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Monday, August 14,2006

Fed cattle trade sharply higher

by WLJ
— Fed cattle $5-6 higher live and $6-7 higher dressed. — Feeder cattle follow feds higher. Packers stepped up to the plate early last week and paid sharply higher prices for cattle in both the north and south Plains. Trading occurred late Wednesday afternoon at $86 live basis in the south, $5-6 higher than the previous week. In the northern Plains, packers paid $136 live, $6-7 higher than the prior week. Volume was reportedly good with feedlots in Texas, Kansas and Nebraska each trading approximately 90,000 head, according to USDA figures. Despite the good cleanup of feedlot show lists on Wednesday, there was some additional light trade reported on Thursday morning last week. Analysts said the positive news from Japan, which reported that five tons of beef sold out in a single day, coupled with rising domestic demand in advance of the Labor Day holiday, were the primary factors in the rise in prices paid by packers last week. It also appeared that at least one major packer last week was very short on their supply of fed cattle, which added to the early trade. Packer margins last week were much improved from prior weeks and on Thursday, HedgersEdge.com estimated packers were earning $46 on every head passing through plants. The margins were bolstered by a rising boxed beef cutout value last week. On Thursday, Choice boxed beef cutout values rose another 62 cents in morning trade to $147.59. The day prior prices had added $1.29 to the Choice cutout value. Select boxed beef was also up, adding $1.54 last Wednesday and another $1.09 Thursday to trade at $136.11. Trade was called moderate on light to moderate offerings from packers last week. Packers, in an effort to take advantage of positive margins, ramped up harvest levels last week killing 127,000 head last Thursday for an estimated 502,000 head for the week-to-date total as of Thursday. That number was 64,000 head more than the prior week and 18,000 ahead of last year’s numbers. Retail movement of beef out of packing plants last week was good as buyers began forward contracting to meet holiday demand and cooler weather also led consumers back to beef cuts as grilling weather returned after a hot spell across most of the country which had decreased demand temporarily. All of the positive news coming from the cash fed cattle trade, coupled with the improvement in the boxed beef complex, spilled over to contract trade last week. Prices were lifted significantly ahead of the Cattle on Feed report by the much improved trade on the cash side. On the Chicago Mercantile Exchange (CME) last Thursday, prices were also sharply higher. The August contract traded up 217 points to close the day at $88.47 and setting a new contract high in the process. In fact, during last Thursday’s trading session, all but the February contract broke through resistance levels to reach new contract highs. The October live cattle contract was up 192 points on the day and closed at $92.37. December contracts closed up 97 points to settle at $90.97. Mike Roberts, commodity marketing agent for Virginia Tech, said last week that the boost in retail demand and the market opening in Japan were driving contract prices higher, but he cautioned that the market would be slow to recover overseas. There was also optimism last Thursday about Korean inspectors being dispatched to review the two plants that had previously failed the inspections by South Korea. The prospect of fully revived Asian trade added support to the already exuberant marketplace in Chicago and in the country last week. “Quick shipments (to Japan) indicate better-than-expected price levels may be in order. Cash sellers should continue to sell live cattle as soon as they can at the heaviest possible weights,” Roberts said. He also cautioned feeders not to jump into the corn market ahead of USDA’s crop report, due out last Friday, because of the current volatility. “Corn users should not consider pricing more corn needs at this time,” Roberts said. Feeder cattle According to industry leaders, and taking a solid glance at the feeder cattle market, allows one to say with confidence that producers have little to no validity for complaints. Although auction markets across the country have feeder cattle prices staying steady to slightly higher, as well as slightly lower, prices are still strong considering drought conditions and a heavy supply. Also on the CME, contracts are all in the black. Compared to a week prior in Oklahoma City, feeder cattle stayed steady to $1 lower. Steer and heifer calves were described as selling unevenly steady. Officials at the facility said demand was moderate to good. Supply in Oklahoma City was heavy with 9,200 head selling, compared to 7,966 the week before. Quality was staggering, being called plain to average with an increased showing of number 2 muscled cattle in thin to average flesh coming off short grass due to extreme drought conditions. Like many other geographical regions of the U.S., weather continues hot and dry. In all parts of Oklahoma, they have witnessed 23-plus days of 100 degree or better temperatures. In Winter, KS, 1,058 fewer head were sold last Thursday, but the lighter supply increased demand and allowed producers to realize steady to $1 higher. Steers weighing 700-950 lbs. traded firm to $1 higher, with heifers weighing 700-900 lbs. steady in what was called a very limited supply. Slaughter cows brought good money, selling from $1-3 higher. Slaughter bulls in a very limited test, firm to $1 higher. At the Joplin Regional Stockyards in Joplin, MO, last Tuesday, 4,800 head traded places compared to the 3,270 the week before. Trade could be called uneven in Joplin with a wide flux in prices. Compared to the week prior, steers under 700 lbs. were steady and over 700 lbs. steady to $2 higher. Heifers in south Missouri weighing 450-600 lbs. sold weak to $3 lower and heifers under 450 lbs. and over 600 lbs. traded steady. Similar to Oklahoma City, Joplin market officials said temperatures were forecast at 100 degrees plus and said the heat is holding the calf trade in check. In Hub City, SD, at the Hub City Livestock Auction, 3,119 head went through the ring. Compared to the Wednesday the week before, feeder steers and heifers sold up $2-4 with good demand in all classes. Offerings included long strings of reputation feeders off grass, where the cattle were average to thin, again undoubtedly due to drought conditions. At the Billings, MT, Livestock Commission Co., 555 head sold where feeder cattle offerings were too limited to offer any price comparisons. However, the market sold slaughter cows and bulls steady to $1 lower. Six hundred and forty head sold at the Stockland Livestock Auction in Davenport, WA, up 300 head from the Tuesday prior. Slaughter cows and bulls, like most other markets, were realizing higher prices. They were bringing steady to $1 higher in Washington last week. Trade was also described as active with good demand. In the most recent Superior Livestock Auction, held July 31 through Aug. 4, over 207,820 head sold with consignors from 31 states. The auction was held in Winnemucca, NV. Officials there said the demand was “excellent” and trade “very active” on all classes of cattle. The calves on cows in the southern region were $2-5 lower while the weaned calves were selling mostly $2 higher in all tiers. Egbert Livestock in Wells, NV, sold 410-lb. calves that were certified natural from Anus and Angus cross for $158.85 per cwt. Skinner Ranches in Jordan Valley, OR, sold 515-lb. certified natural Red Angus and Hereford cross steers for $140.50 per cwt. The yearling steers were trading steady to $2 higher while heifers suffered $2 lower. Officials at the market said the largest interest was in good quality, conditioned yearlings to be “delivered immediately.” Van Norman Ranches in Tuscarora, NV, sold Angus and Beefmaster cross steers weighing 725 lbs. for $114.50 per cwt. Delong Ranch in Winnemucca, NV, sold 800-lb. certified natural Red Angus/Charolais cross steers for $115.50 per cwt. Debruycker Charolais sold cross steers weighing 890 lbs. for $112.85 delivered. Cedar Top Ranch in Stuart, NE, received $116.25 for their yearlings weighing right around 860 lbs. On the CME, contracts traded significantly higher across the board as a result of spillover enthusiasm from the live cattle pit last Thursday to reach some new contract highs. August contracts traded $1.33 higher, closing at $117.40, which was 15 cents short of being a new contract high. September did reach new highs last Thursday, increasing 150 points, settling at $117.45. October contracts traded 140 higher to close at $117.93. November followed trend, settling at $116.75, which was 105 points higher than last Wednesday’s $115.20. — WLJ  

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Monday, August 7,2006

Canadian cow imports delayed

by WLJ
— USDA halts rule-making process. USDA has rescinded a proposal which would have allowed imports of Canadian cattle over 30 months of age, saying there won’t be a ruling on the case until it has completed its investigation into the most recent case of bovine spongiform encephalopathy (BSE). The most recent case, announced last month, was found in an animal just 50 months old. That animal had been born nearly four years after Canada’s ruminant animal feed ban was enacted. Dennis Laycraft, executive vice president of Canadian Cattlemen’s Association, said he hoped the delay would be a short one. “USDA has inspectors here working with the Canadian Food Inspection Agency and we hope the delay in this rule will be limited to two to four weeks,” Laycraft said. “Since they are working side-by-side, they will have access to the information as it is being researched, but for right now, we are still waiting for specifics.” USDA spokesman Ed Loyd said the department has withdrawn the proposal which had been under review by the White House Office of Management and Budget that would have allowed shipments of cattle over 30 months of age and beef from the older animals. That rule was expected to be published in the Federal Register sometime in August. “If no revisions to the proposed rule are needed, it will continue through the rulemaking process as planned. Holding this proposed rule has no impact on current trade or related regulations,” said Loyd. According to Loyd, USDA is committed to insuring the feed ban in place in Canada is working properly before continuing down the road toward restoring the full flow of cattle across the border into the U.S. “As Secretary Johanns indicated on July 13, we have questions about Canada’s recent case of BSE in an animal born several years after the 1997 feed ban was instituted. We believe it is prudent to hold the proposed rule until the joint investigation into how this animal may have been exposed to infected material is complete,” said Loyd. He said USDA wants to know how the latest infected animal in Canada acquired the disease, considering it had been born in 2002, well after Canada imposed feed regulations in 1997 designed to curb the spread of BSE. “It is important to confirm that Canada’s regulatory system is effectively protecting consumers and livestock so there is no question about safety as we proceed.” The U.S. banned Canadian cattle and beef in May 2003 after Canada’s first case of BSE. When the ban was eased in August 2003 to allow imports of younger cattle and boneless beef from those animals, USDA said it hoped to eventually end all restrictions. Laycraft said he believed the case was caused by either residual feed contamination or perhaps through the accidental exposure to contaminated feed for other livestock. He pointed to the enhanced feed ban put in place recently. The Canadian feed ban closely mirrors the one in Europe which prohibits ruminant animals from being used in animal feed or fertilizer. “The incidence in Canada is fairly similar to what we have seen in other countries which have had cases of BSE. We anticipated having more cases crop up,” Laycraft said. Scientists say cattle under 30 months are at little risk of contracting BSE, however, USDA argues that beef, from cattle of any age, is safe once the tissues which harbor the BSE prions, including the brain and spinal cord, have been removed from the carcass. R-CALF USA President and Region Five Director Chuck Kiker praised USDA’s decision to halt the rule making process. “The assumptions regarding the scope of the disease problem in Canada, along with the ineffectiveness of the Canadian feed ban, must now be changed following Canada’s discovery of a BSE-infected cow that was only 4 years and 2 months old.” In addition, R-CALF continues to urge USDA’s Animal and Plant Health Inspection Service to publicly announce it is postponing, indefinitely, plans to allow into the U.S. cattle over 30 months (OTM) of age from Canada, and beef from those OTM cattle, until the full scope of Canada’s BSE problem is scientifically known and a new risk assessment is completed that incorporates the four separate BSE-infected cows born after Canada’s feed ban was implemented in 1997. — John Robinson, WLJ Editor

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Monday, July 31,2006

Fed cattle trade expected to be steady

by WLJ
The news of Japan didn’t move the market last week and as of Thursday afternoon, trade was still at a halt, despite rumors of packers being short for the week in the north. Previous week trade occurred in the south Plains at $79-79.50. Live sales in the northern Plains traded at $80- 80.50 live basis with dressed sales at $126-127, mostly $126. Brent Snyder, market analyst for Texas Cattle Feeders Association, said the market this week was difficult to call. “I thought the Japan news might help open up trade a little, but it hasn’t,” Snyder said. “Right now, asking prices are in a range of $82-83 and I think by the time trade starts, it will occur in the $80-81 range.” Boxed beef cutout values and packer margins appeared to be the biggest factors in last week’s market. The seasonal consumer demand for middle meats slumped and end cuts were largely responsible for what movement and support was available in the market. Last Thursday, Choice boxed beef values declined sharply for the second consecutive day and Choice cuts fell $1.34 to $139.68. Select cutout values fell 40 cents to $123.08. Cattle-Fax analyst, Troy Applehans, said he expected cutout values to continue lower for the next two to three weeks before finding the bottom. “Keep in mind though that the Choice/Select spread at $16.60 is still at historical high levels for this time of year,” Applehans said. “I expect to see the cutout values reach their seasonal bottom some-time in the next two or three weeks.” According to HedgersEdge.com, the eroding cutout values have taken a toll on packer margins. Last Thursday, packers were estimated to be losing $5.40 per head. Despite being in negative territory, harvest rates remained in line with prior weeks, which analysts have continuously cited as important to maintaining current price levels. For the week, packers had harvested an estimated 499,000 head, 7,000 head more than the prior week and 20,000 more than the same week a year ago. On the Chicago Mercantile Exchange (CME), early week trading was hit hard by an unexpectedly bearish cattle on feed report issued by USDA on July 21. The repercussions of the report rippled through both fed and feeder cattle markets and on Monday, contracts in both trading pits sold off sharply. Mid-week trading, however, saw significant recovery. “The board supported the fed cattle prices this week much as it has for most of the year,” Applehans said. Although in Thursday’s session, the news from Japan did little to move the market and contracts traded mostly lower in the absence of any cash trade. August contracts traded 80 points lower, closing at $83.47. October was off 22 points, closing at $87.64 and December was down 12 points to $88.27. The June 2007 contract was the single exception to the downward trend last Thursday. It closed unchanged with the previous day at $84.10 on light volume. Beef production impacting market Production of Choice beef continues to slide, which, when combined with the demand for Choice middle meats, has supported the market. According to USDA figures, during the same week last year, 55.56 percent of steer and heifer slaughter graded Choice. Last week, only 52.33 percent of steer and heifer slaughter graded Choice. Production of Prime grading beef has also slipped by two-tenths of a percent since last year. According to analysts, the decline in high quality production is largely responsible for the current boxed beef spread. On the opposite end of the spectrum, cow slaughter continues to run above last year’s level as a result of the drought. The July 1, cattle inventory report showed the number of beef cows in the U.S. up a modest 1.1 percent. That number was lower than expected and shows the current herd expansion rate has slowed. Applehans said most of the slow was a result of the drought and he expected it to continue. “If you look at current cow slaughter rates, they’re above last year, but about even with historical levels. That said, I think there are still a lot more cows out there that are going to be heading to town before too long,” he said. “But regardless, it has impacted the price of the cow carcass market and on the 50 and 90 percent lean price.” In fact last week, the 90 percent lean market was more than $15 below last year’s levels at $122.60. Cow carcass cutout values were also well below last year as a result of the slaughter discrepancy. Cow carcass value last Thursday was $100.92. During the same week in 2005, the carcass value was $111.29. “Keep in mind though, that last year, cow harvest was very low. This year’s harvest rate is much higher as a result of the drought. This year is much closer to historical norms,” Applehans said. Feeder cattle Auction markets across the country are suffering a downward swing. Although total cash receipts were lower at most markets, prices still fell. For example, Joplin Regional Stockyards, Inc. saw feeder prices drop as much as $6 for yearlings. More specifically, steers exceeding 500 pounds and heifers under 450 dropped $2-4. Those weighing between 500 and 800 lbs. sold steady, while over 800 took a $2 cut for the most part. Despite the lower trend, demand and supply was described as moderate with active buyer participation. Market officials said once buyers filled their load, prices quickly moved downward. The market sold 3,650 head compared to the week prior’s 4,000. An array of reasons are responsible for the lower prices. According to Mark Harmon, marketing director for Joplin Regional Stockyards, Inc., the most likely causes are drought conditions, depressing cattle on feed report, activity overseas and other uncertainties. In short, he said it’s all just a guess because “here lately, nothing is typical.” “It’s really hard to tell what causes the market to suffer a bit. There’s a lot going on, it could be all sorts of things,” said Harmon. “For example, the cattle on feed report didn’t look too friendly this go round. It’s real hot in our part of the country and no rain really to speak of. That certainly has something to do with it. I’d say, though, that the report probably had the most impact.” Harmon said having a Monday sale as Joplin does, and the cattle on feed report being released on Fridays, can often times have a “hard reaction” on their market. He also said the overseas activity and the uncertainty that goes along with it has some buyers leery as well. “Overseas effects a lot of this. It’s all a chain reaction,” said Harmon, who was in Oklahoma City at the Oklahoma Cattlemen’s Association’s 54th annual convention. “It’s bone dry here, too, (Oklahoma) and other uncertainties may have affected their market. For example, guys here are skeptical what their corn is going to bring and won’t know until they harvest up north. My guess would be that it’s not going to be very good.” In Oklahoma City last week, the market followed the cycle downward. Steers and heifers stayed steady to $1 lower. The quality last week, however, was reported as much better compared to prior weeks. The demand wasn’t stellar, but stayed moderate for the most part. Oklahoma City’s receipts this week, much like Joplin, also fell, but even more so than the Missouri market. Cash receipts last week summed 9,878 compared to 14,817 the week before. At the Winter Livestock Feeder Cattle Auction in Dodge City, KS, prices also suffered, reportedly as much as $5 lower for feeder steers and heifers weighing 300 to 600 lbs. and didn’t vary to far from that figure, being called weak. The market was described to have limited supply as well as dwindling demand. Slaughter cows dropped $2. However, some feeders weighing 600 to 950 lbs. climbed $2 and stayed mostly firm. In the Western region, prices didn’t follow the sluggish trend quite so closely. More specifically, most markets saw steady prices to even a dollar or two higher. In Wyoming at the Riverton Livestock Auction, consisting mostly of slaughter cows and bulls, things looked positive. Slaughter cows were up mostly $1, with some instances of $3. Bulls also up a dollar with rare instances of $5. In La Junta, CO, at Winter Livestock, steers and heifers under 700 lbs. sold $1-2 higher. Yearling steers jumped mostly $2 and heifers stayed steady. The market sold 1,040 head last week compared to 1,804 the week before, following the overall trend of lessening supplies. As no surprise to most market officials and livestock economists, feeder trade on CME was lower throughout all last week. Few disagree that the bullish cattle on feed report is to blame. Hesitant traders backed away from trade last week. August contracts started weak mid-day Thursday and decided to stay that way, closing 33 points lower to settle at $114.20. September dropped 28 points from Wednesday’s $114.40 to close at $114.13. October joined in at 43 points lower to close at $113.93. November, too, closed lower Thursday, settling at $112.60. Auction markets and future contracts agreed on a lower trend, but Harmon said it’s just a “temporary thing” and said this happens often, calling it a mere reaction to the drought conditions and the cattle on feed report. “I expect prices to stay lower for two more weeks,” he said. “That’s only a guess, though. That, and 25 cents, will get you a cup of coffee.” Harmon said although prices may be a little lower, consumer demand is still good and that’s what really matters and what will keep the beef market alive. “More people are staying close to home this summer than they usually do,” he said. “They are barbecuing, eating ribeyes, and we love them all for it.” — WLJ

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Monday, July 31,2006

Obituary: Earl Adam Smith

by WLJ
Earl Adam Smith, of Antelope, OR, died Saturday, July 22. He was 88. A grave side service was held July 27, at Juniper Haven Cemetery. Smith was born March 26, 1918, in Mayville, OR, to Earl and Gladys Smith. He graduated from Condon High School and attended Oregon State University. He served in the U.S. Army Air Corps as a staff sergeant during World War II. He married Ann Anderson on Aug. 30, 1946, in Vancouver, WA. A cattle rancher, Smith was appointed by three governors to the state Board of Agriculture, and he served as chairman of the board for the Pacific International Livestock Exposition and the Northwest Livestock Production Credit Association. He had also served as vice president of the Oregon Cattleman’s Association, as president of the Wheeler County Cattleman’s Association, as chairman of the Mitchell School Board and as a board member of the Oregon Historical Society. In 1995, he was entered in the Diamond Pioneer Agriculture Career Achievement Registry by Oregon State University. Survivors include his wife; a stepson, Marc Anderson, of Springfield; and two grandchildren. He was preceded in death by three brothers. Memorial contributions may be made to any Oregon youth agricultural program or the Oregon Historical Society. — WLJ  

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Monday, July 24,2006

Comments: A Canadian problem, or ours?

by WLJ
I’d have to say at this point, the Canadian beef industry has a bit of explaining to do. They have certainly had their problems with bovine spongiform encephalopathy (BSE) lately. I hate to say it, but I’ve gathered a bit of concern over the past few BSE cases they’ve experienced. A couple of weeks ago, they found their seventh case of the brain wasting disease in a 50-month- old cow. That cow would have had her first calf after the border was closed by BSE and six years after the feed ban. Canada has now removed meat and bone meal from all animal feeds. A week or two before, the Canadians found BSE in a 15-year-old cow , which didn’t seem to raise any real attention. You could understand the possibility of BSE in a cow that age. The only thing you might be able to say about the 15-year-old cow is question why was she still around. The only thing I can think of is that she was someone’s pet. Anyway, the 50-month-old cow that was found did raise a few concerns about the Canadian feed ban, and at this point, you do have to ask the Canadian government what gives. The first answer—excuse—was that having a 4-year-old cow turn up with BSE is not unusual from other countries’ experiences and it doesn’t surprise them. They are concerned enough about this cow that they decided to quarantine the farm she came from. If I recall, out of six of cases of BSE, three of them are from cattle questionably under, or close to the feed ban. I realize that the day the feed ban was implemented wouldn’t mark the end of any meat and bovine material used in cattle feed, except perhaps at the feed mill, but not at the farm level. It seems the feed ban may have been more of an arbitrary line than anything. It also demonstrates that we still know so little about this disease. The issue doesn’t get any play in the major media anymore, which is just about perfect. No one seems to really care about BSE except for a few of our more fickle trading partners, and a few cattlemen’s groups. BSE has had little impact on the markets in recent times. That brings me to another point. Canada does have a small problem with BSE and its seems to be getting in the way of our ability to do business overseas. Mexico has been a real star in the wake of all this BSE stuff and has been there buying beef since the beginning, I would imagine they are also smart enough to realize that if they don’t buy U.S. beef, the U.S. may not need to buy as many Mexican feeder cattle. Korea has pointedly said they are concerned about buying our beef because they’re aware U.S. packers are not segregating U.S. and Canadian beef. During the first full year of trade with Canada, the U.S. imported around 650,000 head of fed cattle and 350,000 head of feeder cattle. Of the 34 million head of cattle slaughtered in the U.S., it wouldn’t seem that Canada’s million head exports to us would have that much effect on the markets, and it hasn’t. This is one of those situations when perception becomes reality. Japan and Korea think this BSE is pretty real and I’d have to say, right or wrong, ensuring that our packing industry doesn’t ship any Canadian cattle processed in their U.S. plants is apparently an issue. Where do you draw the line on live cattle imports from Canada in order to perpetuate trade with Japan and Korea? A million head of fed and feeder cattle from Canada certainly isn’t enough to make or break this market. But the only cattle shipped to the U.S. for slaughter are under 30 months old and have been proven not to be at risk for spreading the human form of BSE. It’s looking like the Canadian BSE situation may turn out to be like Japan’s and turn up a few cases every year. I was under the impression that as time went on, post feed ban attrition of the cow herd would take care of BSE and be less of an issue. We know that banning specified risk material from bovine feeds has reduced the incidence by 80 percent, or better, world wide. But that other 20 percent is becoming annoying, because this group defies BSE logic as we know it. One thing you have to say about this BSE situation, there doesn’t seem to be anything consistent about it. — PETE CROW

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Monday, July 24,2006

Cutout pulls feds lower

by WLJ
Fed cattle trade was slow to start and the standoff was apparent with packers offering $78 against feeder offers of $83-84 live, and $130 dressed. There was some limited trade at $81-81.50 and $126-128 dressed, but not enough volume to call the market. Boxed beef cutouts have been in a tailspin the past two weeks and wholesale buying interest emerged only when prices fell to a more attractive level of $144 on Choice products. Packer margins fell into negative territory for the first time this summer at a minus $4.80 a head. Even though packers are familiar with this arrangement, it didn’t appear that they were going to give in much. Trade was expected to resume at the $79-80 level and $128 dressed. The mid-summer beef rally appears to have found a lull, typical for the post 4th of July period. Retailers reported slow sales and have backed product up in coolers. The Choice boxed beef cutout was at $151.69 the week of July 10 and this past week, fell to $142.63. Select product also fell to $123.93, closing the Choice/Select spread to $18.69. The Choice and Select primal cuts suffered comparable declines for the week, although the Select rib was sharply lower. Notable out front sales include Choice and Select briskets, Select trimmed top butts and 73 percent fed cattle grinds. Slaughter levels have been strong for most of summer. Last week as of Thursday, slaughter levels were at 492,000 head steady with the same week a year ago. The week ending July 15 showed slaughter at 683,000 head compared to 658,000 the same week a year ago. Several market analysts have pointed out that slaughter is running 4 percent more than a year ago while beef production is 6.5 percent higher than a year ago. Dillon Fuez at Utah State University attributed the increase in production to increased slaughter weights which are posting new records. Last week, steer carcass weights were at 838 lbs., up 5 lbs. in one week and up 16 lbs. from the same time last year. Texas and Oklahoma feeders showed live steer weights at 1,247 lbs., up just 2 lbs. from a year ago. According to Jim Robb at the Livestock Marketing Information Center, the big extra carcass weights are coming out of the northern Plains states and Corn Belt feeders. The high level of calf fed placements in southern lots have kept those feeders fairly current in their marketings. Marketings are expected to show another solid month for June. The slaughter cow market has started its season early due to dry weather. Good fleshy cows are trading at the $45 range and the cow beef markets have fallen along with beef from fed cattle as well. The cow beef cutout was at $100.88 and cow carcass beef at $72.50. The 90 percent lean beef markets were at $122.21 and 50 percent trim is at a annual low of $35.27. Kansas State University reported in their latest feedlot survey that for the month of May, the closeout weight for steers was 1,264 lbs. versus 1,246 lbs. in 2005, while the average weight for heifers was 1,152 pounds, 22 pounds heavier than a year ago. So far this year, steer and heifer closeout weights are up 3 to 3.5 percent on average from 2005, respectively. At 173 days, steers were on feed one week longer than a year ago. Average daily gain at 3.10 lbs. per day was above May 2005 levels of 3.05 pounds. Heifers were on feed an average of 162 days, 4 days longer than 2005 and posted an average daily gain at 2.85 pounds, slightly higher than last year. Compared to the prior five-year average, average daily gains for steers were comparable while daily gains for heifers were 1 percent better. The amount of feed per pound of gain (dry matter basis) for steers in May was 5.91 pounds, down from last year’s average of 6.01. Heifers closed out in May were reported at 6.13 pounds of feed per pound of gain. For the month of May, surveyed feedlots reported the average cost of gain for steers at $53.61 per cwt., just $0.15 per cwt. lower than 2005, while the average cost of gain for heifers was $55.99 per cwt., up $0.20 per cwt. from a year earlier. When compared to the 2000-2004 average, cost of gains for both steers and heifers were 5 and 3 percent higher, respectively. Feeder cattle Hot and dry conditions put feeder cattle buyers in a sour mood last week and auction markets turned sharply lower in many areas as a result. Pasture conditions, according to one USDA market analyst, have deteriorated significantly in the past two weeks and few are willing to buy cattle when there isn’t much grass available. Early weaned calves are heading to town now and market numbers are above year-ago levels in many markets as producers try to stretch available forage for their cowherds. Fleshy, unweaned calves were heavily discounted last week which placed a further drag on the market. The bright spot in the feeder cattle market last week was the result of the first two big video auctions of the year. Superior Video Auction held their annual “Week in the Rockies” sale in Steamboat Springs, CO, July 10-14 and the results were very positive. Trade was very active across all classes of cattle and calves from across the country were called $3-5 higher. Northern yearlings were $4-8 higher while southern yearlings sold $3-5 higher. The large crowd on hand bid actively on an excellent set of cattle. Some representative lots from the sale include a consignment of 400-lb. Angus and Charolais cross steers from Wallace, NE, for October delivery which brought $165. A consignment of 490-lb. English and English Exotic cross steers from Alta Vista, KS, sold for $150.75 for August delivery. Yearling representative lots from the same sale included a consignment of 760-lb. English and English exotic cross steers from Council Groves, KS, for August delivery which brought $118.75. A Tyron, NE, ranch sold 900-lb. Angus, Angus cross steers on September delivery at $118. In Reno, NV, Western Video Market held their sale at the Silver Legacy Casino and a large crowd of buyers bid readily on an outstanding offering of quality cattle. Prices were very strong. Representative lots of yearling cattle included a consignment of 800-lb. steers from Nebraska for September delivery which sold at $119. A consignment of Colorado 725-lb. yearlings brought $120. Calves also sold well. A consignment of 500-lb. steers from Nebraska sold for $141 for October delivery. A Nevada ranch sold 400-lb. weaned heifers for November delivery at $155.50. In auction market trade last week at Oklahoma City, OK, feeder cattle turned sharply lower on heavy receipts. Compared to the prior week, feeder cattle were $1-4 lower, with the least decline on weights over 800 lbs. Demand was called moderate despite fewer buyers on the seats. Steer and heifer calves were $4-8 lower, with some instances of $10-15 lower on fleshy unweaned calves. At Abilene, TX, a light run of feeder steers and heifers under 500 lbs. were $1-3 lower, over 500 lbs. were steady to instances of $4 lower, yearlings were steady. In Joplin, MO, compared to the previous week, steers under 800 lbs. and heifers under 600 lbs. were $2-4 lower. Heavier weights were called steady. Demand and supply were moderate. Farther north in the Dakotas where the drought is taking its toll on the corn crop, cattle prices were mostly steady with the week prior although runs were light. In Torrington, WY, feeder steers and heifers were steady on a limited test. The Chicago Mercantile Exchange feeder contracts last week traded in mixed territory. Wednesday, lower corn markets pushed feeder cattle contracts higher across the board. Last Thursday, contracts traded lower and gave up the previous day’s gains. The August contract shed 45 points last Thursday to close at $115.27. September dropped 65 points, closing at $115.10. October feeders were 55 points lower at $114.70 while November feeder contracts were down 47 points, closing the day at $112.77. — WLJ  

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Monday, July 24,2006

Horse slaughter ban could be reality

by WLJ
— Silent movement on bill could mean an extra 90,000 horses with undetermined futures. Horse slaughtering could be banned permanently in the U.S. in the very near future. In just two months, thousands of unwanted horses may not be shipped to slaughtering facilities. Instead, they will be kept alive, but with equine shelters at maximum capacity, unanswered questions as to who will care for and board them persist. A hearing is to take place July 25 where lawmakers will hear from both sides regarding the permanent ban on horse slaughter. After members of the House return from break in September, a vote is expected the first week of their return. A vote in favor of House Bill 503, “The American Horse Slaughter Prevention Act,” would mean an immediate and permanent ban on the “shipping, transporting, moving, delivering, receiving, possessing, purchasing, selling or donation” of horses in interstate and foreign commerce for slaughter for human consumption. The bill would save approximately 90,000 horses from slaughter yearly, something proponents say is a win for animal welfare. However, opponents cite disaster in the making. “They think by saving unwanted horses they are solving the problem,” said Cathy Purcell, spokesperson for the three existing U.S. horse slaughtering facilities. The three U.S. slaughtering plants include Dallas Crown in Kaufman, TX, Beltex Corp. in Fort Worth, TX, and Cavel International in DeKalb, IL. “By doing this, they are actually making the problem worse; 60,000 to 90,000 horses per year, think of how that will snowball.” According to USDA, 65,976 horses were slaughtered in the U.S. in 2004 and 91,757 were processed in 2005. The meat was then sent abroad for human consumption. Along with her list of foreseen consequences, Purcell added the loss of jobs, millions in U.S. exports vanishing, Dallas and Fort Worth losing their number one air freight customer and the bottom dropping out of the horse market. She said research indicates an instant loss of $304 per horse in the U.S. A research study conducted by six universities agrees the consequences are plenty. In fact, the study cites a “conservative estimate of the total cost of caring for unwanted horses, based upon 2005 statistics, is $220 million.” The report states the cumulative annual maintenance costs of otherwise processed horses since the year 2000 would have exceeded more than $513 million in 2005. The report also assumes the export value of unwanted horses for human consumption to be roughly $26 million. The study also states that horse processing facilities offer a humane end-of- life option for approximately 1 percent of the U.S.’s 9.2 million horse population. Validating opponents’ concerns, the study suggests more cases of animal neglect, translated into animal cruelty, will be derived from such a ban. Carolyn Stull, with the veterinary medicine extension at the University of California Davis, not only participated in this particular research study, but also conducted extensive research for USDA since the early 1990s. She has focused her research on transport conditions and on slaughtering plant regulations. Stull is not only convinced through research that a ban on horse slaughter would provoke a series of unintended consequences, but more so convinced by witnessing them firsthand in her home state. California banned the slaughtering of horses for human consumption and transportation with the intent to do so in 1998. “The ban not only took away slaughtering, but also took away all funding for USDA inspections, Stull said. “If this passes, we may have serious biosecurity issues to deal with.” After conducting the research, Stull said with confidence that if a disease outbreak in horses was ever to occur, there would be no government control. “There would be no biosecurity, nothing to protect the horse market,” she said. “If a disease outbreak happened there would be no way to process humanely and no way to dispose humanely. The one way to secure an outbreak with veterinarian supervision would be gone. The wow factor after doing the study was how in the heck are we going to dispose of approximately 90,000 head of unwanted horses a year. We can’t cremate that many and shelters are full as it is.” She said with no processing facilities, diseases would be more prominent and could put public health at risk. As an example, she cited West Nile Virus. Purcell agrees the consequences of this ban are being overlooked, while emotions take control and foster an opinion that lacks facts. “Lawmakers are only hearing from people like Bo Derek who can afford fancy retirement homes for elder horses,” said Purcell. “They are not hearing from ranchers,” but she urges them to speak up. Purcell said the bottom line is determining whether horses are livestock or pets. She said most activists would agree they are pets, and if that is the case, she said pets have to be put down when they can no longer live healthy lives or “perform the functions ranchers hired them to do.” “This just boils down to the animal rights wackos putting emotions above the well being of animals,” she said. “Just because PETA (People for the Ethical Treatment of Animals) is going nuts doesn’t mean the facts should be muddied with the sentimental attachment to horses.” Although PETA was unavailable for comment last week, their Web site serves as a descriptive spokesman for their cause. On the organization’s site, onlookers are told of the horrific procedures involved in horse slaughtering and it urges individuals to contact their legislators to ban horse slaughtering all together. Purcell said this type of information being spread to uniformed citizens is simply playing on emotions. She said, most critically, the information is not completely true. Purcell said horses are not stunned as they were several years ago, they are killed immediately with a “knock gun” or a “bolt gun,” which does not temporarily stun the animal. Purcell said this initiative is being led by many other animal rights activists including J.P. Goodwin, the grassroots coordinator at the Humane Society of the United States, the world’s richest animal-rights organization. This organization is not related to the Humane Societies that shelter animals in the U.S. Goodwin, who previously co-founded the Texas-based Coalition to Abolish the Fur Trade, is clear about his intentions, writing in one Internet activist listserve: “My goal is the abolition of all animal agriculture.” He’s developed a lengthy arrest record in pursuit of that goal. He was arrested and convicted for being the ringleader of a crew that vandalized fur retailers in multiple states during the 1990s. Purcell said he released some 10,000 minks, of which 4,000 or so died. She said the same will happen with thousands of unwanted horses with no one to care for them. Jim Ahern with Cal Poly’s agribusiness department in San Luis Obispo, CA, also participated in the massive study. He focused on the human consumption perspective. Ahern said although most Americans do not consume horse meat, we cannot dictate what is food and what is not for the rest of the world. He continued by saying the nutritional value of horses is higher than most red meats. “Banning horse slaughter could affect people in these export markets as they rely on horse meat for affordable food and it makes up a large percentage of their diets,” said Ahern. He said although many consider Belgium and France to be the largest consumers of horse, the U.S.’s largest export markets are China and Mexico. “We export approximately 1.7 million pounds to China, nearly triple Mexico’s 600,000 pounds, the second largest export market.” He said by banning slaughter in California, he has witnessed the elimination of the lower end of the horse market. Ahern said burros are already running wild on public land property as well as wild horses in northern San Luis Obispo county and he assumes the population will just get larger with a permanent ban in the U.S. With most of this property being desert land, he ponders how the horses will survive. Stull agrees with Ahern’s concerns, recalling an incident in San Luis Obispo where hundreds of horses were found starving and with shelter facilities already saturated, viable options for control were gone. “We couldn’t handle hundreds, and money certainly doesn’t exist to handle thousands,” said Stull. “California couldn’t even take care of their own little problem. What’s going to happen when that problem is not so little?” The bill, introduced by Reps. John Sweeney, R-NY, John Spratt, D-SC, and Ed Whitfield, R-KY, is expected to be brought to a vote in September, though it is not by any means the first attempt to ban horse slaughtering. A measure to further protect horses from slaughter was signed into law in November by President Bush. The law bars USDA from paying for inspections of horses before slaughter and started March 10. The idea, according to PETA, was to force plants to shut down because federal law requires all livestock to be inspected before slaughter. However, the three slaughterhouses said they will pay the inspectors’ salaries under a “fee for service” arrangement similar to the system used for elk and other exotic animals. The USDA since agreed to allow slaughtering to continue under this arrangement. This further inspired activists’ fiery passion to end slaughtering. There is also a similar bill in the Senate (S. 1915), introduced last October by Sens. John Ensign, R-NV, and Mary Landrieu, D-LA. It has been referred to the Senate Committee on Commerce, Science and Transportation. The fast moving House bill’s hearing will be heard by the Energy and Commerce committee, which Purcell said has angered some who feel it should be heard by the agricultural committee. She said there is talk of having two hearings, the second one in the House Committee on Agriculture. “These initiatives have been bantered around like a political football,” said Purcell. “Here we go again, they are not following the facts, or their facts are wrong. This time, a permanent ban is closer than ever before and ranchers need to speak up.” She continued by saying it makes more sense to side with veterinarians, not PETA, and urges ranchers to call their lawmakers. — Mike Deering, WLJ Editor

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Monday, July 24,2006

Obituary: Benjamin F. Hofeldt

by WLJ
Benjamin G. Hofeldt, 82, died of natural causes at his ranch south of Chinook, MT, on July 2, 2006. Funeral services were held on Saturday, July 15. Ben was born on Dec. 17, 1923, to Henry and Alvina (Struve) Hofeldt in Chinook, MT. He was rai/.sed on the family ranch, along with four brothers and two sisters. He attended grade school in the Bear Paw Mountains and graduated from Chinook High School. After leaving high school, Ben came back to the mountains to ranch. He made his home at the Runyun Place, along with his mother, who was widowed when Ben’s dad passed away in 1942. Ben was just 18 years old. Ben married Ruth Olson on June 16, 1945. To this union three sons were born: Rodney Benjamin, Douglas Fred and Clark Allen. Ben leaves behind his three sons, Rodney (Carolina), Douglas and Clark, all of whom are carrying on his legacy in the ranching profession. He also leaves six grandchildren, Clayton Hofeldt, Tanith (Dale) Daugherty, Angie Hofeldt, Dustin Hofeldt (Vicki), Kyla and Shaina Hofeldt and one step-great granddaughter, Makayla Wilke. Ben is also survived by three brothers, Paul, Hans and Lawrence Hofldt, one sister, Hilda Drugge, and many nieces and nephews. He was preceded in death by four infant siblings, 7-year-old sister Margaretha, sister Christine Miller, brother Roy Hofeldt, his parents, and his wife of 55 years, Ruth Olson Hofeldt.

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Monday, July 24,2006

Wilderness proposal passes committee

by WLJ
The U.S. House Resources Committee last week approved a bill sponsored by Rep. Mike Simpson, R-ID, which will create 492 square miles of federal land in central Idaho as protected wilderness while conveying other public land to the state and local governments. Lloyd Knight, executive vice president of the Idaho Cattle Association, said the group is still opposed to the legislation. “We are concerned about the addition of more wilderness in the state. We are also opposed to the fact that some of the language that would have provided compensation for ranchers who lost grazing land has been taken out of the bill,” Knight said. “We are still committed to working with Representative Simpson on the bill though.” The Central Idaho Economic Development and Recreation Act (CIEDRA) designates three new federally protected wilderness areas in the rugged mountain peaks of the Sawtooth and Challis National Forests—the Ernest Hemingway-Boulder Wilderness, the White Clouds Wilderness and the Jerry Peak Wilderness. The CIEDRA bill will also add 600 acres protected from development to the existing Sawtooth National Recreation Area. In return, local governments in Stanley, Clayton, Mackay, Challis, Custer and Blaine counties will get almost 4,000 acres of Forest Service and Bureau of Land Management (BLM) property to sell, manage or develop into affordable housing or public facilities. Another 960-acre parcel of BLM land near Boise would be given to the state for a new off-road vehicle state park. As a concession, the Department of Interior will be required to release from study 130,000 acres of public land which had been earmarked as potential wilderness, allowing federal land managers to issue permits for grazing, mining, logging or other commercial uses. Although Democrats on the House Resources Committee had voiced concern over the Idaho bill during a hearing in October 2005, the measure was approved on an unanimous voice vote last Wednesday. The measure now will be scheduled for a final vote on the House floor and then must make it through the U.S. Senate before the end of the year when this session of Congress concludes. “I’m pretty confident it will pass the floor of the House,” Simpson said. “After that, it depends on how quickly the Senate moves it.” The latest version of Simpson’s wilderness bill added 11,000 more acres to the proposed wilderness areas than previous versions, for a total of 315,215 acres. It also dropped an earlier provision that would have compensated ranchers financially in return for surrendering their grazing rights within the proposed wilderness areas. — John Robinson, WLJ Editor

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Monday, July 10,2006

Beef absent of antibiotics may not be safer

by WLJ
In light of recent legislation in both the House and the Senate proposing to ban antibiotics from livestock feed, some say beef will not be any safer with such measures imposed, according to an Institute of Food Technologists’ study released last week. Chicago Tribune reported the study, conducted by the panel of food scientists and microbiologists, was provoked by marketing campaigns during the past decade by organic food advocates who have suggested there is an overuse of antibiotics making the food less safe for human consumption. The claims stated in the proposed legislation cite critical danger to humans. One particular group mentioned in the study is the Organic Trade Association, based in Greenfield, MA, which serves as a host organization of the U.S.’s organic producers. The association refers to 10 studies during 2000 and 2001 regarding the use of antibiotics to support their claims that antibiotics have been abused by U.S. farmers and ranchers. The most recent study was pursued to “bring balance” to the issue, according to Michael Doyle, chairman of the panel. “The study does raise questions about those groups using this as a basis for their promotion of organic and natural products,” Doyle said. The study is being presented as organic and natural meat sales reach new highs. The most recent data shows a 13.5 percent jump in organic and natural meat sales from 2004 to 2005 and reports of continued skyrocketing growth are being made. Within four years, sales have nearly doubled to $681.3 million annually, according to AC Nielson, a research and consulting firm. Doyle said his intentions are not to advocate the misuse of antibiotics, but rather warn against reducing the levels of antibiotic use in food production, claiming elimination would have little effect on bacteria that might develop resistance to antibiotic treatment in humans. Rather, he said, stopping the use of antibiotics in feed would cause livestock to gain immunity to the drugs making them ineffective in treating disease. “The fact is that if we cut back on antibiotics in animals raised in food production, we would see a marked increase in food costs because we’re going to have a lot of animals we’re not able to treat effectively,” he said. “Overuse in humans, not regular use in animals, creates strains of resistant bacteria that hurt humans. Prior human exposure to antibiotics is the greatest factor for acquiring an infection with antibiotic resistant bacteria,” said Doyle, not routine treatment of animals. The panel reviewed 20 years of research into antibiotic and antimicrobial resistance to make their claims. — Mike Deering, WLJ Editor  

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