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March 28th - Animal Disease Traceability Update

The federal Animal Disease Traceability (ADT) program is up and running, but challenges including inconsistencies in state requirements and mixed messages regarding program goals continue to slow progress toward true traceability. Those points were clear during the recent National Institute for Animal Agriculture (NIAA) conference in Indianapolis where the NIAA Animal Identification and Information Systems Council received an update from USDA officials and others.

Neil Hammerschmidt, ADT program manager for the USDA’s Animal and Plant Health Inspection Service (APHIS) provided a program overview and update. The ADT rule was published in January 2013 and the rule became effective on March 11, 2013. Today the program continues to build on the original program guidelines, Hammerschmidt says.

The ADT rule specifies that several classes of cattle travelling in interstate commerce must be identified with official ID and accompanied by traceability documents acceptable to the shipping and receiving states. These include all sexually intact cattle and bison over 18 months of age, all female dairy cattle of any age, all dairy males (intact or castrated) born after March 11, 2013 and cattle and bison of any age used for rodeo, shows, exhibition and recreational events. Feeder cattle under 18 months of age, by far the most common class of cattle traveling across state lines, are currently exempt from the ADT rule.

March 11, 2015 marked the end of a 24-month phase-out period during which producers could continue to use various identification tags, such as those using a “900” numeric prefix, as official identification. As of that date, only tags beginning with the 840 prefix and using the program’s official Animal Identification Number (AIN) system and the U.S. shield will be in compliance with the program for non-exempt cattle moving across state lines. Others such as 900 tags remain acceptable only if the animal was tagged prior to March 11.

Currently, APHIS is engaged in assessing the effectiveness of the ADT system in tracing cattle in the case of an animal-disease outbreak. These assessments include several performance measures such as determining the ability and time it takes to determine the state and premises of origin for an animal based on its ID and shipping documentation

Early in the program, APHIS conducted 255 trace exercises on cattle shipped interstate to establish baseline performance data. In determining the premises of origin, the success rate was 77 percent, but at an average time of 264 hours – far longer than the program’s goal of 24-hour traceback.

APHIS now is running a news series of trace exercises using updated standards and a new software system. By this August, the agency plans to have new assessment data to compare with the baseline performance numbers.

As for enforcement of ADT requirements, APHIS initially focused on educating producers and markets when animals were out of compliance, and began phasing in enforcement procedures in March 2014. Enforcement focused on repeat offenders, and so far, APHIS has issued 1,015 letters of information and initiated 33 cases with its Investigative and Enforcement Services (IES).

Hammerschmidt also outlined a number of ongoing challenges including inconsistencies between states in terms of required documents for importing animals and lack of producer awareness of program requirements, such as that they need to obtain an official premises identification number (PIN) to purchase official program ID tags.

Jack Shere, DVM, associate deputy administrator for APHIS Veterinary Services also addressed some of the program’s challenges.  He indicated USDA administrators and Congress want to see faster progress in the program at the state level, and said USDA currently is implementing a review of the ADT program. A high percentage of states, he says, have fallen behind in updating their ADT plans or “road maps,’ which serve as the basis for cooperative agreements with APHIS.

Shere also pointed out that APHIS is under pressure from other government agencies and industry over the lack of a comprehensive farm-to-fork traceability system and its impact on trade. Most of our competitors for international meat exports have such a system, and use it as leverage against the United States in trade negotiations. Some critical import markets, including China, cite our lack of traceability in refusing imports of U.S. beef.

International trade falls outside the official goals of the ADT program, which was designed to help minimize and contain potential disease outbreaks. Many in the industry however, believe we need a more comprehensive traceability program to help ensure future competitiveness in international markets.

Bovine Veterinarian

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March 27th - National Feeder & Stocker Cattle Summary
USDA-MO Dept of Ag Market News

RECEIPTS:  Auctions   Direct   Video/Internet    Total
This Week     215,800     52,600          2,400        270,800 
Last Week     265,700     32,100        25,600        323,400 
Last Year      224,300     70,600        35,200         330,100

Compared to last week, yearling feeder cattle traded firm to 5.00 higher with instances 6.00-8.00 higher. Direct sales were very active this week and posted the full advance on feeder cattle.  Steer and heifer calves sold mostly steady to 5.00 higher.  Buyers flexed their muscle in pursuing all classes of feeder cattle this week.  Improvements in the weather across the country also did its part in adding to the feeder cattle market, especially on calves and stocker cattle that are in suitable condition for immediate turn-out and compensatory gain on greening pastures.  The Southern Plains received rain and warm weather to help improve wheat crop conditions, and boost summer grazing interest on very good buyer demand. 

With “grass fever” in full swing following the warmer temperatures, market signals from late last week started finding confidence as most major salebarns noticed higher prices as farmer feeders and local backgrounders entered the mix.  Cattle feeding can be frustrating at times with expensive overhead, fluctuations in feed prices and volatile market prices but grazing cattle on grass can be just as satisfying and rewarding.  Inexpensive growth and gains are what backgrounders receive on pasture and what motivates cattlemen and farmer feeders to assemble their stockers each year.  At the St. Joseph Stockyards on Wednesday sold a string 105 head of fancy black steers weighing 828 lbs settled on a bid of 234.00 with a part load of lighter steer mates in thin condition weighing 710 lbs dropping the gavel at 266.00.  Demand continues to remain very good for popular weight steer calves weighing 400-650 lbs, with many areas selling 500-550 lb steer calves selling near or above the 3.00/lb level. 

Cattle futures busted out of the gate on Monday with sharp triple-digit gains after the fat cattle market closed 2.00-3.00 higher last Friday with most live prices trading from 163.00-165.00.  Open interest for Live and Feeder cattle contracts has increased with this rally.  Live and feeder cattle markets are starting to see prices that many analysts thought we might not see for a while or so soon.  Cattle feeders are finding confidence with tight supplies and seeing some bullish momentum on the board as boxed beef prices received a shot in the arm at Midweek with sharp gains as Choice product closed above 250.00.  This week’s reported auction volume included 56 percent over 600 lbs and 41 percent heifers.

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March 27th - House Ag Subcommittee Discusses Termination of COOL as Final WTO Decision Nears

The House Agriculture Committee’s Livestock and Foreign Agriculture Subcommittee held a public hearing Wednesday to examine the implications of potential retaliatory measures against the United States in response to its country-of-origin labeling (COOL) requirements for beef and pork.

The World Trade Organization (WTO) is expected to make a decision on the COOL rule by May 18 in response to a U.S. appeal following a WTO compliance panel’s decision declaring that Canada and Mexico were facing unnecessary burdens imposed by COOL regulations in labeling beef and pork muscle cuts for export to the U.S.

California cattleman Mike Smith testified before the subcommittee pointing out that his ranch’s experience has mirrored the findings of the Kansas State University Study showing that COOL is a mandatory marketing program that consumers pay little attention to and has had no impact on beef demand. “The K-State study actually measured how Americans vote,” said Smith. “Americans vote with their pocketbook by purchasing beef, and the vast majority don’t consider COOL in their purchasing decision. Why then would we incur the costs of a program that the consumer is not demanding?”

In his opening statement at the hearing, subcommittee ranking member Rep. Jim Costa (D-Calif.) said, “Mandatory (COOL) was destined not to work for a number of factors. While the supporters have argued the opposite, I think that we have to look at the facts. I think that we’ve seen an increase in production costs, we’ve seen impacts in costs to consumers that are factoring in meat purchasing.”

Should COOL not be fully repealed, retaliatory efforts from both Mexico and Canada are likely on the horizon. According to Canadian Agriculture Minister Gerry Ritz, Canada doesn’t “want to go the retaliatory route, but we certainly will should it be forced on us.” He also noted that those retaliations could come in many different forms “from California wine to Minnesota mattresses.”

U.S. Agriculture Secretary Tom Vilsack says that the USDA has done everything possible with all involved to make the current COOL statute work. Though there are still U.S. parties on both sides of the issue, a full repeal of the rule is the most likely outcome. 

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March 27th - Closing Futures Summary

Cattle traders may have anticipated cash firmness. Cattle futures traded weakly Thursday, with suspicions of short-term wholesale slippage being the likely cause. However, CME prices rebounded today despite weak midsession beef quotes. The rally suggested traders were leaning toward another strong close to cash market trading this week. April cattle futures climbed 0.95 cents to 162.62 cents/pound in late Friday trading, while August cattle ran up 0.90 to 149.95 cents/pound. Meanwhile, April feeder cattle futures leapt 2.05 cents to 219.27 cents/pound, and August feeders jumped 2.02 to 219.22. 

Corn traders may have squared positions before the weekend. After exhibiting considerable strength over the previous week, corn futures declined Thursday and continued sliding today. There was little fresh news, and the financial markets essentially stalled. Thus, today’s corn slippage probably resulted traders and funds squaring positions before the weekend and next Tuesday’s important USDA reports. May corn futures slipped 0.25 cent to $3.91/bushel at Friday’s CBOT settlement, while December stalled at $4.1475. 

The soy complex traded mostly lower. Soybean and product futures ended Thursday’s CBOT session generally mixed. In contrast, virtually the whole complex moved lower Friday, with big crude losses weighing heavily on soyoil quotes. Bears appeared to be prowling the bean pit in anticipation of a big increase in soy plantings on Tuesday’s USDA report. Demand strength seemed to limit meal losses. May soybean futures closed 7.25 cents lower at $9.6725/bushel Friday afternoon, while May soyoil dove 0.57 cents 30.60 cents/pound, and May meal skidded $1.0 to $321.4/ton. 

The wheat markets posted impressive gains Friday. Wheat futures were swamped by bearish news Thursday, with a poor Export Sales result and improved southern Plains moisture being the most pertinent factors. Conversely, the markets marched higher today, which suggests bears were taking profits before the weekend and next Tuesday’s USDA news. May CBOT wheat rebounded 8.5 cents to $5.0775/bushel to end the week, while May KC wheat surged 10.00 cents to $5.53/bushel, and May MWE wheat vaulted 11.75 to $5.75. 

CME hogs traded mixed before the report. The cash hog and wholesale pork markets ended Thursday on a strong note, which supported swine futures in early Friday trading. However, the Chicago gains dwindled as the day passed, with the deferred contracts dipping below unchanged levels at the close. Talk of big supplies on the quarterly Hogs & Pigs report (due at 2:00 PM CDT) probably undercut prices. April hog futures ended Friday having risen 0.15 cents to 61.12 cents/pound, while June hogs slid 0.15 to 75.00.

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March 27th - Shootin' the Bull Weekly Analysis
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In my opinion, the rally in fats and feeders is nearing completion.  The appearance of a 5 wave move from the end of February leads me to anticipate one of two scenarios.  The first being the least destructive of a correction that would retrace a portion of the gains made from the February low to this weeks high.  The other would suggest that the 5 wave sequence completed an A B C correction of the initial decline from contract high to the February low per respective market and contract month.  If the latter begins to materialize, it would lead me to anticipate the formation of the C wave decline.  This would lead me to anticipate a decline equal to the wave A minus the wave B high.  Visuals for these wave counts are available for viewing on my website. 

So, whether a minor retracement in price or the resumption of the down trend, I anticipate a lower trade in the coming weeks.  In anticipation of the analysis, I made recommendations on Monday of this week to own puts on both fats and feeders. The drastic change in basis on feeder cattle from positive to negative made this recommendation appear much more advantageous as now feeders can be marketed at a higher level than the index.  It hasn't been the same for fats.  Even with the gains in the June and August contracts, traders appear exceptionally cautious to push these months up to levels of the April or cash.  This exceptionally wide positive basis makes hedging June and August very unattractive.  However, the basis has been like this for some time and just because it's ugly doesn't mean its not the right thing to do. 

I perceive the widening spread between lightweight feeder cattle and heavier feeder cattle is distorting the index some.  As the lighter weights are moved to grass and more heavier weights become marketable, the index is anticipated to reflect the lower price of the heavier weighted cattle.  I also perceive that some of the buying in feeder cattle is from the inability to secure physical inventory.  I would urge producers to be overly cautious about this as when inventory is acquired, you now have double the inventory. 

Of interest was some points read this week that there has been little to no contracting of the back grounding sector of the industry.  Both the packing and feeding portions of the industry have contracted significantly over the past 16 months.  The cow/calf sector has shown some fledgling signs of expansion.  Currently, the still large number of back grounding operations are fighting for inventory that is either not there or is already under contract.  This falls calf crop is anticipated to be larger again.  This is anticipated to increase supply to back grounders with no increase in capacitity in the feeding and packing sectors. It is not perceived that either of these sectors will expand anytime soon.  Therefore, more inventory and less demand is anticipated to begin to weigh on prices as well.

Lastly, corn is anticipated to move higher.  The March 31st planting intentions report is anticipated to be the primer to set off a rally with a target to $4.77 December.  Higher corn prices has the potential to further negatively impact profit margins on feed yards.  Therefore, reducing incentive to bid up for inventory.  My analysis suggests that within the next 3 to 8 trading days, we will see trends begin to materialize.  I perceive those trends to be lower prices in feeder cattle and higher prices in corn. 

Christopher B. Swift is a commodity broker and consultant with Swift Trading Company in Nashville, TN. Mr. Swift authors the daily commentaries "mid day cattle comment" and "Shootin' the Bull" commentary found on his website @ www.shootinthebull.com

An investment in futures contracts is speculative, involves a high degree of risk and is suitable only for persons who can assume the risk of loss in excess of their margin deposits.  You should carefully consider whether futures trading is appropriate for you in light of your investment experience, trading objectives, financial resources and other relevant circumstances. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

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March 27th - Meat Export Expectations for 2015

Exports are an important component of demand for all three of the major meat species.  According to the most recent data, exports of beef, pork, and chicken amounted to 21 percent, 19 percent, and 11 percent of production, respectively, in 2014.  All of these figures are high by historic standards, but none is a record for the share of production exported.  Figure 1 shows exports as a share of total production for beef, pork, and chicken from 1984 through 2015 (forecast). 
 


Percent of Beef, Pork, and Chicken Production Exported: Annual, 1984 through 2015F. 
Data Source: USDA Foreign Agricultural Service.

Clearly, exports have become an important part of the market for all of these products.  For chicken, exports became a really significant factor in the market with the fall of the Iron Curtain, which resulted in improved market access in eastern Europe and Russia.  For pork, exports really took off in the early 2000s, with a major boost from China as purchasing power in that country began to grow.  And, of course, beef exports grew more-or-less steadily through the 1990s before being severely set back at the end of 2003 with the discovery of the first U.S. case of BSE.

But what is as noticeable as the periods of growth in exports is the fact that exports (again, as a share of production) have not grown for the last few years.  In fact, for 2015, USDA’s most recent forecast has exports declining for beef, pork, and chicken as a share of production as well as in total pounds.  In fact, if that forecast holds, it will be the second straight year in which exports of beef, pork, and chicken have all declined together.  That has really never happened – at least not since exports became a meaningful component of these markets. 

Combined, beef, pork, and chicken exports in 2015 are currently forecast to decline by 485 million pounds (beef down 173 million pounds, pork down 108 million pounds, and chicken down 204 million pounds).  There have been larger annual declines in combined exports before.  In 2004, beef exports alone declined by over 2 billion pounds.  In 2009, following the Olympic-fueled boom in pork exports to China in 2008, pork exports fell by 572 million pounds.  In 2002, chicken exports fell by 748 million pounds due to Russia’s first really serious export ban.  But it is unusual to see all three species decline together, and the combined 485 million pound drop in red meat/chicken exports will be, if realized, among the bigger year-over-year declines in the last twenty years. 

Why the weakness in exports this year?  There are several factors at work.  For one thing, beef, pork, and poultry are historically quite expensive.  Relatively tight production, particularly when considered on a per capita basis, and strong domestic demand have helped push prices to record levels.  This alone would tend to reduce exports (ceteris paribus, of course).  Adding to the impact of higher prices for foreign consumers is a very strong dollar.  While it doesn’t seem to be attracting as much attention this time around, the dollar is actually stronger on a trade-weighted basis that it was during the financial crisis in 2009.  This makes U.S. meat (and, in fact, all U.S. products) more expensive for foreign consumers in terms of their home currency.  Finally, the West Coast port disruptions got exports off to a very slow start this year.  Some of that ground may be made up as the year progresses, but it will not necessarily be easy to do.

John D. Anderson, Deputy Chief Economist -- American Farm Bureau Federation

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March 26th - Canadian Weekly Cattle Report

Fed cattle set record

  • The weekly Canfax weighted average steer price was $196.78 per hundredweight, while heifers averaged $194.01, both new record highs.
  • Western Canadian fed cattle slaughter for the weeks ending Feb. 28 and March 7 were about 32,000 head, but slaughter was down the following week.
  • Some cash cattle were reallocated last week to meet contract obligations and others were committed on a formula price arrangement, but negotiated sale volumes were adequate to establish a weighted average steer and heifer price.
  • U.S. buyers were active in the Canadian market, and bids strengthened. These sales worked back to the mid to upper C$190s, depending on freight and dressing percent. Cattle sold to the United States would be lifted within two weeks, while local buyers are scheduling cattle for roughly three week delivery.
  • It was the first time this year that Canadian fed exports to the U.S. exceeded 6,000 head.
  • Western Canadian fed slaughter will struggle to exceed 30,000 head over the next two weeks.
  • Alberta fed cash-to-futures basis closed the week at -$1.49.
  • Basis levels usually improve into April.
Cows at records
  • D1, D2 cows ranged $138-$152 per cwt. to average $145.33, while D3s ranged $120-$138 to average $128.10
  • Grain fed cows fetched premium prices.
  • Rail grade cows were $277-$282
  • Slaughter bulls set new highs with a weighted average of $157.22.
  • Weekly western Canadian non-fed slaughter to March 14 fell to 5,273 head. Export trucks are being reallocated to accommodate increased feeder and fed cattle shipments, but non-fed exports will likely increase in coming weeks.
  • Seasonal demand for hamburger should maintain strong non-fed prices.
Feeder prices soar
  • Strong demand for steer calves stretched the Alberta calf-feeder spread to a record level.
  • Steer calf prices rallied $3-$5.50, and heifer calves 500-700 pounds surged $4.50.
  • Feeders heavier than 700 lb. generally rose $1.50-$2.50.
  • A few special feeder sales increased the week’s sale volume to the largest this year.
  • Alberta auction volume rose six percent to 40,299 head, which was one percent larger than last year. That was likely the seasonal peak for volume.
  • Weekly feeder exports to the U.S. to March 7 rose eight percent to 12,277 head. Feeder exports this year are up 11 percent to 89,764 head.
  • Many of the feeders offered during the first quarter of 2015 are going to auction for a second time. Last fall, buyers put them in a backgrounding program.
  • There will continue to be strong competition for the small number of feeders.
U.S. beef mixed
  • There was little trade in the U.S. but dressed sales in Iowa were steady to $3 stronger, while trade in the American South was $3 higher on a live basis.
  • American packers are cutting hours as they try to mend negative processing margins. The weekly cattle slaughter was 518,000 head, down 1.2 percent from the previous week and 10.6 percent lower than the same time last year.
  • Choice cutout last week rose 63 cents to US246.61 per cwt., while Select was down $1 at $244.79.
  • Canadian cut-out values for the week ending March 7 rose C$3-$4 from the previous week with AAA at $305.68 and AA at $303.66.
  • AAA prices are now 28 percent higher than a year ago, and AA is 29 percent higher.
This cattle market information is selected from the weekly report from CanFax, a division of the Canadian Cattlemen’s Association.
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March 26th - How Current Are We?

Several publications have charted the currentness of feedlots in marketing fed cattle and their analysis, supported by graphs, indicates a lack of currentness. This assessment conflicts with packer buyers who are finding very little selling pressure from cattle owners intending to market cattle each week.

The decision each week on the part of cattle owners starts with an evaluation of the estimated current weight of pens considered for sale on a feedlot show list. The feedlot manager assesses current cattle performance, pen conditions, and individual cattle group expectations based on history then provides a recommendation to the owner.

There have been several structural changes that have occurred during this past year. Corn prices have fallen from record highs during the drought years. Cattle prices reached record highs that are likely not to be seen again for years and maybe decades. The combination of these two events caused cattle feeders to seek out heavier marketing weights for fed cattle in an effort to lower breakevens. Packers welcomed the extra tonnage and encouraged this behavior by reducing and in some cases eliminating penalties for heavy carcasses. Feeding cattle to heavier weights obviously throws more cattle into heavier weight categories. When comparing weight groups of cattle to prior year, more cattle this year fall into heavier weight classifications.

Heavier weights do not necessarily mean the industry lacks currentness, it simply reflects a change in the intended marketing weights. If feedlots were marketing cattle at 1300# then change to 1400# or 1500#, this is intentional and does not necessarily cause cattle to be backed up. The determination of currentness is somewhat arbitrary. It can be defined as when feeders are able to market cattle at the target weight. If they are unable, then cattle are backing up.

Many factors impact a cattle owners choice of marketing dates. Certainly the spot and deferred futures prices influence the decision whether the owner is hedged or not. Deep discounts in the futures will encourage cattle owners to sell early. It is obvious that many normally hedged cattle owners are unhedged and not willing to be influenced by futures as much as in a normal hedge environment. Some hedged feeders have covered deeply discounted futures.

Show lists are also becoming less useful in determining currentness. Analysts check the carryover and compare the show list this week to prior year and last week. Looking at the show list in Texas is meaningless. A few hundred cattle more on the show list might increase offerings 25%. The decline of numbers of cattle offered in the cash markets harm our ability to evaluate the meaning of show list numbers.

The best evaluation of currentness is still "does the market go up or go down". The packers reaction to stubborn sellers and red ink is dark days at the beef plants and ultimately dark plants. There is always the implied threat that if sellers will not accept lower prices then packers will shut down the kill and eventually a plant. Packers like feedlots will not lose money forever. It is likely there are sufficient cattle on feed currently to support a higher slaughter rate but beef demand today is the problem.

Ag Center Cattle Report

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March 26th - Effects of Ralgro Implants

Effects of Ralgro implants administered at branding on growth performance of steer calves through weaning

Previous studies have shown that Ralgro implants administered at 30 to 90 days of age increase weaning weight in suckling steer calves by 24 lb. (Mader et al., 1985) and 23 lb. (Gill et al., 1986). However, these and other peer-reviewed research results from experiments conducted in the U.S. were completed nearly three decades ago. Beef cattle genetics in the U.S. have changed dramatically during this time period. Specifically, aggressive selection for growth, milk yield and muscling has occurred since 1985. Consequently, it is possible that the response to anabolic implant compounds may have changed as well. 

The objective of this experiment was to determine the impact of a Ralgro implant administered at 30 to 90 days of age on suckling phase growth rate and weaning weight. A total of 154 suckling steer calves weighing 254 lb. at branding (approximately 30 to 90 days of age) from two locations were used. Two hundred nine cow/calf pairs grazed primarily bermudagrass pastures near Valiant, Oklahoma, at the Mac Lindley Research Station while 106 cow/calf pairs grazed primarily native grass rangeland at the Crosstimbers Research Station near Stillwater, Oklahoma. Cows and calves were sired by Angus bulls. Within location, steer calves were stratified by dam age, then randomly assigned to two experimental treatments; implanted with Ralgro (77 animals) and no implant (98 animals). The steers were weighed at the time of branding/implanting and again at weaning 134 days later.

  • Implanted steers gained 20 lb. more body weight between the branding and weaning dates compared with nonimplanted steers.
  • This resulted in a tendency for a 4% increase in weaning weight and an 8% increase in 134-day body weight gain.
  • Ralgro growth-promoting implants remain an effective and economical method to increase performance of suckling steer calves, and the response is similar to research results published in the 1980s.
C. L. Bayliff et al., Oklahoma State University 
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"Click Here" to view a Slide Show of Drought Monitor maps for the last 12 weeks
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March 23rd - Cold Storage Report
  • Total red meat supplies in freezers were up 8 percent from the previous month and up 12 percent from last year. 
    • Total pounds of beef in freezers were up slightly from the previous month and up 20 percent from last year. 
    • Frozen pork supplies were up 15 percent from the previous month and up 5 percent from last year. 
    • Stocks of pork bellies were up 27 percent from last month but down 23 percent from last year
  • Total frozen poultry supplies on February 28, 2015 were up 4 percent from the previous month and up 6 percent from a year ago. 
    • Total stocks of chicken were up slightly from the previous month and up 8 percent from last year. 
    • Total poundsof turkey in freezers were up 15 percent from last month and up 4 percent from February 28, 2014.
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March 20th - March Cattle on Feed Report

United States Cattle on Feed Down 1 Percent

  • Cattle and calves on feed for slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 10.7 million head on March 1, 2015. The inventory was 1 percent below March 1, 2014.
  • Placements in feedlots during February totaled 1.52 million, 8 percent below 2014. Net placements were 1.46 million head. During February, placements of cattle and calves weighing less than 600 pounds were 330,000, 600-699 pounds were 270,000, 700-799 pounds were 388,000, and 800 pounds and greater were 535,000.
  • Marketings of fed cattle during February totaled 1.52 million, 2 percent below 2014. February marketings are the lowest since the series began in 1996.
  • Other disappearance totaled 62,000 during February, 13 percent below 2014.

Cattle on Feed Inventory in 1,000+ Capacity Feedlots as of March 1st
Millions of Head
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Number of Cattle Placed on Feed in 1,000+ Capacity Feedlots in February
Millions of Head
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Number of Cattle Marketed from 1,000+ Capacity Feedlots in February
Millions of Head
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Cattle on Feed by State as of March 1st
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March 20th - Closing Futures Summary

Cattle futures firmed before the COF report. The cattle market appeared to stage a mid-week bullish breakout, with anticipation of fresh cash strength being the likely cause. Thus, mixed Friday morning action suggested bulls weren’t getting their way. Still, the market staged a late rally before the close and the afternoon release of the monthly USDA Cattle on Feed report. That seemed supportive, but the results of late-day cash trading will probably determine Monday’s CME opening. April cattle futures closed 0.35 cents higher at 158.35 cents/pound Friday, while August cattle advanced 0.57 cents to 148.10 cents/pound. Meanwhile, April feeder cattle futures edged up 0.17 cents to 216.20 cents/pound, whereas August feeders sank 0.42 to 216.07. 

Financial markets sparked big crop market gains Friday. A report indicating traditional exporter South Africa is importing Argentine corn seemingly supported corn futures Thursday night, as did strength spilling over from the soy and wheat complexes. But the main driver of Friday’s rally was almost surely concurrent stock market strength and big U.S. dollar losses, both of which are conducive to improved demand. May corn futures surged 11.5 cents to $3.85/bushel at Friday’s settlement, while December corn ran up 10.25 to $4.0925. 

The soy complex also turned unanimously higher. Soybeans and meal surged Friday morning despite the flood of soy currently coming out of South America. Big equity gains and a sharp hit to the value of the U.S. very likely encouraged CBOT bulls. The broad commodity sector advance included the energy sector, which in turn boosted soyoil. Bulls also cited persistently strong meal demand. May soybean futures ended Friday having climbed 12.0 cents to $9.7375/bushel, while May soyoil gained 0.06 cents to 30.68 cents/pound, and May meal added $4.7 to $324.0/ton. 

Weather forecasts likely boosted the wheat markets. Today’s financial market moves almost surely encouraged wheat bulls as well, especially with nearby futures overcoming intermediate-term moving-average resistance. Still, talk of growing dryness in the U.S. southern Plains and in the Black Sea region seemed to drive prices higher. May CBOT wheat leapt 18.0 cents to $5.30/bushel at their Friday close, while May KC wheat soared 19.25 cents to $5.695/bushel, and May MWE wheat jumped 16.75 to $5.895. 

Hog futures posted a mixed Friday close. Although the cash hog and wholesale pork markets remained weak Thursday, anticipation of seasonal strength apparently spurred opening CME gains Friday. However, midsession reports of wholesale weakness apparently undercut upward momentum, with only the nearby April contract ending the day higher. Talk of huge supplies on next Friday’s quarterly report may also have depressed prices. April hog futures edged up 0.32 cents to 58.45 cents/pound in late Friday trading, while June hogs slumped 0.67 to 73.85. 

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March 20th - Meat Groups Unhappy with USDA

USDA has extended the comment period on the proposed nutritional guidelines for 30 days, beyond the current April 8 deadline. The guidelines suggest a healthy diet should include more fruits and vegetables, whole grains, low and non-fat dairy, seafood, legumes and nuts. The recommendations include a footnote that “lean meats can be part of a healthy dietary pattern.” Meat groups argue that lean meats are among the most nutrient-dense food choices and deserve more than a footnote in the guidelines, and object strenuously to language saying livestock production hurts the environment. They also cite recent research showing consumption of cholesterol-rich foods has little to do with cholesterol in the bloodstream. The guidelines have a big influence on school lunches and other nutrition programs.

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 February 29th Seasonal Drought Outlook

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March 18th - Cattle Fundamentals Back on Top

The cattle market has been caught in the crosscurrents of negative technical signals and multiple non-cattle-supply related issues and its own fundamentals that continue to paint a positive picture. Packer margins may be negative, exports for all U.S. commodities compromised by the strong dollar but solid-enough domestic beef demand and limited cattle supplies keep providing a foundation for fed cash cattle prices at much higher levels than futures have and continue to portend.

Discounts Proved Wrong

After a 3 month sell-off, the levels reached when the market bottomed February 26 just above $148 in spot are beginning to look as overdone as the low made May 2014 at $135.40 (also made 3 months after the February 2014 high). When futures bottomed in late May last year, the board was $9 under cash and $9.50 just 3 weeks ago. The last time cash cattle prices were under $149 was the week of June 6, 2014.

A quick look back shows cash cattle prices one year ago this week averaged just under $151 with larger fed and non-fed supplies. Last week, cash prices averaged $161. Choice boxes a year ago this week averaged $242.40, yesterday $247.40.

Same Old Arguments

Bears have argued and argued that tight fed cattle supplies don’t trump all the negative factors facing livestock, poultry and commodity prices in general. After months of running longs out and sucking short hedgers in the discounted market, a lot of bad news is now priced.

The Packer Knows

The futures may not understand but the packer does only too well just how difficult it is to secure inventory right now to fill the current bare-bones slaughter schedule. The historically and remarkably small kills this March are a testament to this fact.

Futures Find a Fundamental Bearing

Cattle futures are staging an impressive rally today, having once again gotten caught in the same “too-cheap” trap. Apr LC is back in the lead and the entire strip is making new highs for the week. It may not be this week, but Apr LC appears destined to take out last week’s high of $156.30, fill the gap on the spot chart at $158 and maybe even vault over $160.

.

March 17th - Annual Sales Data for Cattle Farms & Ranches

The USDA’s National Agricultural Statistics Service has compiled data from the 2012 Census of Agriculture Farm Typology report profiling family farms/ranches in the United States.  For farms/ranches raising cattle or calves, the report lists a total of 740,978 operations...

  • Of those, 202,047 are listed as retirement farms, where the operators report they are retired, although they continue to farm on a small scale. 
  • On 266,250 cattle operations, NASS reports the operator has an off-farm occupation. 
  • Of the cattle farms where the operator’s primary occupation is farming, 
    • 130,774 are listed as having annual sales less than $150,000
    • 47,648 have sales of $150,000 to $349,999
    • 51,301 have sales from $350,000 to $999,999
    • 20,142 have sales from $1 million to $4,999,999
    • 2,609 have sales of more than $5 million
  • Non-family farms account for the remaining 20,207 cattle operations.
.

March 16th: Beef Trade Troubles

I dislike the term “perfect storm” because it is too frequently used and too casually applied to many situations.  However, it is an appropriate description of international cattle and beef trade in early 2015.  Several factors joined forces simultaneously to seriously impact beef exports and imports so far this year.  The situation in 2015 is a continuation of trade issues that developed in 2014.  Total beef production decreased nearly 6 percent in 2014 and resulted in dramatic increases in U.S. cattle and beef prices. A rapidly strengthening U.S. dollar in the second half of the year further exaggerated prices both with respect to U.S. exports and imports, making U.S. exports more expensive and imported beef more attractive in the U.S. market. 

Beef exports were mixed to major export destinations in 2014, compared to 2013, with increased exports to South Korea (up 19 percent); Hong Kong (up 16 percent) and Mexico (up 8 percent) offsetting decreased exports to Canada (down 22 percent) and Japan (down 1 percent) and holding total exports to a less than one percent decrease.  Continued growth in beef exports pushed the Hong Kong total, which surpassed South Korea in 2013, past Canada to be the number three U.S. beef export destination behind Japan and Mexico in 2014.   Total 2014 beef imports were up 31 percent, year over year, with increases from all major import sources.  Import increases were led by Australia (up 74 percent); Mexico (up 23 percent); New Zealand (up 14 percent) and Canada (up 12 percent).  The majority of U.S. beef imports are processing beef, largely for ground beef, the demand for which was enhanced in 2014 by a 14 percent drop in U.S. cow slaughter.

The west coast dock slowdown that developed in late 2014 culminated in severe disruptions in meat exports by January of this year.  The combination of adverse economic values and hampered logistics dealt a serious blow to beef exports in January.  Total exports in January were down 19 percent year over year with decreased export quantities to all major beef export destinations including Hong Kong (down 33 percent); South Korea (down 28 percent); Canada (down 24 percent); Japan (down 15 percent) and Mexico (down 11 percent).  The dock dispute has been settled but it will likely take several more weeks for port movement to return to normal.  In the meantime, some beef that would have been exported was diverted back into domestic markets on top of the winter weather impacts that slowed beef movement and demand in the U.S. 

Interestingly, the dock situation seemed to have less impact on beef imports which jumped dramatically in January.  January beef imports were up 64 percent over January, 2013, led by Australia (up 124 percent); New Zealand (up 38 percent); Mexico (up 35 percent) and Canada (up 18 percent).  Beef imports from Uruguay and Nicaragua were also up sharply year over year. Increased beef imports reflect continued strong demand for lean beef, primarily for ground beef.

U.S. cattle imports were up 16 percent in 2014 from one year earlier as U.S. cattle market prices and the strengthening dollar attracted more cattle form Canada and Mexico.  Total feeder cattle imports were up 20 percent year over year, consisting of a13 percent increase in Mexican cattle imports and a 38 percent increase in Canadian feeder cattle.  Canadian slaughter cattle imports were up 7 percent in 2014 compared to year earlier levels.  Recently released Canadian cattle inventories indicate that cattle numbers continue to fall in Canada and that herd rebuilding has not yet begun.  Anticipated increases in heifer retention in both Canada and Mexico may limit cattle exports from both countries to the U.S. in 2015  January cattle imports were down a combined 14 percent year over year with Canadian numbers down 26 percent and imports of Mexican cattle down 3 percent.  Total cattle imports consisted of a combined three percent decrease in feeder cattle imports and a 33 percent decrease in imports of Canadian slaughter cattle.  Despite tight cattle numbers and potential heifer retention, strong U.S. cattle prices and weaker Canadian and Mexican currencies will keep the incentives to export cattle to the U.S. strong.

Improvement in the port situation should improve the flow of beef in the coming weeks.  Moving forward in 2015, it’s not clear whether the dollar will continue strengthening relative to other currencies but U.S. beef and cattle prices will remain high in any event.  The surge in beef imports from Australia has been fueled by drought-forced liquidation and unsustainable levels of Australian beef production.  Continued drought may result in additional Australian cattle liquidation but possibly at a slower pace as cattle inventories decrease.  Drought improvement could lead to sudden decreases in beef exports from the country if rebuilding should begin.  Though some of the factors adversely affecting beef trade may improve, it is likely that U.S. beef exports will continue weak and drop more in 2015 while beef imports will likely remain elevated.

Derrell S. Peel, Oklahoma State University

.

March 16th - Heavier Dressed Weights Limit Declining Beef Production

Beef/Cattle: Despite continuing drought in the Southwestern United States, winter precipitation has kept feeder cattle on Southern Plains wheat pasture. Placements of heavier feeder cattle in feedlots during the first and second quarters, combined with heavier average dressed weights for cows, could mitigate anticipated declines in cattle slaughter. Despite record retail beef prices, recent declines in live cattle prices have not resulted in significantly wider packer margins.

Beef/Cattle Trade: U.S. cattle imports were weaker during January than in the same period a year earlier. U.S. beef imports in January were 63.7 percent higher than the previous year, mostly due to higher shipments from Australia, while January beef exports
were below those of last year. 

Pork/Hogs: USDA increased first-quarter 2015 pork production slightly, to reflect larger than expected February hog slaughter and heavier average dressed weights. January pork exports were off sharply—21.4 percent—due in part to labor disputes at Pacific U.S. port facilities that limited shipments to Asia. Pork imports were up sharply, duein large part to the higher exchange rate value of the U.S dollar, which tends to lower foreign product prices. Retail pork prices are exhibiting stickiness even as wholesale pork prices decline.

Poultry: Broiler meat production for 2015 is estimated at 40 billion pounds, up 75 million from the previous estimate. Production increased by 5 percent in January due to an increase in the number of birds slaughtered and growth in average live weights. Turkey meat production for 2015 is forecast at 6.1 billion, up 6 percent from the previous year. With higher production, turkey cold storage holdings at the end of January rose to 280 million pounds.

Source: USDA Livestock, Poultry and Dairy Outlook

.

March 13th - Check Cattle with Drones

Drones could temperature check your cattle. Personnel with UAV producer PrecisionHawk claim they can take the temperature of cattle in pastures. Thermal sensors on a drone may see one animal with a green tint, while another would look purple. A rancher would then have an idea if an animal is running a fever or in heat. 

.

March 13th - U.S. Beef Trade: 2014 Value of Exports & Imports Up

On a dollar value basis, the U.S. beef industry is a net exporter; that is exports exceed imports. Although 2014 was no exception, the net value between cattle and beef exports and imports slipped on an annual basis. In 2012 and 2013 the net export value was around $2 billion dollars, but in 2014 it shrunk to about $1 billion. The value of exports set a new high, but imported beef and cattle also jumped up.

The U.S. exports live cattle, beef and veal, hides and skins, variety meats, and tallow and grease. The total dollar value of all U.S. cattle and beef 2014 exports reached $9.2 billion, a 10% increase year-over-year. Within the export categories, beef and veal made up 68% of total export value and was also the category that experienced the largest year-over-year gain in value, up 16%. Variety meats came in second, with a 15% increase in value, and accounted for 9% of total export value.

On the import side, the same categories are traded. The total dollar value of all U.S. cattle and beef imports in 2014 grew by 47% year-over-year to sit at $8.2 billion. The largest growth was seen in beef and veal at 52%, and live cattle at up 40%. These categories account for 65% and 30% of total import value, respectively.

The large increase in cattle and beef imports shrunk the annual U.S. net export value to $990 million, the smallest net since 2009. 
 

Livestock Marketing Information Center

.

March 11th - U.S.-Canadian Beef Herds Move in Opposite Directions

On March 5, 2015, Statistics Canada released its Livestock Estimates, January 1, 2015, report which detailed cattle, hog and sheep inventories in Canada. That same day USDA-NASS released the United States and Canadian Cattle and Sheep and the United States and Canadian Hogs reports.

The Jan. 1 U.S. cattle inventory numbers were also previously released by NASS on Jan. 30 in the Cattle report. Those numbers have been discussed in previous In The Cattle Market columns. In summary, all cattle and calves in the U.S. on Jan. 1 were up 1.4% from 2014. Beef cows were up 2%, heifers kept for beef cow replacement were up 4%, calves and feeder cattle outside of feedlots were up 0.5%, cattle on feed were up 0.6%, and the 2014 calf crop was up 0.5%.

There were 11.915 million cattle and calves in Canada on Jan. 1, 2015, down 2.5% from 2014. That is the lowest level since 1993. The total cattle herd in Canada peaked at 14.925 million head in 2005.  Beef cows at 3.824 million head were down 2%, continuing a downward trend that started in 2006. Canada’s beef cow herd is less than the 4.18 million head that were in Texas on Jan. 1. On a provincial basis, Alberta has the most beef cows at 1.546 million, followed by Saskatchewan at 1.136 million, Manitoba at 445.2 thousand, British Columbia at 188.7 thousand and all other provinces at 508.8 thousand head. Beef heifers held for breeding in Canada were down 1.5% from 539,100 head in 2014 to 531,100 in 2015.

On a comparative basis, total cattle numbers in the U.S. were up 1.4% compared to a 2.5% decrease in Canada. Beef cows increased 2% in the U.S. and declined 2% in Canada, beef replacement heifers increased 4% in the U.S. and declined 1.5% in Canada, cattle on feed in the U.S. increased 0.6% but decreased 8.7% in Alberta and Saskatchewan, and the 2014 U.S. calf crop increased 0.5% compared to a 1.8% increase in Canada.

U.S. cattle slaughter declined 7.1% in 2014 while Canadian cattle slaughter increased 3.3%. Cattle prices were record high in both countries in 2014. But the increasing value of the U.S. dollar was one reason why 2014 beef imports from Canada increased 11.9 percent and U.S. beef exports to Canada declined 22%. Cattle imports from Canada in 2014 also increased about 19% and cattle exports to Canada also increased 4.4%.

Cattle prices are higher in the U.S. than in Canada. On a U.S. dollar basis for the week ending February 27, 500-600 lb. feeder steer prices at auctions in Manitoba averaged $247.42/cwt. compared to North Dakota auctions across the border at $275.63. Steers weighing 700-800 lbs. in Manitoba averaged $200.29/cwt. compared to $216.12 in North Dakota. Alberta Direct, mostly Select, slaughter steer prices averaged $153.22 compared to the U.S. 5-area direct slaughter steer average price of $158.44.

Tim Petry, North Dakota State University 

.

February 27th - Comparison by State of Heifers Retained for Replacements
.
January 1, 2015 Inventory vs. 2014 Inventory... Compiled from USDA National Agricultural Statistical Service Data
.
Rank
State
2015
2014
% Change
2015 as
% of Total
.      
 
1
Texas
710,000
660,000
7.58%
12.29%
2
Montana
425,000
430,000
-1.16%
7.36%
3
Oklahoma
405,000
325,000
24.62%
7.01%
4
Nebraska
390,000
400,000
-2.50%
6.75%
5
South Dakota
380,000
340,000
11.76%
6.58%
6
Missouri
310,000
305,000
1.64%
5.37%
7
Kansas
260,000
240,000
8.33%
4.50%
8
Wyoming
183,000
175,000
4.57%
3.17%
9
Iowa
170,000
160,000
6.25%
2.94%
10
North Dakota
164,000
170,000
-3.53%
2.84%
11
Colorado
160,000
150,000
6.67%
2.77%
12
Arkansas
141,000
137,000
2.92%
2.44%
13/14
Kentucky
135,000
150,000
-10.00%
2.34%
13/14
Tennessee
135,000
130,000
3.85%
2.34%
15
Florida
125,000
115,000
8.70%
2.16%
16
California
120,000
110,000
9.09%
2.08%
17/18
Idaho
110,000
110,000
0.00%
1.90%
17/18
Oregon
110,000
105,000
4.76%
1.90%
19
Alabama
110,000
110,000
0.00%
1.90%
20
Virginia
105,000
115,000
-8.70%
1.82%
21
Mississippi
95,000
91,000
4.40%
1.64%
22
Minnesota
85,000
80,000
6.25%
1.47%
23
Georgia
83,000
82,000
1.22%
1.44%
24
New Mexico
80,000
70,000
14.29%
1.38%
25
Utah
 78,000
70,000
11.43%
 1.35%
26
Wisconsin
75,000
70,000
7.14%
1.30%
27
Louisiana
73,000
84,000
-13.10%
1.26%
28
North Carolina
69,000
72,000
-4.17%
1.19%
29
Illinois
64,000
63,000
1.59%
1.11%
30
Washington
51,000
50,000
2.00%
0.88%
31/32
Ohio
50,000
55,000
-9.09%
0.87%
31/32
Pennsylvania
50,000
50,000
0.00%
0.87%
33
Indiana
45,000
39,000
15.38%
0.78%
34
New York
40,000
45,000
-11.11%
0.69%
35
Nevada
37,000
36,000
2.78%
0.64%
36
Arizona
34,000
30,000
13.33%
0.59%
37
West Virginia
32,000
35,000
-8.57%
0.55%
38
South Carolina
30,000
30,000
0.00%
0.52%
39
Michigan
23,000
29,000
-20.69%
0.40%
40
Hawaii
11,000
9,000
22.22%
0.19%
41
Maryland
8,000
9,500
-15.79%
0.14%
42/43
Vermont
4,000
4,500
-11.11%
0.07%
42/43
Maine
4,000
3,000
33.33%
0.07%
44/45
Connecticut
2,000
1,500
33.33%
0.03%
44/45
Massachusetts
2,000
2,000
0.00%
0.03%
46
New Jersey
1,300
1,000
30.00%
0.02%
47
New Hampshire
1,000
1,000
0.00%
0.02%
48
Alaska
900
800
12.50%
0.02%
49
Delaware
700
500
40.00%
0.01%
50
Rhode Island
500
500
0.00%
0.01%






-
Total
5,777,400
5,551,300
+4.07%
 100.00%
.

February 27th - Beef Cows: State Rankings & Change
.
.January 1, 2015 Inventory vs. 2014 Inventory... Compiled from USDA National Agricultural Statistical Service Data
.
. Rank
. State
2015
2014
. % Change
2015 as
% of Total
 
 
 
 
1
Texas
4,180,000
3,910,000
6.91%
14.08%
2
Oklahoma
1,900,000
1,795,000
5.85%
6.40%
3
Missouri
1,881,000
1,820,000
3.35%
6.33%
4
Nebraska
1,786,000
1,807,000
-1.16%
6.01%
5
South Dakota
1,632,000
1,635,000
-0.18%
5.50%
6
Montana
1,506,000
1,476,000
2.03%
5.07%
7
Kansas
1,477,000
1,414,000
4.46%
4.97%
8
Kentucky
1,007,000
992,000
1.51%
3.39%
9
Iowa
920,000
895,000
2.79%
3.10%
10
Florida
916,000
907,000
0.99%
3.08%
11
North Dakota
904,000
923,000
-2.06%
3.04%
12
Tennessee
883,000
864,000
2.20%
2.97%
13
Arkansas
863,000
862,000
0.12%
2.91%
14
Colorado
745,000
710,000
4.93%
2.51%
15
Wyoming
694,000
694,000
0.00%
2.34%
16
Alabama
672,000
681,000
-1.32%
2.26%
17
Virginia
637,000
637,000
0.00%
2.15%
18
California
600,000
600,000
0.00%
2.02%
19
Oregon
525,000
516,000
1.74%
1.77%
20
Georgia
489,000
500,000
-2.20%
1.65%
21
Idaho
481,000
465,000
3.44%
1.62%
22
Mississippi
468,000
477,000
-1.89%
1.58%
23
Louisiana
466,000
450,000
3.56%
1.57%
24
New Mexico
407,000
407,000
0.00%
1.37%
25
Illinois
376,000
355,000
5.92%
1.27%
26
North Carolina
363,000
355,000
2.25%
1.22%
27
Minnesota
350,000
340,000
2.94%
1.18%
28
Utah
324,000
340,000
-4.71%
1.09%
29
Ohio
282,000
293,000
-3.75%
0.95%
30
Wisconsin
275,000
250,000
10.00%
 0.93%
31
Nevada
217,000
231,000
-6.06%
 0.73%
32
Indiana
199,000
187,000
6.42%
 0.67%
33
Washington
198,000
214,000
-7.48%
 0.67%
34
West Virginia
185,000
191,000
-3.14%
 0.62%
35
Arizona
175,000
178,000
-1.69%
 0.59%
36
South Carolina
170,000
169,000
0.59%
 0.57%
37
Pennsylvania
150,000
160,000
-6.25%
 0.51%
38
New York
115,000
105,000
9.52%
0.39%
39
Michigan
112,000
119,000
-5.88%
 0.38%
40
Hawaii
69,800
71,800
-2.79%
0.24%
41
Maryland
41,000
38,000
7.89%
 0.14%
42
Vermont
12,000
12,000
0.00%
 0.040%
43
Maine
11,000
11,000
0.00%
0.037%
44
New Jersey
7,500
7,000
7.14%
0.025%
45
Massachusetts
5,500
6,000
-8.33%
0.019%
46
Connecticut
5,000
4,000
25.00%
0.017%
47
Alaska
4,300
4,300
0.00%
0.014%
48
New Hampshire
3,000
3,000
0.00%
 0.010%
49
Delaware
2,500
2,800
-10.71%
 0.008%
50
Rhode Island
1,500
1,500
0.00%
0.005%






-
Total
29,693,100
29,085,400
+2.09%
100.00%
.

February 27th - All Cattle & Calves: State Rankings & Change
..
January 1, 2015 Inventory vs. 2014 Inventory... Compiled from USDA National Agricultural Statistical Service Data
.
Rank
State
2015
2014
% Change
2015 as
% of Total
.      
 
1
Texas
11,800,000
11,100,000
6.31%
13.14%
2
Nebraska
6,300,000
6,250,000
0.80%
7.02%
3
Kansas
6,000,000
5,800,000
3.45%
6.68%
4
California
5,150,000
5,250,000
-1.90%
-5.73%
5
Oklahoma
4,600,000
4,300,000
6.98%
5.12%
6
Missouri
4,000,000
3,850,000
3.90%
4.45%
7
Iowa
3,900,000
3,800,000
2.63%
4.34%
8
South Dakota
3,700,000
3,700,000
0.00%
4.12%
9
Wisconsin
3,500,000
3,400,000
2.94%
3.90%
10
Colorado
2,600,000
2,550,000
1.96%
2.90%
11
Montana
2,500,000
2,550,000
-1.96%
2.78%
12
Minnesota
2,330,000
2,300,000
1.30%
2.59%
13
Idaho
2,300,000
2,240,000
2.68%
2.56%
14
Kentucky
2,060,000
2,110,000
-2.37%
2.29%
15
Tennessee
1,730,000
1,760,000
-1.70%
1.93%
16
Florida
1,700,000
1,670,000
1.80%
1.89%
17
North Dakota
1,650,000
1,750,000
-5.71%
1.84%
18
Arkansas
1,640,000
1,650,000
-0.61%
1.83%
19
Pennsylvania
1,530,000
1,610,000
-4.97%
1.70%
20
Virginia
1,470,000
1,510,000
-2.65%
1.64%
21
New York
1,450,000
1,450,000
0.00%
1.61%
22
New Mexico
1,340,000
1,310,000
2.29%
1.49%
23
Oregon
1,300,000
1,280,000
1.56%
1.45%
24
Wyoming
1,300,000
1,270,000
2.36%
1.45%
25
Ohio
 1,250,000
1,250,000
0.00%
 1.39%
26
Alabama
1,220,000
1,270,000
-3.94%
1.36%
27
Washington
1,150,000
1,110,000
3.60%
1.28%
28/29
Illinois
1,140,000
1,130,000
0.88%
1.27%
28/29
Michigan
1,140,000
1,130,000
0.88%
1.27%
30
Georgia
1,040,000
1,040,000
0.00%
1.16%
31
Mississippi
910,000
930,000
-2.15%
1.01%
32
Arizona
880,000
920,000
-4.35%
0.98%
33
Indiana
870,000
860,000
1.16%
0.97%
34
North Carolina
800,000
810,000
-1.23%
0.89%
35
Louisiana
790,000
790,000
0.00%
0.88%
36
Utah
780,000
810,000
-3.70%
0.87%
37
Nevada
435,000
460,000
-5.43%
0.48%
38
West Virginia
370,000
385,000
-3.90%
0.41%
39
South Carolina
335,000
335,000
0.00%
0.37%
40
Vermont
260,000
260,000
0.00%
0.29%
41
Maryland
185,000
182,000
1.65%
0.21%
42
Hawaii
135,000
133,000
1.50%
0.15%
43
Maine
85,000
85,000
0.00%
0.095%
44
Connecticut
47,000
47,000
0.00%
0.052%
45
Massachusetts
38,000
39,000
-2.56%
0.042%
46
New Hampshire
30,000
32,000
-6.25%
0.033%
47
New Jersey
28,000
27,000
3.70%
0.031%
48
Delaware
17,000
16,000
6.25%
0.019%
49
Alaska
10,000
10,000
0.00%
0.011%
50
Rhode Island
5,000
5,000
0.00%
0.006%






-
Total
89,800,000
88,526,000
+1.44%
 100.00%
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January 19th - Mixed Cattle Outlook for 2015

Tight margins and lower grain prices are encouraging cattle feeders to feed to heavier weights, helping offset lower numbers of cattle available for feeding and slaughter, according to the latest Livestock, Dairy and Poultry Outlook report from the USDA. At the same time, improved forage conditions appear to be encouraging ranchers to retain more heifers for breeding, which could further reduce supplies of feeder cattle in the near term.

Milk prices, meanwhile, are dropping, which could result in a pickup in culling of dairy cows. The average all-milk price for 2014 was a record high of $23.97 per hundredweight, up 19.6 percent from the 2013 price of $20.05 per hundredweight. But for 2015, USDA now projects an average all-milk price of  $17.75 to $18.55 per hundredweight, down from last month's forecast of $18.45 to $19.25.

Pork will become more competitively priced as the U.S. industry rebounds from the effects of Porcine Epidemic Diarrhea. USDA reports producers have increased breeding inventory increases express strong farrowing intentions, suggesting higher pork production and lower hog prices in 2015. Hog prices are expected to average $60 to $65 per hundredweight this year, almost 18 percent below prices in 2014.

Other key points in the report include:

  • Drought continues in the Southern Plains and Southwestern United States, although its intensity has abated somewhat. The U.S. Drought Monitor, released December 30, 2014, showed an improved situation for cattle country compared with last month.
  • Despite continuing drought, the limited precipitation has allowed wheat pasture to remain in relatively good condition, providing some opportunity for weight gains in feeder cattle being pastured on Southern Plains wheat.
  • Placements in 1,000-plus-head feedlots during November dropped 4 percent below 2013. November placements were the lowest and marketings were the second lowest for the month since the series began in 1996.
  • Any significant retention of heifers for rebuilding the cow herd would offset increases in beef production due to heavier slaughter weights. However, cow-calf operators face significant incentives to sell heifers as feeder cattle sooner rather than waiting for income from their calves at least two years later.
  • Commercial red meat production for the United States in November 2014 was down 9 percent compared with November 2013. Further, Livestock Slaughter showed a 10-percent drop in commercial beef production through the month of November 2014 compared with this time last year.
  • Average live weights of commercial cattle continue higher than last November, up by 24 pounds. Since September 2014, 5-Area Fed Steer live weights have consistently exceeded 1,420 pounds.
  • November 2014’s All-fresh beef retail value was $5.98 per pound, up nearly a dollar from a year earlier. Estimated average monthly Choice retail beef prices for January 2014 through November 2014 were $5.97 per pound, 13 percent above the same-period average of $5.28 for 2013.
  • For 2015, average annual retail beef prices are expected to be slightly higher than they were in 2014. Recent drops in gas prices have given some indication of additional spending power at the grocery store. Larger supplies of pork and poultry may limit beef price increases this year.
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May 21st - As Fundamental Change Moves an Industry

It doesn't feel any different as you walk around but beneath the surface some large and monumental plates are shifting and the foundations of an industry are undergoing change. The day to day business continues and we wake every morning to new bids and offers, new grain prices, the drought, and other continuing influences but there are some big picture developments that are occurring while we move day to day.

  • Climate: There are major changes occurring in the climate. Extreme weather patterns are more severe and long lasting. Drought in some areas continues. Flooding in other regions is causing its own problems. We can debate whether it is man made or not, but large and serious weather patterns are at work and no one impacted more than agriculture.
  • Geography: Nebraska took over Texas's spot as top feeding state. The image below clearly demonstrates the loss of feeding capacities in Texas and increases else where. Processing plants follow the feeding locations for cattle and the southern plains has lost processing capacity to the northern plains -- but both have suffered plant closings and slow downs as the herd grows smaller.
  • Basis: Cattle and grain are moving towards cash markets trading basis the futures. Cattle cash trading has ceased to be reported in Texas and lightly reported elsewhere. Poor grain basis pricing, south of Amarillo, is pressuring south plains feedyards in competitiveness.
  • Sustainability: This is a term used by everyone and understood by no one. Beef retailers are being pressured to act on assuring the industry is observing best management practices to deliver a sustainable agriculture.
  • Mandatory ID: Whether it is a trading scandal involving phantom cattle or a disease threat that can't be traced, animal ID won't go away. International trade and exports will demand it or penalize our products without it.
Downsizing is no fun and lots of money has been lost in processing and feedings. Downsizing is always painful but it also can build a better and stronger industry through change.


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March 28th - Animal Disease Traceability Update

The federal Animal Disease Traceability (ADT) program is up and running, but challenges including inconsistencies in state requirements and mixed messages regarding program goals continue to slow progress toward true traceability. Those points were clear during the recent National Institute for Animal Agriculture (NIAA) conference in Indianapolis where the NIAA Animal Identification and Information Systems Council received an update from USDA officials and others.

Neil Hammerschmidt, ADT program manager for the USDA’s Animal and Plant Health Inspection Service (APHIS) provided a program overview and update. The ADT rule was published in January 2013 and the rule became effective on March 11, 2013. Today the program continues to build on the original program guidelines, Hammerschmidt says.

The ADT rule specifies that several classes of cattle travelling in interstate commerce must be identified with official ID and accompanied by traceability documents acceptable to the shipping and receiving states. These include all sexually intact cattle and bison over 18 months of age, all female dairy cattle of any age, all dairy males (intact or castrated) born after March 11, 2013 and cattle and bison of any age used for rodeo, shows, exhibition and recreational events. Feeder cattle under 18 months of age, by far the most common class of cattle traveling across state lines, are currently exempt from the ADT rule.

March 11, 2015 marked the end of a 24-month phase-out period during which producers could continue to use various identification tags, such as those using a “900” numeric prefix, as official identification. As of that date, only tags beginning with the 840 prefix and using the program’s official Animal Identification Number (AIN) system and the U.S. shield will be in compliance with the program for non-exempt cattle moving across state lines. Others such as 900 tags remain acceptable only if the animal was tagged prior to March 11.

Currently, APHIS is engaged in assessing the effectiveness of the ADT system in tracing cattle in the case of an animal-disease outbreak. These assessments include several performance measures such as determining the ability and time it takes to determine the state and premises of origin for an animal based on its ID and shipping documentation

Early in the program, APHIS conducted 255 trace exercises on cattle shipped interstate to establish baseline performance data. In determining the premises of origin, the success rate was 77 percent, but at an average time of 264 hours – far longer than the program’s goal of 24-hour traceback.

APHIS now is running a news series of trace exercises using updated standards and a new software system. By this August, the agency plans to have new assessment data to compare with the baseline performance numbers.

As for enforcement of ADT requirements, APHIS initially focused on educating producers and markets when animals were out of compliance, and began phasing in enforcement procedures in March 2014. Enforcement focused on repeat offenders, and so far, APHIS has issued 1,015 letters of information and initiated 33 cases with its Investigative and Enforcement Services (IES).

Hammerschmidt also outlined a number of ongoing challenges including inconsistencies between states in terms of required documents for importing animals and lack of producer awareness of program requirements, such as that they need to obtain an official premises identification number (PIN) to purchase official program ID tags.

Jack Shere, DVM, associate deputy administrator for APHIS Veterinary Services also addressed some of the program’s challenges.  He indicated USDA administrators and Congress want to see faster progress in the program at the state level, and said USDA currently is implementing a review of the ADT program. A high percentage of states, he says, have fallen behind in updating their ADT plans or “road maps,’ which serve as the basis for cooperative agreements with APHIS.

Shere also pointed out that APHIS is under pressure from other government agencies and industry over the lack of a comprehensive farm-to-fork traceability system and its impact on trade. Most of our competitors for international meat exports have such a system, and use it as leverage against the United States in trade negotiations. Some critical import markets, including China, cite our lack of traceability in refusing imports of U.S. beef.

International trade falls outside the official goals of the ADT program, which was designed to help minimize and contain potential disease outbreaks. Many in the industry however, believe we need a more comprehensive traceability program to help ensure future competitiveness in international markets.

Bovine Veterinarian

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