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Monday, July 18,2005

Beef demand pulls feds $2 lower

by WLJ
After a couple weeks of steady prices, feedlots nationwide were starting to feel the pressure and traded cattle $1-2 lower than the prior week. Through last Thursday, northern Plains cattle feeders sold 55-60,000 head at mostly $127 dressed. Southern Plains and Southwest feedlots finally pulled the trigger Thursday afternoon at $80-80.50 live, compared to mostly $82 the previous week. Texas feeders sold 35-40,000 head, while Kansas trade totaled 45-50,000 cattle. Beef demand was significantly softer the week after the Fourth of July weekend, which was considered strong for beef sales. Retail sources were skeptical whether it would pick up until Labor Day weekend in early September. However, retailers have several big beef features scheduled for the second half of July. Andy Gottschalk, analyst with HedgersEdge.com, said that the current struggle in the market is seasonal and that market pressure has been exacerbated because of weaker-than-normal beef demand. “There’s definitely a demand problem when packers are losing money at these slaughter levels. This time of year, packers generally are well into good margins, earning $30-50 per head, and now they’re losing $7.50 per head.” Boxed beef movement last week was very strong, however, prices were declining as packers were trying to clear inventory. The choice boxed beef index was at $132.99 midday Thursday, compared to $135.14 at the beginning of the week. Select product was down to $128.81 Thursday, compared to $131.22 Monday. Three of the first four days of last week saw well over 450 loads move, with one 600-plus day noted among them. Gottschalk said the beef movement last week could be positive for the cattle market later this month or early August when beef featuring at the retail level is expected to resume. Cattle slaughter picked up last week, but that was following a holiday shortened week. Through Thursday 487,000 head were processed, compared to 500,000 during the same time frame last year. Analysts were still speculating that weekly slaughter could end up over 625,000 head, which is still more than what is needed to meet current beef demand, both domestic and export. For the week ending July 2, 652,000 head were processed, about 30,000 head more than current beef demand. Finishing weights of fed cattle continue to escalate, and that is adding to beef supply pressure. The average weight of all cattle processed for the week ending July 2 was 1,249 pounds, compared to 1,245 the week prior and 1,236 a year ago. Carcass weights were at 767 pounds, compared to 764 the previous week and 761 last year. The USDA reported last Thursday that fed steer live weights averaged 1,322 pounds live, and 841 pounds dressed, compared to 1,266 and 837 pounds two weeks ago. “The holiday shortened week left a lot of ready cattle in feedlots, those cattle were fed an extra week and are now coming out at a very heavy weight, thus hurting the market,” said Reed Marquotte, M&Z Livestock Analytics. “A 1,275-pound steer that missed the packing house because of Fourth of July, probably tipped the scales between 1,300-1,310 pounds, which is a lot of extra weight, when beef demand is already slumping.” Gottschalk added that the weight jump can be attributed to three things—high replacement cattle costs, cheap feed costs and high breakevens on cattle currently being fed. “Feeders feel it is cheaper to feed cattle currently in the lot right now, instead of buying a replacement animal and feeding it,” he said. Feeders, stockers struggle Losses of $100-plus on a lot of fed cattle last week started to weigh on feeder cattle prices. Across the country, heavy weight cattle were bringing $2-4 less than the previous few weeks. In addition to cattle feeders losing money, prospects for beef trade with the Pacific Rim appeared to be delayed even further to very late this year or early 2006. As a result, cattle feeders need fewer cattle to meet marketing slots in the fall and winter, analysts said. The CME feeder cattle index for 600-850 pound steers was around $113 last Wednesday, compared to $116-plus the previous week. Calf prices last week were very mixed with a wide range of prices reported even within the same weight divisions. Steers ranged between slightly softer to slightly firmer, while higher quality heifers were $3-5 stronger. The best demand was from stocker operators on replacement type females that were bought to go back on grass, and sold next winter. Superior Video Auction’s “Week in the Rockies” sale July 5-9, offered over 250,000 head during the five-day event. There were several instances where 400- to 500-pound steers brought $155 or more. There were also instances of 500- to 600-pound heifers bringing $145 or more. Some of the highlights at Superior’s sale were: a set of 450 lb. certified Natural Angus steers for $154, October or November delivery; Barbara Jolly & Sons, Kit Carson, CO, sold a set of 465 black and red Angus certified natural steers for $157 for October delivery; Dragging Y Cattle Co., Dillon, MT, topped the sale with a set of 425 lb. Charolais and Angus sired steer calves, VAC 45 and VASE, for $165; the top yearlings were some 850 lb. Red Angus and Red Angus cross steers from Lonnie Frimann, Minatare, NE, that sold for $113.10; and some 935 lb. steers for $108.85, for August delivery. Western Video Auction also held one of its special sales in Reno, NV, offering over 187,000 head. Some of the highlights from that sale were: a split load of 55 steers weighing 485 lbs. and heifer mates at 470 lbs. from Corder Farms, Ft. Benton, MT, that sold for $131.50 and $126.50, respectively; 83 black steers weighting 600 lbs. from Boone and Crockett Ranch, DuPuyer, MT, that sold for $120; 90 head of heifers weighing 650 lbs from L. Johnson, Great Falls, MT, that sold for $126.50 cwt; 250 Angus-Charolais cross steers, weighing 580 lbs. from Yribarren Ranch, Bishop, CA, that sold for $120.85. On the steer side, a $6-8 premium is being paid for those cattle that are sold with a preconditioning program behind them, are certified as being “naturally raised,” or have been fitted with some sort of source verification mechanism. Superior did sell a group of 420-pound steers for $168 per cwt, and another group of 450-pounders for $162.50. However, for the most part, prices on steer calves were called mostly steady. – WLJ © 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, July 18,2005

House approves mCOOL delay

by WLJ
The U.S. House of Representatives last week maintained a delay in the implementation of mandatory country-of-origin labeling (mCOOL) for meat products. The provision barring USDA from spending any money to prepare for COOL’s implementation this September was included in an appropriations bill that the House voted in favor of 408-18. mCOOL, which is supported by several independent farming and consumer organizations but is opposed by most U.S. meat-industry trade associations, would require meat products sold at retail to indicate the origin of the meat contained in the products. Trade groups opposing the plan say COOL will cost the industry hundreds of millions of dollars to implement and that there has been little public outcry for such a labeling law. Opponents of mCOOL said that by passing the delay, Congress will now have time to take action on a meaningful, bipartisan country-of-origin program that makes sense for both livestock and meat producers and American consumers. However National Farmers Union president Dave Frederickson, said there was a need for the bill to be allowed immediate implementation because the competitiveness of U.S. producers in the domestic U.S. market is at stake. “Congress missed an opportunity to help American consumers known where their food comes from, as well as a change to help American producers differentiate their high quality domestic products from imported beef,” said Frederickson. “This law has been on the books for three years. How much more time do they need?” The Senate has not yet taken up ag appropriations discussion, however, debate and a vote on the issue is expected before the end of the month. Language delaying the implementation of mCOOL is expected to be discussed and voted on by Senate members for inclusion in the appropriations package. However, there appears to be much more support for a mandatory program in that branch of Congress. If the Senate keeps Sept. 1 mCOOL implementation, then the issue will be decided in an ag appropriations conference committee made up of both Senate and House members. House Ag Committee Chair, Charles Goodlatte, R-VA, has introduced separate legislation that would repeal country-of-origin labeling on meat permanently. Similar legislation has been introduced in the Senate, being led by Sens. John Cornyn, R-TX, and Blanche Lincoln, D-AR. A time line on discussion and votes for those bills was not known last week. — 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, July 18,2005

Species protection bill disliked before unveiling

by WLJ
A proposed bill that would amend sections of the Endangered Species Act (ESA) is getting criticized by property rights organizations, including western ranching groups, and it hasn’t even been introduced in Congress yet. A leaked copy of Rep. Richard Pombo’s (R-CA) “Threatened and Endangered Species Recovery Act of 2005" showed the proposal includes two main items of concern for property owners. The first criticism is for language mandating a 50 percent compensation trigger. Under this change, landowners would have to prove that wildlife protection provided under the ESA has resulted in 50 percent or more of private land being removed from their management before compensation can be applied for. Secondly, Pombo’s bill would give invasive plant species protection. Western state ranching organizations called those two modifications “uncalled for” and an effort to appease radical environmentalists and species conservationists. Two western state cattle organization executives told WLJ last week that the 50 percent trigger compensation, if included in the ESA, could force many of their ranching members out of business or severely hamper their financial stability. “Forget 50 percent, most ranchers would start to lose their viability after losing 10-15 percent of their production. And, to compound it by having to go through a verification process that says 50 percent of your land has been impacted by ESA actions is ludicrous,” one state executive director said. “People will still be in limbo for years before agencies issue final decision, all the while not able to use their land.” On the issue of including “invasive” species under the auspices of the act, private property interests said ranchers could be forced off their grazing or pasture lands because a certain forage has been deemed “threatened” or “endangered.” In addition, several concerns were the result of some grasses commonly used for lawns or yards that could be classified for ESA protection and then the government would technically have control of those areas, as well. “For instance, tall fescue, a grass commonly used by homeowners for their lawns, could qualify as an invasive species and be regulated by the federal government,” said the private property group Liberty Matters, in a statement. Congressional aides said last week that Pombo’s proposal is expected to be introduced in the House of Representatives by the end of July, but did not know any specific date. — 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, July 11,2005

BLM rebuffs grazing rule complainers

by WLJ
Last month’s release of the environmental impact statement (EIS) concerning new federal grazing rules was met with some harsh criticism from radical environmentalists and animal rights activists. However, officials with the Bureau of Land Management (BLM) told WLJ that allegations of wrongdoing by them were “false and groundless.” Several activist groups claimed that BLM blatantly and illegally removed findings from the EIS that livestock grazing was indeed detrimental to federally-managed lands, specifically from a wildlife and riparian area standpoint. The groups said they were told by two scientists involved in the regulatory review process that their findings were disregarded and kept from the final EIS publication. However, Tom Gorey, spokesman for BLM, said that the EIS included all information that was agreed to by a majority of the researchers involved in the overall review process. “There were approximately 20 people in the process, including the two scientists that are dissenting,” said Gorey. “They are not happy that their findings were not included in the final EIS, however, the overwhelming majority of reviewers agreed those findings were not pertinent enough to lead to further grazing restrictions.” Of particular concern to the two reviewers critical of the final EIS was that economic benefit to local economies trumped potential environmental damage that could be caused by livestock grazing. However, Gorey said that the findings of the two reviewers failed to incorporate any other parameters into federal grazing management besides potential wildlife habitat or waterway damage. The EIS was published in the Federal Register June 17, and Gorey said that final federal grazing rules will be released late this month and will be implemented 30 days after they are released to the public. Among the changes will be more open communication between graziers and federal land managers and that actual damages will need to be cited before any litigation against federal lands grazing can even proceed to court. — 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, July 11,2005

CAFTA halfway through Congress

by WLJ
— Senate passes trade pact. — House debate, vote around corner. The highly controversial Central America Free Trade Agreement (CAFTA) passed the full Senate July 1, and is now awaiting action from the House of Representatives later this month. The Senate vote was 54-45 in favor of opening free trade with six Central America countries—Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua. Proponents of CAFTA called the Senate action very positive, however, opponents of the proposal said that the vote shows that there are some concerns with the agreement. R-CALF United Stockgrowers of America, and several other producer organizations who oppose CAFTA said that the Senate’s vote was the least supportive of any trade agreement voted on by that division of Congress. “We are grateful for the strong opposition to CAFTA,” said Jess Peterson, director of government relations for R-CALF. “In particular, we thank each Senator that stood up for the U.S. agricultural producer and against the poor precedent that CAFTA set for future FTAs (free trade agreements). U.S. ranchers deserve an agreement that ensures international trade, enhances their business operations and isn’t destructive or detrimental.” Opponents of CAFTA claim the agreement fails to create a level playing field for U.S. cattle producers, by allowing Costa Rica and Nicaragua to add special and specific safeguards to block beef import surges from the U.S. Costa Rica and Nicaragua are considered the two largest Central American markets for U.S. beef. “CAFTA fails to address global beef distortions in trade that left unaddressed, only guarantee that U.S. cattle producers will not be allowed to be competitive,” said Peterson. “The U.S. received no special safeguards for beef import surges from CAFTA nations as mandated by Congress, nor does CAFTA follow the guidelines for mandatory country-of-origin labeling (mCOOL) as passed by Congress. The Australian FTA did include these special safeguards for U.S. beef.” Proponents of the agreement said U.S. beef will not get more competition from Central America product and that opponents of the trade pact are just showing their “protectionist tendencies.” Aides to U.S. Agriculture Secretary Mike Johanns said there are tariff rate quotas (TRQs) already in place against Central American countries if they export more than a minimum requirement of beef into the U.S. So far there has never been a TRQ placed against beef from any of those countries because they haven’t exported the minimum amount of product over a year. In addition, officials with the National Cattlemen’s Beef Association (NCBA) said that quality hinders Central America from being much of a competitor in the U.S. beef market. Most Central American beef is from animals that have been grass fed between 18 months and two years and is most suitable for processing, particularly canned or prefabricated products, sources said. Additional concerns of the agreement include not containing adequate environmental protections, or enforceable protections for such core workers' rights as the freedom to form a union. In fact, opposition said that the U.S. Department of Labor intentionally suppressed an analysis of CAFTA that showed several of the Central American countries included in the agreement have poor working conditions and do not enforce workers' rights laws. The Labor Department reportedly instructed the contractor to remove the reports from its web site, to retrieve paper copies of the report before they were distributed to the public, and to not discuss the studies with outsiders. The agency has denied those accusations. CAFTA now goes in front of the full House for discussion and vote later this month. House staffers indicated that a vote could happen sometime during the second full week of July. The biggest sticking point in the House is the debate over details regarding sugar trade with the Central American region. — 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, July 11,2005

Drought receding across most of West

by WLJ
— Southwest conditions worsening. — Heifer prices could see jump. Meteorologists and climatologists are on the verge of declaring a majority of the western U.S. drought-free this summer. Sources said there are still some drought-like pockets in the extreme northern Plains, Northwest and parts of the Southwest, however, the Intermountain West, West Coast and central Plains are all in better shape than the previous four or five years. Cattle market analysts said continued improvement in weather and climate conditions could result in a much larger growth rate in the northern Plains and Intermountain cow herds, and a better calf and feeder cattle market later this summer and fall. According to the National Oceanic and Atmospheric Administration’s (NOAA’s) Drought Monitor, as of June 28, the worst situation in the 17 most western states was some D0 to D2 drought conditions. The NOAA data utilizes five classifications of drought with D0 being the least intense and D4 being the most severe. Last year at this same time D3 and D4 areas were noted across the western U.S. Currently, the worst drought areas are the northeastern third of Wyoming, extreme western Montana, the eastern border of Idaho and central Washington and Oregon. Colorado, New Mexico, Nevada, Utah, Nebraska and the Dakotas are almost entirely free of drought conditions. The most improvement has been seen over the last six weeks to two months, with most drought-stricken areas seeing monthly precipitation range between three to six inches. Compared to the previous several years, meteorologists said that rainfall is three to five times larger in many western states, particularly Montana, the Dakotas, Colorado, Nevada, Utah and New Mexico. However, there is cautious optimism concerning the weather outlook come later this summer, into fall. “Things can change very quickly, particularly right now when temperatures get consistently over 90 degrees and the winds kick up severely,” said Douglas Le Comte, NOAA Climate Prediction Center. There was more concern that parts of the Southwest, particularly the eastern two-thirds of Texas and southeastern Oklahoma were drying out more than normal, compared to the previous few years. “Extreme D3 drought developed in northeastern Texas and included adjacent parts of Oklahoma, Arkansas, and Louisiana,” said Le Comte. “Longview, in northeast Texas, has experienced the second driest March-June since 1902. D0, D1 and D2 drought expanded in Texas, with D1 stretching into the Blacklands. Farther south, D3 developed across the Lower Valley. As of June 28, year-to-date rainfall in Brownsville totaled just 2.85 inches versus the normal amount of 10.68 inches.” Herd rebuilding, stronger prices? The marked improvement in a large portion of the northern western states has market analysts projecting cattle herd expansion at rates two to three times more than last year and forecasting another strong rally in calf and feeder cattle prices this fall, particularly heifers. “Particularly in the Dakotas, northern and western Nebraska, Colorado, and several states straight west, cattle herds were downsized significantly the past few years,” said Don Bainstrom, livestock market analyst with Plains Ag Commodities, Rapid City, SD. “The summer and fall grazing season looks to be six weeks to two months longer at least, and then normal wintering kicks in for females. Heifers could be hotly demanded, compared to their steer mates.” Bainstrom and Jim Robb, chief analyst at the Livestock Marketing Information Center (LMIC), Lakewood, CO, both indicated that steers from eastern Texas, southeastern Oklahoma, and into Missouri may start to somewhat overload the feeder cattle market if weather doesn’t cooperate and that even more heifers could be available for producers in areas where drought has started subsiding. Robb added that stocking rates for pasture and rangeland in the northern two-thirds of the western U.S. are probably two to three times what they were the previous few years. Bainstrom concurred. “We had a lot of northern Plains, and western cattle moving south the past few years because of drought,” said Bainstrom. “We could see a lot of Texas and Oklahoma females making their way back up here, particularly those with 1/4, or less, ear in them. The demand for heifers is improving and the continuation of better weather will only help more.” — 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, July 11,2005

Feeders hold out for fed rally

by WLJ
Reports of very good Fourth of July beef demand and some early week strength in both the futures and boxed beef markets gave fed cattle producers some optimism for a stronger market last week. However, as of Thursday, market activity was still almost nonexistent as packers were waiting for asking prices to get in line with the previous week’s market. The only trade reported as of press time was 5-8,000 head in Nebraska at $130 dressed, which was $1-2 stronger than two weeks ago. Thursday morning packer bids were down to $128-129 in northern feeding states. In the southern Plains, cattle feeders were asking mostly $84-85, but, packers were still bidding mostly $80. “We’re looking at a Friday trade, maybe even a Friday afternoon market,” said one Denver-based market analyst. Packers were reluctant to get into the market even at steady money, compared to the previous week, because they are seeing negative margins, again. Most analysts said that packer breakevens were between $81.50-82, and that steady to stronger prices could move them to the minus side of the ledger. Retail beef movement over the three-day Fourth of July weekend was called very good by several retail and market sources, which produced some strength in the boxed beef market last Tuesday and Wednesday. Almost 400 loads were sold Tuesday, while a 500-plus load day happened Wednesday, which was a $1 jump in Choice beef and a 40-cent gain in Select, compared to the previous Friday. However, Thursday saw the boxed beef cutout fall $1.50 on Choice and $1.10 on Select. Analysts said that heavier-than-expected slaughter volumes during the previous few weeks were starting to weigh on packer storage and that beef needed to be “firesaled.” It looked like Thursday was going to be another 500-plus load day for boxed beef movement. While the Fourth of July weekend was considered the best three-day period for beef demand in almost a year, it was on middle meats and other items associated with grilling. Chucks and rounds weren’t in big demand and the supply was building. A lot of the inventory reduction was on those primal cuts, sources said. One central Plains retail buyer told WLJ, “Even with the new ‘steak’ cuts that are coming out of the chucks and rounds, there is just not enough demand in the summer to swallow up that part of the beef supply. We are also talking about fed cattle that are 20-30 pounds heavier, compared to previous years, meaning there’s another 13-18 more pounds of beef produced, and at least 50 percent of that is additional chuck and round.” For the week ending July 2, USDA reported that the fed steer average live weight was 1,286 pounds, compared to 1,257 the same week a year ago. That figure was also five pounds heavier than the previous week. Analysts also said that recent slaughter volumes continue to eclipse current beef demand levels. For the week ending July 2, USDA reported 652,000 head of cattle processed, compared to 643,00 head the week prior and 646,000 for the same week a year ago. Most analysts concurred that 620-625,000 head of cattle was more than enough to supply current beef demand levels, both domestic and export. Northern feeders, stockers stronger The national calf and feeder cattle market was several dollars stronger last week, however, most of that was due to the extreme rally seen in markets in the central and northern Plains and Intermountain West regions. Reports that drought is on the verge of ending or already ended in most western states has strengthened demand for cattle to put on pasture, specifically heifers, sources said. With more heifers going to cow/calf producers, there are more steers available but fewer overall cattle for feedlots, which means there is more demand for a dwindling supply of feeder cattle. Southern auction barns reported very limited offerings and even weaker demand. Most of the weakness was contributed to the extremely hot weather and the holiday “hangover.” “Typically, feeder cattle this time of year hits a peak in the northern areas of the country, and with weather conditions helping out pasture, and hay production, there is even greater demand for grass cattle.” said Derrell Peel, extension livestock economist at Oklahoma State University. “We are dry here, but that’s a normal trend down here.” While the Fourth of July kept a lot of auction barns closed for the first half of last week, Superior Livestock Auction had a very large video auction that was broadcast from Steamboat Springs, CO, last Tuesday through Saturday, and prices were considerably higher. Attendees at that sale reported heavy seven and eight weight cattle bringing well over $115 per cwt, and 650- to 700-pound cattle back up over the $130 range. Peel and several colleagues still said the fed cattle prospects for the rest of the year don’t appear to justify the current prices being paid for fed cattle. Most analysts indicated, however, that feedlot operators still contend they are better off feeding cattle even if they lose money, rather than have empty pen space. “I can see (cattle feeding) losses the rest of the year, but it is still more beneficial for them to feed them rather than have no cattle at all,” Peel said. The CME feeder cattle index last Wednesday got over $116 per cwt, almost $4 higher than the previous Wednesday. — WLJ © 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, June 27,2005

BEEF BITS

by WLJ
South Dakota plant delayed Connecticut-based Ridgefield Farms will further delay breaking ground on a South Dakota beef processing facility until next spring. In addition, construction on a cattle slaughter facility has been pushed back another year, company officials said. In April, the company announced a six-month delay for starting construction on the proposed plant in Huron, SD, and five investors resigned from the company's board. The company is expected to spend approximately $20 million on the initial plant, plus another $7 million on technology. Originally the cost was expected to be around $42 million. Until it can build its own slaughterhouse, Ridgefield Farms will contract that function to local processors. Midwest beef processors merge Rosen Meat Group, Fairmont, MN, and American Foods Group Inc., Green Bay, WI, recently announced plans to merge the two companies and keep the name American Foods Group (AFG). AFG is known for producing ground beef products and deli meats, while Rosen is a manufacturer of steaks, ground beef and sausage. No layoffs are expected, and the new company plans to restore full-time work hours that employees from both companies lost after cattle supplies tightened due to a lack of Canadian cattle imports. Jobs are expected to be added once imports resume and additional Asian markets reopen to U.S. beef. The deal is expected to close sometime in late August. Collective sales between the two companies totaled more than $1.5 billion last year. Tyson plant votes union out The National Labor Relations Board has certified the February vote that decided to remove the Teamsters Union from Tyson Foods, Inc.= s beef processing facility in Pasco, WA, after 28 years. The union has objected to the vote, but withdrew their objections earlier this month and the vote was certified. Tyson said in a statement it is finalizing plans for a pay increase and other benefit enhancements for the 1,500 hourly production and maintenance workers. Those changes are expected to go into effect July 3. Tyson said about 70 percent of its 300 production plants are now non-union. Cattle neglected at college farm Ten cattle at a University of Wisconsin research farm died after apparently suffering from neglect over the winter, according to school officials. The cattle were fed a diet of poor-quality hay and corn silage in December and January that left them malnourished, Ben Miller, assistant dean at the College of Agriculture and Life Sciences, said last week. The animals were housed at the university-operated Franbrook Farm where they were involved in predicting whether cattle give birth to twins. Six cattle died in February and March of complications during calving, while the others died of malnutrition. Communication problems between the researcher and the worker charged with caring for the animals were cited. The worker has since resigned. Uruguay beef exports hit record Uruguayan beef exports reached record levels during May, with export volume increasing 39 percent over last year, at 26,100 metric tons. The value of beef exports for May rose 48 percent, to U.S. $68 million. Over the first five months of 2005, Uruguayan beef exports totaled 119,000 metric tons worth $303 million, increases of 22 and 27 percent, respectively. The U.S. remained the primary destination for Uruguayan beef, accounting for 76 percent of the country= s May exports. The majority of that product was frozen, at 19,800 metric tons. During the first five months of 2005, exports to the U.S accounted for 74 percent of Uruguay= s exports, totaling 88,500 metric tons. Spanish-language web site unveiled The California Beef Council (CBC) expanded its Hispanic-based promotion efforts recently by launching a Spanish-language web site, www.MeGustalaCarnedeRes.com. Translated the web site name means A I like beef.@ The new web site includes beef recipes, nutrition facts and beef safety information. In addition, this year's CBC Hispanic marketing campaign also includes radio advertising and in-store retail promotions with more than one hundred Hispanic stores. USDA certifies Greater Omaha Greater Omaha Packing Co. received Quality System Assessment approval from USDA, which qualifies the company to export to customers in Japan when that market is reopened to U.S. beef products. The QSA signifies that a processor has ties with ranchers and feeders who maintain careful feed, age and genetic records of cattle and gives such companies an advantage when the border reopens. Harris Ranch Beef Co., Brawley Beef Co. and Packerland Co. have received similar designations. Winn-Dixie closing 300-plus stores Winn-Dixie Stores Inc. will sell or close 326 of its 918 stores, close three of its 10 distribution centers, sell off manufacturing plants and lay off approximately 22,000 workers. The closing distribution centers are in Atlanta, Charlotte, N.C., and Greenville, S.C. The retailer is attempting to emerge from bankruptcy protection and is expected to will see its gross sales dip from $10 billion last year, to $7.5 billion. The 22,000 layoffs account for about 28 percent of the company's employee base. Giant Eagle opens super store A prototype supermarket for Giant Eagle's new grocery concept opened last week in Pittsburgh, PA. The 24-hour, 86,000-square-foot store includes a prepared-foods department, an in-store cafe, a natural and organic section, a full-service dry cleaner and a child-care center. According to Kevin Srigley, Giant Eagle's vice president of marketing, convenience is the primary feature of the new supermarket, which houses a fully staffed meat department selling USDA Prime Beef, Certified Angus Beef, and natural beef. The store also offers 100 varieties of deli meats, salads, and antipasto items.

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Monday, June 27,2005

Live cattle BSE test awaits U.S. validation

by WLJ
Company expects fall introduction. Confirmatory A quick-test@ also unveiled. Canadian-based Vacci-Test Corporation recently announced it has developed a diagnostic blood test that shows the presence of brain diseases, including BSE, in live animals. Company officials said USDA researchers will conduct validation studies on their research starting next month, and that the test could be available for use in the U.S. sometime this fall. Vacci-Test BD is a quick test that determines the presence of a protein marker that is indicative of a variety of brain diseases in cattle, including BSE. AA single drop of blood will identify the presence of Protein 14-3-3, the marker for brain infections, including BSE,@ said Bill Hogan, president and CEO of Vacci-Test. AThis will facilitate affordable mass testing of live cattle in the field with results readable in less than 30 minutes.@ According to Hogan, if an animal tests positive for a brain disease using the Vacci-Test kit, further post-mortem tests should be conducted to confirm whether the disease is BSE or not. AThe test itself can detect a wide variety of diseases. If the test is negative, then animals are free of brain infections, including BSE. If the test is positive, further testing is needed to rule out or confirm BSE,@ said Hogan. A This is a good precursory test for producers to use.@ Hogan added that the test uses a hand-held, non-laboratory process that makes it easy and quick to use. ABecause it is a hand-held kit that doesn= t require a laboratory setting the cost is five to six times less expensive than the other lab-based tests,@ Hogan said. The test reportedly costs around $20. Vacci-Test conducted two-years worth of testing on 2,000 blood samples that were given by the Veterinarian Laboratories Agency (VLA) in Weybridge, England, which is considered the foremost authority on BSE testing, internationally. AWe conducted blind vial testing on samples that were collected on animals that were alive but then slaughtered and tested for the BSE in Great Britain. We used our test on samples from animals that were both positive and negative for the disease, and had a 100 percent success rate,@ he said. That test data has already been filed with food and livestock agencies in France and Canada as well as with the European Food Commission in Brussels. Hogan added last Wednesday that his company is also in the process of filing its data with both the World Animal Health Organization (OIE) and the U.S.= National Veterinary Services Laboratory in Ames, IA, for validation. AWe are two weeks out from submitting our data to the U.S. and OIE, and the analysis of that data is expected to take another few weeks,@ he said. AIf their (NVSL) review is positive we will then be allowed to market the test in the U.S.@ USDA officials told WLJ last week that in the case of diagnostic tests or kits there isn= t a full-fledged certification or approval process needed, and that a positive review from federal scientists is enough to allow those products to be marketed in the U.S. C WLJ

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Monday, June 27,2005

Outrage over BSE retest lingers

by WLJ
Final results likely early this week. Testing disclosure scrutinized. Cattle industry and U.S. agriculture officials last week were both eagerly awaiting final results of confirmatory BSE testing being conducted by a world-renowned lab in Weybridge, England. However, as of press time last Thursday, those results were not known, and USDA officials were indicating that results would be known probably the first half of this week (starting June 27). In the meantime, USDA was still facing intense criticism due to the decision to retest and the fact that they breached normal BSE surveillance protocol by announcing A preliminary@ test results and not waiting for final confirmatory tests to be completed. During a June 17 teleconference, Jim McAdams, president of the National Cattlemen= s Beef Association (NCBA) said that his group had a face-to-face meeting early that morning with U.S. Agriculture Secretary Mike Johanns concerning how the current BSE situation has been handled. A We took this opportunity to let Secretary Johanns knowCin no uncertain termsCthat these actions have created great anxiety within our industry, and have resulted in significant losses for producers forced to market during these uncertain conditions,@ McAdams said. A We believe that the market uncertainty stemming from last week's report has already resulted in a serious drop in value for the U.S. cattle inventory. No matter how quickly or fully the market rebounds, many producers have suffered very real losses that will never be recovered. This situation will continue to bring volatility and economic harm to our industry as long as uncertainty hangs over the marketplace.@ According to Johanns, his agency had no choice but to order the Animal and Plant Health Inspection Service (APHIS) to conduct retests on three A preliminary inconclusive@ samples that were collected last year. USDA's Office of Inspector General (OIG) asked for the retest using the Western blot test, and Johanns said that is a branch of the agency that he has no say over or against. Samples from three cows showed A preliminary positive@ results using BioRad= s rapid BSE testing kit, however, confirmatory testing at the National Veterinary Services Laboratory (NVSL), Ames, IA, showed there to be no infection in those animals. According to OIG, there was some reason to believe that the confirmatory testing process was flawed or conducted incorrectly and that a retest using the Western blot test was in order. That retest came back positive in one of the three retested samples. That sample was then sent over to the Weybridge lab for additional testing. USDA officials indicated that the English laboratory received the sample last Monday, June 20, about a week later than originally projected. The delay was the result of USDA needing to make sure they kept enough of the suspect animal= s brain sample so they could continue to do their own batteries of testing as well. There was some industry and scientific concern with OIG= s decision to use the Western blot test, because it is a broader test that can determine the presence of other prion diseases besides BSE. AThe positive result from the Western blot could have been something else besides BSE, while the IHC test, which USDA uses as its confirmatory test, exclusively looks for BSE,@ said Gary Weber, executive director for regulatory affairs with NCBA. AThe IHC is the > gold standard= BSE test and recognized internationally.@ According to NCBA and other industry organizations, USDA needs to stick to original protocol regarding announcements of BSE tests and their results. A few months after implementing their stepped-up BSE surveillance program on June 1, 2004, USDA announced that they would not publicly report test results unless they were positive following confirmatory testing. In this case, producer groups said USDA violated that protocol by announcing the positive Western blot test results before the English laboratory had a chance to conduct it= s testing to confirm or deny the presence of the disease. AOnce again, USDA= s actions surrounding this same animal have unnecessarily caused extreme volatility in the marketplace, and conditions can only be described as miserable,@ said Leo McDonnell, president of R-CALF United Stockgrowers of America. AMarkets are reeling as a result of USDA= s indecisiveness, which is causing irreparable harm to our industry, and someone needs to take the reins and steer us back on a proper course.@ There was also concern that USDA is withholding information on the specifics of the animal in question and that rumor and speculation is causing even more harm to the industry, specifically cattle markets. It has been indicated by some USDA reports that the cow is between 10-12 years old, meaning it was born prior to a 1997 ban on ruminant meat-and-bone-meal in ruminant feed. In addition, reports have indicated the cow was from the Southwest U.S., more than likely Texas. APHIS spokespeople have denied those reports, and that specific information on the animal will only be released if the England lab comes back with a positive BSE result. Jim Rogers, spokesman for APHIS, did say that preliminary reports about the suspect animal= s remains not entering the human or animal food chain were correct and that any chance of the disease spreading beyond this animal was nonexistent. C Steven D. Vetter, WLJ Editor

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