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Demand, not supply, is the key in the short term. The possible
exception to this statement could be the oil markets, where a major
disruption in Middle East production, or a hurricane hitting U.S.
coastal production facilities and/or refineries, could drive the market
because of supply concerns.
It was China and surging world demand that led the push in oil price;
conversely, a softening economy and escalating prices have served to
decrease demand, which has resulted in the lowered prices of late.
In the corn market, crop conditions are actually running above year-ago
levels. And while the crop isn’t expected to be as large as last
year’s, it’s likely to be among history’s largest.
In the beef market, numbers are expected to tighten moving into the
fall; supply isn’t a concern on either the fed or calf side. Instead,
all eyes are on demand.
The trends have been moving in a positive direction in the corn and oil
markets, as higher prices have worked to ration supply and decrease
demand. The trend appears more neutral on the fed side as beef demand
has remained solid. Robust demand could see the market set all-time
highs this fall, but we may see lower prices if the slumping economy
weakens beef demand. On the calf side, supplies will remain relatively
tight; excess capacity in the feeding and packer segments will keep
buyers from buying any profits.
Conversely, supply is the key in the long term. In the energy markets,
demand will only increase as China, India and other developing countries
grow, and the U.S. economy eventually rebounds. OPEC and its pumping
rates, as well as new drilling, new technologies and other sources of
new energy, will determine the supply-demand ratios.
It is concern about supply – not demand – that is making the packing
and feeding industries anxious. JBS even went as far as setting up a
banking system for cattle producers in an effort to increase production.
-- Troy Marshall
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This debate over supply (discussed in the item, “Demand, Not
Supply, Is The Key In The Short Term,”) is now front and center in
national politics and promises to be for quite some time.
-- Click on headline to read the rest of this
story by Troy Marshall
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Economists everywhere are talking about the dramatic shift in
consumer attitudes and behavior that’s been driven by the recent
problems in the economy. Shifts of this magnitude usually have lasting
effects.
The buying habits and attitudes of consumers have changed dramatically,
and everyone is trying to figure out which ones will be discarded when
the economy recovers, and which will have staying power. Some of these
trends potentially have ramifications for the beef industry.
We’ve seen a shift away from national brands to store brands, away
from department stores to discount chains, away from Choice beef to
Select and the list goes on. Right now, we know that cost has moved way
up the consumer’s priority list. It’s no longer a stigma to buy at
Wal-Mart; it’s a badge of honor. Meanwhile, luxury-car companies are
revamping their marketing strategies to depict their product less as a
sign of prestige and comfort, but rather safety, fuel economy or the
like.
Fewer meals are being purchased at restaurants with more being purchased
for home use. The cow-calf sector, and particularly the seedstock
business, have adopted a Depression-like mindset, where cutting costs is
once again taking precedence over raising value.
A correction in housing values, and exploding food and fuel prices
shouldn’t be compared to the Great Depression - after all, the economy
has yet to post a single quarter of negative growth, and overall
inflation and unemployment has remained relatively in check. But those
who lived through the Great Depression still to this day are extremely
frugal, and this downturn may end up being similar in that it didn’t
affect specific segments of the economy, but is more widespread.
The biggest change right now is the loss of optimism in the economy, not
only currently but long-term. With food prices soaring, consumers
aren’t spending any less on food, but they are changing their eating
habits and cutting back in other areas.
American car companies are shutting down truck and SUV production,
anticipating that smaller, more fuel-efficient cars will be in demand
well into the future. And we’re seeing similar trends in the beef
side, with the chuck and round seeing far more demand growth than demand
for the more expensive loin cuts.
-- Troy Marshall
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Adding sizzle to grilling
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choose beef for grilling. From co-marketing partnerships with Kraft
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radio advertising, your checkoff reminds people to add sizzle to
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To address consumer concern about the care ranchers and farmers give
their animals, the American Farm Bureau Federation (AFBF) has launched
the “Conversations on Animal Care” initiative.
So far, the effort has trained 125 farmers and ranchers from 10 states
on ways to share their stories with consumers. Around 180 will be
trained by year’s end, according to Don Lipton, AFBF public relations
director.
In a national online survey conducted in January, nearly 3,500 voters
were asked if they agreed or disagreed that “Farmers and ranchers in
your state treat their animals humanely.” A majority of respondents
– 57% – either agreed or strongly agreed with the statement. When
exposed to a series of educational statements and messages about
food-animal production, however, 72% of respondents agreed or strongly
agreed that producers are good caretakers. In addition, 34% were not
sure.
What’s more, while veterinarians, ranchers and farmers scored very
high as a credible source of info on animal care, so did the Humane
Society of the U.S.
Therefore, the campaign focuses on positive messages, Lipton says,
rather than negatively attacking animal rights activists. Those messages
include: healthy animals mean healthy food; farmers and ranchers care
deeply about the health, well-being and safety of their animals;
standards of animal care should be set by experts, such as
veterinarians; and changes to animal care guidelines should be based on
data and science.
For more info, go to www.conversationsoncare.com.
-- Burt Rutherford
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The Samuel Roberts Noble Foundation’s Ag Division and Oklahoma
Extension will host the 18th annual Southern Plains Beef Symposium Aug.
9 at the Ardmore Convention Center in Ardmore, OK.
Entitled “Coping with the Times, Higher Cost and Tighter Margins,”
symposium speakers will discuss how they and other farmers and ranchers
are coping with the challenges of increased input costs related to the
higher cost of energy. Speakers include: Bob Woods, Oklahoma Extension
agronomy specialist; Job Springer, Noble Foundation ag economist; Yates
Adcock, Middle Creek Ranch manager in Dustin, OK; and Scott Brown, Food
and Ag Policy Research Institute (FAPRI) director.
An afternoon panel discussion includes: Jack Cunningham, Cunningham
Ranch, Springer; Terry Stuart Forst, Stuart Ranch, Waurika; Jim Howard,
Howard Cattle Company, Ringling; and Steve Jones, Sooner J. Ranch, Rush
Springs. Panelists will highlight their operations and detail their
coping strategies for higher energy costs and other challenges.
Registration is $25/person ($30 at the door) and includes a prime rib
lunch. For more info or to register, contact Tracy Cumbie at
580-224-6411 or email tlcumbie@noble.org.
-- Noble Foundation release
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The checkoff-funded National Beef Ambassadors are sponsoring a photo
contest. Focusing on the theme that showing cattle encourages good
stewardship of our animals, first place wins a digital camera, while
second place gets a beef shirt, and third place a beef checkoff hat.
Entry deadline is Oct. 1.
The assignment is to capture those little moments, such as washing the
animals, leading them around, or any other picture-worthy scene that
exemplifies how well the animals are being taken care of. The photo
should “show” how involvement with beef cattle production encourages
good animal welfare.
Entrants should send their photo submissions via e-mail to raisingthesteaks@gmail.com,
including their email address for follow-up contact. Feel free to
include a caption about the picture.
Photos will be judged according to how well they meet the objective and
portray the mission; winners will be notified via e-mail.
For more on the National Beef Ambassadors, visit www.nationalbeefambassador.org
or www.raisingthesteaks.com.
-- National Beef Ambassadors release
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It’s becoming rather tiresome – the war of words and press
releases as to whether the diversion of millions of bushels of grains to
biofuels production has been a major factor in the steep increase in
food prices.
-- Click on headline to read the rest of this
story by Hembree Brandon, Farm Press
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With fall just around the corner, oats could be the answer for some
extra grazing in late September and October.
Bruce Anderson, University of Nebraska-Lincoln Extension forage
specialist, says oats may be one of our most under-used fall forages,
but it offers a lot of advantages. For starters, it grows fast, thrives
under cool fall conditions, has good feed value, and can produce over
two tons of hay or pasture yet this year. Plus, it dies out over winter,
so it protects soil without causing planting problems next spring.
To plant oats, Anderson recommends drilling about 3 bu./acre of oats in
early August for maximum yield potential. A fully prepared seedbed
usually is best, but oats can be planted directly into wheat stubble or
other crop residues if weeds are killed ahead of planting.
“Even flying oats onto corn fields severely damaged by weather or to
be chopped early for silage can work, although rye tends to work better
for flying on seed. Avoid fields with herbicide carryover, and top-dress
40 lbs/acre of nitrogen, unless the previous crop was heavily
fertilized,” he says.
With good moisture, oats will be ready to graze 6-8 weeks after
emergence. Calves and yearlings can gain more than 2 lbs/day, but be
careful to avoid grass tetany on lush oat pasture, he warns. Ask your
veterinarian if you should supplement with magnesium.
“Also, don't suddenly turn out on oat pasture if livestock have been
grazing short or dry pastures. Sudden respiratory problems can occur,”
Anderson says.
For hay production, cut the oats soon after the plants begin to dry out
following a killing freeze, or cut earlier if plants reach a desirable
growth stage. Because oats can accumulate nitrates, it’s advisable to
test the hay before feeding.
“If you have good soil moisture, give fall oats a try. Some of your
best forage growth may still be ahead of you,” Anderson says.
-- Bruce Anderson, Hay & Forage Minutes
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In a court order that had both sides claiming victory, Judge John C.
Coughenour of the U.S. District Court, Western District of Washington in
Seattle, on Thursday gave cattle producers some limited relief by
allowing them to hay and graze Conservation Reserve Program (CRP) acres.
-- Click on headline to read the rest of this
story by Burt Rutherford
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The U.S. average retail price for regular gasoline dropped 4.9¢ to
$4.064/gal. for the week ending July 21. Meanwhile, the U.S. average
retail diesel price fell for the first time since June 30, slipping
4.6¢ to $4.718.
Gasoline was down in all but the Rocky Mountain area. The East Coast
shaved 2.7¢ to $4.044, the Midwest cut 8.5¢ to $3.981, the Gulf Coast
fell 2.9¢ to $3.942, and the Rocky Mountain region added .8¢ to settle
at $4.105. The West Coast shaved 5.2¢ to 4.363, and California dropped
6¢ to $4.46/gal., or $1.342/gal. more than a year ago.
Diesel decreased in all regions from the record highs of last week. The
East Coast was down 4.9¢ to $4.773, Midwest 4.9¢ to $4.649, Gulf Coast
3.6¢ to $.4701, Rocky Mountains 0.4¢ to $4.714, and the West Coast
6.4¢ to $4.845. California slid below $5 for the first time since June
30, falling 6.2¢ to $4.964/gal.
-- U.S. Energy Info Administration
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With skyrocketing production costs and tough consumer economic
conditions, the beef industry is facing challenging times. But do those
margin-squeezing conditions make a case for or against participation in
value-added beef alliances?
-- Click on headline to read the rest of this
story by Amanda Nolz
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The Senate Appropriations Committee passed the 2009 ag
appropriations bill. It provides $20.435 billion in discretionary
spending, which is 11% more than in fiscal year 2008 and about $1.8
billion over the administration’s request. The bill also provides
$76.8 billion in mandatory spending for farm payments, food stamps and
other nutrition programs. The bill includes:- Food safety – the
Food Safety and Inspection Service receives $972.6 million, $43.4
million above last year.
- Research – USDA’s Ag Research Service will receive $1.134
billion, an increase of $13.043 million over last year and $97.1 million
above the administration’s request.
- The Foreign Market Development (FMD) and Market Access Program (MAP)
– FMD is fully funded at $34.5 million, while MAP is fully funded at
$200 million.
- User fees – the bill doesn’t contain the administration’s
proposed user fees for meat and poultry inspection.
- USDA computers – $67.650 million is given to USDA’s Farm Service
Agency and Rural Development to upgrade the “failing” info systems
to help implement the farm-bill programs.
-- P. Scott Shearer, Washington, D.C. correspondent
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“The rising costs of production have largely been absorbed by
livestock producers so far,” says Jim Mintert, Kansas State University
(KSU) Extension livestock marketing economist, “but that can’t
continue indefinitely. Ultimately, higher prices throughout the
marketing chain will be required to offset the large increase in
production costs.”
Mintert says increases in feed-grain and protein-supplement prices,
along with increases in forage-production costs, will push total feed
costs above $400/cow this year, a 40% increase in just two years. And
producers are at the tipping point – anticipated increases in feed
costs for 2008 “will almost certainly push returns below variable
production costs,” he says.
That will spark herd reductions and encourage some producers to exit the
industry, he says.
“If beef demand – especially export demand – doesn’t increase
enough to boost beef and cattle prices high enough to offset the rise in
production costs, the industry will shrink in size to the point that
fewer pounds of beef are marketed to U.S. and international
consumers,” he says. “The magnitude of the supply shift will depend
on how rapidly beef exports recover and on whether feed grain prices
continue to increase or they stabilize at current levels.”
Either way, the next few years will be telling on the beef industry.
“Looking ahead, the U.S. beef industry could be facing several more
years of herd reduction before prices rise sufficiently to offset the
new production cost regime.”
-- KSU release
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Turnips make for some great extra grazing, says Bruce Anderson,
University of Nebraska-Lincoln Extension forage specialist, in his
latest Hay & Forage Minutes.
-- Click on headline to read the rest of this
story by Bruce Anderson, University of Nebraska
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The beef industry has a new “bulls-eye” consumer in its sights.
Called an influential food and health-involved consumer, this category
of beef eater has the potential to influence a lot of their peers –
either toward beef in the diet or away from it.
And that’s why the beef industry is targeting them, says Laura
Pelegrin with Pelegrin-Gray Research in Glendale, CA.
These consumers are a bold, formidable, knowledgeable, opinionated and
highly focused set of individuals, she says, and are indisputable
frontrunners at their workplace and within their social circles in
accumulating and dispensing information about food, health and
nutrition. Fortunately for cattlemen, these consumers are positive in
their perceptions of beef.
What’s more, there is still room for growth in their beef consumption,
if the beef industry can compete effectively with other protein sources
and address their concerns about the balance of taste and nutrition,
food safety and saturated fat.
To address those concerns, Pelegrin says the beef industry must advance
the idea that beef protein is a good source of fuel for the body and
convey the message that beef nutrition, including specific nutrients in
beef, can help create the “balance” for beef’s strong taste
profile.
-- Burt Rutherford
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The Senate Ag Appropriations bill prevents the importation of
livestock from Argentina until USDA can certify that Argentina is free
of foot-and-mouth disease (FMD). The provision is taken from Senators
Tim Johnson (D-SD) and Mike Enzi’s (R-WY) legislation, the “Foot and
Mouth Disease Prevention Act of 2008,” which was introduced earlier
this month. Johnson said, “FMD is a highly contagious and destructive
disease, and we can’t risk the health of our livestock herds for
questionable imports from Argentina.”
Enzi’s website says he and Johnson developed the legislation after
hearing from constituents concerned about the USDA’s plan to allow
cattle, sheep and swine and certain livestock product imports from
Patagonia, a region within Argentina that is free of FMD, though it is
found in surrounding regions and countries. Argentine commenter Muriel
Elizabeth Hayes points out there has never been an FMD case in Patagonia
and the restriction is akin to “blaming the U.S. for problems in
Mexico.”
Meanwhile, Representatives Stephanie Herseth Sandlin, D-SD, and Barbara
Cubin, R-WY, introduced a similar measure into the House. It prohibits
importation into the U.S. of ruminants and swine from Argentina, as well
as any fresh, chilled or frozen meat or product of any ruminant or swine
born, raised or slaughtered in Argentina until USDA certifies every
region of Argentina as free of FMD without vaccination.
-- P. Scott Shearer and Joe Roybal
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According to a recent poll by Greenberg Quinlan Rosner Research and
Public Opinion Strategies, registered voters, by a 2-1 margin, favor
increased use of ethanol. The poll found 59% favor increased use of
ethanol in the nation’s fuel supply, while 30% oppose increased use.
The poll also asked voters whom they most blame for rising food costs in
the U.S. and the world. The results were:- 49% – increased cost
of gasoline.
- 11% – increased commodities speculation.
- 8% – increased use of grain for ethanol.
- 8% – corporate takeover of feed production.
- 7% – increased demand in China and India.
- 7% – severe weather.
- 2% – none.
- 5% – all.
- 3% – don’t know or refused.
-- P.
Scott Shearer, Washington, D.C. correspondent
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A USDA’s Inspector General’s report says horses and animals
intended for meat inspection have entered the U.S. without inspection by
USDA’s Animal and Plant Health Inspection Service (APHIS). According
to the report, APHIS has no effective and adequate system for approving
animals and making certain they go to their proper destinations. In
addition, APHIS needs better control over USDA seals that go on
shipments of approved animals, the report says.
-- P. Scott Shearer, Washington, D.C.
correspondent
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Meat goats are gaining popularity among cattle graziers as income
diversification and a tool for pasture brush and weed control. Caring
for, breeding and feeding them is the focus of the second annual North
Central Tri-state Meat Goat Conference set for Sept. 26-28 in
Alexandria, MN.
Among the topics of discussion are goat health, nutrition, breeding
management and artificial insemination, selection of meat goats for
breeding stock, show tips and techniques, and Midwest marketing
strategies and opportunities. In addition to educational workshops and
demonstrations, conference participants will be able to visit with
vendors, meet and socialize with other meat goat producers and attend a
Texas-style meat goat barbecue. The conference concludes with a "best of
the best" Boer goat sale.
Sponsored by Extension personnel from North Dakota State University, the
University of Minnesota and South Dakota State University, learn more at
www.extension.umn.edu/meatgoats.
-- University of Minnesota Extension
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Researchers at the University of Nebraska-Lincoln (UNL) and Iowa
State University are involved in promising beef-quality research.
UNL scientists have developed a way to predict steak tenderness,
which would make possible a guaranteed-tender label. The system consists
of a digital video camera and spectrograph to capture the two key
qualities that affect beef tenderness, muscle structure and biochemical
properties.
Current USDA grading classifies beef carcasses by quality and yield but
doesn’t assess tenderness. A tenderness measure could provide
producers with a financial incentive to supply a tender product. Go to:
ianrnews.unl.edu/static/0806020.shtml
to learn more.
Meanwhile ISU is researching opportunities to advance the
nutritional value of meat. The project is assembling experts on
molecular genetics, biochemistry, meat science and animal breeding to
identify cattle genetics that lead to desired nutritional traits in
beef. Go to www.ag.iastate.edu/aginfo/news_detail.php?var1=642
to learn more.
-- National Meat Association’s Lean Trimmings
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