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Monday, October 23,2006

International picture bright for U.S. cattlemen

by WLJ
The worldwide picture for U.S. beef exports looks positive, according to Clayton Yeutter, and that’s good news for cattlemen. Speaking at a joint meeting of the Texas Cattle Feeders Association (TCFA) and the Texas and Southwestern Cattle Raisers Association (TSCRA) in Amarillo, Yeutter told cattlemen that there is some good news in the international competitive picture. Cattle feeders were in Amarillo for the TCFA annual convention and TSCRA members gathered for their fall board and committee meetings. Yeutter, a past USDA secretary and former U.S. trade representative, believes that beef’s traditional export markets will come back fairly quickly and that’s encouraging for the U.S. cattle industry. “The real question is, can we build on that and make it bigger in the future?” Yeutter thinks the U.S. beef industry can, even in the face of global competition from Brazil, Australia, Argentina and the European Union. “First, when and if we ever complete the Doha round of multilateral trade negotiations, agricultural export subsidies of all kinds will disappear forever.” The biggest user of agriculture export subsidies, including beef, is the European Union, he said. “Once those export subsidies are out of the picture, that will make it far more difficult for the European Union to move product into the world market in competition with the United States.” Yeutter said many feel the Doha round of World Trade Organization talks is dead. “But my personal judgment is it will come back to life. I’m not sure it will come back to life in the next few months, but I think it will get there eventually. I believe that export subsidies in agriculture are going to go by the wayside and that’s going to be good for the industry.” Argentina and Australia have the potential to be major world competitors in beef exports, but Australia doesn’t have the resources to expand its beef industry much beyond its present size, Yeutter said, and Argentina’s government will continue to hamper the nation’s ability to export beef. “So that means Brazil is likely to be our major competitor in export markets in beef. And what we have to do is beat the Brazilians in terms of quality of product. We need to put higher valued, higher quality beef into the international marketplace in the coming years.” Yeutter told cattlemen that someone always asks if there are enough affluent people outside the U.S. to buy American beef. Where are those consumers? “Basically, it’s the developing nations throughout Asia that will have the population and the growing purchasing power to be able to handle additional imports of American beef products. And those can be some excellent markets for American beef through the years.”

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Monday, October 23,2006

Fed cattle expected steady

by WLJ
There was some early, light trade last week in Nebraska at $135 dressed basis while most dressed offers were holding firm in a range of $140-142 in the northern Plains. In the south, offers were in the $90 range with buyers offering only $85 for inventories, which were slightly larger than the prior week. Analysts were calling for trade steady with the previous week, when trade finally developed in earnest. The last substantial trade was at $87-88 live basis and $135-138 dressed two weeks ago. Feedlots were holding out for higher money last week as a result of higher boxed beef prices and what was expected to be a supportive cattle on feed report, in some respects. Pre-report estimates were calling for at or near record high numbers of cattle on feed for the month. However, placements were anticipated to be smaller and marketings solid for the month. Those expectations were causing packers to hold onto cattle in the hope of improving packer bids. On the other hand, packers, whose margins were still estimated to be minus $14.15 by HedgersEdge.com, were sticking to their offers last week. Boxed beef cutout values received a slight boost last week from lower production levels. Packers, who announced two weeks ago they would trim kill levels, followed through, and in the process raised Choice boxed beef cutouts more than $3.50 from the prior week. Choice cutout value on Thursday was down slightly at $146.21. Select cutout values were five cents higher at $136.41 in last Thursday’s trade. Those prices are up from $143.32 on the Choice and $134.44 on the Select from the previous week. Last Thursday, packers harvested 125,000 head, up slightly from the prior week and 3,000 head above a year ago. For the week to date as of last Thursday, packers had harvested 498,000 head, down from 502,000 the prior week, but up from the 487,000 head harvested during the same week last year.   On the Chicago Mercantile Exchange last week, live cattle contracts were mixed as futures traders waited for cash trade and USDA's cattle on feed report. In Thursday trade, contracts were lower across the board. October was down 70 points to $87.87, December was 65 points lower at $87.20 and February was down 57 points to close the session at $89.95. According to Virginia Tech Commodity Marketing Agent Mike Roberts, live cattle futures were mixed with the nearbys lower amid concern for higher feed costs pushing fed cattle to market sooner rather than later. “Floor sources stated today they were still concerned that feedlot supplies are adequate and rising feed costs will push cattle into packer yards. Trader's expectations are that beef packers will not reduce slaughter rates to any appreciable extent due to very high fixed costs,” Roberts said. “A lack of positive export news from Asia added a bearish tone to the market.” Roberts encouraged cash sellers to consider protecting a portion of fourth quarter 2006 and first quarter 2007 marketings. “Hedgers sensitive to the downturn in this market should be on short positions by now. Corn users should hold off pricing inputs at this time while considering selling a put option,” Roberts said. Feeder cattle Feeder cattle trading last week was also on a downward trend, largely as a result of the very strong corn market. Corn prices jumped to $3.16 per bushel for new crop December corn futures on the Chicago Board of Trade last Thursday. The rise in prices, more than 18 cents per bushel in a week, added heavy pressure to an already weakened feeder cattle market. According to market reports from across the country, feeder steers and heifers sold $2-5 lower. This is the fifth consecutive week of downturns and some calves were off $20-25 per cwt. during this slide. The price slide, along with harvest time and the fact that a lot of calves were marketed early as a result of drought, has pushed down auction market receipts to low levels in most areas. Buyers are only purchasing cattle in a “hand to mouth” fashion, according to Livestock Marketing Information Center Economist Erica Rosa. On the West Coast, the fall runs are resulting in heavy runs of feeder cattle at this time of year and prices there are mostly steady despite the volume. In Toppenish, WA, last week, feeder cattle steady to $3 lower. Trade was called moderate with good demand. In Klamath Falls, feeder steers sold $3 lower and feeder heifers were $3-6 lower with demand for all classes moderate to good. At Famoso, CA, feeder and stocker cattle last week were $3-4 lower last Monday. Demand for stocker cattle was excellent, with the best call for quality steers and heifers in the 450-525 lb. range, although prices were somewhat softer as a result of climbing corn prices. Feeder cattle were in excellent demand, particularly the 650-750 lb. steers and heifers. In Billings, MT, steer and heifer calves were in short supply last week and were steady to slightly lower. Demand was called good for light fleshed calves under 550 lbs. and moderate for heavier weights. In Riverton, WY, last week, feeder calves came under heavy pressure with steer calves under 500 lbs. trading steady to $2-5 lower with instances of $8-9 lower. Cattle over 500 lbs. were mostly $5-7 lower. Heifer calves under 500 lbs. traded steady with some instances of $1-6 lower, over 500 lbs. were $2-3 lower with instances of $6-8 lower on 550-600 lb. cattle. Demand was called moderate to good. In La Junta, CO, compared with the previous sale, steer calves under 600 lbs. were $2-3 lower except for 500 to 550 lb. calves, which were steady. Heifer calves under 450 lbs. were steady, while those over 450 lbs. were $2-3 lower, except for 450 to 500 lb. calves which were $5 lower. Yearling feeder steers were lightly tested. Yearling feeder heifers were $1-2 lower. Trade was called moderate to active with demand moderate to good. In Joplin, MO, compared with the prior week, steers and heifers sold $3-6 lower, with some reports of $7-10 lower. Demand was called moderate with quality average to poor in most classes. Yearlings over 700 pounds were reportedly scarce. Receipts at Joplin were much lower compared to last year as a result of market prices as much as $20 lower compared to sales last month. In Oklahoma City, OK, where runs continue to be well below last year's numbers, prices last week were $2-3 lower on feeder steers and heifers. Steer and heifer calves were $1-3 lower, with the most loss on calves over 500 lbs. Demand was called moderate to good for calves, the best action on long weaned calves.

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Monday, October 16,2006

Packers announce cutback in operations

by WLJ
— Negative per head returns finally take their toll. Three of the four major packing companies last week took a step toward improving profitability when they announced immediate cuts in the processing shifts at their beef plants. Analysts had been predicting the move for weeks as projected packer margins fell farther and farther behind break-even prices. Bob Price at North American Risk Management Services, Inc. said the cutbacks were a result of all the usual concerns, such as poor margins, lower priced competing meats, and difficult trading conditions overseas. The largest of the companies announcing cutbacks, Springdale, AR-based Tyson Foods, said the company intended to reduce its operating hours from 40 to 35 during the next six to eight weeks. That reduction alone will eliminate approximately 12,000 head of cattle from the slaughter mix each week. A Tyson spokesperson blamed the slowdown at least partially on difficulties in export markets and the expected seasonal softening of beef demand. “Access to key export markets remains limited. Competing meats, such as pork and poultry, are significantly less expensive (than beef), and we’re in the fall season when beef demand historically softens,” the company said in its statement. In addition to the cuts in slaughter at its primary Plains states plants, Tyson announced its Boise, ID, beef plant would be permanently shuttered last Tuesday, as had been previously planned. The losses in the beef industry have weighed heavily on Tyson Foods, with quarterly losses reported in May and July. The third quarter report, issued in July, showed Tyson was $53 million in the red. It is widely anticipated that the company will also record a loss for fiscal year 2006 which ended Sept. 30. Competing proteins such as chicken and pork, which sell at retail for less than beef, have also contributed to the problems in the beef market. National Beef Packing Co. also put the brakes on its operating hours last week when it reduced its hours at Dodge City, KS, and Liberal, KS, to an estimated 37 hours per week, down from its normal 40 to 48 hours per week. The company said it had gradually been cutting back its operating hours for the previous two weeks before making the official announcement. “We’re normally a six-day-a-week operator, so for us, this is a dramatic cutback,” company spokesman Keith Welty said. He said he was unsure of the cost savings for the company as a result of the reduced operations. According to Welty, there are 3,100 employees at the Liberal plant and 2,800 employed in Dodge City.   In a release, National Beef President Tim Klein attributed the action to “poor demand, tight supplies of cattle, and the continued limited access to our export markets.” “We do not expect market conditions to improve for several months,” Klein said. “We will make a concerted effort to keep our suppliers, customers and employees abreast of our reduced production schedule.” By the end of the day last Tuesday, Swift & Company, the third-largest processor of fresh beef products in the U.S., also announced its intent to limit production at three of four domestic beef processing facilities. The company said it plans to limit its kill schedule to only 32 to 37 hours per week. Swift cited declining gross margins due to high cattle prices, seasonally weak domestic boxed beef demand, and limited access to key international export markets as the key reasons for the production cutback. Swift officials said the company intends to limit production at its Cactus, TX, Grand Island, NE, and Greeley, CO, plants until beef processing gross margins materially improve. The company said it, too, had been working reduced kill shifts for the past several weeks. Although Cargill Meat Solutions (CMS) has not publicly announced it will reduce operating hours or kill level, CMS spokesman Mark Klein said the company had been working at a slower rate for the previous month. “We have been managing our hours, including reducing them for the last 30 days. It has been on a week-by-week and plant-by-plant basis depending on availability of cattle and the price,” Klein said. Last Wednesday, after the reductions were announced, HedgersEdge.com estimated packer losses in excess of $50 per head. Analysts said they expected the cutback in harvest would help support the boxed beef cutout prices and, as a result, boost packer margins. However, despite the cutbacks, slaughter volume was still above year ago daily and weekly totals last Tuesday when packers harvested 128,000 head. That figure was 7,000 above the prior Tuesday and 12,000 head more than a year ago. For the week to date, 255,000 head had been harvested, 6,000 more than the prior week and well above the same week in 2005 when packers killed 240,000 head. Packers haven't been the only ones impacted by large supplies of slaughter-ready cattle and a decline in boxed beef prices. According to information from the Livestock Marketing Information Center (LMIC), feedlot closeout prices have hit cattle feeders hard for much of this year. High feeder cattle prices and a stronger than normal grain market have kept them in the red as well. In coming months, break evens will move even higher, making it increasingly difficult to regain positive margins at the feedlot level. For example, the estimated monthly breakeven for a 750-pound steer that will reach slaughter weight in January 2007 is just over $98 per cwt., according to LMIC data. — John Robinson, WLJ Editor  

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Monday, October 16,2006

Fed cattle prices slide

by WLJ
Short bought packers last week jumped into the market early and got trade started at levels lower than the prior week. A combination of factors, including seasonal softening beef demand at the consumer level and a sharp decline in the Chicago Mercantile Exchange (CME) live cattle contracts on Monday worked against cattle feeders who, last Wednesday and Thursday, sold cattle in a range of $86-$87 live and $135-$138 dressed in the north and $87-88.50 in the southern Plains. Packer interest tapered off once moderate trade had developed, indicating they were not interested in buying more cattle than necessary to meet immediate needs. A similar trend was evident the prior week, when trade developed very late in the day, Oct. 6, at very low volumes. The widely expected news that packers were going to trim kill levels by reducing operating hours finally came through last week. Now all that remains is to see how much the cutback will actually affect slaughter volumes. Some analysts last week were quick to point out that previous announcements did little to decrease slaughter volume and didn’t last long. Despite packer statements that the cutbacks had been underway for several weeks, the slaughter volume for the month to date last week was still well above 2005. For Thursday last week, USDA estimated slaughter volume at 123,000 head, which was down 5,000 from the prior week but still ahead of 2005. For the week to date last Thursday, packers had processed 502,000 head, which was 1,000 head more than the prior week and 19,000 head more than the same week in 2005. Reductions in harvest did boost boxed beef cutout prices, but not enough to boost packer profitability very much. Choice boxed beef cutout values last Thursday were up just 14 cents, to $143.42, in morning trade. Select was also up 49 cents, trading at $134.36 for a Choice/Select spread of $9.06. Despite the improvements, packer margins were still deep in the red, according to HedgersEdge.com. Last Thursday, per head losses were estimated at $53.70. Movement of product was called moderate as wholesale buyers worked to fill needs before prices climb as a result of the cutbacks in kill levels. On CME last week, early week trade was sharply lower as a result of bearish sentiment after the lower cash trade the week prior. October and December live cattle contracts lost 167 and 152 points respectively and were as much as $2-3 lower than the prior week. During last Monday's sell-off, contracts dropped below their 100-day moving averages which triggered technical fund selling which added to the pressure. Despite the early week losses and lower cash trade, CME live contracts bounced back last Thursday, with contracts closing higher across the board. October was 40 points higher at the end of the session, closing at $88.75. December was up 80 cents, the largest gain of the day, to close at $87.70. February and April contracts were both 77 points higher, closing at $89.87 and $88.90 respectively. Mike Roberts, commodity marketing agent for Virginia Tech, said Cash sellers should consider protecting a portion of fourth quarter ‘06 and first quarter ‘07 marketings at this point. “Hedgers sensitive to the downturn in this market should be on short positions now,” Roberts said last week. Feeder cattle Live cattle losses on CME last week were enough to pull feeder cattle contracts sharply lower. Figure in seasonally larger runs of cattle, higher corn prices, a cut in USDA’s corn crop estimate, larger numbers in auction markets, and lower cash trade in the country and it added up to a rough week for feeder cattle last week. Monday CME trade saw significantly lower trade especially in the nearby feeder cattle contracts. October feeders were 223 points lower at the end of the session, closing at $110.75. November was down 292 points to $108.32 and January contracts gave up 300 points to settle at $106.27. Those prices were more than $3 lower than a week earlier. Feeder cattle sales trended lower all week as a result of a lack of support from either cash or contract trade and with the cutbacks in slaughter and lower prices being paid for fed cattle, it looked last week like it might be some time before that changes. If grain prices continue to rise like they did last week, it will add additional pressure to the feeder cattle market. Numbers of yearling feeder cattle remain tight, which should help to support prices in the near term, however, rallies are likely to be limited on either the cash or contract side. In Coleman, TX, last Wednesday, feeder steers under 500 lbs. were $1-3 higher, defying the week's trend. Those calves over 500 lbs. were steady to $1 higher. Feeder heifers were also $2-3 higher. Trade and demand were called good. At Oklahoma City, OK, last week, feeder cattle and calves were $2-4 lower, except thin fleshed, long weaned or preconditioned calves under 500 lbs. which sold steady to $3 higher. Demand was called moderate to good for all classes, with the best demand for light weaned calves. Calves over 500 lbs. found narrow outlets as northern buyers pull out of the market. In West Plains, MO, last week, feeder cattle were sharply lower with steers and heifers $2-7 lower. A few steers under 350 lbs. sold $12-15 lower than the prior week’s strong market upturn for light feather-weight steer calves. Supply was moderate to heavy with the demand called light to moderate. In Dodge City, KS, compared with the previous week, steers 300-650 lbs. sold steady to $2 lower on a light test. Heifers in the 300-650 lb. range didn’t have enough volume for a test, but a lower undertone was noted at the market. Steers 650-950 lbs. were called weak to $3 lower, also on a light test. La Junta, CO, markets sold steer calves under 500 lbs. steady with the previous week, while those over 500 lbs. were $3-5 lower with a full decline on cattle in the 600 to 700 lb. range. Heifer calves and yearling steers were $2-3 lower on active trade and moderate to good demand. In Riverton, WY, compared to the prior week, steer calves under 500 lbs. were $2-4 lower, and those over 500 lbs. were steady with some instances of $2-5 higher. Heifer calves at the market were under pressure with most steady to $2-3 lower. Yearlings steers were called steady with some instances of $3 lower. Heifers were steady with replacement quality animals in the 800-850 lb. range $4-5 higher on moderate to good demand. In Billings, MT, last week, steer and heifer calves were $2-5 lower in a light test, except 600 lb. steers traded near steady. Demand was called moderate as a result of lower quality and smaller lot sizes being offered. On the West Coast, in Toppenish, WA, last Tuesday, feeder cattle were called $2-7 lower on moderate trade and light to moderate demand. In Famoso, CA, stocker and feeder cattle were $2-3 lower with excellent demand for stockers, especially the quality 450-525 lb. steers and heifers. Feeder cattle also met excellent demand, especially the 625-750 lb. quality steers and heifers. At Madera, CA, stocker and feeder cattle were steady with the prior week with 500 lb. class steers bringing $102-117.75 and the heifers in the same class were selling between $99 and $112.50 in a light test.

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Monday, October 9,2006

Shipments to South Korea on hold

by WLJ
—Lack of clarity preventing companies from trade. USDA statistics showed last week that no beef has been shipped to South Korea since the border opened. Sources at major packers have said they are concerned about having shipments condemned in the event inspectors find even small fragments of bone in shipments of U.S. beef. Officials with the South Korean agriculture ministry have said they will have a zero tolerance policy regarding any bone fragments in beef products sent overseas. That stand means any product found containing bone fragments could be rejected or destroyed by government inspectors. That is a risk major exporters aren’t willing to take. Lynn Heinze, U.S. Meat Export Federation vice president of information services, said vague responses and instructions from South Korean officials are the reason packers have not yet resumed shipments overseas. “Individual companies will make their own decisions as to when they will resume shipments, but without additional guidance, it could be some time before shipments begin,” said Heinze. USDA sent a high-level delegation to Korea in August in an effort to come to an agreement on an acceptable standard for a tolerance level for bone fragments in boneless beef shipments, but the South Koreans rejected the request. Sources at major packing companies said most don’t intend to ship overseas until a standard is reached. The border officially opened to shipments of boneless beef from animals under 30 months of age on Sept. 8. USDA Foreign Agriculture Service officials said last week the agency would “continue to press Korea for appropriate beef trade protocols.” The regulations, which U.S. officials had hoped to get changed quickly once trade barriers were lifted, said if problems are found, South Korea “may suspend temporarily export loading from the relevant meat establishment that produced the exported beef.” The regulations also state inspectors may “return the export beef to its origin or destroy it if discrepancies with the health requirements of Korea are found.” In Hong Kong, which maintains similar standards to those imposed by South Korea, shipments from some U.S. plants were prohibited after the discovery of bone fragments in shipments of beef from multiple U.S. packing plants. In 2003, the U.S. exported more than $814 million worth of beef to Korea, with boneless beef accounting for $449 million. A large portion of the remainder was bone-in product such as short ribs, which are popular in Korean-style barbeque dishes. One source at a major U.S. packer said his company wouldn’t ship to Korea until a standard is met, a condition which was conveyed to USDA officials negotiating with South Korea even before the announcement to open the border was made. Until a standard is set, or at least the penalties for bone fragments are set forth, packing companies have too much to lose, according to that official. Industry sources have said maintaining a zero tolerance for bone fragments is very difficult and more costly than it sounds. “The industry can probably do it on a small scale, but it would be very cost prohibitive and it’s unlikely they (South Koreans) would be willing to pay for it,” the source said. Meanwhile, in an effort to ramp up supplies in light of the border closure, South Korean farmers have been increasing their herd size. This year, total cattle numbers in the country have risen sharply, according to the nation’s agriculture ministry. The South Korean beef cattle herd increased to a seven-year high of 2.02 million, up 3.2 percent in the latest quarter-to-quarter comparison. The herd has grown 37 percent since 2003 and is the highest since 2.09 million animals were recorded in September 1999. — John Robinson, WLJ Editor  

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Monday, October 9,2006

Feedlots hold out for more money

by WLJ
Fed cattle trade continued its recent trend of slow development last week as packers once again worked hard to convince feedlots they intended to stick to offering prices. As of Thursday last week, bids were still as much as $5-6 below asking prices. Very little trade had taken place and analysts were calling the market steady to perhaps $1 higher at $91 live and $140-142 dressed basis when buyers and sellers finally came together. At those prices, packers were well into the red ink, with an average per head loss, estimated by HedgersEdge.com, of $45.70 last Thursday. Attempts to move the boxed beef cutout value higher have been difficult to sustain and packers seemed reluctant to trim kill rates, despite widespread belief they intend to do so soon. Choice cutout values last Thursday were near steady at $142.39. The Select trade was slightly higher at $134.72. For the week-to-date last Thursday, harvest was estimated at 501,000 head, 5,000 more than the prior week and 15,000 more than the same week last year. When combined with the record steer and heifer weights, it amounts to a substantial increase in the amount of retail product being offered at the wholesale level. Jim Robb, director of the Livestock Marketing Information Center, said the cutout values moved higher but that doesn’t necessarily reflect the number of steers and heifers being slaughtered. “If you look at the volume of cattle being slaughtered, it becomes pretty clear that the numbers are higher than last year for the month of September. What isn’t getting as much attention is the fact that the increase is entirely in the cow and bull slaughter,” Robb said. “Preliminary numbers show cow and bull slaughter last month was up 12.5 percent over last year. Steer and heifer slaughter for the month was actually down 2.2 percent.” That slaughter mix has hit cow cutout values extremely hard as the market attempts to absorb the additional volume. USDA cow cutout values last Thursday had dropped to $101.02. The 90 percent lean was trading at $124.30 and the 50 percent trim was $36.87. Those figures compare to last year, when cow harvest year, when cow harvest was considerably lower, in a very negative manner. During the same week in 2005, the cow carcass cutout value was $105.87. The price of 90 percent lean was $130.70 and 50 percent lean traded at $51.38. The combination of sagging demand at the consumer level and beef output more than 5 percent ahead of last year, has packers at the lowest gross margin in many years. The Chicago Mercantile Exchange was higher in last Thursday’s session, despite quiet in the cash market. Despite pressure as fund traders moved money out of October contracts to December, the nearby contract gained 97 points to close the day at $91.35. It lent some support to feeder positions as they held on for better offers last week. December traded 82 points higher at $90.10 and February rose 80 points, closing at $91.35. The gains in the corn market last week took their toll on the feeder calf traders and sent the market down. In most auction market trade, where lighter than normal fall runs are beginning, prices were sharply lower as a result of strong Chicago Board of Trade corn contract movement. Last Thursday, new crop December corn closed the day’s trade at $2.74 per bushel. The upward momentum has feedlots scrambling to secure their corn prices if they haven’t already done so. Robb said the calf and yearling markets were being dominated by the news from the corn pit. “The feeder market, and particularly the contracts, are being linked to gains in corn, perhaps even more than they should be at this point.” Add the recent dismal reports from wheat pasture regions to the pressure from the corn trade and there was ample reason last week for buyers to sit on their wallets. According to Derrell Peel, agricultural economist at Oklahoma State University, hot, dry, windy conditions in the state are erasing hopes of good grazing conditions, which just weeks ago were looking very promising. Temperatures into the 90s last week, along with a lack of precipitation, have already taken their toll on newly sprouted wheat pastures. “There are some reports that the wheat has blown out with the recent winds and will have to be replanted. Emerged wheat needs moisture very soon to avoid losing the young stands. In other cases, dry-planted wheat is still waiting for moisture to germinate. In still other cases, the locally heavy September rains washed out some dry-planted wheat that has or will be replanted,” Peel said. “All of this confirms that fall wheat forage production for grazing will be minimal.” The resulting poor prospects have put a damper on the demand for stocker cattle in the southern Plains. “Oklahoma feeder markets have developed a weaker undertone the past two weeks with lack of wheat pasture demand for stockers compounded by limited feeder demand due to swelling feedlot inventories. Feeder cattle auction volumes are still at or above last year’s levels but should moderate in the coming weeks as earlier drought-induced sales are expected to result in reduced weaning calf runs in October and early November,” Peel said. “This should help moderate seasonal calf price decreases, but the poor wheat pasture prospects described above may mean that demand weakens more than supply, thereby keeping prices on the defensive.” Along the West Coast, the feeder market is less affected by the dry conditions of the southern Plains, however, markets there were also under pressure last week. In Vale, OR, the first real readjustment of the fall run happened last week. The market was called $3-7 lower. In addition to the corn news, buyers there reported the lower fed cattle futures in the first quarter of 2007 were cause for concern. In Famoso, CA, the market trend was steady on feeders and $2 lower on stocker cattle last week. Most demand was found on the feeder cattle, particularly those steers and heifers in the 650-800 lb. range. Demand for feeder cattle from 450-550 lbs. destined for spring harvest was also called good. In Billings, MT, steer and heifer calves over 500 lbs. were steady to $2 lower, with weights under 500 lbs. called steady to $4 lower. Yearling heifers sold $1-2 lower. Calf demand last week was light to moderate, with the weakest part of the market for 600 lb. heifers. Demand for yearlings last week was moderate to good. In Torrington, WY, compared to the prior week’s auction, feeder steers under 650 lbs. were mostly steady, with the 400-450 lb. steers $2-4 lower with quality not as attractive as the previous week on the lighter steer calves. Cattle in the 700-900 lb. range were steady, while those over 900 lbs. were steady to $1 lower. Feeder heifers 400-500 lbs. were steady to $3 higher, and 700-750 lb. heifers were steady with some instances of $2 lower on good demand. At Hub City, SD, compared to the previous week, yearling steers and heifers sold steady, with a large run of high quality yearlings coming off grass. Spring calves sold $1-2 lower in a light test. For spring-born calves, best demand was for light fleshed weaned calves with both spring and fall shots. Farther south in Dodge City, KS, in a light test last week, steers in almost all weight classes were weak to mostly $3 lower. Heifers between 400-650 lbs. were weak to $5 lower, while those from 650-800 lbs. were weak to mostly $3 lower. In West Plains, MO, last week, steer and heifer calves sold $2-5 lower, except light/feather weight stocker calves under 375 lbs. and 500-600 lb. steers were steady to $2 higher. Yearlings mostly steady on moderate supply. At the market, it was noted temperature changes and expanding numbers in sick pens on feedlots prevented buyers from bidding up the market. In Oklahoma City, OK, a limited test on feeder cattle left the market mostly steady with moderate to good demand as light numbers made it difficult to create even loads. Steer and heifer calves were steady to mostly $2-3 lower. In Abilene, TX, feeder steers were called $2-5 lower, with yearlings steady to $1 lower. Feeder heifers were $2-4 lower, and yearlings steady to $2 lower in active trade.

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Monday, October 9,2006

Appraisals a valuable tool

by WLJ
— Producers can benefit from an appraisal. Ranchers can witness value in having their property appraised, despite their intent to sale. Appraisals are often associated with selling property, but according to real estate experts, the value far exceeds the mere selling component. By having an appraiser evaluate property, giving the landowner an approximate value of their ranch, producers can obtain the given knowledge to use for an array of options. Producers do have the option to sell, but can also use the information to refinance their property, obtain a loan, valuing limited or family partnerships, ranch partitioning, solving probate and estate tax issues, financial planning, litigation issues and just simply peace of mind knowing the value of the ranch if a circumstance arises where the information is helpful, according to Derry Gardner, co-owner of Gardner Appraisal Group which specializes in ranch appraising in Texas. In addition, a land appraisal can even assist in dictating the future of the ranch, aid in purchasing property, and determine the best use for each portion of the ranch, be it livestock, crop production or hunting and fishing purposes, said Gardner. A small investment Appraisals can ease many burdens for ranchers and are an affordable way to do so. Although appraisals vary in price, Gardner said cattlemen can usually find a reputable appraiser to do the job for approximately $300, give or take, for roughly 200 acres. The price, of course, varies with the size of the ranch and improvements on the property, such as center pivots, houses, outbuildings, and ponds and streams. According to John Childears, appraiser for Agri Affilates based in North Platte, NE, an appraisal for 10,000 acres can range anywhere from $1,500 to $3,500. He is now appraising a 22,000-head feedlot and said the price for that appraisal can range from $3,000 to $8,000, depending on an array of factors. Childears, who has been in the appraising business for the past 30 years, said this is little money when referencing the future of the property, and even less when compared to the future of the ranching operation and the next generation. “When making decisions on a multimillion dollar property, $5,000 for an appraisal is a very small, but very cheap investment.” Having the knowledge With land being a hot commodity, despite the economy, ranchers can use appraisals to find ways to add value to their property and even shift management practices and usage of the ranch in order to maximize profits at the end of the year. It’s all about having the knowledge. Farm and ranch owners who make decisions knowing exactly what they are working with definitely have the upper hand, according to Childears. “For example, a farmer may want to put a center pivot on their property, which sounds good, but in reality, doesn’t make good financial sense,” said Childears. “Also, farm and ranch owners may want to build a nice, fancy home to enjoy life in, expecting property values to increase. If they don’t get an appraisal, they may find the only way to get the value back out of that home is to live long enough to use the value out of it.” He said farmers and ranchers too often rely on gossip and listen to Joe at the coffee shop. “I am not saying farmers and ranchers can’t be astute at knowing what their property is worth, but oftentimes, the gossip is totally off base. Even though Joe may just live down the road, the property value may be totally different when compared to yours,” Childears said. Appraisal uses He said what he is witnessing in Nebraska is farmers and ranchers realizing that selling off portions of their property for other uses, or even leasing out the property, is a profitable venue. More specifically, property that may not be very useful for farming or ranching may be very valuable for sportsmen wanting to lease or purchase hunting property. “You hit a good nerve here,” said Childears. “What has happened here in the last thirty years is amazing. Thirty years ago, land bordering the river was taxed at $50 an acre. Today, lo and behold, it is being valued at $1,250 to $2,000 an acre. A lot of ranchers now are selling off that land along the river because it is worth more to a hunter than it is to attempt to winter cattle on it. A lot can change while ranchers are rolling up their sleeves and focusing on managing the ranch.” Another reason to have an up-to-date appraisal on hand is to have leverage when negotiating a loan or other investments with a banker. “When trying to get a bank to lend more money or the banker is pulling the purse strings, it’s good to have the appraisal on your side,” said Childears.   He said a lot of times, bankers don’t have any better knowledge of what property is worth than the farmer or rancher. Having the appraisal, can be very beneficial. Another reason can involve estate settlements after the ranch owner has passed or when family disputes need to be solved. Scott Shuman with the Westchester Group, which is a farm and ranch auction company based in Champagne, IL, said appraisals can be very helpful in an array of circumstances. “Obviously, if you don’t understand what the market is doing, an appraisal can give you a snapshot of what is going on,” said Shuman. “They are a great thing to have around and can be helpful to use in a will to prevent headaches in the future in the event of an unfortunate circumstance.” In the event of selling property, however, Shuman said they may or may not be helpful depending on the method of selling. He said they are a must for private treaty sales, but in an auction scenario, they are not. “When we auction off a farm or ranch, we do not suggest the seller get an appraisal,” said Shuman, who is in the process of starting a branch of Westchester Group in Eaton, CO, which is just east of Fort Collins. “We do a market analysis for our clients to see what other similar properties have sold for, but we feel that an auction will effectively establish the true market value. If it is advertised and marketed correctly, an accurate value will be established.” He said “at the end of the day” if the room is full of people approved for financing, it would be difficult to argue whether the true value was achieved. “Although appraisals are helpful, you have to realize that the appraisal is just a snapshot and is only one man’s opinion,” said Shuman. “For example, if the appraisal was done on October 15 and you wanted to use the information on October 20, it may not be completely accurate, as a lot of things can change in this business in just five days.” Quite simply, Shuman said, there are times appraisals are valuable, but in the event of an auction, he wouldn’t recommend it. Finding a good appraiser Finding an appraiser who is the very best for farm and ranch properties can oftentimes be the most difficult chore in the appraisal process. “In this business, like any other, there are the good, the bad, the ugly and the worthless. There is a big difference between appraising residential versus farm and ranch property, although some commercial appraisers still try to do both.” He said the best tool in locating an appraiser is to locate appraisers who are associated with the American Society of Farm Managers and Rural Appraisers. Childears said affiliated appraisers are required to take courses, have experience, pass detailed testing, and a long list of other criteria. Another association is the Appraisal Institute, which Childears said is primarily a commercial appraising group, but some try to appraise farm and ranch property as well. He advises against trusting their criteria until you do your homework. “It’s tough to hire the best,” said Childears, who said Agri Affiliates appraise ranch property in Nebraska, Colorado, South Dakota and Wyoming. “Study and search around. Talk to people and find out who they have used. Don’t just find the cheapest appraiser in the yellow pages.” The value of having land appraised can be simplified to the value of knowledge, which can aid in making sound decisions. Having an appraisal on hand, even if you don’t think you need it, may be a solid tool to making solid choices now and relative to the next generation. — Mike Deering, WLJ Editor    

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Monday, October 2,2006

Spring diseases in fall

by WLJ
—Recent rains are encouraging producers, but also causing animal disease concerns. As fall approaches, cattlemen in nearly all geographical tiers are experiencing some relief from scorching temperatures and lack of rainfall. Recently, producers have received late rains that are giving them hope for additional grass growth, as well as wheat for those who plan to stock cattle for fall and winter grazing. Although the rain is needed, it is also causing producers problems they usually don’t experience in late summer and early fall, but rather the spring. More specifically, along with new grass growth, producers are seeing an increasingly higher occurrence of grass tetany and metabolic pneumonia. Grass tetany Grass tetany is more widespread and more familiar to cattle producers. Grass tetany occurs when there is a low level of magnesium in the cow’s blood. Grass tetany is caused by a low content or availability of magnesium found in hay or pasture forage, according to Edward Rayburn, extension forage agronomist for West Virginia University. “The availability of magnesium is reduced if the forage is high in nitrogen or potassium,” said Rayburn. “This often occurs after heavy application of chemical fertilizers or manure. Unfortunately, producers who practice good pasture and forage management may experience grass tetany more frequently than farmers who do not fertilize or use improved management methods.” In addition to fertilizing pastures, another factor that may increase the occurrence of grass tetany is rapidly growing grass, which is currently happening due to the recent rains. Fast growing grass often contains inadequate amounts of magnesium for cattle, according to Russ Daly, South Dakota State University extension veterinarian, who said that is the source of the concern for producers in South Dakota. At this point, Rayburn said there is very little cattlemen can do to completely prevent grass tetany. He said the most important thing to do is watch cattle carefully, looking for signs and symptoms of the disease, and respond immediately with treatment. The symptoms of grass tetany closely resemble those of milk fever or ketosis. These include nervousness, lack of coordination, muscular spasms, staggering and death. When the disease is suspected, a veterinarian should be called immediately to diagnose and to initiate treatment, said Rayburn. However, in beef cattle operations, cattlemen do not always have the opportunity to observe the signs of the disease and affected cattle may be found dead in the pasture. Daly said grass tetany often progresses so rapidly the symptoms are not observed, and the problem is not identified until the animal is down or dead. He said once the disease presents itself, the treatment is intravenous solutions of magnesium and calcium. However, this is best, according to Daly, if given as soon as symptoms occur. Once the animal is down, it may be too late. If done earlier, prevention is the best remedy. To prevent the cow-killing disease, Rayburn recommends having soil sampled and treat the soil as recommended. “It is highly recommended that regular forage samples are obtained for analysis,” said Rayburn. “This simple procedure will provide valuable information for mineral supplementation to optimize livestock nutrition and production.” He said if the tests show a pasture has soil that is low in magnesium, do not apply heavy rates of nitrogen, potash or manure in early spring. Instead, make fall or late spring applications. The best medicine for now, according to Rayburn, is to choose a good mineral supplement high in magnesium. “To prevent grass tetany, provide adequate magnesium in a herd’s mineral supplement,” Rayburn said.   Metabolic pneumonia A less common, but still problematic disease usually found in the spring, but with recent weather conditions is becoming present now, is metabolic pneumonia. This disease attacks the respiratory system. Daly said it is an acute respiratory disease that occurs very rapidly. He said lush green pastures often contain very high levels of amino acids which, when in an animal’s stomach, are converted into a substance that leads to toxicity in the lungs. Daly said the signs and symptoms include difficulty breathing, breathing with the mouth open, salivation and standing still with necks extended outward. In addition, he said animals may go down under sudden stress. The downside to metabolic pneumonia is there is no guaranteed treatment once the disease is identified. The best process is prevention. The best way to do that, according to Daly, is limit the accessibility to lush pastures and supplement with feed additives, best prescribed by your local veterinarian. Daly said the best way to prevent both diseases is to wait until the grass regrowth has slowed down before turning the cattle back into the pasture. Rain is undoubtedly a good thing, giving optimism to cattle producers who were seriously considering large herd reductions and even selling out completely. The rains will allow wheat to grow, supporting stockers, as well as limit the amount of hay that will need to be fed this winter. However, industry leaders are simply issuing a warrant of caution to cattle producers. Be aware of the occurrence of these diseases; know what to watch for and consult local veterinarians for advice for prevention, including what additives and mineral supplements should be fed now, to prevent significant losses to the bottom line. — Mike Deering, WLJ Editor  

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Monday, October 2,2006

Ranchers face bighorn sheep problems

by WLJ
—Bighorn sheep cause cattlemen to halt production. Ranchers are familiar with the challenges associated with sustaining the wildlife population and working cooperatively with the environment. Often heard called the best stewards of the land, ranchers have constantly compromised with environmentalists and federal institutions to take a proactive stance. Despite ranchers’ efforts, some decisions being made are causing ranchers to halt production. Most recently, environmentalists are praising a decision made by the Forest Service that will suspend livestock grazing in parts of Nevada and California, primarily near the eastern Sierra. The decision was a result of constant legal battles raging between ranchers and conservationists vying to restore bighorn sheep to the Humboldt-Toiyabe National Forests, as well as near the Yosemite National Park. Bighorns are generally found on steep slopes and high alpine meadows just north of Yosemite National Park to the south of Sequoia and Kings Canyon National Parks. “It is refreshing and encouraging to see the Forest Service listening to and responding to biologists, including its own,” said Karen Schambach, California director of Public Employees for Environmental Responsibility. The decision was made in an effort to restore the endangered bighorn sheep to the area. Ranchers affected by the decision said they have been battling environmentalists over the protection of the bighorn sheep since the 1800s. Executive director of the Nevada Cattlemen’s Association, Rachel Buzzetti, said this issue is nothing new and has been yet another hurdle for producers in California and Nevada to deal with. “We have already lost over 50,000 acres of prime sheep and cattle range due to environmentalists claiming to be trying to protect endangered species,” said Floyd Rathbaun, who is the range consultant for F.I.M. Corporation located in Nevada's Smith Valley. F.I.M. is the largest sheep ranch in the national forest affected by the recent regulations. The logic used by the Forest Service to make the decision was reportedly based on the Endangered Species Act (ESA). The bighorn sheep were placed on the endangered species list in 1999. The concern on behalf of the Forest Service and environmentalists is that domestic sheep are spreading diseases to bighorn sheep, preventing any significant population growth. The environmentalists have scientists testifying that domestic sheep are causing bighorns to become infected with fatal diseases, while agriculturalists say the science is not science, simply circumstantial, and have their scientists testifying the opposite. An interagency task force recommended a buffer zone of between nine and 14 miles between the two species, which environmentalist say was the driving force behind the recent curtailment of grazing privileges. Daniel Patterson, an ecologist for the Center for Biological Diversity, said domestic sheep are increasingly threatening bighorns with a pneumonia-like disease known as Pasteurella. Since declared endangered, the bighorn sheep population has more than doubled. When first placed on federal listing, there was reportedly an approximate 125 head. Now the population has grown to over 300 head, according to Patterson. Fred Fulstone, age 86, owner of F.I.M., said he has been around bighorn sheep for 70 years and knows more about them than activists trying to limit grazing to “supposedly” protect them. “We don’t bother the bighorns and they don't bother us,” said Fulstone. “They don’t care about the bighorns, they just want our land. The greenies want to take all the country up there.” Fulstone, who has testified in Washington D.C. to protect his property along with other ranches, said the supposed fact that bighorns are being diseased by domestic sheep is a myth that has been disproved multiple times by credible scientists, microbiologists and veterinarians. “Domestic sheep and the Sierra Nevada Bighorns have grazed together in close proximity for 70 years and no die offs,” said Fulstone. “It boils down to the California Fish and Game trying to railroad the final recovery plan for Sierra Nevada bighorn sheep. This should be stopped because the bigger part of it is not true. Plus, the bighorns were illegally listed on the endangered list in the first place. It's proven that bighorns are not a distinct population as listed.” Anette Rink is a veterinarian and serves as the laboratory supervisor for the Animal Disease and Food Safety Laboratory in Reno, NV, and has testified on behalf of Fulstone and other ranchers based on years of research. She said it is not impossible for diseases to be spread if there were nose-to-nose contact, but calls it unlikely. “The trouble is, the only evidence is circumstantial. There is no hard evidence of any such thing happening after at least 16 years of looking,” said Rink, who said Pasteurella may be somewhat host-specific and is triggered by stress. Rathbun said the bighorns already more than likely carry the pathogen, then stress triggers it, thus causing sickness or death. “They have no scientific proof; absolutely none,” said Rathbun. Rink said the major problem is soon to be a result of simply avoiding the real problem. “The major problem with the reluctance of biologists to accept that domestic sheep are not the major cause of disease die-offs of bighorns is that it excuses them from looking for any other causes. They feel their present management is adequate and changes in management other than removing domestic sheep from the range aren’t necessary,” said Rink. “Unfortunately, it will be too late for the range sheep producer when it becomes obvious that even without the presence of domestic sheep, the bighorns are very susceptible to disease and are still very fragile, will still experience nutritional and environmental stress, and will still die off.” The Washington D.C.-based Public Lands Council, representing the National Cattlemen's Beef Association and the American Sheep Industry, is among those critical of the Forest Service’s decision. In a letter to the U.S. Fish and Wildlife Service earlier this year, Jeff Eisenberg, the executive director of the council, said federal wildlife officials had pledged in the mid-1980s that any efforts to reintroduce the bighorns would not result in any reductions in domestic grazing. “You have our word that we will not require any changes in the use of your allotment because of bighorn concerns,” Forest Service officials said in a letter to Fulstone on Dec. 20, 1989. Eisenberg said it was just one example of how ranchers have been treated unfairly in this particular issue. “Breaking promises to landowners to facilitate the relinquishment of federal permits will only create bad feelings and resistance to conservation efforts,” he wrote May 9 in the letter to the Fish and Wildlife Service. Eisenberg does not buy into the alleged fact that the stricter regulations have anything to do with ESA. “These people say the craziest things,” he said. “We’re looking for a solution that would take into consideration the needs of bighorn sheep, as well as the needs of the ranchers who have been in place for decades, a solution that takes care of the needs of domestic sheep,” he said. “This (recent restrictions) doesn’t address the longer term concerns.” Fulstone is more worried about the future than he is the present. “This bighorn problem is very serious to our cattle and sheep industry grazing on public lands. Thousands of cattle and sheep have already been put off public lands here in the West,” said Fulstone. “I believe the livestock industry should get together and form a coalition and fight this problem before anymore permits are cancelled.” — Mike Deering, WLJ, Editor  

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Monday, October 2,2006

Fed cattle trade expected to move higher

by WLJ
—Packers expected to trim harvest levels soon. Fed cattle traders were still several dollars apart with asking prices in the range of $92 live basis and $142-145 dressed basis last Thursday. Trade was anticipated to occur at prices steady to $1 higher than the previous week once it got underway. The last confirmed trade was Sept. 22 at $88.50-90 in the southern Plains and in the north, live sales traded at $87-89. Dressed sales sold at $137-141. Boxed beef prices, supported by lower packer harvest levels, moved upward last week. Choice cutout values rose 17 cents on Thursday last week to close at $141.72. Select cuts were also slightly higher, gaining 15 cents to trade at $132.82. Volume was much improved last week as wholesale buyers finally found a price point they were satisfied with. Analysts last week said they anticipated packers would continue to attempt to move the cutout value higher in an effort to improve margins. According to HedgersEdge.com, the average packer margin was still considerably below break-even prices at minus $36 per head last Thursday. Erica Rosa, economist at the Livestock Marketing Information Center, said she expected the market to move higher again last week, but that packers would cut harvest levels the following week to improve cutout margins. “The past two weeks, packers have come to the table with more money, somewhat unexpectedly, but they’re also working on the other end to move prices higher. I expect we will see cuts in kill-levels over the next week or two to help boost boxed beef prices,” Rosa said. “The problem recently has been the boxed prices will move higher one day and drop the next. Packers haven’t been able to maintain the upward momentum in the cutout value.” Rosa said, seasonally, she expects the boxed beef market to move higher, although not to the levels enjoyed during the fourth quarter last year when it reached record high prices. “Last year’s prices will be tough to beat and I don’t think we will do it this year, but I think the mid to high $140s are a reasonable target for Choice boxed beef during the fourth quarter,” she said. Factors which will determine the market are still playing out, according to Rosa. The contract trade in recent weeks has been largely dependent upon the cash market to determine direction and even a bearish cattle on feed report, such as the one issued Sept. 22, has done little to move the market. She said there has probably been some speculation in the contract trade with regard to trade with South Korea, and some improved demand on the consumer level as a result of declining energy prices, to boost the market. Beyond those two factors, there isn’t a clear direction for the market during the weeks ahead. “Right now, feedlot break evens are very high based on feeder cattle prices and right now packers appear to be willing to pay more money for them, but they have to be able to work toward better margins or they won’t be able to sustain that practice,” Rosa said. It looked early last week like packers might decrease harvest levels. On Monday, packers killed only 116,000 head, however, the remainder of the week’s harvest rate picked up and Thursday, packers moved 126,000 head through processing chains. That number was 1,000 lower than the previous week and 5,000 head more than a year ago. As of Thursday, for the week, harvest had reached 496,000 head, down from 505,000 the prior week, but well above a year ago when 476,000 head had been harvested. The Chicago Mercantile Exchange (CME) provided little market leadership last week as floor traders awaited cash trade to develop. In the meantime, contracts drifted sideways last week, with Thursday trade mixed to mostly lower last week. The nearby October contract was down 32 points during the session, closing at $90.67. December was down 25 points to $89.77 and February was down 12 points to $90.45. Back end contracts for August 2007 through February 2008 were slightly higher in last Thursday's trade, with the largest gain coming on the February 2008 contract which closed up 20 points at $89.30. Feeder cattle last week didn’t receive the normal boost from the fed cattle market and for the week, most auction markets were mixed to lower as a result. There is some optimism in the southern Plains for much improvement in the winter grazing prospects this year. Farmers are in the fields planting wheat, which is bolstering the stocker prices in some markets in the south. The rising corn crop estimates and fair weather as the crop moves closer to harvest has been pushing corn prices lower as well. According to Rosa, the decline in corn price is also bolstering the market for feeder calves. “Corn prices are declining and it’s adding value to what buyers are willing to pay. Hay is another matter, but rations can be adjusted, so it’s positive news for the feeder cattle prices,” she said. In Pleasanton, TX, last week, feeder steers sold steady to firm, with instances of $2-4 higher. Feeder heifers were called steady with instances of prices as much as $3 higher than the prior week on active trade and good demand. At Oklahoma National Stockyards, in Oklahoma City, OK, compared to the previous week, feeder cattle were mostly steady in a very light test. Feeder cattle numbers in the state remain very tight as this summer's drought, along with a good market, had many cattle moving early. Buyers last week were selective for kind and condition with some better quality black-hided feeders going to out of state buyers. Steer and heifer calves were reportedly steady to $3 lower, with the most loss on heifer calves. Calf demand was called moderate to good, with best action on long weaned calves. In West Plains, MO, compared to the previous week, feeder steers under 750 lbs. sold $4-6 lower, with some cases of $6-8 lower, heifers under 550 lbs. were steady to $2 lower, cattle in the 550-750 lb. range and heifers were $2-5 lower, steers and heifers over 750 lbs. were called fully steady on comparable weights. In West Plains, the large supply of feeders, many of which have health liability concerns, is keeping buyers on edge with filling orders and as a result, most have chosen to take a strong stand with what price they put their bidder cards back in their shirt pockets. In the northern tier, fall runs of cattle, what few are left in the country, anyway, are starting to increase the fall runs although most market sources are expecting fewer numbers than in prior years as a result of early weaning and drought-forced marketing. In La Junta, CO, last week, steer calves under 600 lbs. traded hands $2 lower although quality was noted to play a role at the sale. Steers over 600 lbs. and heifers were called steady. The few yearling feeder steers and heifers available were also trading hands at steady prices. In Bassett, NE, last week, testable weights on steers trended steady, with heifers trading fully $2 lower. However, it should be noted that many heifer consignments were carrying more condition than at the previous sale. In Philip, SD, the market was one of the few which moved higher. According to reports, steer calves under 500 lbs. sold steady to $3 higher, with some instances of as much as $5-10 higher on value added offerings. Cattle in the 500-600 lb. class moved $2-5 lower. Heifer calves under 550 lbs. sold $2-5 lower. Yearling steers and heifers were not well tested. Buyer demand was called good for steer calves with both spring and fall shots and moderate for heifer calves and cattle lacking both spring and fall shots. In Torrington, WY, a good run of feeder steers and heifers sold near to unevenly steady, with 800 lb. steers steady to $1 lower. Heifers in the 650-700 lb. range were steady to $1 higher. According to market reports, many of the calves sold were preconditioned and sold in good size bunches as did many of the yearlings. Demand was good for all classes of feeders. Mike Roberts, commodities marketing agent for Virginia Tech, said although contract prices for feeder cattle were slightly lower as a result of live cattle prices last week, there isn't too much reason for concern. He said losses were limited because there is a shortage of feeder cattle outside of feedlots which can be placed the remainder of the year.   “Interest for feeders is expected to rebound. Cattle feeders may want to watch these markets still looking to catch those up days to sell,” Roberts said. He also said cattle feeders should keep a sharp eye on the corn market if they haven’t yet locked in their contracts for winter needs. “Corn users may still think about pricing a significant portion of corn supplies at this time as input prices may have established their lows. Try to catch the low bounce in this choppy corn market to price your corn if you haven't already,” he said. On CME last week, feeder cattle contracts were also lower, along with the cash trade in auction markets. In the Thursday session, the only contract in the black was the nearby October, which gained 40 points to close the day at $116.07 last Thursday. October was down 62 points to $113.22, November and January 2007 contracts were the biggest declines of the day, with both losing 97 points, closing at $111.52 and $108.97 respectively. — WLJ  

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