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News
Canada Confirms New BSE Case
Canadians confirmed an eighth case of BSE in that
country last Wednesday, this one in a mature cow they believe was either
born just before the ban on feeding mammalian protein or during the
program's early stages.
A day later, the Canadian Food Inspection Agency (CFIA) completed its
investigation into the seventh BSE case there -- confirmed July 13 -- in
a cow born after the ban. As to the completed investigation, CFIA
officials say: "A particular incident was documented in one commercial
feed facility that may have permitted the contamination of a single
batch of cattle feed with prohibited material. The entire batch of feed
was shipped to the BSE-positive animal's farm. While the investigation
looked at all possible routes of exposure, this particular batch of feed
is the most probable source of infection. The CFIA has launched an
enforcement investigation."
As for the effectiveness of Canada's feed ban, CIFA reports,
"Investigators observed good levels of compliance with the feed ban at
the farm, retail and manufacturing levels... In 2005, Canadian and
American officials reviewed and confirmed the effectiveness of Canada's
feed ban. In addition, the surveillance program continues to indicate
the feed ban has prevented the level of infectivity in Canada from
increasing. Nonetheless, the extremely small infective dose of BSE means
even very limited opportunities for contamination may permit periodic
cases."
You'll recall that, following discovery of the seventh case, USDA
delayed final rulemaking to expand Canadian imports to include cattle
over 30 months of age and the beef from them. There's no telling how the
completed investigation and the more recent discovery will impact the
proposed rule.
According to USDA officials on Friday, "USDA participated in the
investigation and we're now reviewing the report to determine whether it
impacts the Department's proposed minimal risk rule."
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Weather And Crops
Drought Stalls Herd
Expansion
"Cow-harvest rates have picked up dramatically,
indicating nationwide cowherd expansion has essentially stopped. In
fact, if recent trends continue, the Jan. 1, 2007, U.S. beef-cow
inventory could be slightly below 2006's," say Livestock Marketing Info
Center (LMIC) analysts.
"The lack of moisture combined with concerns for tight forage supplies
this winter has resulted in a larger number of cull beef cows in the
harvest mix than under normal circumstances," say the LMIC folks. "At
the same time, dairy-cow harvest has also increased in past weeks, not
only due to tighter supplies of quality forage but also lower milk
prices."
As Derrell Peel, Oklahoma State University Extension livestock marketing
specialist, explained in a recent newsletter, "So far in 2006, the
numbers suggest cow culling in the state could be running 1.5 to 2%
higher than last year and we haven't even gotten into the traditional
culling season. Many producers are just now assessing forage and hay
availability and needs, along with water supplies, and there's no doubt
more culling will occur."
What is most surprising about all this, Peel adds, is how well markets
have held up.
"Feeder prices are steady to stronger and are likely to have less than
usual tendency for seasonal weakness this fall. Cull cows have softened
somewhat, but surprisingly little given the increased culling numbers
we're seeing. I continue to worry most about potential impacts on the
cull-cow market this fall. That seems to me to be the greatest risk for
prices to show classic drought impacts," Peel says.
Though rains last week in some of the most parched areas of the South
and Southwest boosted spirits, the die is likely cast.
For the week ending Aug. 20, according to the National Ag Statistics
Service (NASS).
- Corn -- 82% is at or beyond the Dough
Stage, compared to 78% last year and 71% for the
five-year average. Doughing was at or ahead of normal in all states,
except Kansas. 44% has entered the Dent Stage, which is 6% ahead of last year and 11% ahead of
average. 57% is rated Good or better, compared to 50% last year.
- Soybeans -- Acreage setting pods or beyond
advanced to 93% of the acreage, 1% behind last
year, but 5% ahead of normal 4% of the acreage was
dropping leaves, 2% ahead of last year and the
five-year average. 58% is rated Good or better; 52% was at the same time last year.
- Spring Wheat -- 82% of the crop is in the
bin, which is 25% ahead of last year and 29% ahead
of the five-year average.
- Barley -- Harvest advanced to 72% complete, compared to 61% at this time last year and 53% for
normal.
- Oats -- 96% of the acreage is harvested, compared to 91% last year and 84% for average.
- Sorghum -- 83% of the acreage is in the heading
stage, which is 2% behind last year but 2% ahead
of normal. 45% was at or beyond turning color, 6% ahead of last year and 5% ahead of normal. 30% is ranked Good or better, compared
to 41% last year.
- Pasture -- 19% is rated Good and 3% is rated
Excellent, compared to 31% and 4%, respectively
last year. 26% is rated Poor and 25% is ranked Very
Poor, compared to 21% and 11% respectively at the
same time last year.
States with the worst pasture conditions -- at least 40% of the acreage
rated poor or worse -- include: Alabama (77%); Arizona (70%); Arkansas
(63%); California (57%); Colorado (50%); Georgia (56%); Kansas (53%);
Louisiana (41%) ; Minnesota (47%); Mississippi (55%); Missouri (73%); Montana (43%); Nebraska (66%); Nevada (56%); North Dakota (71%); Oklahoma
(85%); South Dakota (66%); Texas (78%); and Wyoming (75%).
States with the lushest pasture conditions -- at least 40% rated good or
better -- include: Idaho (49%); Illinois (48%); Indiana (65%); Kentucky
(54%); Maine (89%); Maryland (50%); Michigan (57%); New York (61%);
North Carolina (46%); Ohio (65%); Utah (54%); Washington (56%); and West
Virginia (42%).
Stocker Business
Drought Taking Billion-Dollar
Toll
"Three-fourths of the land in range and pasture is too
dry to produce much grazing or hay that's harvestable. Without rain
soon, livestock herds will face further liquidation," says Carl
Anderson, Texas A&M University (TAMU) Extension economist and professor
emeritus, in a recent edition of TAMU's AgNews publication.
Anderson says rising hay and supplemental feed costs are forcing many
ranchers to liquidate herds, while lack of water has forced some to sell
out completely. He explains "Cattle sales are up sharply from a year
ago. The reduction in herd size will curtail beef supplies for several
years.The lack of adequate nutrition for cows also means a smaller calf
crop next year."
What's more, according to TAMU analysts, ag lenders are reporting fewer
loan repayments and greater demand for loan renewals and extensions from
a year ago, according to the Federal Reserve Bank's Second Quarter 2006
"Survey of Ag Credit Conditions." Producers are collecting insurance
based on individual coverage on dryland crops, and many cow-calf
operators have taken out larger loans because of higher feed costs.
"Others have sold their herds due to limited water and forage," Anderson
says. "High energy prices have substantially increased production costs
to further stress an already depressed production environment. Some crop
and cow-calf operators can't financially withstand more losses and will
be forced to seek other jobs or business alternatives."
All told, estimated drought losses for Texas have reached $4.1 billion,
eclipsing the $2.1-billion mark set in 1998, according to Texas
Cooperative Extension economists.
Crop losses are estimated at $2.5 billion and livestock $1.6 billion,
the report says. The current drought equals the multi-year dry period of
the 1950s, and could go down as the worst ever if substantial rainfall
isn't received by the end of the year, say Extension officials.
"Most of North Texas, East Texas and the Coastal Bend were in various
stages of drought since May of last year, and hay supplies were depleted
maintaining livestock over the summer and winter," says Travis Miller,
TAMU Extension agronomist. "Much of the corn and soybean crops have been
harvested for silage or hay; pastures are bare and hay barns are empty.
Much of the hay being fed is from out-of-state or along the upper coast,
which has received favorable rains. Livestock water supplies are
disappearing and ranchers are unable to sustain herds with purchased hay
and dry tanks."
The driest regions in Texas are the Panhandle, Southern High Plains and
Rolling Plains, Northeast Texas and the Lower Rio Grande Valley.
Beyond the Lone Star State, Derrell Peel, Oklahoma State University
Extension livestock marketing specialist, reports: "Emerging market data
continues to confirm the significant impacts drought is having on cattle
numbers in Oklahoma. Feeder cattle marketed in the eight federally
reported auctions in Oklahoma are up 6.1% for the year to date compared
to 2005. Since July 1, feeder marketings have been up by more than
65,000 head. This despite the fact that the Jan. 1 estimated feeder
supply in Oklahoma was down by 30,000 head. Clearly the increased summer
marketings are mostly early movement of 2006 calves rather than yearling
stockers."
Peel goes on to explain, "This pattern has been confirmed in the last
Cattle on Feed report which indicated a large increase in July
placements compared to last year, with the largest increase in the
cattle under 600-lbs. category. Given the Oklahoma numbers it appears
August feedlot placements could follow a similar pattern.
"These changes in the timing of cattle marketings suggest several
implications for the remainder of 2006. First, fall runs of weaned
calves should be smaller than previously expected. Second, should we
manage to get some wheat pasture, there will be a smaller supply of
stocker calves available to fill wheat pasture. Third, feeder supplies
will stay tight for the rest of the year and into 2007, especially if we
should be able to establish some winter grazing on wheat," he says.
You can find the complete TAMU report at agnews.tamu.edu/dailynews/stories/DRGHT/Aug1106a.htm
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Issues
National ID Process Remains
Muddled
Anyone hoping for answers and clarity at last week's
ID/InfoExpo -- a de facto national forum for discussing and developing
the national ID system -- surely walked away disappointed. Though USDA
Secretary Mike Johanns was on the docket and took questions from the
crowd, his answers remained vague and non-committal.
For example, Johanns repeatedly dodged questions about whether USDA's
intent was to make and maintain NAIS as a voluntary or mandatory
program. He stressed it's a voluntary program today and believes a
voluntary program is preferable. Yet USDA's NAIS Implementation Plan
(animalid.aphis.usda.gov/nais) issued in April
states in black and white that adopting mandatory regulations is a
contingency plan for producer participation.
Johanns also demurs from questions aimed at assessing what level of
voluntary participation is required for effective animal-health
trace-back.
Similarly, Johanns will not provide an answer about the system's cost,
other than alluding to the $83 million USDA has already poured into it.
One reason may be no such estimate exists, despite repeated requests
from the industry for a cost-benefit analysis.
In a separate one-on-one interview, Chief Veterinary Officer, John
Clifford, was more specific, implying producers will be responsible for
purchasing and applying NAIS tags. He pointed out no state is currently
charging producers to register their premises with NAIS, which is a
prerequisite to obtaining official NAIS tags.
On the issue of money, there was no public mention of the General
Accounting Office's current investigation of NAIS at the behest of a
U.S. Senator. Nor was any mention made of the fact there remains some
question about whether the $33 million in federal dollars earmarked for
NAIS next year will be frozen until specific answers are provided to
Congress, as was stipulated in one of the appropriations bills awaiting
conferencing.
Other key questions still unanswered:
Who guarantees confidentiality? For obvious reasons, producers
are unlikely to provide any NAIS data if they believe it could be
accessed by anyone other than state and federal animal-health officials.
Johanns said, "I agree with livestock producers who believe information
about your livestock is your business, period."
Again, in a separate interview, Clifford was more specific. He explains
USDA has protected producer info from prying eyes and the Freedom of
Information Act via the Privacy Act. However, state animal-health
officials and others continue to emphasize the need for legislation at
both levels aimed at protecting NAIS data specifically.
What about working group recommendations? Each livestock species
devised its own working group to make NAIS recommendations to the
Secretary of Ag. Those from the Cattle Industry Working Group were
submitted months ago and have yet to receive approval or denial from
USDA. That means anything beyond premises registration remains
speculation. In turn, that means few producers are likely to begin
tagging cattle with NAIS tags until species-specific recommendations are
adopted.
Is it all for all and one for all? Cattle and swine are more
advanced in NAIS development than any of the others. Some other species
are just getting started, while others continue to dig their feet in
against elements of the program. It's difficult to imagine cattle
producers embracing a program like NAIS if other species are allowed to
sit on the sidelines.
Do you know what you're talking about? The cooperative effort
between the livestock industry and the state and federal animal-health
officials charged with protecting those industries emphasized the need
for a national system for animal health purposes. Yet Johanns continues
to harp on his belief the market will drive NAIS adoption, that there
are already economic incentives in the domestic and international
markets to provide ID.
It's true that in isolated circumstances a few producers are able to
command a higher price for source verification or other process
verification tied to ID. Even if the economic incentives were high and
widespread, NAIS isn't about those things. It's about the nation's
ability to better protect its livestock industry, period.
Perhaps the most positive outcome of the meeting was a public display of
the livestock industry's ongoing resolve to develop and implement a
national animal ID system for the purpose of protecting the nation's
livestock. In an informal survey of the 600 meeting participants, 78%
believe such a system is so imperative to protecting the livestock
industry that it should be made mandatory.
Events
Sign Up Now For BEEF Quality
Summit, Nov. 14-15
Sign up now at www.beef-mag.com for BEEF magazine's 2006
BEEF Quality Summit. The Nov. 14-15 workshop in Oklahoma City's
Clarion Hotel aims to provide attendees with the background, tools and
the environment to make the connections for involvement, and the
potential rewards offered, in the new beef-value chain.
The first day's program is devoted to outlining the opportunity
available in the new beef-value chain, the second to how to link your
production into that chain. Among the topics to be discussed are:
- How U.S. beef consumers define quality.
- Quality, profit and the cattle cycle.
- International competition and opportunities for U.S. quality
beef.
- Current international beef trade opportunities.
- Producers will discuss how they're paid for quality.
- Selecting a marketing partner.
- A value-chain production and marketing workshop -- attendees will
learn how to match their production with available markets for the
cattle, and management adjustments needed to make the "next" calf crop
fit a chosen market.
- Linking up with a marketing partner -- an opportunity to meet with
participating marketing channel reps.
For more detail, visit www.beef-mag.com and click on the "BEEF
Quality Summit" box in the top right corner of the opening page.
South Dakota Grazing School Set For
Sept. 12-14
A three-day intensive, hands-on grazing school is set
for Sept. 12-14 at the CLC Ranch in Oacoma, SD. The short course,
"Managed Grazing: Pathway to Profit," will provide participants with
hands-on training in pasture allocation, improved knowledge of
principles of grassland productivity, and the opportunity to network
with other grazing lands managers.
The school is limited to 30 participants. Cost is $150/person and
includes resource materials, two breakfasts, three lunches, two dinners
and breaks. For more info, call Mindy Hubert at 605-394-2236.
Other Events
Sept. 28 -- Kansas State University (KSU) Beef
Stocker Conference, KSU Beef Stocker Unit, Manhattan, KS. For more info,
call 785-532-1267.
Feb. 13-14 -- Mid-South Stocker Conference, Cave City, KY,
presented by the University of Kentucky and the University of Tennessee.
For more info, visit www.midsouthstocker.org. You can also contact Jim
Neel at 865-974-7294 or jneel@utk.edu; John Bartee at
931-648-5725 or jbartee1@utk.edu; or John T.
Johns at 859-257-2853 or jtjohns@uky.edu.
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Markets
Boom or Bust Bidding
Just like the weather extremes that have defined the
past year, last week was a case study in the stocker and feeder market
taking a sizeable jump or a steep drop.
Try this on for size: According to reporters from the Ag Marketing
Service (AMS), last week's sales ranged from $3 lower to a whopping $10
higher depending on location. Overall, the market was called steady to
$2 higher.
"The really rough spot in this week's market picture was a $5 drop in
boxed-beef cutouts," AMS analysts say, but point out the direct feedlot
trade, finally under way by Friday afternoon in Nebraska, was $1 higher
than the previous week at $87. For the week, the average price was on
par with the previous one at $85.59 for steers and $85.66 for heifers.
The average price for both at the same time last year was $79.07.
The summary below reflects the week ended Aug. 25 for Medium and Large 1
- 500- to 550-lb., 600- to 650-lb., and 700- to 750-lb. feeder heifers
and steers (unless otherwise noted). The list is arranged in descending
order by auction volume and represents sales reported in the weekly USDA
National Feeder and Stocker Cattle Summary:
Summary Table
| State | Volume | Steers | Heifers
|
| Calf Weight | 500-550 lbs. | 600-650 lbs. |
700-750 lbs. |
500-550 lbs.
| 600-650 lbs. |
700-750 lbs. |
| OK |
34,100 | $129.92 | $123.04 | $118.81 | $117.57 | $114.11 | $109.66 |
| TX | 33,100 | $118.00 | $113.45 | $106.74 | $111.53 |
$103.77 | $106.43 |
| MO | 28,700 | $131.14 | $126.97 | $117.73 | $120.87 | $116.30 | $108.07 |
| KY* | 18,100 | $117-125 |
$108-118 | $103-1135 | $10-115 | $99-1083 | $94-1045 |
| Dakotas | 17,400
South Dakota
North
Dakota |
$1305.63
** |
$126.16
$128.02 |
$126.32
$123.83 |
$124.95
**
|
$117.404
**
|
$114.42
$114.59 |
| AL | 16,400 | $115-123 |
$108-1153 | $102-1065 | $108-116 | $102-108 | $94-1035 |
| NE | 12,800 | $138.19 | $126.29 | $125.66 | $123.592 | $117.624 | $116.88 |
| AR | 10,700
| $119.40
| $113.56 | $108.81 | $111.72 |
105.50 | $98.80 |
| TN* | 9,900 | $118.60 | $111.92 | $106.15 | $110.13 | $102.41 | $97.81 |
| FL* | 9,100 | $96-118
| $96-108 |
$97-1034 | $94-112 | $88-102 | $87-964 |
| GA*(***) |
8,700 | $103-123 |
$99-114 | $93-107 | $100-116 | $92-105 | $89-94 |
| MS* | 8,000 | $110-120 |
$100-110 | $90-1004 | $100-1101 |
$90-1003 |
** |
| Carolinas* |
7,000 | $102-125 |
$99-1153 | $95-1085 | $96-111 | $90-1053 | $78-955 |
| KS | 6,500 | $133.84 | $127.22 | $121.18 | $120.102 |
$115.61 | $114.09 |
| LA* | 5,900 | $108-119 |
$101-113 | **
| $103-118 |
$97-1102 | ** |
| WY* | 5,600 | ** | $121.744 | $116.83 | ** | $111.614 | $112.64 |
| VA | 3,100
| $122.992 | $115.75 | $112.804 |
$108.25 |
$106.17 | $106.054 |
| WA* | 2,500 | ** | $111.17 |
$106.11 | ** | $105.29 | $100.97
|
* Plus 2
** None reported at this weight or near weight
(***) Steers and bulls
NDNo Description
1500-600 lbs.
2550-600 lbs.
3600-700 lbs.
4650-700 lbs.
5700-800 lbs.
6750-800 lbs.
7800-850 lbs.
Contact
Questions & Comments
Please send questions to:
Wes Ishmael, Contributing Editor, BEEF Stocker Trends, at wesleysink@aol.com
Joe Roybal, Editor, BEEF magazine, at jroybal@beef-mag.com
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