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Monday, September 27,2004

CoF called bullish all around

by WLJ
— Marketings could mean $86-plus feds. — Placements down third straight month. Market analysts were quick to call USDA's September 1 Cattle-on-Feed (CoF) Report, released September 17, supportive to both the cattle futures complex and the cash fed cattle market. Leading the optimism was last month's double-digit-percentage drop in August feedlot placements, compared to 2003, and an August marketing figure that was at the top end of analysts' pre-report estimates. According to USDA, U.S. feedlots placed 2.1 million head of feeder cattle during August, 12 percent below last year and six percent below 2002. In addition, that figure was the second lowest since 1996, which is the first year this specific data series started being collected. The range of analysts' pre-report guesses was 86-98.5 percent, compared to last year, however, a majority of those guesses were over 92 percent. The average guess was 94.5 percent. USDA said August fed cattle marketings totaled 1.92 million, seven percent below 2003 and 10 percent below 2002. While that is the lowest August marketing figure since 1996, it was at the very top end of analysts' guesses, which ranged between 87-93 percent of last year. Total U.S. feedlot inventory, as of September 1, tallied 9.97 million head, one percent above last year but two percent fewer than two years ago. Most analysts expected the on-feed figure to range between 102.5-105 percent, compared to 2003. Several analysts indicated this was the first time in a long time the on-feed report could actually result in some direct impact on the cash fed market, because marketings and placement figures were both better-than-expected. Most of the time pre-report projections are rather close to USDA's data, and the market has already been adjusted accordingly, several analysts said. This time there were some fairly big surprises that were positive, which should result in better prices the next couple of weeks. Most analysts said better-than-expected marketings were resulting in finishing weights of cattle discontinuing their significant week-to-week climbs, which were seen most of June, July and August. Richard Nelson, livestock market analyst at Allendale Inc., said with slaughter weights leveling off, cattle feeders are becoming more comfortable with their marketing position and moving more cattle, particularly front-end supplies. However, Jim Robb, lead economist at the Livestock Marketing Information Center, said that fed cattle sellers should be "cautiously optimistic." "Nationally, weights are steadying, however, Kansas and Texas data shows weights skyrocketing," he said. "In addition, we had one more marketing this year than last year, which might be the reason why USDA's figure was better than expected." The average daily marketing rate for August was approximately 87,400 head, 11,000 head below a year ago and 8,000 head fewer than the average over the previous five years. "The report was positive, however, there are still some lingering concerns," Robb said. Placements positive While marketings appeared good for the near term fed cash market, the decline in August placements had analysts excited about deferred fed cattle futures. Last month marked the third straight month that monthly placements were down from a year ago. In fact the period of June, July and August saw one-third fewer cattle placed in feedlots, compared to last year. According to Robb, there are very few yearling cattle available and cattle feeders are shying away from cattle that will require more overall expense because of taking longer to finish out. In addition, three months worth of losses has kept feeders from wanting to spend more money than they have to on replacement cattle. Grazing interest has also picked up as fall grass and forage quality and quantity in the central and southern Plains and the Southwest have been called "unbelievably good to excellent." "What heavy placements are out there are being placed. In fact, the only placement weight group to show an increase (compared to last year) was the 800 pounders and heavier," said Lance Zuhrmann, M&Z Livestock Analytics. "Every other weight category was down significantly." There were only 506,000 head of six-weight calves and lighter placed in August, compared to 602,000 last year; 413,000 head were placed weighing 600-700 pounds, compared to 529,000 head last year; and 700-800 pound placements totaled 565,000, compared to 659,000 in August 2003. The heaviest weight category totaled 615,000 head, compared with 594,000 a year ago. "There are a lot fewer cattle in feedlots that would normally be set for February through April marketings, and that bodes well for those months, futures wise," said Zuhrmann. "A third fewer cattle this summer is significant and should be a positive come late winter, early spring." Possible feeder pressure There was some concern expressed by analysts that feeder calf prices over the next few months may see some slight struggles because of larger-than-expected supplies being met by more finicky feedlot buyers. Most analysts are fearful that a colder and wetter-than-normal winter will severely restrict the amount of money cattle feeders are willing to dole out because of the extra time, labor and expense it could take to transition cattle onto full feed and the additional health concerns that arise with extreme winter weather. "The one thing fewer summer placements means is that more (feeder) cattle will be on the market this fall, and that means buyers can be more selective on what they buy and a little more judicious with the money they want to spend," said Zuhrmann. "However, it's not like the market is going to entirely crater. It's still likely that producers will get $12-15 more (per cwt) than they have in years past." USDA's report also indicated that fewer placements were needed than last year because there were seven percent fewer disappearances reported this August, compared to last year. In most cases, analysts said feedlots were holding onto their cattle and feeding them through rather than releasing some out to fall pasture. — Steven D. Vetter, WLJ Editor  

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Monday, September 27,2004

Cattle-Fax offers beef market class to students

by WLJ
After a successful trial run in five colleges and universities, cattle marketing specialists with Denver-based Cattle-Fax recently announced broad-scale availability of its Beef Executive Seminar Training (BEST) program to universities and colleges nationwide. The course is designed to increase students' knowledge of marketing and risk-management concepts and principles, while using course information and applications to replicate business decisions in a current day-to-day market. Officials with Cattle-Fax said the cattle market is hard enough to understand for seasoned livestock market veterans, let alone students just learning the overall business. Randy Blach, chief executive officer of Cattle-Fax, said, "In today's beef industry, marketing and risk management are as important as production knowledge. We have found through our experience that there is a great opportunity to provide and prepare upper level college students with key marketing and risk management tools, along with strategies and applications that can give them an advantage when they graduate and begin their business careers in the beef industry." Case Gabel, a student at Colorado State University, took part in the first class, which was offered during the spring 2004 semester. "The value of the course to me wasn't only the practicality of the material but the real world business knowledge that I will carry with me into the industry," Gabel said. "I gained knowledge that I wasn't able to get from any textbook or any other course." The pilot program was offered at Colorado State University, Fort Collins, CO; University of Missouri, Columbia, MO; Western Kentucky University, Bowling Green, KY; the University of Wyoming, Laramie, WY; and Fort Hays State University, Hays, KS. Dr. Tom Field, professor of animal science at Colorado State University, said, "The course provides a tremendous learning experience for students that wish to pursue a career in the beef industry and provides a win/win for universities and Cattle-Fax as we attempt to provide beef industry students a high quality educational experience to prepare them to contribute to the beef industry." Cattle-Fax is offering the BEST course to all interested universities. Information or questions can be directed to Mike Murphy at 800/825-7525. The course is also fully explained on a DVD that is available by calling that number. — WLJ

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Monday, September 27,2004

Brazilian official fails to lift Russia meat ban

by WLJ
A Brazilian government delegation came away emptied handed from meetings with Russian authorities to convince them to lift a ban on Brazilian meat imports following an outbreak of hoof-and-mouth disease (HMD) in the Amazon region, Brazil's agriculture ministry said last Thursday. "They were very firm and gave no indication of when the embargo may end," said Agriculture Minister Roberto Rodrigues. One of the biggest importers of Brazilian pork, chicken and beef, Russia announced the ban Friday, after Brazil confirmed that outbreak of the disease September 10, near the jungle city of Manaus. The government was confident the mission to Moscow would get the ban lifted as the Amazon region does not export beef, chicken or pork. Indeed, it is over 3,000 kilometers away from the nearest exporting region. The mission supplied Russian officials with information on the latest outbreak, but the only concession was to allow Brazilian shipments sitting at port to be unloaded. Brazil will lose $4 million a day with the ban, officials estimate. This is the second time this year Russia has prohibited Brazilian meat imports. An embargo was imposed in June after a similar HMD outbreak in a remote part of the Amazon state of Para. Russia lifted that ban in August after Brazil agreed to export no meat from Para or the neighboring state of Mato Grosso for 12 months. The Russian embargo caused local pork prices to fall by around 10-15 percent last week, local traders said. — Alastair Stewart, Dow Jones Newswires

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Monday, September 27,2004

Bullet vaccination of brucellosis proposed

by WLJ
With winter fast approaching, the National Park Service (NPS) and Wyoming Fish and Game Department (WFGD) are putting some serious thought into a brucellosis vaccination program for free-roaming elk and bison herds. Topping the list of available technology are "biobullets," a vaccine delivered from a pneumatic rifle. If this plan is approved, it will be the first vaccination of free-roaming bison in the Yellowstone National Park. Biobullets are essentially brucellosis vaccine loaded in an air rifle delivery system. The U.S. Animal Health Agency has deemed this system to be the most reliable, humane, efficient and safe system currently available for delivery of vaccines to free-ranging animals. Because the vaccine is effective at a distance of about 100 feet, wildlife do not need to be caught and contained to vaccinate, which creates opportunity for more bison and elk vaccinations when they are gathered at their winter feeding grounds. Al Nash, spokesperson for Yellowstone National Park, said they are looking at existing technology for the biobullets to see if they should start on the program. The Park Service plans to write an environmental impact statement (EIS) examining the use of biobullets and submitted a notice of intent to prepare an EIS to the Federal Register on August 3. Biobullets are being considered by NPS under their Interagency Bison Management Plan. This plan calls on the park to develop a program to vaccinate bison against brucellosis, when a "safe and effective vaccine becomes available and when a method is developed to vaccinate bison remotely, that is without capturing or handling the bison." Biobullets meet the requirements of this interagency plan, but biologists say the drawback is they are not certain biobullets are completely effective, granted no vaccine is 100 percent effective for brucellosis. With Wyoming's continual fight to regain brucellosis free status, state animal health officials have said they strongly support a biobullet vaccination program for wildlife. Wyoming state veterinarian Jim Logan said, "We have to realize that's just one tool in getting this thing cleaned up. It's not going to be a cure all." In terms of efficacy of the vaccine, Logan said, "I think they are fairly effective and it's not bad at all. They're not the perfect answer to vaccination, but they're the best answer we have right now." Since 1985, about 60,000 doses of vaccine have been loaded in biobullets and shot into elk in the Jackson Hole region of Wyoming. "No one is going to convey this is the silver bullet," said Dean Clause, a WFGD biologist, Pinedale office. "But until other improvements are made, including a more effective vaccine or providing more room for elk in the winter, biobullets are one of the best ways to fight the spread of brucellosis." NPS has decided to extend their comment period for accepting public comments on a biobullet program to October 2. Producers can access more information on the biobullet program, or submit comments, by contacting the Bison Ecology and Management Program, Yellowstone National Park, P. O. Box 168, Mammoth, WY 82190, or by calling 307/344-2505. — Sarah L. Swenson, WLJ Associate Editor

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Monday, September 27,2004

Bison producers applaud new nickel

by WLJ
The United States Mint recently announced it was releasing a new limited-edition nickel in 2005 featuring an American bison and a newly-designed image of Thomas Jefferson. The National Bison Association (NBA) called the announcement "a dynamic tribute to the heritage and the future of this great American symbol." "We are excited, not only by the announcement, but also by the beautiful design that will be incorporated on this new Bison Nickel," said Dave Carter, executive director of NBA. "This new coin recognizes that bison are an integral part of the American experience." A delegation of bison ranchers from around the nation stood with U.S. Sens. Mike Enzi, R-WY, and Ben Nighthorse Campbell, R-CO, in July when the Senators announced the introduction of legislation to authorize a bison image as a part of the nickel redesigns honoring the Lewis & Clark Expedition. At the time of that announcement, National Bison Association President Steve Wilson of Kentucky said, "The original buffalo nickel commemorated a history and a heritage of something that was in danger of becoming extinct. This proposal celebrates restoration…the restoration of a magnificent animal through the efforts of independent ranchers and farmers and the Native American nations." In making Thursday's announcement, U.S. Mint Director Henrietta Holsman Fore noted, "These small pieces of contemporary art will place us at those spellbinding moments when Lewis and Clark first encountered a grazing American bison." Sen. Enzi added that the new design honors "the importance of our Western heritage, the importance of the bison in Native American culture, and the importance of the public/private efforts to restore the American bison from virtual extinction. "While our nation's symbol is the bald eagle, an enduring symbol of the West is the American Bison," he said. The new design is scheduled for public release in early 2005. — WLJ

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Monday, September 27,2004

Where have all the beef cows gone?

by WLJ
The feast or famine scenario is never far away for those in the beef business. Ironically, the same scenario is evident in the crop business. Generally, crop producers are very market focused, entwining farm program concerns, management options, and individual will to come up with an annual approach to production. The triad of producer inputs generally produces a crop output that has a home, not always at the desired price, but nevertheless a home. Although individual memories don't always go back as far as one would like, difficult years, such as this one, tend to get stuck in the mind and are easier to recall than the good years. Years like this tend to defeat the best laid plans. Many acres of what was originally a marketable crop suddenly becomes forage. Crop acres converted to forage acres is not a new problem and neither is the problem of finding a machine to harvest the forage. Forage using machines are typically called ruminants such as cows, sheep, or goats. As many realize, these four-legged forage machines are not always readily available. For some producers, years like this result in alternative marketing opportunities for cash cereal grains, but the demand is lower than expected this year. The principle reason is a lack of livestock to feed. The North Dakota Agricultural Statistics Service shows that beef operations and the number of cows has declined. The last year of the last millennium (1999) showed North Dakota with 980,000 beef cows. The number declined to start the new millennium as 970,000 cows were on North Dakota farms and ranches in 2000. The year 2001 showed an increase to 1,004,000 beef cows and then increased to 1,008,000 in 2002. The trend went south the last two years with a total of 973,000 cows in 2003 and 937,000 cows in 2004, almost a four percent decline from a year ago. Over the long haul, these numbers are between the highs and lows. The highest cow inventory was 1,242,000 beef cows in 1975. Since this high, nineteen years were more than the current inventory and nine years were less. The lowest total came in 1989 when only 832,000 beef cows were in the inventory. In terms of beef operations, the trend is still negative. In 1999, there were 12,700 beef operators, but the total fell to 11,000 by 2003. In comparison, total farm numbers were listed as 31,000 in 1999 and 30,300 in 2003. Beef operations decreased by over 13 percent, while total farm numbers decreased by only 2.3 percent. If long term numbers mean anything, North Dakota producers annually try to maintain a balance between crop and livestock production. If years like this are on the horizon (which they most likely are) and the short term trends continue, finding forage harvest machines is only going to get more difficult. Cows are important to the state and region. A long list of reasons could be made, but the list does not change the end result. Areas where soil profiles and topography make crop production difficult are dedicated to beef cow production with little opportunity to change. Cattle are needed. Crop production areas, although very viable most years, need a neighbor's cows when the conditions create a relatively immobile forage crop. This year will be a memory making year. Let us hope a positive outcome will be a strengthening of the crop and livestock balance. May you find all your USAIP ear tags. — Kris Ringwall (Kris Ringwall is a North Dakota State University Extension beef specialist, director of the NDSU Dickinson Research Center and is also the executive director of the North Dakota Beef Cattle Improvement Association.)

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Monday, September 20,2004

What's ahead for U.S. beef?

by WLJ
Looking into the future is tricky business. As renowned economist Peter Drucker once said, "Forecasting future trends is a somewhat futile exercise. The best we can do is to take trends that are already occurring and extrapolate them into the future." The following trends and projections represent a consensus of numerous analysts in every beef industry sector, from seedstock to consumer. These trends, listed in no particular order, are likely to occur over the next few years and into the next decade. Global markets will increasingly liberalize, assuming that developed nations, the U.S. and Canada included, don't adopt extreme protectionist policies. As developing nations become more affluent, their first demand is for more protein in their diets, especially animal protein. Driven by rising demand, total world meat production is projected to increase 13 percent by 2013. Beef is expected to parallel this overall increase. The U.S. and Canada will continue to dominate world production of high-quality beef, primarily because they can more economically produce grain-fed beef. Plant geneticists, however, are capable of developing grain varieties adapted to non-traditional environments. This could enable nations such as Brazil and Argentina to become competitive in the global market for high-quality beef. The world's water supply is becoming increasingly scarce. Water will be the "oil" of the 21st century. Expect water management to reach the top of the political agenda in the near future. Consolidation will continue, especially in the retail, packing, and feedlot sectors. Today, the top five supermarkets account for 50% of total supermarket sales. By 2010, this could be 75 percent. Meanwhile, the top 30 cattle feeding companies account for about 40 percent of the fed cattle. That could be more than 50 percent by 2010. More than 70 percent of fed cattle are processed by the top three packers; by 2010, they could be processing 80 percent. Communication and coordination between segments will increase as the industry becomes more vertically "coordinated." This needs to happen to remain competitive with other proteins. Be assured, however, that our industry won't vertically "integrate" like poultry. No single entity could invest the amount of capital—estimated at more than $6 billion—required to integrate from seedstock through retail. Contractual arrangements between feedyards and cow-calf producers, and between feedyards and packers, will continue to grow. Such contacts are needed to ensure that retail and foodservice clients consistently meet their customers' needs. Failure to deliver the specified supply on time, every time, is a sure way to lose business. Adoption of an individual animal ID and source verification system will help the U.S. remain competitive globally. It won't be easy, but it is certain. Fed cattle marketed outside the spot/cash market could increase from the current 50 percent up to 80 percent by the next decade. Branded beef currently is estimated to be 20 percent of the market. By the next decade, that could be 60 percent. Today, most branded beef products carry national brands. In the future, supermarkets will want more products in the beef case to carry their private store labels. Improved packaging technology will encourage supermarkets to offer more case-ready beef products, which currently account for about 30 percent of total units in the retail meat case. Case-ready processing, where nearly all the fat and bone is left on the packinghouse floor, will enhance the value of cattle with higher red meat yield. Instrumentation capable of accurately assessing beef tenderness at line speed in the packinghouse will finally be developed. This will allow factors other than marbling to be used as indicators of tenderness, as the correlation between marbling and tenderness is not high. But, such technology won't diminish marbling's value, as it is highly correlated with juiciness and flavor. Today, the demand for well-marbled beef, mid-Choice and higher, accounts for 25-30 percent of the market, which likely won't change. The value of "guaranteed tender" USDA Select, however, will increase. As intervention strategies improve, the incidence of disease outbreak and beef recalls due to bacterial pathogens, such as E. coli, pasteurella, campylobacter and listeria, will decline. Consumers will grow even more confident about beef safety, but the industry can't afford to relax efforts in this area. The current excitement over low-carbohydrate diets will eventually peak, and other fads will come into play. However, demand for beef will remain strong and not decline along with the low-carb fad. Regardless of trends, foods need to taste good or they won't have staying power in the marketplace. The good news: taste is beef's number one attribute. Specialty/niche food markets are growing exponentially. Once dismissed as a fad, the natural/organic market is growing at a 20 percent annual rate. Increasingly, producers will ally in partnerships, alliances, and cooperatives to produce beef for these specialty markets. Cow/calf producers can look forward to a few more years of profitability. Despite the positive margins, producers must continue to control their unit cost of production ($ cost per pound of calf). The veterinary profession will serve increasingly as a source of information for cattlemen on numerous topics. Veterinarians will be prepared to provide valuable advice on genetics, nutrition, reproduction, marketing, and other beef production areas. Improved production efficiency throughout the beef value chain will help beef better compete with pork and poultry. Of all feed energy expended in producing beef, 70 percent goes solely to maintenance, and only 30 percent to productive processes such as growth and lactation. An astounding 50 percent of total feed energy is expended at the cow herd level. Animal scientists recently developed an expected progeny difference (EPD) for cow maintenance. It will enable producers to put selection pressure on the cost of maintenance. Feedlot technology will result in continuing improvement in feed conversion. We know some cattle are genetically capable of converting at a ratio of five pounds of feed to one pound of gain or better. Increased coordination of industry segments will increase efficiency and reduce the cost of producing beef. Recent research reveals early weaning—90-150 days of age—offers many advantages, particularly during drought. This alternative management strategy is likely to increase. In addition, several studies show early weaning, followed by a backgrounding phase that does not result in an unduly prolonged period of dietary restriction, can enhance eventual quality grade. Another study shows heifer calves early-weaned at 90 days reached puberty at a younger age and had a higher pregnancy rate than those weaned at 230 days. Because traditional crossbreeding systems are cumbersome, especially in small herds and in intensive rotational grazing systems, more commercial producers will utilize heterosis by rotating unrelated F1 hybrid bulls composed of the same two breeds (A••B x A••B). This can result in a 12 percent increase in pounds of calf weaned per cow exposed over the average of the parental breeds. Rotating F1 bulls with only one breed in common (A••B x A••C) can result in a 16 percent increase. Because of the increasing demand for hybrids, more seedstock breeders will respond by offering more hybrid bulls to commercial customers. Today, nearly everyone has equal access to outstanding beef genetics. Customer service will become the differentiating factor in the seedstock business. "Full-service genetic providers" will form the new generation of breeders. These breeders will be able to analyze customer production systems, determine the genetic package to best fit that need, and guarantee consistent production at an appropriate price. The National Beef Cattle Evaluation Consortium will use genetic markers validated in the National Cattlemen's Beef Association's Carcass Merit Project to enhance accuracy of carcass EPDs. DNA tests for carcass traits also are being commercially developed. Expect a proliferation of similar diagnostic tests in the next few years. Cloning holds great promise for genetic advancement. However, early embryonic mortality, late-term abortions, and low calf-survival rates must be resolved before its use is widespread. Food companies will face increased pressure to develop animal welfare plans as a way to assure consumers that food animals are humanely raised and handled. Other important issues, which aren't covered in this article, include land use, the environment, and government regulatory policies. These issues will continue to be a challenge for the industry just as they are currently. — Harlan Ritchie (Harlan Ritchie is a professor of animal science at Michigan State University in East Lansing, MI.)

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Monday, September 20,2004

Oregon wolf reintroduction issue under debate

by WLJ
Oregon Governor Ted Kulongoski would like to see wolves back in Oregon although the species has been extirpated from the state for more than 50 years. Last year, Kulongoski commissioned the Oregon Fish and Wildlife Service (FWS) to draft a plan for wolf reintroduction. The 14-member committee appointed to advise and develop a draft a Wolf Management Plan concluded their scheduled meetings last week, however a consensus was not reached. The 14-member group was designed to represent interests from livestock owners, to hunters and environmentalists. Given the diversity of the group, total agreement on how the wolves are suppose to be managed was not expected. But, as the livestock industry is noting, strong opposition for the plan is coming from the two producer members on the panel. Sharon Beck, co-chair of the wolf task force for the Oregon Cattlemen's Association and member of the National Cattlemen's Beef Association (NCBA) wolf management task force, served on the panel, and said she cannot support the proposed plan. In the first place, Beck said wolves do not have a place in Oregon and, secondly, the plan is not fair to livestock owners. The way the debacle began, Beck explained, is that cattle producers approached Oregon's FWS to request a delisting of the wolf citing the Oregon Act, which calls for a balanced use of the land, as well as the cost burden to manage wolves when the state is already in a budget deficit. According to federal government regulations, Oregon is not required to be host to gray wolves. Wolves were listed in Oregon because they were grandfathered in as part of the federal listing of the species. Cattle producers filing a delisting proposal is what prompted environmentalist groups to file a petition to protect the species, according to Beck. She said the response producers received to their petition is there's not enough science to declare the wolf wasn't in danger of becoming extinct in Oregon. However, producers said FWS records indicate the wolf has not been present for more than half a century. "It is one of those circular arguments that you just can't get a resolution too," said Beck. "How are we going to show they (wolves) are recovered when they aren't here." Beck also said that, according to Oregon law, wolves don't have to be recovered, they just have to be conserved. But conservation can have various meanings. In her opinion, it should mean not killing wolves that enter the state. In the opinions of both the Department of Justice and the environmentalists', Beck explained conservation means allowing wolves to recover in Oregon. The management plan was written with the goal of recovering the wolves. "My goal statement would have said that you keep wolves out and save money for the state," said Beck. "Their goal statement was to ensure the long-term survival and conservation of gray wolves while minimizing conflicts with humans, primary land uses and other Oregon wildlife." As far as the specifics of the draft management plan, FWS proposes a minimum of four breeding pairs be present in Oregon for three consecutive years before the wolf will be removed from the endangered species list. It also proposes education of livestock producers and landowners on nonlethal management techniques. Then, depending upon the population growth of the wolves, there are three separate management plans proposed, all of which are not livestock owner friendly in Beck's opinion. The draft proposal has three pieces of the plan that would require legislative action. Those three pieces are: • Reclassification of the wolf to "special status mammal" within the game mammal category. Special status means opening up the range of management tools available to control populations of wolves, including hunting and trapping; • Options for killing wolves, since it is not included in Oregon law; • Funding for a compensation program that reimburses livestock owners for depredation of their livestock by introduced wolves. Beck said she submitted a model to the panel asking for full and fair compensation to livestock owners. "We don't want them here, our ancestors killed the wolves off," said Beck. "But, if they do, they better figure out a way to pay for livestock that they kill and we will figure out a way to live with them. They also better give us a way to kill a wolf that we catch killing our livestock. In other words, it needs to be the state and the Commission's responsibility to take care of the wolf for what it does. That's what is written in Oregon law." Eastern Oregon county commissioner, Ben Boswell the other adversary of the management plan that was on the panel with Beck. Boswell called the chore of establishing and managing wolves in Oregon a "fools errand." "I propose that wolves be kept from Oregon by whatever means are necessary," said Boswell. "Wolves have no biological, social or legal right to be in Oregon and certainly no one has a right to add a threat to our rural lifestyle." The draft management plan was discussed by Beck, Boswell and the other panel members at a series of 10 meetings. However, Beck said the issues of depredation and compensation were skipped over in these meetings and since they reached the end of the term for the meetings the issues will not be discussed. Instead, the plan was presented to Oregon's FWS. Beck said she is presently writing a minority opinion of the management plan and will set the record straight on the legal status under which FWS is trying to reintroduce the wolves. Beck is also writing a report and both opinions and reports will be submitted with the plan. These documents will be presented to the Oregon Fish and Wildlife Commission who will have a rule making process and public meetings around the state. However, public testimony will not be taken at the meetings, which is a concern to Beck since she feels the Commission needs to know what people are thinking about the possibility of wolves in Oregon. After the meetings, the Commission will either adopt or delay the plan, possibly by January 7, when Oregon's legislature reconvenes. Even is the plan is adopted, the legislature will still need to vote on the three issues which fall under legal jurisdiction. — Sarah L. Swenson, WLJ Associate Editor  

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Monday, September 20,2004

Second dairy cow retirement scheduled for October

by WLJ
Beginning October 1, a second dairy cow retirement will be put into implementation in order to reduce national milk supplies and spike sputtering milk prices. Several beef market analysts said that while the program will ruffle some cow/calf producers' feathers, that the program will probably not hurt the beef market that much, if any. According to officials in charge of Cooperatives Working Together (CWT), a self-funded, self help program of the National Milk Producers Federation (NMPF), a total of 49,000 dairy cows will be removed out of production permanently and done so by being taken to beef processors. In total, the CWT initiative is expected to reduce nationwide milk supplies by 870 million pounds. This is the second time that CWT funds will be used to retire cowherds, permanently. The first retirement initiative happened during August of 2003, when a total of 32,274 cows, representing 608 million pounds of annual milk production, were processed. CWT's management committee voted to allocate 80 percent of it funds to the herd retirement program, with the remaining 20 percent earmarked for an export assistance program. Beef market analysts said that just the announcement of more dairy cows being processed has gotten beef producers "up in arms" in the past. However, they said when looking at the overall market, the impact should be minimal. Most sources said that there is so much additional need for lean beef from the hamburger and further processing sector, that the impact of 49,000 slaughter cows won't be felt much, particularly if the sale of them is spread out over several months. "If we were talking 100,000 head or more, then there might be an issue, but at less than 50,000 head, that is an additional per month figure of 8-12,000 head, which isn't that much," one Denver-based market analyst said. "On top of that, we are talking about cows that don't bring much product to the table, and that needs to be taken into account also. They are providing lean product that will go towards hamburger or some other further processed products." Information on the bidding process for the dairy cow retirement program will be made available, by CWT, starting September 27. That information is available by accessing the web site www.cwt.coop, or calling 888/463-6298. — Steven D. Vetter, WLJ Editor

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Monday, September 20,2004

USDA: 11B bushel corn harvest likely

by WLJ
— Frosts ignored by agency; analysts still uncertain. — Grain price down early, but recovering last week. In its most recent crop production forecast, released Friday, September 10, USDA's National Agriculture Statistics Service (NASS) dismissed most fears about early frosts in several northern-tier corn states and projected an 11 billion bushel corn crop, a record by over 800 million bushels. The nearest-term corn futures, and current cash corn prices dropped around, or below, $2.10 early last week, in direct response to that report. However, as last week progressed corn prices rebounded again as several analysts indicated that there is still potential for some feed corn loss. Several cattle market analysts said it is too premature to figure in $2-or-lower corn, but that it is still possible, particularly if the top corn producing states go through the rest of September without a severe freeze. The most recent forecast was on the high end of analysts' pre-report estimates, and up almost 70 million bushels from USDA's August production forecast. This year's projected corn crop is eight percent larger than last year's record crop of just over 10.1 billion bushels. Yields have been forecasted at seven-plus bushels more per acre than last year, when a then-record per-acre yield of 142.2 bushels was reported. In its report, NASS said, "Yields are forecast at record high levels in all Corn Belt states, except Minnesota and Wisconsin, as weather conditions have been mostly favorable throughout the growing season. However, brief periods of freezing temperatures in the northern Corn Belt and adjacent areas of the Great Plains raised concerns about the crop being able to fully develop before a killing frost occurs." Of the top 10 corn producing states, eight are expected to show increases in both acres harvested and per-acre yields, compared to last year. One of the top 10 states is expected to show a downturn in both figures, while the other one is expected to harvest the same amount of corn, but at lower yields, than a year ago. Nationally, only seven states are showing potential declines in yields, compared to 2003. Those states are Alabama, Colorado, Michigan, New York, North Dakota, South Carolina and Wisconsin. Wisconsin is the only top ten producing state with a yield decline expected. Commodity analysts that projected a decrease in USDA's production forecast, compared to last month, were still uncertain whether or not yields would be near as high as the agency has indicated. "It's not the fact that there's not a record crop on the horizon, because there is, and that's not in question," said Barry Turner, market analyst and consultant with TL Agriculture Commodities Inc. "It's still hard to believe that the harvest will be that much larger than last year, particularly with unseasonably-cold summer weather being reported across the country, particularly major corn producing areas." Turner also said the report is a "good news, bad news" situation, with corn producers facing the prospect of very low prices, but livestock producers, particularly cattle feeders and commercial hog raisers, looking at even cheaper feed grain prices through the rest of the year. In addition, feeder cattle prices aren't expected to see as big of a downturn as was once expected because of the corn situation. "We usually see a reverse $1-1.50 move in feeder prices for every dime move in corn prices, and a corn projection of 10.6-10.7 billion could have meant an additional $3-5 decline in feeder cattle prices the rest of this month," Turner said. Instead of that, last week's feeder cattle futures movement was upward with the nearby contracts getting back up $113 per cwt. "And that was even in the face of a dime gain in the nearest-term corn futures contract (December)," said Turner. "It's amazing what an 11 billion bushel projection did for the psyche of cattle feeders in terms of getting back into the feeder market and filling up some empty pen space with cattle that could utilize cheap feed." Turner, and several of his colleagues, suggested, however, that any "significant" corn purchases be done now in the form of forward contracts in order to prevent any negative impact from a possible downward readjustment in the corn production figure. "There's still a good possibility several hundred million bushels of corn could be taken out by weather or other situations, and that could mean at least $2.50 corn later this year, which could be costly given the fact that feeder cattle remain at unheard of price levels," Turner said. Last Wednesday saw the December corn contract close at $2.18, after hitting $2.20 earlier in the day. In addition, March 2005 closed at $2.28 last Wednesday. In both cases, prices were up over a dime compared to Monday's closes. Most sources indicated that there is still some concern that USDA's forecast is too big for the current growing conditions and maturity levels. — Steven D. Vetter, WLJ Editor

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