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July 24th - Mid-Morning Futures Summary

Cattle futures proved quite volatile Thursday morning. News that western Plains cattle were trading at record highs in the $160-$162/cwt area sent CME futures soaring early this morning. However, bulls proved unable to sustain the advance, thereby triggering a technical drop that put the complex lower on the day. Prices have since recovered, but today’s action suggests a major CME top may be looming. August live cattle had surged 0.95 cents to 157.00 cents/pound in late Thursday morning action, while December gained 0.32 cents to 158.05. Meanwhile, August feeder futures rose 0.40 cents to 217.65 cents/pound, but October feeders dropped 0.17 to 218.00.

Corn futures dipped on China talk Thursday morning. Corn futures followed soybeans higher Wednesday night and seemed likely to keep rising after the weekly Export Sales report stated the new-crop result far above expectations. However, rumors that China will insist that U.S. DDGs shipped to that country be certified free of an unapproved GMO trait apparently undercut the market. September corn sank 0.25 cents to $3.6225/bushel late Thursday morning, while December sagged 0.5 cent to $3.7025.

Soy prices set back from early highs. Forecasts for Corn Belt dryness in late July and early August sparked a follow-through rally in the CBOT soy complex overnight. Moreover, the results of the weekly Export Sales report looked generally bullish for bean and product futures. Nevertheless, Chicago prices declined from their early highs. The reason for the drop was obvious, which may bode ill for short-term prospects. August soybean futures advanced 15.5 cents to $12.165/bushel around midsession Thursday, while November futures climbed 16.5 cents to $10.93. August soyoil ran up 0.18 cents to 36.38 cents/pound and August soymeal climbed $6.2 to $397.7/ton.

The wheat markets turned mixed. Wheat futures also followed soybeans upward overnight, but have subsequently set back. The Export Sales data looked neutral. The morning decline may partially reflect news that scouts are finding strong productive potential while touring spring wheat across the northern Plains. September CBOT wheat gained 3.0 cents to $5.3375/bushel as lunchtime loomed Thursday, while September KC wheat edged up 1.5 cents to $6.25/bushel, and September MWE wheat moved up 1.5 cents to $6.225.

Hog futures remain under pressure. Wednesday’s hog breakdown had lots of bearish technical implications, so late-day news of sizeable cash and wholesale losses triggered fresh CME selling overnight and again this morning. The August future is trying to firm, but its ability to sustain the bounce is debatable. August hog futures dove 1.25 cents to 123.32 cents/pound just before lunchtime Thursday, while December plunged 2.30 cents to 99.20.

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July 24th - Cash Fed Cattle Prices Trading at New All Time Highs

It started late yesterday afternoon and has continued this morning, all major packers bidding $161, then $162, with some numbers trading at both prices. Some cattle feeders are passing and pricing cattle at $165. For the first time in history, fed cattle will likely average above $160 when this week is done. 

Packers are competing aggressively for a limited supply of fed cattle. With beef production down 6%, ground beef patty makers are competing for a limited supply of beef to convert to hamburgers. And the American consumer is not likely to give up hamburger anymore than he or she would give up a car (or the gas to power it) or a cup of coffee. 

Futures Still Don’t Want to Believe

CME Live Cattle futures are placidly following this surge in cash prices, staying big discount, reflecting the collective belief that prices at these new highs are not sustainable and a top must be near. Such is the hallmark of this Bull of 2014, a realizing, climb the wall of worry bull that could be singled out as a textbook example for Wikipedia. 

And the risk management community continues to look at new contract highs as a place to lay off risk, not considering what may lay in store for this market in the 4th and 1st quarters could be much higher prices than being seen today. 

Placements Historically Small

While many are concerned prices are already too high, feedlot placements for July are running over 20% below a year ago and the five year average. And August placements won’t be much different more than likely. Tomorrow’s USDA Cattle on Feed report is expected to show placements down 4% but more importantly, we will likely have marketed 350,000 cattle more than we placed, taking our total cattle on feed inventory lower. A shortfall of placements in July and August will only set up a possible “hole” in fed cattle numbers in late in 2014.  Yet, Dec and Feb LC futures have taken on heavy selling the last couple days. This is yet another example of how the industry’s bearish mind set is the prevailing one. Remarkably, August LC is only a quarter discount to Dec LC.  Talk about a bullish market structure!

It’s Far From Over

August LC retreated to its old contract high this morning and dipped lower on the day, just as rumors of $165 cash trade bubble about. This bull market may seem long in tooth but as long as futures are grossly discount at a time when a basis change typically occurs and the bull spreads work, most experienced traders know better than to pick a top. Better to buy breaks and have patience, and see where we end up come expiration. 

The Beef

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"Click Here" to view a Slide Show of Drought Monitor maps for the past 12 weeks
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July 23rd - Cold Storage Report
  • Total red meat supplies in freezers were down 5 percent from the previous month and down 13 percent from last year.
    • Total pounds of beef in freezers were down 5 percent from the previous month and down 26 percent from last year.
    • Frozen pork supplies were down 7 percent from the previous month and down 5 percent from last year. 
    • Stocks of pork bellies were down 2 percent from last month but up 100 percent from last year.
  • Total frozen poultry supplies on June 30, 2014 were down 2 percent from the previous month and down 18 percent from a year ago.
    • Total stocks of chicken were down 9 percent from the previous month and down 18 percent from last year.
    • Total pounds of turkey in freezers were up 9 percent from last month but down 19 percent from June 30, 2013.
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July 23rd - The Need for African Breed Composites in the US

Johann Zietsman, a renowned grazier and livestock breeder from Zimbabwe, has written an article on the profitability of integrating African beef breeds into the American ranching system. After his tour of ranching in the United States, he deduced that influence of African breeds would be beneficial to any operation, not just in the southern states. The "survival of the fittest" aspect of the African breeds introduces a economical sustainability factor that is hard to ignore for its practicality. These cattle have survived harsh weather conditions, tribal practices, meager grazing, and hard labor. The hardiness of these animals would be an excellent genetic addition to the comparably pampered North American improved breeds. A PDF description of the benefits and specifics of this system is linked below as well as a link to his website. Visit either to learn more about this research or other work that Zietsman is doing in the area of sustainable ranching practices.

Article: The Need for African Breed Composites in the USA

Website: profitableranching.com

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July 23rd - Disease Update: Vesicular Stomatitis

Several new cases of vesicular stomatitis (VS) have been confirmed in horses in Texas and Colorado over the past week. The Texas Animal Health Commission (TAHC) also confirmed diagnoses of VS in two cattle earlier this month, and several states have modified their livestock import requirements to prevent spread of the disease.

This week, a premises in Boulder County Colorado was placed under quarantine after a case of VS was confirmed in a horse. The case follows confirmation of VS in four horses on two premises in Weld County Colorado a week ago.

Also this week, TAHC confirmed three new cases of VS in horses on three premises in Texas. So far this year, a total of 16 VSV-positive premises have been identified, 13 in Texas and three in Colorado. On May 28, the TAHC announced confirmation of the nation’s first case of VS this year in horses in Kinney County.

Vesicular stomatitis virus (VSV) is classified as a rhabdovirus, and there are two serotypes of VSV – New Jersey and Indiana. Outbreaks this year have involved the New Jersey serotype. Infection with one serotype is not cross-protective for the second serotype. Clinical signs of VS, which can affect equines, cattle, bison, sheep, goats, pigs and camelids include vesicles, erosions, and sloughing of the skin on the muzzle, tongue, teats and above the hooves.

Insect vectors are the primary source of transmission of VS although mechanical transmission occurs in some species. Fly control is a key component in preventing spread of the virus.

Rarely, VS can affect humans, typically those who are in contact with infected animals. In humans the disease typically causes flu-like symptoms. Find more information about the disease on the University of Wisconsin’s Vetmed website.

Several states have modified their requirements for importing livestock in an effort to prevent the spread of VS. Last week, Wyoming State Veterinarian, Dr. Jim Logan, announced that, due to cases of VS recently found in Colorado and Texas, the Wyoming Livestock Board (WLSB) is now requiring that all livestock imported from any state where the disease has been diagnosed must be accompanied by a health certificate written within 10 days prior to entry into the state. Livestock animals include horses, cattle, sheep, goats and swine.

TAHC has compiled information states have provided on enhanced entry requirements they are imposing on Texas livestock (including cattle and horses) due to the recently announced VS cases. View the list of states and their requirements here.

Veterinarians and livestock owners who suspect an animal could have VS should contact state or federal animal health authorities. Livestock with clinical signs of VS typically will be quarantined until they clear the virus and present no further threat to transmit the disease.

USDA provides weekly situation reports, maps and other information on VS online

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July 22nd - All over the Web: "Cattle & Greenhouse Emissions"

This story, or a variation thereof, has been all over the web this week.  In reading the story, and in view that the U.S. Dept. of Interior estimates there were 70 Million bison roaming the Plains in the year 1500, it makes one wonder how the planet, or for that matter, the Lesser Prairie Chicken have survived.

Beef Cattle Responsible 'For Far More Greenhouse Gas Emissions' Than Other Animals

New research suggests that livestock emissions are on the rise and that beef cattle are responsible for far more greenhouse gas emissions than other types of animals.

Carbon dioxide is the most-prevalent gas when it comes to climate change. It is released by vehicles, industry, and forest removal and comprises the greatest portion of greenhouse gas totals. But methane and nitrous oxide are also greenhouse gasses and account for approximately 28 percent of global warming activity.

Methane and nitrous oxide are released, in part, by livestock. Animals release methane as a result of microorganisms that are involved in their digestive processes and nitrous oxide from decomposing manure.

These two gasses are responsible for a quarter of these non-carbon dioxide gas emissions and 9 percent of total greenhouse gas emissions overall.

The research team, including Dario Caro, formerly of Carnegie and now at the University of Siena in Italy, and Carnegie's Ken Caldeira, estimated the greenhouse gas emissions related to livestock in 237 countries over a nearly half a century and found that livestock emissions increased by 51 percent over this period.

They found a stark difference between livestock-related emissions in the developing world, which accounts for most of this increase, and that released by developed countries. This is expected to increase further going forward, as demand for meat, dairy products, and eggs is predicted by some scientists to double by 2050. By contrast, developed countries reached maximum livestock emissions in the 1970s and have been in decline since that time.

"The developing world is getting better at reducing greenhouse emissions caused by each animal, but this improvement is not keeping up with the increasing demand for meat," said Caro. "As a result, greenhouse gas emissions from livestock keep going up and up in much of the developing world."

Breaking it down by animal, beef and dairy cattle comprised 74 percent of livestock-related greenhouse gas emissions, 54 percent coming from beef cattle and 17 percent from dairy cattle. Part of this is due to the abundance of cows, but it is also because cattle emit greater quantities of methane and nitrous oxide than other animals. Sheep comprised 9 percent, buffalo 7 percent, pigs 5 percent, and goats 4 percent.

"That tasty hamburger is the real culprit," Caldeira said. "It might be better for the environment if we all became vegetarians, but a lot of improvement could come from eating pork or chicken instead of beef."

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July 22nd - Introducing the Commercial Long Hedger

The movement to the current elevated cattle prices is something most trade participants viewed as a isolated and temporary phenomena. Cattle owners and beef processors are a wary lot. They watched the price spike after the first of the year -- sometimes with doubt and disbelief. Most viewed the spike as temporary and have been awaiting more normalized seasonal price patterns to prick what some regard as a price bubble. After all, few believed beef could move through the pipeline at these elevated prices without a consumer backlash.

The speculative longs in the cattle market took a hit in 2013 when hopes that prices would reach $140 were denied and instead prices traded in the $120 level for much of that year. Technical traders have been short much of this year and sell signal after sell signal by the charts has resulted in major damage to traders who live by the language of "key reversals", "head and shoulder patterns", "moving averages" and other esoteric price interpretations.

The loss of many of the speculative long traders in the cattle futures market has resulted in an discounted price structure on all futures - spot and deferred. This has been a windfall for hedged feeders who have capitalized on unexpectedly large premium basises. The current futures price structure is set to attract a new clientele to the market -- the commercial long hedger.

Beef packers willing to step out into August and pay $7 premiums for a basis to the August board also might choose to protect price by buying the August board. The August contract settling last week at $151.60 might be an attractive risk management option. Protecting price is a key component of margin management. The days of leaving all pricing to the spot week's transactions, both on the buy and the sell side, is living in the past.

Cattle feeders also face a similar situation with feeder cattle. The spot August contract is selling at $211.57 as of last Friday. The deferred feeder contracts are flat for the balance of the year then fall back several dollars per hundred weight early next year. All these prices are discount to the current cash prices. It is doubtful the cattle feeder will see increasing numbers of feeder cattle next year. The feeding companies might find that option attractive and protect some portion of future inventory for price.

The days of a nice fully protection balanced position whether in the feedyard or packing plant are gone. They disappeared as packing plants and feedlots struggle to cope with downsizing facilities to match the downsized herd. Surviving in the current environment requires flexibility and adaptability and no small amount of nerve.

The Cattle Report

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July 22nd - Corn Crop Condition

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July 21st - Chicken Consumption Surges as Beef Prices Soar

For years, Chick-fil-A's cow mascots have urged Americans to "eat mor chikin," and the message appears to be working.

Chicken consumption has risen 17 percent from 2012, according to a new report from the National Chicken Council.

"With the tight supplies in the cattle and hog herds, and accompanying record beef and pork prices, it's not surprising to see a double digit increase in chicken consumption this year," said National Chicken Council Vice President of Communications Tom Super in a release.

Despite these high beef and pork prices, health/nutrition appears to trump price as the most common reason consumers are picking chicken.

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July 18th - National Feeder & Stocker Cattle Summary:
USDA-MO Dept of Ag Market News

RECEIPTS:    Auctions     Direct    Video/Internet     Total
This Week     155,500     32,300       306,100        493,900 
Last Week     190,700     86,200         48,900        325,800 
Last Year      168,500     66,300        212,400        447,200

Compared to last week, yearling feeder cattle sold weak to 5.00 lower while calves traded 5.00-10.00 lower after moving briskly higher every week for three straight months.  Auction receipts were fairly light as most of the industry was expecting lower cash markets this week, following a major selloff of CME Feeder Cattle futures last week.  However, the Board showed some footing this week and the few sellers left are not overly concerned that they missed the boat.  The overwhelming majority of summer and fall delivery yearlings have already been sold and many of the better fall delivery calves.  Most market fundamentalists expect the record price levels to return after a minor correction. 

Ideal growing conditions continue to push feed/grain prices lower and most don’t expect this year’s corn crop to see 4.00/bu again.  Packers tipped their short-bought hand this week by coming out and buying cattle only slightly lower on Wednesday and paying roughly an extra dollar for a two week delivery.  It’s very unusual to see shrewd packers paying extra for out-front cattle in a downward market, especially when the cash trade is at a sizeable premium to the spot Live futures contract.  Direct slaughter cattle in the 5 Area feeding region sold steady to 1.00 lower from 155.00-157.50, mostly 246.00-248.00 dressed.  This action sent CME cattle futures sharply higher on Thursday and made cattle feeders feel good about the physical commodity directing traffic on the paper trade for a change. 

Cooler weather and cooler heads prevailed across cattle country this past week and, although the feeder market remains very strong, few sales reached excitable levels after the headlines from the last few weeks.  But, Western Video Market held a nice three-day 95,000 head sale based out of Reno, NV with over 70 percent of the consignments coming from areas west of the Rockies.  One load of 430 lb weaned Idaho steer calves brought 367.50 for December delivery. 

Year-to-date beef cow slaughter through the first six months of 2014 was down 15 percent from a year ago (17 percent lower than the average of the previous five years) and the boneless beef market is doing its best to lure cows out of the pasture.  It’s not uncommon for high dressing cows in the salebarns to bring near 130.00 on the hoof and heavy-muscled lean slaughter bulls are routinely selling up to and over 150.00.  Despite vigorous attempts at herd rebuilding, ranchers are unlikely to give older cows another chance when they come up open at preg-checking time.  Beef prices are testing consumer budgets in thestores and restaurants, but pork cut-outs reached their own all-time record high this week and most folks can’t survive on bread alone.  This week’s reported auction volume included 45 percent over 600 lbs and 40 percent heifers. 

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Canadian Weekly Cattle Report:
Provided by CanFax

Fed cattle higher

  • Canfax weighted average fed steers rose $2.26 to $162.95 per hundredweight last week and heifers rose $1.98 to $160.23.
  • The gain over the past two weeks has been about $7 per cwt.
  • The Canadian market was catching up to the American market last week, but U.S. prices backed down a little from recent records.
  • This caused the Alberta cash to Chicago futures basis to improve by $6.65 to +$2.39 per cwt. It is the first time since 1998 that the cash-to-futures basis has been positive in July.
  • Weekly fed cattle exports to June 28 rose 20 percent to 7,818. That was the best week since early May.
  • Feedlots are extremely current in their marketing. Steer carcasses are the lightest since 2010 and are 20 pounds lighter than a year ago. However, carcass weights tend to rise at this point in the year.
  • The sharp decline in Chicago futures suggests a top in the market. Fundamentals have shifted only modestly. Wholesale beef prices are still strong and feedlots remain current.
Cow prices rise
  • Since Jan. 1, D1, D2 cow prices have risen about 44 percent.
  • Only once in the past 10 years, in 2008, has there been a larger percentage increase.
  • There was a slight increase in non-fed supplies last week but prices rose.
  • D1, D2 cows ranged from $107-$124 to average $115, up $2.
  • D3 cows ranged from $95-$109 to average $102.42. Railgrade cows were $207-$212.
  • Top end butcher bulls traded in the upper $130s to low $140s per cwt.
  • Weekly non-fed exports to June 28 totalled 5,123 head.
  • Younger feeder and breeding quality cows fetched commercial and speculative buying interest.
Feeders stronger
  • In light trade, feeder prices were steady to higher, but there was downward pressure late in the week.
  • The decline in the Chicago cattle futures markets pressured 900 lb. and heavier yearlings for August-September delivery down by as much as $5-$7 by the end of the week.
  • A few exposed heifers have traded on the feeder market at a slight premium over the feeder market. Bred heifers are trading out of season, so it could be tough to see much of a premium over the feeder market.
  • Last year a lot of exposed heifers entered feed yards.
  • Buyers are having trouble assembling load lots given light volumes of calves and light feeders. The inconsistency of quantity and quality is being priced into the market.
  • Alberta auction volumes totalled 11,546 head. Auction volumes this year have consistently trended above year-ago volumes.
  • Yearling steers for August-September delivery are looking at break-evens of about $160 per cwt. Canfax projected prices on fed cattle for the fourth quarter show many of these yearlings have little if any margin.
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July 18th - Shootin' the Bull Weekly Analysis:
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In my opinion, traders, producers, and purveyor's are grappling with the perception that fed cattle are being used to take up the slack of cow beef.  While the knowledge of this may or may not cause price movement, the thought that only one product of the carcass is carrying such tremendous weight in pricing.  This is perceived as one of the reasons that fats may remain firm for a little while longer, but not feeder cattle.  Feedyards are not anticipated to be excited about bidding up for inventory if something were to start to erode hamburger demand.  Whether from a persistent price hike or import supplies, any disruption of demand for hamburger meat is anticipated to cause a quick change in fat cattle prices.  The close today near the middle of last weeks decline leaves a great deal of speculation.  Both sides have good arguments.

Feeder cattle did not retrace in price anything like the extent that fats did.  This dissention is well noted.  If one considers the significant reduction in the cow kill, and smaller reduction of the heifer kill, this fall and spring calf crop is anticipated to be larger than previously anticipated.  It is noted that if O'bessie can live through this birth, she will be destined for the kill plant.  Two factors will increase then. One, the advent of a higher cow kill and the other, a new calf.  This is perceived as one reasons for the $5.00 to $8.00 discount of the '15 months.  Producers are enveloped with the present as no one has ever seen this much liquidity poured into the beef industry.  From my perspective only, do not let this sway you from securing prices in the future that may or may not be available, even if it is at a discount to the present price. 

Corn is perceived on a path to intrinsic value, the level in which supply and demand begin to consolidate price. My analysis suggested the $3.80 level, but some contend there will be a 2 handle before it is over with.

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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June 20th - Cattle on Feed Report:

United States Cattle on Feed Down 2 Percent 

  • Cattle and calves on feed for slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 10.6 million head on June 1, 2014. The inventory was 2 percent below June 1, 2013. 
  • Placements in feedlots during May totaled 1.91 million, 7 percent below 2013. Net placements were 1.81 million head. During May, placements of cattle and calves weighing less than 600 pounds were 435,000, 600-699 pounds were 290,000, 700-799 pounds were 477,000, and 800 pounds and greater were 710,000. 
  • Marketings of fed cattle during May totaled 1.87 million, 4 percent below 2013. May marketings are the lowest for the month since the series began in 1996. 
  • Other disappearance totaled 101,000 during May, 1 percent above 2013.
Analysts regarded the report as neutral to positive as all percentages were close to analysts’ average estimates and very similar to the prior month’s report. May placements saw a large year-on-year decline in the heaviest two weight categories. Four states, Arizona, Iowa, Nebraska and South Dakota had COF totals above a year ago. Texas returned to having the most cattle on feed (2.550M head), although its total was down 3.0% on a year ago. Nebraska was second with 2.410M head and Kansas third with 2.020M head. Only Kansas and Texas placed more cattle than last year, while Nebraska placed 10% fewer cattle. The weight breakdown showed that the only-year-on-year increase in placements came in the under 600 lb category, as occurred in April. The 700 lb and up category saw 163,000 fewer cattle placed. Two states, California and Minnesota, marketed more cattle in May than a year earlier.
 
Cattle on Feed Inventory in 1,000+ Capacity Feedlots as of June 1st
Millions of Head
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Number of Cattle Placed on Feed in 1,000+ Capacity Feedlots in May
Millions of Head
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Number of Cattle Marketed from 1,000+ Capacity Feedlots in May
Millions of Head
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Cattle on Feed by State
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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.


The Cattle Report

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May 5th - 2012 Census of Agriculture Reveals Trends

There are now 3.2 million farmers operating 2.1 million farms on 914.5 million acres of farmland across the United States, according to the 2012 Census of Agriculture, released today by the U.S. Department of Agriculture. The agriculture census presents more than 6 million pieces of information, which provide a detailed look at the U.S. farm sector at the national, state and county levels.

"Once every five years, farmers, ranchers and growers have the unique opportunity to let the world know how U.S. agriculture is changing, what is staying the same, what's working and what we can do differently," said Dr. Cynthia Clark, the retiring head of USDA's National Agricultural Statistics Service, which administered the survey. "Today, we can start to delve into the details." 

Census data provide valuable insight into the U.S. farmer demographics, economics and production practices. Some of the key findings include: 
 

  • Both sales and production expenses reached record highs in 2012. U.S. producers sold $394.6 billion worth of agricultural products, but it cost them $328.9 billion to produce these products. 
  • Three quarters of all farms had sales of less than $50,000, producing only 3 percent of the total value of farm products sold while those with sales of more than $1 million - 4 percent of all farms - produced 66 percent. 
  • Much of the increased farm income was concentrated geographically or by farm categories. 
  • California led the nation with 9 of the 10 top counties for value of sales. Fresno County was number one in the United States with nearly $5 billion in sales in 2012, which is greater than that of 23 states. Weld County, Colorado ranked 9th in the top 10 U.S. counties. 
    • The top 5 states for agricultural sales were California ($42.6 billion); Iowa ($30.8 billion); Texas ($25.4 billion); Nebraska ($23.1 billion); and Minnesota ($21.3 billion). 
  • Eighty-seven percent of all U.S. farms are operated by families or individuals. 
  • Principal operators were on average 58.3 years old and were predominantly male; second operators were slightly younger and most likely to be female; and third operators were younger still. 
  • Young, beginning principal operators who reported their primary occupation as farming increased 11.3 percent from 36,396 to 40,499 between 2007 and 2012. 
  • All categories of minority-operated farms increased between 2007 and 2012; the Hispanic-operated farms had a significant 21 percent increase. 
  • 144,530 farm operators reported selling products directly to consumers. In 2012, these sales totaled more than $1.3 billion (up 8.1 percent from 2007). 
  • Organic sales were growing, but accounted for just 0.8 percent of the total value of U.S. agricultural production. Organic farmers reported $3.12 billion in sales in 2012, up from $1.7 billion in 2007. 
  • Farms with Internet access rose from 56.5 percent in 2007 to 69.6 percent in 2012. 
  • 57,299 farms produced on-farm renewable energy, more than double the 23,451 in 2007. 
  • 474,028 farms covering 173.1 million acres were farmed with conservation tillage or no-till practices. 
  • Corn and soybean acres topped 50 percent of all harvested acres for the first time. 
  • The largest category of operations was beef cattle with 619,172 or 29 percent of all farms and ranches in 2012 specializing in cattle. 
Conducted since 1840, the Census of Agriculture accounts for all U.S. farms and ranches and the people who operate them. The Census tells a story of how American agriculture is changing and lays the groundwork for new programs and policies that will invest in rural America; promote innovation and productivity; build the rural economy; and support our next generation of farmers and ranchers.
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February 14th - USDA Long-Term Projections

Despite lower prices for many agricultural products in the near future, USDA is projecting U.S. farm income to remain historically high through 2023. Analysis for the report was conducted prior to completion of the Agricultural Act of 2014, and was based on the assumption of continuation of policies in the 2008 Farm Bill. Projections range from long-term economic growth, global production and consumption trends, global trade trends, commodity prices, farm income and more.

USDA projects global economic growth to average 3.2 percent annually over the next decade, with stronger growth projected in developing countries, including China, India, and countries in Africa and Latin America. The U.S. economic growth is projected to average 2.6 percent over the next decade. “Steady global economic growth supports longer term gains in world food demand, global agricultural trade, and U.S. agricultural exports,” according to the report.

While prices for many of the major crops are projected to decline in the next few years, long-term growth in global demand, a low-valued U.S. dollar, and demand for biofuel, will hold prices for corn, oilseeds and other major crops above pre-2007 levels, according to the report.

As a result of recovering from high feed prices in recent years and drought, USDA is projecting livestock production and per capital red meat consumption to increase through 2023.
While beef production is projected to decline through 2016 as producers retain heifers to grow the overall herd, production is expected to begin increasing in 2016. USDA is projecting that beef cow numbers will increase from 29 million today to more than 33 million in 2022-2023. The total cattle inventory is projected to expand to approximately 96 million in 2023, and increasing slaughter weights add to increased beef production projections. USDA is projecting beef cattle prices to increase through 2017, then fall but increase again through 2023.

With regard to global beef trade, USDA is projecting world meat consumption to increase by about 1.9 percent annually from 2014-2023 and world meat trade to increase by 22 percent during that same period. Stagnate beef export projections from Australia resulted in the top four beef exporting nations, according to USDA, to be Brazil, India, the United States and Australia. On the import side, China and Hong Kong are projected to increase beef imports by 55 percent in the next decade as China’s middle class grows from 300 million today to an expected 640 million by 2020.

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February 13th - USDA Projects Net Farm Income to Fall in 2014

While USDA’s latest farm income projections indicate an overall decline in net farm income of around 26.6 percent in 2014, there are some positive projections in the report, especially for livestock producers.

“Livestock receipts are up marginally,” said USDA Chief Economist Joe Glauber. “They’re up at $183.4 billion. It’s the first time in a long while that we’ve seen livestock and crop receipts at around roughly the same magnitude.”

Crop receipts are projected at $189.4 billion in 2014, down more than 12 percent and back to pre-2011 levels. According to the report, declines in cash receipts are expected for almost all major crop categories, including food grain, feed, oil, fruits/tree nuts, and vegetables/melons. Large anticipated declines in the 2014 price for corn are impacting farmers’ decisions regarding other major crops. According to the report, use of corn for ethanol is expected to rise in 2014. Additionally, USDA is projecting declines in hay, wheat and soybeans receipts as well.

USDA is projecting a 0.7 percent increase in livestock receipts in 2014. For cattle and calves, steady receipts are projected due to lower production levels. Additionally, USDA is forecasting a decline in beef and veal export quantities in 2014.

Overall, net farm income, earnings only from current year production, is forecast to be $95.8 billion in 2014, down 26.6 percent from 2013 and projected to be the lowest since 2010. Net cash income, which includes income from carryover stocks from 2013, is forecast at $101.9 billion, down 22 percent from 2013.

For just the second time in the last 10 years and the first time since 2009, USDA is projecting a decline in production expenses, with an expected $3.9 billion decrease in 2014.

“Expenses are down,” Glauber said. “We’re forecasting them at $310 billion. That’s down almost $5 billion from last year, and that’s largely lower feed costs.”

Feed expenses are expected to decline by $6.6 billion, 11.3 percent, but livestock and poultry purchases are projected to increase, driven by an expected double-digit increase in the price of feeder steers due to tight supplies and strong beef demand. The overall expenses for the two major livestock-related expenses, however, are projected to fall by 6.1 percent, or $5.1 billion.

Other farm expense projections include a 4.7 percent decline for the three major crop-related expenses – seed, fertilizer and pesticides; a 9.6 percent decline in net rent to non-operators; a 4.6 percent increase in total labor; and a 3.2 percent increase for miscellaneous expenses, including things like animal health and breeding expenses, contract production fees, irrigation water, and general production and management decisions.

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All Cattle & Calves... State Rankings & Change
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January 1, 2014 Inventory vs. 2013 Inventory... Compiled from USDA National Agricultural Statistical Service Data
Rank
State
2014
2013
% Change
2014 as
% of Total
 
1
Texas
10,900,000
11,300,000
-3.54%
12.42%
2
Nebraska
6,150,000
6,300,000
-2.38%
7.01%
3
Kansas
5,800,000
5,850,000
-0.85%
6.61%
4
California
5,250,000
5,300,000
-0.94%
5.98%
5
Oklahoma
4,300,000
4,200,000
+2.38%
4.90%
6
Missouri
3,800,000
3,650,000
+4.11%
4.33%
7
Iowa
3,700,000
3,850,000
-3.90%
4.22%
8
South Dakota
3,650,000
3,850,000
-5.19%
4.16%
9
Wisconsin
3,350,000
3,450,000
-2.90%
3.82%
10
Montana
2,550,000
2,600,000
-1.92%
2.91%
11
Colorado
2,480,000
2,600,000
-4.62%
2.83%
12
Minnesota
2,280,000
2,390,000
-4.60%
2.60%
13
Idaho
2,190,000
2,370,000
-7.59%
2.50%
14
Kentucky
2,090,000
2,240,000
-6.70%
2.38%
15
North Dakota
1,770,000
1,790,000
-1.12%
2.02%
16
Tennessee
1,760,000
1,830,000
-3.83%
2.01%
17
Arkansas
1,660,000
1,600,000
+3.75%
1.89%
18/19
Florida
1,620,000
1,660,000
-2.41%
1.85%
18/19
Pennsylvania
1,620,000
1,610,000
+0.62%
1.85%
20
Virginia
1,530,000
1,610,000
-4.97%
1.74%
21
New York
1,450,000
1,400,000
+3.57%
1.65%
22
New Mexico
1,290,000
1,340,000
-3.73%
1.47%
23
Oregon
1,280,000
1,280,000
+0.00%
1.46%
24
Wyoming
1,270,000
1,290,000
-1.55%
1.45%
25
Ohio
1,250,000
1,230,000
+1.63%
1.42%
26
Alabama
1,240,000
1,220,000
+1.64%
1.41%
27
Illinois
1,130,000
1,120,000
+0.89%
1.29%
28
Michigan
1,120,000
1,120,000
+0.00%
1.28%
29
Washington
1,100,000
1,150,000
-4.35%
1.25%
30
Georgia
1,000,000
1,020,000
-1.96%
1.14%
31
Mississippi
930,000
910,000
+2.20%
1.06%
32
Arizona
920,000
900,000
+2.22%
1.05%
33
Indiana
870,000
810,000
+7.41%
0.99%
34
North Carolina
810,000
820,000
-1.22%
0.92%
35
Utah
800,000
770,000
+3.90%
0.91%
36
Louisiana
790,000
780,000
+1.28%
0.90%
37
Nevada
455,000
460,000
-1.09%
0.52%
38
West Virginia
380,000
410,000
-7.32%
0.43%
39
South Carolina
360,000
355,000
+1.41%
0.41%
40
Vermont
260,000
270,000
-3.70%
0.30%
41
Maryland
182,000
192,000
-5.21%
0.21%
42
Hawaii
130,000
132,000
-1.52%
0.15%
43
Maine
85,000
85,000
+0.00%
0.097%
44
Connecticut
47,000
48,000
-2.08%
0.054%
45
Massachusetts
39,000
39,000
+0.00%
0.044%
46
New Hampshire
32,000
33,000
-3.03%
0.036%
47
New Jersey
29,000
31,000
-6.45%
0.033%
48
Delaware
16,000
18,000
-11.11%
0.018%
49
Alaska
10,000
12,000
-16.67%
0.011%
50
Rhode Island
5,000
4,600
+8.70%
0.006%






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Total
87,730,000
89,299,600
-1.76%
 100.00%
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Beef Cows... State Rankings & Change
.
January 1, 2014 Inventory vs. 2013 Inventory... Compiled from USDA National Agricultural Statistical Service Data
. Rank
. State
2014
2013
. % Change
2014 as
% of Total
 
 
 
 
1
Texas
3,910,000
4,015,000
-2.62%
13.46%
2
Missouri
1,820,000
1,757,000
+3.59%
6.27%
3
Oklahoma
1,805,000
1,754,000
+2.91%
6.22%
4
Nebraska
1,797,000
1,805,000
-0.44%
6.19%
5
South Dakota
1,635,000
1,688,000
-3.14%
5.63%
6
Montana
1,476,000
1,506,000
-1.99%
5.08%
7
Kansas
1,414,000
1,328,000
+6.48%
4.87%
8
Kentucky
1,012,000
1,028,000
-1.56%
3.48%
9
North Dakota
943,000
922,000
+2.28%
3.25%
10
Iowa
885,000
925,000
-4.32%
3.05%
11
Arkansas
882,000
851,000
+3.64%
3.04%
12
Florida
877,000
908,000
-3.41%
3.02%
13
Tennessee
864,000
912,000
-5.26%
2.97%
14
Colorado
700,000
715,000
-2.10%
2.41%
15
Wyoming
694,000
694,000
+0.00%
2.39%
16
Alabama
671,000
651,000
+3.07%
2.31%
17
Virginia
657,000
686,000
-4.23%
2.26%
18
California
600,000
610,000
-1.64%
2.07%
19
Oregon
516,000
527,000
-2.09%
1.78%
20
Georgia
480,000
490,000
-2.04%
1.65%
21
Mississippi
477,000
486,000
-1.85%
1.64%
22
Louisiana
450,000
454,000
-0.88%
1.55%
23
Idaho
445,000
510,000
-12.75%
1.53%
24
New Mexico
387,000
390,000
-0.77%
1.33%
25
North Carolina
360,000
364,000
-1.10%
1.24%
26
Illinois
359,000
360,000
-0.28%
1.24%
27
Minnesota
350,000
375,000
-6.67%
1.21%
28
Utah
325,000
315,000
+3.17%
1.12%
29
Ohio
293,000
290,000
+1.03%
1.01%
30
Wisconsin
240,000
260,000
-7.69%
 0.83%
31
Nevada
226,000
231,000
-2.16%
 0.78%
32
Washington
209,000
221,000
-5.43%
 0.72%
33
Indiana
192,000
191,000
+0.52%
 0.66%
34
West Virginia
191,000
200,000
-4.50%
 0.66%
35
Arizona
178,000
175,000
+1.71%
 0.61%
36
South Carolina
174,000
174,000
+0.00%
 0.60%
37
Pennsylvania
170,000
155,000
+9.68%
 0.59%
38
Michigan
114,000
113,000
+0.88%
0.39%
39
New York
105,000
90,000
+16.67%
 0.36%
40
Hawaii
68,800
69,900
-1.57%
0.24%
41
Maryland
38,000
41,000
-7.32%
 0.13%
42
Vermont
12,000
12,000
+0.00%
 0.041%
43
Maine
11,000
11,000
+0.00%
0.038%
44
New Jersey
8,000
9,000
-11.11%
0.028%
45
Massachusetts
6,000
6,500
-7.69%
0.021%
46
Alaska
4,300
4,900
-12.24%
0.015%
47
Connecticut
4,000
6,000
-33.33%
0.014%
48
New Hampshire
3,000
3,500
-14.29%
 0.010%
49
Delaware
2,800
4,000
-30.00%
 0.010%
50
Rhode Island
1,500
1,500
+0.00%
0.005%






-
Total
29,042,400
29,295,300
-0.86%
100.00%
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February 4th - Rabobank Report: Structural Changes Needed to Keep U.S. Beef Industry Competitive

Consumption shift requires better cost control as U.S. becomes a “Ground Beef Nation”

Rabobank has published a new report on the U.S. cattle industry, calling for changes in the way beef is produced in order for the industry to remain competitive. In the new report, “Ground Beef Nation,”, Rabobank says that changing consumer preferences and a production model tailored to production of top-shelf steaks has put the U.S. cattle industry in a position of losing market share to competitive proteins.

“Under the existing business model, the U.S. cattle industry manages all fed beef as if it were destined for the center of the plate at a white table cloth restaurant,” notes Rabobank cattle economist Don Close. “The industry is, essentially, producing an extraordinarily high-grade product for consumers who desire to purchase a commodity. More than 60% of U.S. beef consumption is ground product. If the U.S. cattle industry continues to produce ground beef in a structure better suited to high-end cuts, the result will be continued erosion of market share.”

The report goes on to explore the trend of changing consumer preferences and the role pricing plays in the notable decline in beef consumption. The industries that produce competitive proteins such as pork and chicken have grown and become more efficient, making the products more readily available at competitive prices.

“The industry must change to a production model that determines the best end use of an animal as early as possible, in order to compete in a ‘ground beef nation’,” notes Close. “A new system for end-use categorization that influences calf selection, cattle management, production costs, and feeding regimen throughout the life of the animal is vital to keeping beef competitive with other choices at the meat counter.”

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USDA Cattle Inventory Report... January 1 Cattle Inventory Down 2 Percent

All cattle and calves in the United States as of January 1, 2014 totaled 87.7 million head, 2 percent below the 89.3 million on January 1, 2013. This is the lowest January 1 inventory of all cattle and calves since the 82.1 million on hand in 1951.

All cows and heifers that have calved, at 38.3 million, were down 1 percent from the 38.5 million on January 1, 2013. This is the lowest January 1 inventory of all cows and heifers that have calved since the 36.8 million head in 1941. 

  • Beef cows, at 29.0 million, were down 1 percent from January 1, 2013. 
  • Milk cows, at 9.2 million, unchanged from January 1, 2013. 
Other class estimates on January 1, 2014 and the change from January 1, 2013, are as follows:
  • All heifers 500 pounds and over, 18.8 million, down 2 percent. 
  • Beef replacement heifers, 5.5 million, up 2 percent. 
  • Milk replacement heifers, 4.5 million, unchanged. 
  • Other heifers, 8.7 million, down 5 percent. 
  • Steers weighing 500 pounds and over, 15.4 million, down 3 percent.
  • Bulls weighing 500 pounds and over, 2.0 million, down 1 percent. 
  • Calves under 500 pounds, 13.3 million, down 4 percent. 
  • Cattle and calves on feed for slaughter in all feedlots, 12.7 million, down 5 percent. 
  • The combined total of calves under 500 pounds, and other heifers and steers over 500 pounds outside of feedlots was 24.7 million, down 3 percent. 
 Calf Crop Down 1 Percent

The 2013 calf crop was estimated at 33.9 million head, down 1 percent from 2012. This is the smallest calf crop since the 33.7 million born during 1949. Calves born during the first half of 2013 are estimated at 24.7 million, down 1 percent from 2012.

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July 23rd - 

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