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Monday, July 10,2006

Idaho producers hold mid-year meeting

by WLJ
—New policies on beef for troops set. Members of the Idaho Cattle Association (ICA) met in Jackpot, NV, June 20-22 for the annual Mid Year Conference. Nearly 150 producers were in attendance as members heard the latest updates on policy priorities important to Idaho’s cattle industry, and those present set new policy positions in place to guide the association in the coming months. The conference was highlighted by the announcement of an Executive Order by Governor Jim Risch—also a cattle producer and ICA member—that outlines the steps that will be taken by the state to regain the Brucellosis Class Free Status that was lost in January. Those steps include the development of a brucellosis management plan and appointing of a task force that will develop recommendations to manage wildlife and cattle interactions in eastern Idaho. Updates were provided on the efforts of the National Cattlemen’s Beef Association (NCBA) by Andy Groseta, NCBA Policy Division Chairman and Cottonwood, AZ, cattle producer and Cevin Jones, NCBA Region 5 Vice President and Eden, ID, cattle feeder. Groseta and Jones provided an update on NCBA’s push to permanently repeal the Death Tax, amend the Endangered Species Act (ESA), and exempt manure from regulation as a hazardous substance, among other issues. Conference attendees enjoyed a presentation by Dr. Sam Barringer, a veterinarian with Pfizer. Dr. Barringer has served for over a year in Iraq as a veterinarian and major in the Army Reserves, assisting with animal health, human health, and biosecurity issues. Dr. Barringer offered personal insight into the positive efforts of the U. S. Military to make life better for everyday Iraqis. Ty Groshans of the American Angus Association provided those present with an update on the Angus Source program. Angus Source is a program that provides source verification services to producers that utilize Angus genetics. The Wolf Management Workshop included representatives of the Idaho Department of Fish and Game, Governor’s Office of Species of Conservation, and USDA-Wildlife Services. Panel speakers outlined the steps that have been taken to facilitate state management of wolves until delisting of wolves in Idaho becomes a reality. Planning efforts are underway for future workshops around the state. New policy positions were also taken by members at the conference, including the decision that ICA will work with Idaho’s Congressional Delegation and NCBA to ensure that U.S. troops are supplied with U.S. beef. ICA also took a position on the proposed Central Idaho Economic Development and Recreation Act. Based on existing ICA policy stating concern for the creation of wilderness and of permanent grazing buyouts, while also recognizing the right of individuals to seek solutions that are in their best interest, ICA does not support the passage of this legislation as currently written because it will potentially establish a precedent for grazing permit buyouts and it fails to adequately protect and promote grazing within the SNRA and the proposed Boulder White Clouds Management Area. — WLJ  

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Monday, July 10,2006

New Mexico producers meet in spite of drought

by WLJ
Over 100 cowboys from across New Mexico converged on Silver City, NM, recently, despite drought and fire, for the New Mexico Cattle Growers’ Association (NMCGA) mid-year meeting. Caren Cowen, executive director for NMCGA, was pleased by the conference. “It was a good turn out in light of the drought and fires.” Cowen continued, “Policy issues discussed included a measured approach to death tax reform and capitol gains as well as the need for the IRS to provide longer time frame for 1031 exchange on lands sales. Other resolutions addressed water rights, jaguar critical habitat, The Nature Conservancy involvement in federal land management, country of origin labeling, archeological clearances necessary for land conservation projects, the state’s growing elk herd and other state issues.” A new membership contract was unveiled to the attendees with hopes of attracting more interest and support for the organization. Cowen was pleased with the conference and looks forward to next year as the group has already begun work on its agenda for the 2007 Legislature.

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Monday, June 26,2006

West Nile season begins early

by WLJ
West Nile Virus has once again started to plague many western states. According to the Centers for Disease Control, active cases of the disease have been detected in mosquitoes and birds in California, Idaho, Utah, South Dakota and Wyoming, and nine other Midwest and East Coast states. In Texas, Mississippi and Colorado, the disease has already been transmitted to humans.   A spring and early summer which has dumped above normal amounts of precipitation in some West Coast states has contributed to the problem by offering mosquitoes more breeding grounds than in past years.   In Utah, parts of which are currently well above normal for precipitation, the problem this year comes six weeks sooner than last year. Utah County Department of Health spokesman Lance Madigan said the batch of mosquitoes that tested positive was in Goshen, UT. That area was the center of West Nile activity during the 2005 season. “There’s a lot of marshy land down in the south end of the county,” Madigan said. “That’s why we’ve been planning on doing aerial spraying down there.”   Utah County officials also emphasized the need to vaccinate horses. The county led the state in equine cases of West Nile Virus in 2005.   The county regularly samples mosquito larvae found in standing water to locate pools of the disease. This is the first positive mosquito test in the state, although two magpies tested positive for the virus in Salt Lake County last month. In an effort to be proactive and limit the spread of the disease, the Utah Department of Agriculture and Forestry has offered $150,000 in grants this year to assist communities with mosquito spraying costs. Several other states, including South Dakota, have also set up grant programs in an effort to control the spread of mosquitoes which have been found to carry the disease. South Dakota’s grant program is expected to spend $518,000 this year in an attempt to limit the spread of the disease.   In Colorado, where much of the state is much drier than normal, one of only a handful of human cases so far nationally was confirmed in Weld County, located in the north central portion of the state. In western Colorado along the Utah border, officials have also found the disease in Mesa County in a bird submitted to the Department of Health for testing. The impact of the disease on horses can be serious and, in many cases, fatal.   Veterinarians in most states are recommending that horse owners vaccinate animals as soon as possible in an effort to minimize the likelihood of infection. Because the vaccine requires a series of shots, it is important to begin the vaccination process before the disease begins to spread more rapidly.   In horses that do become clinically ill, the virus infects the central nervous system and causes symptoms of encephalitis. Clinical signs can include: loss of appetite, depression, fever, weakness of hind limbs, paralysis of hind limbs, impaired vision, ataxia, head pressing, aimless wandering, convulsions, inability to swallow, circling, hyperexcitability, or coma.   In humans, infections are generally mild, and symptoms include fever, headache, and body aches, occasionally with skin rash and swollen lymph glands. More severe human infection may result in headache, high fever, neck stiffness, stupor, disorientation, coma, tremors, convulsions, muscle weakness, paralysis, and rarely, death. In order to avoid being infected, health department officials recommend the following precautions be taken to limit exposure to insect vectors of the disease:   • Drain standing water near the house and work areas.   • Avoid being outside at times when mosquitoes are most active, particularly at dawn and dusk.   • If you cannot avoid being outside at dawn and dusk, use a mosquito repellent which contains DEET to help prevent insect bites.   • When practical, wear long sleeve shirts and pants to limit the amount of skin exposure. Although West Nile Virus is not frequently transmitted to humans, health department officials across the nation are urging caution this year and warn individuals who exhibit any of the symptoms listed above to contact their health care provider immediately.

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Monday, June 19,2006

Canada will wait for U.S. on feed ban

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

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Monday, June 19,2006

Cash fed cattle lose ground

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

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Monday, May 22,2006

Letters

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

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Monday, September 5,2005

BEEF BITS

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

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Monday, September 5,2005

Canadians close “over-30-month” probe

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

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Monday, September 5,2005

Preconditioning premiums growing

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

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Monday, August 29,2005

BEEF BITS

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

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© Crow Publications - Any reprint of WLJ stories, except for personal use, without permission, written consent and appropriate attribution is prohibited. 2008 Crow Publications. All rights reserved.