopathy, which is essentially zero. As far as the World Animal Health Organization is concerned, beef from cattle over 30 months of age with specified risk materials removed is safe for human consumption. The only real threat from Canadian cows is in the market. According to Gottschalk and other market analysts, little, if any, market impact will be realized. This next cattle on feed report looks like it will be awfully bullish. Cattle on feed is expected to be 4-5 percent below a year ago. Marketings are expected to be up 4-7 percent and placements up just a few percent. All in all, it appears we have put the industry in a very positive posture for the second quarter to expand the market. Carcass weights are down 19 pounds and slaughter remains strong. I certainly didn’t expect to see $1 cattle so soon. We knew the late winter and spring months would be pretty good, but I think a dollar fooled everyone. The weather markets have kept production in check and 80 cent cost of gain has helped cattle feeders maintain an aggressive marketing program. Some profitability on the packers’ side has also helped them maintain an aggressive buying posture. Now that we know that the market is going to remain strong for awhile, we can focus some attention on other aspects of our industry. I suppose we need to comment on the trials and tribulations at R-CALF USA, which is becoming entertaining. I’m sure for some, this is serious business; for others, amusement. Anyway, the rogue board of directors at R-CALF has taken control and they will pursue their efforts on mandatory Country of Origin Labeling, Rule 2, packer ownership and other market disrupting legislation that the industry really doesn’t need. Ironically, this R-CALF board is getting a shot of its own medicine. Call it a coup, call it treason or anarchy, but the departed members of the board of directors decided that their only recourse was to create a new cattlemen’s organization. United States Cattlemen’s Association will attempt to pick up the pieces and advance the moderate causes of the former R-CALF Board. This situation with cattlemen’s organizations is out of control. One would think that with as many groups as we have representing the industry, our voice in Washington, D.C., would be stronger. However, that’s not the case. It appears to me that the multitude of cattlemen’s groups will confuse the issues and create more frustration for legislators. So, keep in mind, we have a good market for now. We have high feed costs and feeder cattle have maintained a very strong market, but it is vulnerable. My suggestion would be to focus your efforts on the market and what you can do to take advantage of it. Creating another cattlemen’s association seems more like a problem than a solution.

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Monday, March 26,2007

Fed cattle market backs away from $1

by WLJ
Cash fed cattle trade stalled out early last week as boxed beef cutout values and choppy trade stalled the market slightly ahead of the cattle on feed report due out on March 23. Both feeders and packers were holding firm on their positions last week, neither willing to give ground to move cattle. As of press time last Thursday, asking prices were firm at $100-102 in the south and $162 plus in the north, while packers were holding steady with offers in the range of $94 in the south and $95-97 in the north on a live weight basis. Dressed offering prices in the north were in a range of $154-157, with some very light trade reported at $157, although it was not enough to call a trend for the week. Most analysts expected trade to come in a range of $1-2 lower than the prior week when live sales in the south Plains traded at $98 and dressed sales were at $154-158. In the northern Plains and western Cornbelt, live sales ranged from $97 to $100, dressed sales from $158-160. Boxed beef prices were quickly working their way lower last week after posting two-year highs the previous week. As of Thursday, wholesale buyers were beginning to show some interest after Choice shed $2.36 and Select dropped $2.26 to trade at $160.06 and $149.15 respectively at mid-day. Buying was evident as the load count inched higher after a lull following the previous week’s high prices. By mid-day last Thursday, packers had managed to move 238 loads of cuts, trim and grind product. Packers have continued to harvest good numbers of cattle in an effort to take advantage of positive margins. According to Glenn Grimes and Ron Plain, University of Missouri agricultural economists, calf slaughter under federal inspection has been up substantially since September of 2006. The first month that showed a larger calf slaughter than a year earlier was October, which was up 14.5 percent from 2005. November was up 19.3 percent, December was up 14.1 percent, January of 2007 was up 45.4 percent, and February through Feb. 24 was up 19.6 percent. “This is another sign that producers are currently reducing the size of the cattle herd due to the short supply of forage, which is very expensive in some areas,” Grimes and Plain said. The increase in domestic slaughter has caused a decreased need for cattle and beef imports from abroad. According to Grimes and Plain, beef imports in January 2007 were down 7.1 percent from 12 months earlier. “All of our major suppliers of beef showed some reductions in their sales to the U.S.,” they said. “Feeder cattle imports from Mexico during January were down 63.5 percent from 12 months earlier and live cattle imports from Canada were up 17 percent from a year earlier. Total live cattle imports for January 2007 were down 25.2 percent from 2006.” One additional cause for the higher slaughter is the decline in carcass weights and overall beef production from those slaughtered cattle, according to Grimes and Plain. “Dressed carcass weights continue to run below a year earlier. For the week ending Feb. 24, steer carcass weights at 815 lbs. were 10 lbs. lighter than a year earlier. Heifer carcass weights under federal inspection were at 759 lbs., down 12 lbs. per head from 12 months earlier,” they said. “More stress than a year earlier from weather and high corn prices are the major reasons for the lighter weights. With the tighter supply of cattle coming out of feedlots in coming weeks, fed cattle prices are likely to continue strong.” That expectation was also evident in the analyst estimates in advance of the USDA cattle on feed report. Estimate for the number of cattle on feed spanned a range of 5.6 percent to 2.1 percent below March 1, 2006, for an average expected decline of 3.7 percent. February placements were expected in a range of 4 percent below to 7.1 percent above 2006, for an expected average of 2.5 percent above 2006. The number of cattle marketed was placed in a range of 2 to 8 percent above 2006 for an average guess of 5.5 percent above February 2006. The cattle on feed report and its expected positive news was eagerly anticipated on the Chicago Mercantile Exchange (CME) last Thursday. Traders pushed live cattle contract prices higher across the board with up-front April contracts realizing the largest gains of the day. April live cattle gained 67 points, closing at $98.40, while June rose 42 points to settle at $95.35. August was 22 points higher at $92.55 and October settled 25 points higher, closing at $96.37. The day’s positive tone corrected some early week declines after cash trade faltered slightly the prior Friday. Many traders expected to see more $1 cash fed cattle trade, however, after topping $1, trade quickly backed off to end the week at mostly $97-98. However, that won't be the end of the good times for the cash fed cattle market. Last week, some market analysts said the fed cattle market hasn’t put in the spring highs and likely won’t until perhaps April or early May. Feeder cattle Spring is in the air and with the promise of fresh grass, the demand for stocker cattle has sharply increased. The good news is, so has the value of lighter weight cattle ready to go to grass. Cattle that can be classified as thin were the most in demand as cattle buyers are showing a very strong interest. “These greener cattle are just going to bring more at the auction markets,” said Joe Bollers, an independent cattle buyer. “If we get some more moisture (in the northern states), it’s going to green up in a hurry. The grass will be a huge relief as hay prices are killing everybody.” There are many factors working to the cow/calf producer's benefit right now. The warmer temperatures with the promise of grass is a significant driving factor but so is the fed cattle market. With the fed cattle market increasing to over $100 two weeks ago, cattle buyers were more comfortable with the increase in prices of feeder calves. It doesn’t hurt that corn prices and corn futures have stayed relatively steady over the past few weeks. This is compared to the dramatic increase seen in corn prices the last several months. Regardless, the increase in the fed cattle futures market is giving feedlot owners the option to lock in a high price for fat cattle and, as such, they are more willing to risk paying more for feeder cattle. In addition, the CME cash feeder cattle index, which closed at $103.92 on Wednesday two weeks ago, continued to show strength, closing at $104.71 last Thursday. In Billings, MT, feeder steers and heifers weighing under 650 lbs. were $5 to $10 higher when compared to the previous week. Steers over 650 lbs. were $2 to $5 higher with too few heifers of the same weight to test. The demand in Billings was excellent for stocker cattle and good for feeder cattle. Five weight steers averaged $131 and their heifermates called for an average of $110.50. Fleshy steers weighing an average of 726 lbs. sold for $103 and heifers of a similar type and kind sold for $94. La Junta, CO, had a fairly large run last week with almost 5,000 head trading hands. In comparison to the prior week, steers and heifers sold steady with the exception of calves weighing 400 to 500 lbs. which sold as much as $5 lower. Trade was active with good demand on all classes. Five weight steers ranged from $110 to $118 while heifers averaging 500 to 550 lbs. sold between $95 and $101. Heavier weighted cattle were up some as steers weighing an average of 623 lbs. called for an average of $99.81 and heifers averaging 631 lbs. sold for an average of $95.63. To the south in Dalhart, TX, feeder steers and heifers weighing between 300 and 500 lbs. were steady to strong while those over 500 lbs. were $2 to $3 lower. Steers weighing between 500 and 600 lbs. sold between $115 and $125.75 but steers at the same weight, classified as thin, sold for an average of $127.50. Heifers of the same weight sold between $110 and $113.75. Oklahoma City, OK, boasted another large run last week with over 9,000 head of feeder cattle, sharply higher compared to last year when only 3,800 were sold during the same week. Feeder steers were mostly steady when compared to the previous week except those weighing 800 to 825 lbs. Those steers sold $1 to $2 lower. Feeder heifers over 650 lbs. were $1 to $2 lower while stocker heifers under 650 lbs. sold steady. Stocker steers were $4 higher. Demand was called moderate to good for cattle headed to grass or graze out wheat. The feeder cattle were in medium to fleshy conditions, however, several consignments of thin fleshed stockers were actively supported by grazing buyers. One lot of thin steers averaging 541 lbs. sold for an average of $129.20. Steers that averaged 737 lbs. called for an average of $108. Heifers that averaged 532 lbs. were sold for an average of $122 while the heavier females at an average of 778 lbs. sold for $109.10. Joplin, MO, also sold more feeder cattle than the same week in 2006. Steers and heifers under 600 lbs. sold $3 to $5 higher while those weighing over 600 lbs. were $1 to $3 lower when compared to the prior week. The supply was heavy and the demand was best for yearlings and calves suitable for grazing. Fleshy, new crop calves took the heaviest discounts. Five weight steers sold for an average of $124 while their heifermates called for $108. Heavier steers weighing in at 750 lbs. sold for an average of $107.25 and heifers of a similar weight sold for an average of $93. To the west in Valentine, NE, steers weighing in over 650 lbs. sold for $2 to $3 higher. There were numerous lots of green, grass calves and replacement heifers with good demand and buyer competition. Steers weighing an average of 531 lbs. sold for an average of $133.44 and a fancy lot of steers at 606 lbs. called for $127. Heifers averaging 529 lbs. sold for $117 while fancy five-and-one-half weights called for $123. In Sioux Falls, SD, feeder steers sold mostly steady to $2 lower. Feeder heifers remained steady to $3 higher. The best demand was in the heifer class of females over 700 lbs. There were many offerings of replacement quality females. Spring fever was in the air with a lot of conversations regarding the need for moisture in western South Dakota. Six weight steers average $111 while heifermates called for an average of $107.75 Females of replacement quality at an average of 627 lbs. were purchased for $115.75.

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Monday, March 12,2007

Fed cattle trade $4-7 higher

by WLJ
Relatively active, and substantially higher fed cattle trade took place last Wednesday, bucking the trend of late week trade over the previous few months. Fed cattle prices on approximately 20,000 head were trending as much as $4-7 higher last week, with prices reportedly in the range of $98 live basis in the southern Plains, an increase of $4 over the prior week. In the north and Corn Belt, dressed prices were reportedly as much as $7 higher in some areas, with prices in a range of $154-155 dressed in Colorado, Nebraska, Iowa and Minnesota. Last Thursday, in the wake of $98 trade the day earlier, feedlots were busy raising prices on their remaining showlists to take advantage of the bullish movement in the market. Particularly in the southern Plains, feed yards were asking $99-100 for slaughter-ready cattle. The prior week’s blizzard conditions in the central and northern Plains, as well as portions of the Corn Belt, also helped move the market as conditions prevented the movement of cattle in some areas and caught some packers short bought. However, much of the upward movement was spurred by an anticipated shortage of Choice-grading cattle in the weeks ahead as a result of winter weather conditions in cattle feeding areas early this year. Although prices are moving higher, grading percentages remain above early expectations. Last week, USDA reported that 53 percent of all slaughtered cattle were grading Choice, although most analysts expect that to drop as packers move in to the spring supply. That expectation has buyers forward purchasing to meet the increased demand for Choice middle meat products as grilling season gets underway in the southern states. The forward purchasing last week was pushing boxed beef prices, for both Choice and Select product, markedly higher. Last Thursday, Choice product was trading at $158.34, up $1.19 and Select gained 65 cents to trade at $147.87. Prices were as much as $7 higher than the previous week. Those gains were helped by a $4.38 jump in the Choice cutout and a 68 cent rise in Select boxed beef prices last Wednesday. Middle meats, in particular Choice rib primals, benefitted from the active buying spree at the wholesale level, gaining $19 per cwt. last Wednesday. Choice loin primals gained $8 during the day. End meats also got a boost as buyers look for any available bargains to meet rising demand going into spring. In an effort to capitalize on rising boxed beef prices last week, packers were ramping up their slaughter volumes. On Thursday last week, packers harvested an estimated 126,000 head which was 8,000 head more than the previous week and 4,000 more cattle than the same day last year. For the week through last Thursday total harvest was 495,000, up from the prior week’s total of 488,000 and above the same period last year, which totaled just 484,000 head. Cow beef cutouts were pressured last week by high slaughter volumes at cow processors’ last week. The cow beef cutout value declined 66 cents last Thursday to settle at $109.37. The cow beef cutout value was more than $2 lower than the previous week and down $3 from last year’s prices. The 90 percent lean was at $133.80 last week, while the 50 percent trim traded at $44.64, up from $38.42 the previous week. The sharply higher cash prices gave commodity traders reason to push live cattle contracts higher on the Chicago Mercantile Exchange (CME) at the close of the session last Thursday. Prices were 35 points to 247 points higher across the board. Up front contracts received the biggest boost. April 2007 live cattle contracts were the biggest gainers on the day, rising 247 points to settle at $101.02. June issues added 192 points, closing at $98.75, and August closed 177 points higher at $95.32. Feeder cattle Feeder cattle markets last week showed a sharp increase due to several factors. Many cattle buyers showed some optimism for spring grass and as a result, feeder cattle prices for thin steers and heifers ready to go to grass soared. “The light end of the feeder calves is really up because we have conditions that are suggesting much of the U.S. will have green grass going into the spring,” said Jim Robb, director of Livestock Marketing and Information Center. In addition to the optimistic outlook cattle buyers have for grass, the CME cash feeder cattle index rose to $100.48 last Thursday, up from $98.70 the previous week. One of the biggest factors that resulted in increased feeder cattle prices was the huge increase in the cash and futures fed beef market. Feedlots are receiving more for fed cattle and can afford to pay more for feeders. “The futures market for beef is really on fire this week,” said Robb, last Thursday. “The fed cattle market has really had a spark lit under it and has pulled the feeder cattle prices up.” Fed cattle were trading an average of $98 last Thursday with some averages going as high $99 to $100 in the southeastern region of the U.S. Interestingly, corn prices have only come down a little and have probably not had much of an effect on the market. “Corn prices certainly haven’t come down enough to support the feeder cattle market and that’s a little strange,” he said. “With the corn coming down just a little, cattle buyers are turning a blind eye and focusing on the fed cattle increase.” In auction market trade in Davenport, WA, feeder cattle sold from $1 to $4 higher. The trade was active with good demand. Five weight feeder steers called for $116 while their heifermates sold for $95.25. Fleshy, 700 lb. steers sold for $94 and heifers of similar type and weight sold for $89. Torrington, WY, had more cattle consigned last week when compared to the previous week with 3,100 head. Steers and heifers were steady to $3 higher. The overall quality at the sale was attractive and the demand was moderate to good. Steers weighing 510 to 540 lbs. sold for an average of $140.25 and steers weighing 700 to 785 brought an average of $104.25. Five weight heifers sold for $110 while the heavier consignments, weighing 715 lbs., sold for $98.50. Compared to the previous Wednesday, steer calves in La Junta, CO, under 500 lbs. sold for $3 to $5, and in some instances, $8 higher. Steers over 500 lbs. were steady to $1 higher. Yearling feeder heifers were $2 higher. One lot of fancy 435 lb. steers brought $149. Five weight heifers sold for $125 to $130 and yearling heifers of replacement quality sold for an average of $100. In Amarillo, TX, feeder steers and heifers were mostly steady except heifers under 600 lbs. which were $1 to $3 higher. Steers averaging 530 lbs. sold for $117 and heavier weights of 713 lbs. sold for $103. Heifers weighing 539 lbs. sold for $100.75. The auction market in Oklahoma City, OK, had a large sale last week with a run of more than 15,500 head compared to 11,685 the previous week. Feeder steers and heifers were mostly $1 to $3 higher last week. Demand was reportedly very good for such a large run. Some cattle were in thin to gaunt condition which was in the buyer’s favor. Demand was very good for thin cattle suitable for grass. Thin steers weighing 440 lbs. averaged $140 and thin five weights sold for an average of $134. Seven-hundred-fifty pound steers, also in thin condition, sold for $106. Nine weight steers sold for an average of $95.62. Five weight heifers sold for an average of $107.40 while their value added counterparts brought $109. Heifers weighing an average of 724 lbs. sold for $93.87. Just north in Dodge City, KS, feeder steers and heifers weighing between 300 and 600 lbs. were steady to $3 higher. Steers weighing 600 to 650 lbs. steady to $1 higher and seven to ten weights were steady to $2 higher. Heifers weighing between 600 and 750 lbs. were steady to $4 higher and 750 to 900 lb. heifers were steady to $1 higher. The state of Nebraska boasted over 16,000 head of cattle receipts last week. Steers trended $1 to $4 higher with some instances of $6 to $7 higher. Heifer offerings traded $2 to $4 higher. Demand in the state was very good and trading was moderate to active. Weigh-in conditions were definitely in the buyers' favor after cattle endured extremely frigid temperatures and adverse weather conditions the previous week. Steers weighing 500 lbs. sold for $127.56 while a lot of fancy steers at the same weight brought $139.75 and thin steers averaged $135.26. Steers averaging 807 lbs. sold for $100.67. Heifers averaging 524 lbs. averaged $109.89 and thin heifers weighing in at 506 lbs. called for $127. One lot of value-added heifers weighing 783 lbs. sold for $101. In Ft. Pierre, SD, feeder steers and heifers calves under 700 lbs. sold steady to $2 higher with most improvement on cattle suitable for grass. Feeder steers over 700 lbs. sold $2 to $4 lower. Feeder heifers and heifer calves sold mostly steady. Demand was called moderate to good.

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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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