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Monday, June 19,2006

Canada will wait for U.S. on feed ban

by WLJ
Agri-Food Canada has been working to put a newly enhanced feed ban in effect for several years. The new regulations would eliminate the inclusion of all specified risk materials in all animal feed, not just cattle feed. However, last week, Agri-Food Canada said the agency would postpone any rule-making decisions until the U.S. publishes a similar change to its feed ban. Canadian officials said the delay was made at the request of the Canadian beef industry which hopes to harmonize its regulations to those of the U.S. in order to be more competitive. Cattle producers last week applauded the delay in implementation. If the rule is scrapped, it will help Canada maintain a competitive edge, while also lowering processing costs which would increase significantly if the industry was forced to dispose of the waste covered by the proposed rule. While Canada waits for direction from the U.S., there appears to be little movement in that direction. The U.S. Food and Drug Administration (FDA) which is responsible for monitoring feed production, is not currently considering any tightening of its feed ban regulations which prohibit the feeding of ruminant animal protein to cattle, while allowing the feeding of poultry litter and plate waste. The Canadian Food Inspection Agency first announced two years ago that it planned to issue an updated feed ban which would eliminate all specified risk materials, condemned cattle, carcasses, and other products from all animal feed, pet food and fertilizers. The delay may put those changes on hold permanently if the U.S. does not show intention to follow suit. Last summer, former FDA commissioner Lester Crawford announced FDA intended to introduce a similar ban to the one proposed in Canada and already in effect in Europe. Crawford resigned his post three days after making the announcement, which left the controversial proposal with few supporters either in the industry or the government. Instead of the strict feed ban originally proposed by Crawford, FDA instituted a modified ruminant feed ban which prohibits the use of ruminant brain, spinal column, distal ileum and other specified risk materials (SRMs) from being used in the production of feed for cattle. Dr. Steven Sundlof of FDA said removing just the brain and spinal cord would greatly reduce any remaining risk while minimizing waste disposal problems. “By removing the brains and spinal cords from the animal feed stream, you’ve taken out 90 percent of the risk,” he said. Last October, FDA moved to further tighten the feed ban. Under the new rule, brains and spinal cords from cattle older than 30 months would be banned from all animal feeds, they said. The brain and spinal cord are among the SRMs—the tissues most likely to contain bovine spongiform encephalopathy (BSE) prions if an animal is infected. Agri-Food Canada’s decision last week brought swift criticism from opponents on both sides of the border. Dr. Neil Cashman of PrioNet Canada, a group devoted to studying brain wasting diseases, including BSE, said the ban “should be instituted as soon as possible.” — John Robinson, WLJ Editor  

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Monday, June 19,2006

Cash fed cattle lose ground

by WLJ
— Exchange contracts ignore lower cash to rally sharply. Fed cattle trade last week began in the northern tier and western Corn belt on Wednesday at prices sharply lower than the previous week. Cattle trade in Nebraska and Colorado moved good volume, with more than 100,000 head trading hands at $3 lower than the prior week at $125 dressed and $78-78.75 live, $2-3 lower than the prior week. In the southern Plains, bids and offers were still far apart and as of Thursday, cattle in the south had not traded. Analysts last week expected southern cattle trade would occur $2 lower, in the range of $78-79, when cattle did finally change hands. There has been some talk about an upswing in the fed cattle market which has led some to believe the market has already put in its summer low, but Darrell Peel at Oklahoma State University said the market hasn’t come close to bottoming out. “We thought we already set the summer lows, but we haven’t seen the summer low yet. We are going to be trading cattle somewhere in the $70s until Labor Day,” Peel said. The drop in fed cattle trade last week came as packers tried to protect their positive margins in the face of slipping demand at the consumer level and lower boxed beef prices. On Thursday, HedgersEdge.com estimated packer margins in the black at $54.32. That margin was down from the prior week as packers found it more difficult to move boxed beef last week at asking prices. At the wholesale level, buyers have already replenished the supply of beef depleted by better than expected Memorial Day sales and the forward purchasing for Father’s Day and Fourth of July holidays is said to be mostly complete. That buying has left packers in a situation of having to discount boxed beef in order to move product out of their coolers.   Last Wednesday, they were able to do just that. USDA reported very good movement of product, with 676 loads of boxed beef selling at prices 53 cents lower on Choice product and 42 cents lower on Select cuts. Prices on Thursday were again lower by 30 cents on Choice product and only slightly lower on Select. Prices were expected to trend lower for the next several days as everyone in the game attempts to stay current and avoid stockpiles. Those stockpiles will be difficult to avoid without heavy discounting or help from the export markets opening at some point in the process this summer. Feedlots have done an exceptional job of staying current in light of heavy front-end supplies of finished cattle and packers have been harvesting good volume to keep pace. Slaughter volume on Thursday last week was estimated at 126,000 head and USDA estimated the total harvest for the week to date at 501,000 head. Expectations were for a total weekly harvest in excess of 700,000 head again last week. That number is 4,000 head below the previous week estimate and almost 15,000 head higher than 2005. Those numbers appear to indicate good news for the upcoming cattle on feed report. Pre-report estimates for both number of cattle placed on feed and marketings are expected to lend support to the market later this year. According to estimates from the Livestock Marketing Information Center (LMIC), taking into account one additional marketing day in 2006, the number of cattle marketed last month is estimated more than 8 percent above 2005. Steep slides in the number of cattle placed in May are expected to push the placements number to 4.6 percent below last year’s levels. Those numbers, if they prove out, could lend support to the later part of this year for cattle feeders. Jim Robb, director of LMIC, also pointed out May placements of imported Canadian cattle were well below the levels of recent months, but still contributed to the number of cattle placed in May. Peel agreed, and said the headlines about 9 percent more cattle on feed were just indicative of more cattle stacked up early in the year. “There were more cattle put in feedlots early, which caused cattle to stack up. The payoff is going to come in the third and fourth quarters of this year as a result,” Peel said. “I expect this month’s cattle on feed report to show placements down substantially, as much as 5-7 percent lower.” With regard to marketings and the impact on current pricing levels, particularly the Choice/Select spread which continues to trend above $22, Robb said there was no evidence cattle feeders had been pulling cattle forward in an effort to clear pen space or get ahead of the curve to take advantage of favorable pricing, although it may be in their best interest to do so. “Current slaughter weights don’t show there is any evidence of feeders pulling cattle forward. In fact, last week, average slaughter weights were actually up two pounds above the week prior. Instead, it just looks like the industry is having a difficult time getting cattle to grade Choice,” Robb said. On the Chicago Mercantile Exchange (CME) last week, live cattle contracts rebounded sharply from their oversold condition on Thursday. Analysts reported the action was largely due to a narrowing of the basis as the contracts begin to trade closer to par with cash trade. The June contract gained 272 points Thursday, closing at $80.95. In fact, contracts across the board rebounded despite the lower cash trade being reported. The August contract gained another 300 points on Thursday to close the day at $82.60. October live cattle gained 265 points to close at $85.95 and December contracts moved 205 points higher to end the day at $87.10. Feeder cattle Feeder cattle were also on the up trend in auction markets across the country, as well as on the CME. The reasoning behind such sudden jumps is up in the air, with several theories floating around the marketing arena. Darrell Mark, University of Nebraska agricultural economist, said he has been out of the office and is unsure as to the sudden spikes, but said optimism about overseas markets may have caused some of the action. “I think it is probably related to optimism in the export markets,” said Mark. “Many are being hopeful and that can cause a rally.” Others, however, say export markets are unlikely to be the source of motivation in the markets, due to Japan and South Korea still dragging their feet regarding trade resumption. On the CME Thursday, midday trading was jumping as high as $178 for August contracts and $142 for September trades. By the end of trading Thursday, August contracts settled 293 points higher at $112.35. September trades jumped even higher to settle at $111.83, a 300 point jump. October contracts climbed 265 points to close at $110.48. “Last week, the markets were oversold and traders are just having fun trading back and forth, like playing monopoly.” Peel said such trading in commodities results in a big impact compared to other financial trades. “A lot of money chasing a few places to park it resulted in heavy commodity trading,” said Peel. “It may not be much money to them, but relative to the size of our market, it gets impacted in a big way.” As far as the auction markets are concerned, feeders are holding steady to $2 higher in most geographical regions. In fact, at the 1st Annual Famoso All Natural Stocker and Feeder Premium Sale, which was held last Thursday, more than 16,000 head sold very well, according to Jerry York, WLJ field representative. York said calves sold steady to slightly stronger with fleshing conditions ranging from thin to moderate. He said 525 weaned steer calves weighing 640 lbs. sold for $129.75. Also, 173 calves weighing 502 lbs. sold for $135. Yearling cattle sold $2 higher in good condition. York said 502 yearlings weighing 779 lbs. sold for $111 with active Internet participation. He said certified natural cattle were realizing an $8- 10 premium. Most feeder cattle, according to York, received active buyer participation from Midwest and eastern buyers. Along those lines, Oklahoma City, OK, feeders sold steady last week. Demand was described as moderate for all classes as buyers discriminated a little more for quality last week. Receipts totaled 10,200 head, down from the week’s prior 14,534 head. Peel said he has had several conversations in the past week with cattlemen wondering why the feeder market is holding strong. He said the short answer is there really aren’t that many cattle to work with. More specifically, “cattle that should have sold in the second quarter sold in the first quarter.” He said cattle that should have sold in May, were already gone by March. Likewise in La Junta, CO, last week, feeder steers and heifers under 700 lbs. sold mostly steady in a light test. Yearling feeder steers sold $2 higher on improved quality. In Hub City, SD, last week, compared to a week prior, feeder steers sold steady to firm. Feeder auctions across the country are displaying a solid, firm feeder market. Peel said, however, the severe drought leaves the future up to discussion. He said as far as stockers, he sees them presenting little impact to the market due to few head still being out there. Peel said most were already sold due to diminishing wheat and grass. He said where the impact could occur is in the cow/calf arena. “If a lot of culling, liquidation and early weaning occurs, we could see some impact,” Peel said. He said the Plains states will determine largely what the feeder market will do since “65 percent of the beef herds” are located in those regions. He said many may send cattle to the feedlot early instead of waiting until July. At this time, the future of feeders rests in the hands of mother nature. — WLJ  

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Monday, May 22,2006

Letters

by WLJ
  What about Mexico? Dear Pete: First to congratulate you on taking over the Cattlemen’s Tour from your Dad and Barbara. It is a great program and the trip to Africa I took with them was fantastic. Pete, the amount of print on the Japan Beef Ban is overwhelming. You can not open an Internet site or a trade journal without it being the presiding factor. However, there are other export markets that are important to seedstock producers and the rank and file of the cattle industry, that are totally ignored. We have not been able to export seedstock to Mexico in two and a half years! The pre-ban levels, in a down market, was around 30,000 head, give or take. It was the livelihood of the small purebred breeder in the Southwest and of the supporting marketers like myself. It is not only detrimental to us, but also to the beef industry of Mexico. In this fast changing industry they need the influx of breeding stock that possesses the desired traits to make the Mexican cattle more suitable to the American market. Anecdotal conversations with feedlot managers points out that the recent imports from Mexico are not performing up to previous levels. The percentage of cattle that “look the part” (breed character) but do not perform to satisfactory standards is getting higher. We are still receiving upwards of 1.2 million head of Mexican feeder cattle per annum. Inquiries to U.S. and Mexican authorities as to the status of the ban result in the same answer. Quien sabe! (Who knows!) It would be a great service if you could get us some answers. Su amigo; Ray Rodriguez PhD President R&R Agrotech, Inc., Tucson, AZ Speak up against death taxes Dear Editor, The two things in life that are certain, are taxes and death. What a 1-2 punch for family ranchers when you put these two things together. According to the Joint Economic Committee Study on the Death Tax, it is the number one reason why families are losing their businesses. Ranchers across the country are being faced with liquidating their assets to pay off this tax. That is thousands of dollars per year being taking away from the ranch that could go towards cattle, equipment and other ranch expenses. Yes, estate planning is an option for limiting the death tax, but what happens when a family member suddenly dies without any precautions? Fortunately, when my dad passed away last December, my family was prepared for such a loss. I can’t imagine going through such an ordeal and being faced with losing your livelihood as well. Isn’t it enough that ranchers are being faced with trade issues, markets, drought, and animal disease every day? To me, ranchers are one of the hardest working groups in the U.S., so why are those precious pennies going to an unjust tax? Even if you haven’t been hit by a family loss and think the death tax doesn’t affect you, one day it just might. I ask you to look closely at the death tax. The people’s voice is a strong one, so let your voice be heard and contact your Senator and let them know what you feel about the death tax. As a fifth generation rancher, I will not let my voice be unheard. Rose Malisani Cascade, MT

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Monday, September 5,2005

BEEF BITS

by WLJ
Malaysia bans Aussie beef Malaysia has suspended beef imports from several Australian abattoirs, claiming slaughter methods do not meet Islamic law and the meat is unfit for Muslims to eat. Inspectors from Malaysia’s Department of Islamic Development have refused to approve Halal certification to Australian processors that stun animals to ease their suffering before slaughter. The Australian government has refused to say how many processors have been denied certification. The trade minister, Mark Vaile, has been talking to the Malaysian government to try to resolve the standoff. Processors finalize merger Rosen’s Diversified Inc., Fairmont, MN, and American Foods Group (AFG), Green Bay, WI, have announced the completion of their merger. The new national food company will be known as American Foods Group, LLC and have operating plants in Minnesota, Wisconsin, South Dakota, Ohio, Nebraska and Virginia. The two companies announced their intent to merge July 15. Combined total sales for the two meat companies last year were more than $1.5 billion. Tom Rosen, CEO of Rosen’s, and Carl Kuehne, CEO and owner of AFG, will serve as co-chairmen and co-CEOs of the new company. Greg Benedict will be COO and Robert Hovde will be the CFO. The new company will provide fresh and frozen meats to leading retailers and national food system distributors. It will also supply cooked and case-ready meat products for the retail and foodservice market. New Zealand exports get boost New Zealand’s beef exports to Japan, Korea and Taiwan have grown substantially in both value and volume in recent years. In 2004, New Zealand beef exports to those countries rose by 69 percent in volume and 74 percent in value, according to Meat and Livestock Australia (MLA). MLA said a Rabobank report indicated New Zealand has taken advantage of the opportunities offered by the recent BSE bans on U.S. and Canadian beef, and used its clean, green and quality reputation to promote its beef. In terms of New Zealand exports to the U.S., MLA said the Rabobank report predicts that the re-entry of Canadian live cattle exports will increase competition in that market and possibly soften prices for New Zealand producers. HMD spreading in Russia The number of hoof-and-mouth disease (HMD) infected cattle kept growing in the Primorye territory of Russia last week. More than 130 cows have fallen ill with HMD in three villages. The sick cows are exposed in Krasny Kut, Spassky district, Pavlo-Fedorovka, Kirovsky district and in Ignatyevka, Pozharsky district. The vaccination of cattle is going on in all districts of the territory. About 46,000 cows have already been vaccinated. Approximately 150,000 vaccines against HMD Asia-1 have been supplied to the territory. Another 160,000 vaccines will be brought to the Primorye territory before the middle of the month. According to specialists, these vaccines will be enough for the vaccination of all cows, pig and sheep not only at big farms, but also at private farms. Japanese consumers survey A September Japanese farm ministry survey found that 43 percent of survey respondents have either stopped eating beef or reduced consumption since the first case of BSE disease in Japan was confirmed, according to results released by Kyodo News reports. The results indicate that while seven percent of Japanese consumers still eat beef occasionally, 36 percent have cut back on consumption, the Ministry of Agriculture, Forestry and Fisheries said. The ministry solicited replies to its Internet survey from 2,000 consumers in February and March. Valid answers came from 1,557 people. The survey found 53 percent of respondents unaffected by the outbreak of mad cow disease in terms of beef consumption. Beef recall expanded due to listeria Allison’s Gourmet Kitchens, Ltd., Moore, OK, last Wednesday expanded the recall of processed beef products due to potential listeria monocytogenes contamination. The company originally announced Aug. 23 it was voluntarily recalling 4,925 pounds of product. However, that number jumped to a total of 23,435 pounds last week. The additional products were packaged between July 26 and Aug. 10, and were distributed to delicatessens in Arkansas, Louisiana, Nebraska, Oklahoma and Texas. The products subject to the recall are five-pound plastic containers of “Allison’s Gourmet Kitchens Barbeque Beans with Beef.” The containers bear the use-by date “09 06,” “09 13,” “09 20” or “09 21” and include the establishment number, “EST. 27404,” inside the USDA seal of inspection. Each case bears the code “04075.” © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.

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Monday, September 5,2005

Canadians close “over-30-month” probe

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

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Monday, September 5,2005

Preconditioning premiums growing

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

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Monday, August 29,2005

BEEF BITS

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

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Monday, August 29,2005

Canadian import rules violated

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

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Monday, August 29,2005

Heat stress shortens summer, fall gestation

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

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Monday, August 29,2005

Market finds strength

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

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© 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.