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News/Events
Deadline for Stocker Award Is April
30
You still have time to nominate your own or a peer's
program for the first National Stocker Award (NSA), and the chance for
the $10,000 cash prize. But time is growing short.
Competition is open to any stocker or backgrounding operation that
derives the majority of its cattle income from stockering or
backgrounding cattle. Operations can be nominated in one of three
divisions:
- Summer Stocker operation (forage-based)
- Fall/Winter Stocker operation (forage-based)
- Backgrounding/Dry lot Stocker (feed-based)
BEEF magazine developed the contest as a way to recognize the top
stockers and backgrounders in the nation. Moreover, the notion is to
share with others the strategies and practices of the winners so that
other operations can also benefit. The cash prize and trip to the
National Cattlemen's Beef Association annual convention for the winner,
sponsored by Elanco Animal Health, is the icing on the cake.
You can find an application and detailed instructions at: www.beef-mag.com.
If you have any questions, contact Steve May, publisher of BEEF
magazine at 1-800-722-5334.
By way of clarification, if you are involved in all three enterprises,
perhaps with the same group of cattle, nominate the group in the contest
in the division where the cattle performed the strongest and returned
the most to the bottom line. The judging committee, consisting of
stocker experts from industry and university extension, will contact
applicants if they have questions about whether a nomination fits a
particular division or should be moved to another.
The deadline for applications is April 30.
News
Energy Prices Put More Acres In
Soybeans
USDA's 2006 "Prospective Plantings" estimates projects
U.S. farmers will plant record soybean acres and fewer corn acres this
year. Soybeans are expected to claim 76.9 million acres in 2006, up 7%
from 2005. Large increases are expected in the Corn Belt, including
600,000 more acres in Illinois, and 500,000 more acres in Indiana.
Meanwhile, corn plantings are expected on 78 million acres in 2006, down
5% from 2005. This would be the lowest corn acreage since 2001.
In addition, wheat is expected to total 57.1 million acres, down
slightly from 2005. This will be the lowest wheat acreage since 1972.
USDA says farmers are switching from corn to less input-intensive crops
due to high fertilizer and fuel costs.
Government Predicts Rise In Fuel
Prices
The Energy Information Agency (EIA) short-term energy
outlook for summer 2006 isn't sunny. The April 11 report projects diesel
and gas prices to both average $2.62/gal. this summer. Diesel's 2005
summer average (April-September) was $2.59/gal.
EIA attributes the rise to the world's growing oil consumption, as well
as new federal rules for both diesel and gasoline. The transition to
ultra low-sulfur diesel is "possibly the most difficult fuel
specification transition the refining industry has had to make so far,"
the report says, with the transition resulting in "increased production
costs and distribution complexity."
Increased diesel demand from China and Europe is another contributor, as
diesel fuel consumption is expected to increase about 3.2% over summer
2005.
Though hurricane season is still a couple of months away, oil prices
this week resembled post-Katrina levels. Oil price eclipsed$70/barrel
yesterday on the New York Mercantile Exchange before settling back down
around the $60 mark. The all-time high for oil is the Hurricane
Katrina-induced $70.85/barrel in early September 2005.
National Beef To Roll Out Natural
Angus Product
National Beef® plans to introduce
NatureSource™ Natural Angus Beef to its retail customers
this month. The program complements the 2004 launch of the firm's
Naturewell™ Natural Beef brand.
A company news release says the new program uses only "U.S.- born Angus
cattle raised on 100% vegetarian diets. The program's cattle never
receive antibiotics or added hormones at any time." The firm says its
proprietary NatureSource Verification System™ ensures
the program's corn-fed Midwest cattle meet strict quality standards and
follow strict humanely raised and handled guidelines. National Beef
Packing Company LLC (www.nationalbeef.com) is the nation's fourth
largest beef processor, and the largest in the U.S. with beef producers
holding majority ownership. Its sales exceed $4 billion annually and 12%
market share.
Markets
After A Good Start, 2006 Softening
For Feedlots
The years 2002-2005 were generally profitable for cattle
feeders, says Dillon Feuz at www.lmic.info. The University of Nebraska
economist says 2006 will likely be much different, with losses some
weeks possibly exceeding $150/head.
How do these returns compare to historical returns? Feuz modeled weekly
feedlot returns for Nebraska based on average Nebraska feeder cattle
prices and Nebraska fed cattle prices. For the 2000-2002 period, Feuz
estimates feedlots averaged a $40/head loss. During the 4th quarter of
2001 and the 1st quarter of 2002, losses averaged $115/ head, with one
week seeing losses of more than $200/head. In contrast, he estimates
average profits were $80/head sold from 2002-2005.
Feuz says feedlots found the first few weeks of 2006 profitable but
returns have been negative since February. At current fed-cattle price
levels, he estimates losses of about $90/head.
If cash prices follow the CME Live Cattle board and decline into the
mid-to upper-$70s in the next couple of months, he says losses likely
will average more than $125/head. Feeder prices have declined some in
recent weeks, but Nebraska feedlots may not generate positive returns
until the 4th quarter of 2006, he adds.
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