January 14, 2013
Managing Weather and Marketing Risk in 2013
The major headline from the USDA's Supply and Demand Report was that corn was being fed to livestock at a great rate than the market anticipated.
USDA declares much of the wheat belt a disaster area
With the first disaster declaration of 2013, USDA has declared much of the central and southern Wheat Belt a natural disaster area as the continuing drought threatens the winter wheat crop. In all, 597 counties in 14 states - including most of the four major wheat-growing states; Kansas, Colorado, Oklahoma and Texas – were included in this declaration.
Vilsack to Stay as Agriculture Secretary for Obama Second Term
Tom Vilsack will stay on as U.S. agriculture secretary during President Barack Obama’s second term, said people familiar with the matter who asked not to be identified before an announcement later today.
Cold in China kills about 180,000 cattle
About 180,000 cattle have died in the north while hundreds of emergency shelters have opened in southern China to help people who do not have adequate housing or heat to survive the below-average cold.
Last Sale for the Freeman Family at Freeman Livestock Auction in Sulpher, Okla.
The Freeman family has been operating Freeman Livestock Auction since February 1958. After nearly 55 years, they’re selling the market and the last sale under their ownership was this past Friday. We thank Jim and his family for their many years of membership and wish them and the new ownership at the market the best of luck.
Reminder: Eastern Bankruptcy – Deadline to “Opt In” is January 16th
If you filed a claim against Eastern in its bankruptcy case, you should have recently received a notice informing you that the deadline to “Opt In” is January 16, 2013. According to the Plan of Liquidation, holders of potential allowed unsecured claims may choose to “opt in” to receive a distribution from the “Fifth Third Settlement Monies”. By “opting in” to receive a share of the Fifth Third Settlement Monies, you will be waiving any claims that you may have against Fifth Third Bank or the Trustee. Your receipt of the “opt in” notice does not mean that your claim has been allowed and the Trustee may still object to the validity of your claim. If your claim is allowed and you do not “opt in” you will still receive distributions on your claim that are not funded from the Fifth Third Settlement Monies.
The Trustee has strongly advised recipients of the notice to read the plan and the confirmation order carefully and consult with an attorney before making a decision whether to “opt in”.
Additional copies of the “opt in” agreement and instructions are available on the Trustee’s blog (www.easternlivestockbkinfo.com).
December 14, 2012
Cow-calf producers are in the best profit position among beef-cattle segments coming into 2013. Stocker operators also have good profit potential, but cattle feeders and packers will continue to face tight margins, according to Cattle-Fax…
China and South Africa are suspending imports of beef from Brazil after a case of atypical bovine spongiform encephalopathy was confirmed recently, according to Reuters. Officials from the two countries informed Brazil of their intentions on Dec. 13.
This move brings the number of countries suspending Brazilian beef imports to three. Japan suspended beef imports from Brazil on Dec. 10…
Currently, only estates valued at over $5 million would owe estate taxes. If the president’s proposal is approved, estates valued at $3.5 million and up would be taxed.
The tax rate would also increase 10 percent from 35 to 45 percent…
December 3, 2012
Cattle Outlook: Lowest October Cattle Placements on Record
The November cattle on feed report said there were fewer cattle placed on feed during October than for any October since USDA began the current data series in 1996. Placements were down 12.5%, marketings during October were up 2.8% (thanks to two extra slaughter days) and the number of cattle on feed was down 5.3%...
Rural Thieves Target Hay
With the price of hay rising because of high demand and diminished production due to fewer acres and the severe drought, hay theft reports across the country are on the rise. A Google search of the phrase "hay theft" brings up many articles of hay being stolen from Maine to California and other places…
November 30, 2012
The latest Consumer Price Index (CPI) report from USDA shows retail beef and veal prices have continued to rise through 2012, while all food prices, on average, have stabilized. But while the report projects beef and veal prices to increase 5.5 to 6.5 percent this year, the rate of increase has slowed somewhat. During 2011, beef prices rose by 10.2 percent…
The rally in live cattle futures appeared to run out of steam this week as market participants worry about the pace of beef sales and wholesale beef prices going into the year end holidays, reports CME Group…
U.S. grain exporters have slashed by up to 50 percent the weight of cargo shipped by barges on the Mississippi River to the Gulf of Mexico due to low water on a critical stretch of the waterway after the worst drought in 56 years, grain traders and barge operators said on Thursday.
Barge companies, including Ingram Barge, have informed exporters that the draft has been reduced to 8 feet from the normal 12 feet for shipments on the Mississippi River north of Cairo, Illinois, which means 800 tonnes less in cargo loaded on barges…
The nation's worst drought in decades has taken a turn for the worse for a second straight week, after conditions had improved for more than a month…
"The CFIA ensures that the same stringent food safety standards are applied to domestic and exported products. This was the case four years ago and it remains true today. Within meat plants, there are specific inspection tasks conducted at various stations and production points in production. The memo referenced simply emphasized this division of labour.”…
November 28, 2012
Live cattle futures are trading a little higher Wednesday morning. The modest gains in futures are probably related to ideas that cash prices will be steady to higher this week. Cash bids so far are still about $3 to $4 below last week’s prices, but packers appear to be very short on inventory…
Cattle feeding margins improved more than $26 per head last week, leaving average losses at just over $67 per head, according to the Sterling Beef Profit Tracker…
November 26, 2012
Demand for grazing cattle weakens as the days shorten, temperatures become cooler and the lack of moisture persists. Wheat pastures on the Southern Plains have shown decline for weeks, and cattlemen are now seeking to reduce inventories and readjust business strategies…
Next year could be the worst of times or the best of times for the North American beef industry, depending on the sector.
The cow-calf sector may enjoy record prices, but ongoing drought in the United States and escalating feed grain prices could drive other sectors further into the red…
WOWT television reports that federal judge Lawrence Piersol, who was overseeing a $1.2 billion defamation lawsuit filed by a Beef Products Inc. against ABC News, has recused himself from the case that is being heard in US District Court for the District of South Dakota. This case has been reassigned to Chief Judge Karen Schreier…
The drought of 2012 may have diminished Corn Belt yields, but now it is diminishing the capability of getting the minimal crop to market. Low water levels in the Mississippi River watershed have threatened to close a portion of the mid-Mississippi between St. Louis, MO and Cairo, IL. That means southbound grain will not be delivered by barge to Gulf ports for export, and northbound fertilizers and fuel on barges may not be delivered in a timely fashion for spring planting…
November 20, 2012
The price of corn: What is the ‘new normal’?
Conley, professor of agricultural economics at the University of
Nebraska-Lincoln, recently presented “U.S. Economic Policies
Distillers Grains Exports and the Price of Corn—will there be a
second new normal?”
the interview with Brownfield Ag News.
Despite severe drought farm income may hit record high
of the worst drought in 50 years, agricultural economists from the
Federal Reserve say the farm sector could post record high income
this year. High market prices and insurance indemnities will help
compensate grain producers for drought-shortened crops, a buffer
that livestock producers lack.
Turkey, beef, pork or something else?
About 88% of Americans will be eating Turkey this Thursday What will be the main dish on your family’s Thanksgiving table?
Actual ad on craiglist
cow - $1400
nice cow for sell been with hereford bull over 60 days....good breeding cow have nice bull calf on her side NOT FOR SELL..... COW ONLY BEST OFFER....BUCKET FEEDED... VERY CALM..... been around dogs and kids ok..... call only..........thanks ...
November 12, 2012
Demand for stocker cattle continues to weaken across the Central Plains as the ongoing drought forces cattlemen to reduce inventories and readjust business strategies…
USDA has raised its estimates for 2012 U.S. corn and soybean production.
The Ag Department sees corn at 10.725 billion bushels, with an average yield of 122.3 bushels per acre, up on the month and above the average pre-report estimates. USDA has harvested are at 87.721 million acres, unchanged from October…
President Barack Obama faces a new urgent task now that he has a second term, working with a status-quo Congress to address an impending financial crisis that economists say could send the country back into recession.
"You made your voice heard," Obama said in his acceptance speech, signaling that he believes the bulk of the country is behind his policies. It's a sticking point for House Republicans, sure to balk at that…
Banks and cattle rustling. Not words that often land in the same sentence, at least not in the last few centuries.
But a group of cattle producers, stockyards operators and cattle auction houses sued Cincinnati-based Fifth Third Bank over what the group claims is Fifth Third’s participation in a company’s scheme that allegedly bilked cattle companies out of $30 million…
Cattle producers in South Dakota are excited to see limited production begin at Northern Beef Packers’ new plant which has been six years in the making.
One cattleman told the Aberdeen News the facility will bring cattle feeding back to where it belongs. Northern Beef opened production on a limited scale on Oct. 16…
Capturing and recycling ammonia from livestock waste is possible using a process developed by U.S. Department of Agriculture researchers. This invention could help streamline on-farm nitrogen management by allowing farmers to reduce potentially harmful ammonia emissions and concentrate nitrogen in a liquid product to sell as fertilizer…
Only eight per cent of meat consumed in China is beef, explained Peter Hardwick, Eblex Head of Trade and Development at their annual conference. This means there is the potential for beef consumption to increase significantly…
"Without the 2012 drought, corn prices might be closer to $5 per bushel instead of near $8 per bushel," Peel said. "While these short-run factors would have changed the feedlot picture somewhat, they do not change the fact that the role of the feedlot sector is changing and must change fundamentally in the future compared to how it has operated in the past…
Failure by the U.S. House of Representatives to pass a five-year farm bill before adjourning last month may mark the beginnings of a drought on U.S. agricultural exports…
Commercial red meat production for the United States totaled 3.95 billion pounds in September, down 6 percent from the 4.19 billion pounds produced in September 2011…
September 11, 2012
The smallest U.S. soybean harvest in nine years will leave inventories in the world’s largest exporting nation at the lowest in four decades.
Canada's dependence on cattle and beef sales to the United States leaves it at risk of becoming a net importer of beef from the U.S. as it buys back higher-value processed products, a report on the C$6-billion ($6.1 billion) industry said on Monday.
Although Isaac spared the Gulf States the level of damage that most were expecting, there are some takeaways for the livestock industry, writes John Michael Riley, Mississippi State University.
If you think you have what it takes to be the next WLAC Champ – don’t miss out because you forgot to enter!
The final opportunity to qualify for the 2013 WLAC will be at Stockland Livestock Auction in Davenport, Washington on Monday, October 29.
The DEADLINE for entry is Wednesday, September 26, at 4:00 p.m. (CT)! To register, go to www.LMAweb.com and click on the WLAC tab.
August 28, 2012
Officials at a California slaughterhouse shut down because of cruelty and food safety allegations said it has been given federal permission to reopen.
At President Obama’s direction, the Defense Logistics Agency is procuring a six-month advanced meat supply for its Department of Defense customers, to provide relief to the drought-stricken agriculture industry.
The nationwide average price for a gallon of regular rose seven cents over the past two weeks, according to the Lundberg Survey.
Following the mission, he worked for NASA, taught aerospace engineering at the University of Cincinnati, and then bought a 200-acre dairy farm near Lebanon, Ohio.
August 23, 2012
An undercover video depicting animal abuses at a California meat processor may not be what it seems, according to animal handling expert Dr. Temple Grandin.
The federal government and McDonald's Corp. suspended purchases of meat Wednesday from a California slaughterhouse under investigation for animal cruelty and possible health issues.
Farmers and ranchers will have the option of haying or grazing cover crops this fall and winter without affecting their next-season’s eligibility for crop insurance.
Thirty-nine of the nation’s foremost agricultural organizations have joined forces in an effort to raise public awareness of the need for Congress to pass a new, comprehensive, five-year farm bill before current farm programs expire in September.
The Canadian livestock industry is a lot smaller today than it was seven to eight years ago, a casualty of sharply higher feed costs, disease disruptions (cattle) and the rapid increase in the value of the Canadian currency, (hence reduced competitiveness), write Steve Meyer and Len Steiner.
July 17, 2012
Excerpts from USDA
WASHINGTON, July 16, 2012 —As serious drought conditions continue to creep across nearly two-thirds of the lower 48 states, U.S. Department of Agriculture (USDA) officials are fanning out to rural communities across the country to show support to farmers and ranchers affected by a string of extreme weather in 2012. Today, Under Secretary for Farm and Foreign Agricultural Services Michael Scuse begins a tour of Michigan, Ohio and Indiana—three states affected by severe frost and freezes in the spring, with Indiana now experiencing increasing levels of drought. In the weeks ahead, additional USDA subcabinet leaders will travel to Tennessee, Kentucky, Illinois, Arkansas, Missouri, Colorado, New Mexico, Texas, and others to augment ongoing assistance from state-level USDA staff. USDA officials will also provide guidance on the department's existing disaster resources and remind producers to keep thorough records of losses as the department's authority to operate the five disaster assistance programs authorized by the 2008 Farm Bill expired on Sept. 30, 2011, and Congress has not yet acted to restore these vital forms of assistance.
USDA agencies have been working for weeks with state and local officials, as well as individuals, businesses, farmers and ranchers, as they begin the process of helping to get people back on their feet. USDA offers a variety of resources for states and individuals affected by the recent disasters. Individuals can also apply for other types of federal disaster assistance at www.disasterassistance.gov .
In rural communities, USDA's Rural Development works with existing individual and community borrowers that have been affected by a natural disaster to help them with their loans. With respect to loans guaranteed by Rural Development, borrowers should initially contact their lender for assistance.
USDA's Farm Service Agency provides emergency loans through the Emergency Loan Program to help producers recover from production and physical losses due to natural disasters. Producers will be eligible for these loans as soon as their county is declared a Presidential or Secretarial disaster county. Last week, Vilsack announced three significant improvements to USDA programs and processes related to Secretarial disaster designations: a final rule that simplifies the process for Secretarial disaster designations and will result in a 40 percent reduction in processing time for most counties affected by disasters; a reduced interest rate for emergency loans that effectively lowers the current rate from 3.75 percent to 2.25 percent; and a payment reduction on Conservation Reserve Program (CRP) lands qualified for emergency haying and grazing in 2012, from 25 to 10 percent.
Hot, dry and drought conditions across states from California to Delaware have damaged some crops and slowed development of others. USDA's Risk Management Agency reminds producers faced with questions on crop losses to contact their crop insurance companies and local USDA Farm Service Agency Service Centers, as applicable, to report damages to crops or livestock loss, and not to destroy or discontinue care for your crops. Farmers and ranchers who participate in the federal crop insurance program are reminded to please contact your agent or company as soon as you experience any failing crops. USDA assures producers that indemnity payments will be made to producers who submit claims for crops and livestock. In addition, USDA reminds livestock producers to keep thorough records of losses, including additional expenses for such things as food purchased due to lost supplies.
USDA's Natural Resources Conservation Service (NRCS) administers the Emergency Watershed Protection program, which provides assistance to areas that have been damaged by natural disasters, such as floods, windstorms, drought, and wildfires. In partnership and through local government sponsors, NRCS helps local communities recover from natural disasters.
The USDA Food and Nutrition Service provides food assistance to those in need in areas affected by a disaster. This Federal assistance is in addition to that provided by State and local governments. USDA provides disaster food assistance in three ways: provides foods to State agencies for distribution to shelters and other mass feeding sites; provides food to State agencies for distribution directly to households in need in certain limited situations; and authorizes State agencies to issue Disaster Supplemental Nutrition Assistance Program (D-SNAP) benefits.
For additional information and updates about USDA's efforts, please visit www.usda.gov/disaster.
Excerpts from Drovers CattleNetwork
The House Agriculture Committee marked up its version of the farm bill last week, but the future of the bill is still very uncertain. Representative Bob Gibbs, R-Ohio, a member of the Agriculture Committee said that it is “highly likely” that the House farm bill will not go to the floor of the House for debate, but will instead go straight to a conference committee with the Senate.
However, Agriculture Committee Ranking Member Collin Peterson, D-Minn., thinks it is unlikely that Speaker John Boehner, R-Ohio, and Majority Leader Eric Cantor, R-Va., will allow that to happen. Cantor’s office has not included the farm bill as a priority for the July schedule and the House is scheduled to be in session only a few days between the August recess and the November election. The chances of getting a bill passed and signed into law by the Sept. 30 expiration of the current farm bill are not very good.
The most controversial part of the proposed farm bill in the House is the $16 billion reduction in the Supplemental Nutrition Assistance Program (food stamps). Several members of the House (mostly Democrats) have blasted the cuts and there is little chance that cuts that large can pass in the Senate. With 1 in 7 people in the country now receiving assistance from the program, big cuts in funding may cost votes. That is another reason why the farm bill debate may be delayed until after the election.
There are similarities and differences between the Senate passed farm bill and the bill being considered by the House Agriculture Committee. Both bills have a county revenue option as a complement to crop insurance; both eliminate direct payments and retain marketing loans. A major difference between the two bills is that the House bill replaces the farm-based revenue program option in the Senate bill with a price-based counter-cyclical program and target prices increased from those in the 2008 bill. Farmers can update yields in this counter-cyclical program to the 2008 through 2012 period and payments would be based on planted acres instead of base acres. The revenue-based programs in the Senate and House bills are similar, but the Senate version offers more protection. Both bills include separate insurance provisions for cotton called STAX.
As has been noted before, the laws covering estate taxes change significantly at the end of this year if Congress does not act. The tax rate in 2013 will be 55 percent with a $1 million exemption if nothing is done, compared to a 35 percent rate and a $5.12 million exemption in 2012. With the uncertainty about future estate taxes, Gary Hoff of the University of Illinois says farmers should talk with their financial advisors now and have plans in place for some possible changes in estate plans. With recent increases in land values, even modest-sized farms would exceed $1 million in value and thus owe estate taxes on the excess and pay much higher rates to boot if the rules change back to levels of a decade ago.
Excerpts from MeatPoultry.com
Industry groups claimed victory July 13 after the Environmental Protection Agency (EPA) withdrew a proposed rule that would have placed more reporting requirements on concentrated animal feeding operations.
The Concentrated Animal Feeding Operation (CAFO) Reporting Rule would have required CAFOs to submit operational information such as facility facts, contact information, production area locations, permit status, the number and type of animals confined and the acreage available for land application of manure.
“As we have consistently stated, the proposed rule was the result of a sweetheart settlement between EPA and environmentalists that would have provided no public health protections,” said R.C. Hunt, National Pork Producers Council president and a pork producer from Wilson, NC. “It would have been a duplicative and burdensome paperwork exercise for producers and clearly was an effort to undermine court decisions that said producers who don’t discharge into waterways don’t need a CWA permit.”
The National Cattlemen’s Beef Association (NCBA) argued the proposed rule could put the nation’s food supply at risk for terrorist attacks. EPA said it would put the CAFO information on the agency’s website in a searchable database, where NCBA said extremists could access the information with the intent to do harm to cattle operations or the nation’s food system. Non-compliance with the proposed rule would have been a violation of the Clean Water Act with fines of up to $37,500 per day.
“Early on, we called for EPA to pull this rule. It turns out they listened. This really showcases the importance of cattlemen and women becoming engaged in the regulatory process and making sure their concerns are heard,” said J.D. Alexander, NCBA president. “We encourage the agency to redirect its focus to working with states and other partners to attain already publicly available information that would allow them to work toward their goal of improved water quality. This can be done in a way that does not put our food system at increased risk.”
Dairy Herd Network
Corn futures closed 34 to 40 cents higher on Monday. Corn price hit record levels during trade today as drought conditions across the U.S. Corn Belt are anticipated to worsen. Front month contract (September) closed limit up as traders fear further reductions to crop condition ratings and corn yields are unavoidable. Today’s crop progress report is expected to be bullish for prices as the trade expects to see a 5 percentage point decline to corn’s good to excellent condition rating this afternoon.
Soybean futures closed 39 to 40 cents higher on Monday. Lack of significant rainfall and relief from excessively high temperatures across the drought stricken Midwest pushed soybean prices higher. Traders continue to eye weather conditions across the Midwest as the region experiences the worst drought in decades and as new crop soybeans are getting ready to enter their key production stage. USDA is set to release its crop progress report this afternoon; analysts are estimating a 5 percentage point decline to soybean good to excellent condition ratings.
Wheat futures closed 32 to 36 cents higher on Monday. The rally in the winter wheat market is not merely a “follow the leader” trend as corn price rise. Prices were buoyed by export sales of both hard red spring wheat (69,784 tonnes) and soft white wheat (37,430 tonnes) to Japan for 2012/13 delivery. News that Russian wheat production could decline to 45 million tonnes due to adverse weather added additional support to market prices. The USDA is set to release its crop progress report this afternoon; the trade is expecting to see further declines to spring wheat good/excellent ratings due to adverse weather conditions across the U.S. Plains.
Cattle futures closed 40 to 90 cents lower on Monday. Declining beef prices and sluggish cash trade were both factors that contributed to lower cattle futures. Midday boxed beef prices did show slight improvement, but overall prices are on the decline. The market saw additional pressure from rising grain prices and worsening drought conditions across the Corn Belt.
Lean hog futures closed mixed but mostly lower on Monday. Hog futures closed lower on waning beef demand and soaring corn prices. As the temperatures continue to rise, consumer demand for pork products dropped which contributed to lower futures prices. The market also felt pressure as grain prices soared to record highs, ultimately leading to higher costs of production for producers. The August contract managed to gain 3 cents while deferred contracts (October and December) were off 13 to 28 cents.
The legal battles are mostly complete on health, although legislative battles remain, with the health care act a hot campaign issue. As a result, key elements of the barely-two-year-old law still are uncertain, pending whether Democrats or Republicans are in charge of Congress and the White House following this November’s election.
For now, though, the law remains intact. One of the key provisions in the law for farmers is that of the state exchanges, which is scheduled to be implemented in 2014, as are other key provisions.
"In theory, that should make health insurance cheaper for farmers," says Jon Bailey, director of research and analysis for the Center for Rural Affairs. That’s because farmers and ranchers in each state, instead of being a pool of one, can join many others in the state in pools, he says. State exchanges will, theoretically at least, make it easier for farmers and other businesspeople to compare policies and prices, Bailey says. In addition, some states are forming health insurance co-ops that farmers may be able to take advantage of.
Another element of the law, for adults, is that insurance companies no longer can discriminate against those with pre-existing conditions. This begins in 2014. The law also allows children to remain on health insurance until age 26. The much-discussed and debated mandate part of the law, Bailey says, will not really affect many farmers and ranchers, because most carry health insurance. The exchanges also subsidize health insurance premiums depending on income levels.
Also beginning in 2014, farmers with 50 employees or more will be required to provide insurance, one mandate part of the bill, says Pat Wolff, director, tax and rural development, American Farm Bureau Federation. She notes that farmers with 25 or fewer employees who provide health insurance qualify for a tax credit under the new law that’s been upheld, providing they pay an average wage of less than $50,000 per year, and pay at least half of their employee health insurance premiums. For tax years 2010 through 2013, the maximum credit is 35% for farmers and other small business owners. This increases to 50% in 2014.
Livestock Marketing Association
10510 NW Ambassador Drive • Kansas City, MO 64153-1278
(816)891-0502 • (800)821-2048 • (816)891-7926
The first half of 2012 was the warmest January-June period for the Lower 48 States in records dating to 1895. That’s according to a report issued Monday by the National Oceanic and Atmospheric Administration.
The national temperatures averaged 52.9 degrees – “4.5 degrees above the long-term average,” the NOAA report said. “Most of the contiguous U.S. was record and near-record warm for the six-month period, except the Pacific Northwest.”
Overall, a total of 28 states, all east of the Rocky Mountains, had record warm first six months of the year. Another 15 states had their top 10 warmest January-June periods. Washington was the only state that recorded a cooler than average first half of 2012.
Although a cool front has brought some relief this week, climate models suggest the warmer-than-normal temperatures are not expected to ease. “It looks like it’s going to stay above normal, for much of the remainder of the summer,” said Jon Gottschalck from NOAA’s climate Prediction Center.
In addition to a warm first half of the calendar year, the past 12-month period has been the hottest on record for the contiguous U.S., surpassing the mark set last month. In fact, the warmest 12-month period on record was set in March of this year and broken each successive month since then.
As hot as June was for many states, however, the month was only the 14th warmest on record for the Lower 48 States. The NOAA said that 170 American cities met or broke record-high temperatures during June. Temperatures of 113 in South Carolina and 112 in Georgia may become all-time state records after a review by NOAA.
The record heat has also been accompanied by a widespread drought. The NOAA report said the January-June period was among the 10 driest six month periods on record in 14 states, primarily the Great Plains states. June was also the 10th driest on record. The U.S. Drought Monitor indicates 56 percent of the contiguous U.S. is experiencing drought conditions.
US beef prices continue to increase as summer barbecue season is underway. During the past year, beef’s average retail price has increased 5.4 percent, including 0.6 percent in the past month, according to the US Department of Agriculture’s Consumer Price Index for Food.
What’s more, the Indianapolis Star reports the rate of increase for beef is more than price increases for not only other meats but food in general, which has been a consistent six-year trend.
Currently, the average retail price of beef is $5.04 per lb., up 28 percent from $3.94 in 2007. Agricultural economists blame this spike on shrinking beef herds plus the rising price of cattle feed.
Marsh grocery stores reports a decrease in beef sales and store management have said shoppers are opting to buy more pork and chicken to meet their budgets. Local Indiana Kroger stores have seen an increase in lamb, fried and roasted chicken sales. But shoppers also tend to compensate by buying lower-cost beef products or purchasing store-brand items.
On a national scale, beef herds are at their lowest level since 1952. Even Indiana, which is home to only approximately 0.7 percent of the US beef cattle supply, has had its beef ranks thinned by 31,000 since 2002, and by 322,000 since 1980, USDA reported.
The cost of feed for cattle is increasing because it is made primarily of soybeans and corn, said Chris Hurt, agricultural economist at Purdue Univ., and both are in high demand. As more corn is used to produce ethanol and more soybeans are exported to China, prices for both have doubled or tripled.
US steakhouses are also being squeezed by this situation. Beef costs are up 20 percent from last year, said Larry Griggers, chief executive officer of RPM Management, a franchisee arm of Ruth's Chris Steak House. Last year he increased his menu prices by 3 percent, but this year he plans to absorb it.
June 29, 2012
Excerpts from Drovers CattleNetwork
Last year’s historic drought in the southwest gained a lot of attention for its dramatic impact on people, livestock and wildlife. This year’s drought, however, is worse in many ways and likely to be much more expensive to both agriculture and to consumers.
According to the National Drought Mitigation Center, 72 percent of the continental United States is classified as “abnormally dry” or worse. By comparison, at the end of the third week in June last year just 32 percent of the continental United States was classified as “abnormally dry” or worse.
Some meteorologists are already comparing this year to the drought of 1988, which was estimated to cost American agriculture $78 billion.
Last year’s drought had a big impact on the U.S. cattle industry and strained the financial resources of many ranchers. This year’s drought, however, will hit consumers much harder due to the impact it has already had on corn and soybean production.
Weather forecasters believe conditions are in place for prolonged hot and dry weather for much of the Midwest. As a result, crop forecasters are adjusting their estimates for this year’s harvest, and smaller corn and soybean yields mean higher prices for many food items for American consumers.
See Full Article
June 27, 2012
With a federal case looming, the founder and former CEO of Eastern Livestock has been sentenced to 10 years in prison probated to run concurrently with any federal charges he receives.
Thomas Gibson, 71, was sentenced June 26 according to the Kentucky attorney general’s office. Business First reports Gibson and the company’s CFO, Steve McDonald, pled guilty in Metcalfe Circuit Court to over 150 charges, including engaging in organized crime and complicity to theft by deception over $1,000 in March.
The two were indicted in September 2011 on a single charge of mail fraud in U.S. District Court in Louisville, the federal case is still pending.
Gibson and McDonald admitted to roles in an ongoing criminal collaboration between 2009 and 2010. Two other company executives, Darren Brangers and Grant Gibson, were each sentenced to five years in prision for their roles in the check kiting scheme.
Eastern Livestock bought cattle from Kentucky producers with non-existent funds. Many cattlemen have already received restitution and more checks will be distributed in the subsequent months. Restitution for victims in the case totals more than $850,000. So far, $600,000 has been handed out.
Gibson will be under federal supervision until his federal case for mail fraud charges begins.
While crops were doing reasonably well in Central Texas, much of the rest of the state is backsliding into drought pretty quickly, said a Texas AgriLife Extension Service expert.
"The area north of Waco, up through the (Dallas/Fort Worth) metroplex and a bit east of there, is in probably as good of shape as anywhere," said Dr. Travis Miller, AgriLife Extension program leader and associate head of the Texas A&M University soil and crop sciences department. "Go a little south of there, into the Williamson County/Georgetown area - and it's pretty darned dry."
Many counties south of that area haven't seen a rain since about May 7, Miller noted. In many areas, including Central Texas and the Brazos County area, the cotton crop is in pretty good shape, he said.
"Right here in Brazos County, we've had several good rains, and we’re in good shape for the time being," he said.
Elsewhere, it's dry or drier, according to Miller and the U.S. Drought Monitor.
"The southern Panhandle is particularly dry. There are some areas that have had some pretty good rains but overall it's dry," he said.
The western Rolling Plains is another really dry area where it's going to be a moisture-limited crop.
On a positive note, wheat was ready for harvest earlier than has ever been seen before, he said. A warm winter allowed some unusually early plantings and a wet spring offset some of the higher temperatures that came later.
According to the U.S. Department of Agriculture Texas Crop Progress and Condition report for June 24, nine percent of corn was in excellent condition, 51 percent good, 30 percent fair and 10 percent either poor or very poor.
June 25, 2012
Cash fed cattle traded $3 lower last week at $116 per hundredweight. With most cattle coming to market carrying breakevens near $135 per hundredweight, losses are substantial. In what was described as a thin dressed trade in the north, prices were $188 to $190 per hundredweight, $2 to $3 lower than the previous week.
Boxed beef cutout values declined modestly to $196.63, which is $1.37 per hundredweight lower than the previous week. Select boxed beef traded at $180.09, down $1.02 from the previous week. The Choice-Select spread narrowed to $16.54 per hundredweight.
Yearling feeder cattle traded $2 to $4 per hundredweight lower and calves sold $3 to $7 lower. Stocker and feeder cattle continue to come under pressure from dry weather and lack of forage resources.
USDA Market News reporter Corbitt Wall noted the weather’s impact on the cattle industry. “Perhaps this year’s drought is not getting near the publicity of the record dry spell across the Southwest a year ago. But, the lack of rain is currently much more wide spread and includes some of the country’s most productive farm land. Out west and in the mountain states, producers are being forced to early-wean calves and sell-off a dramatic percentage of their cow herd.”
Wall reported record receipts at the Torrington, WY, Livestock Market for this time of year, a high percentage of which have been sales of cow-calf pairs. He says the market is already holding weekly feeder special sales, an activity that normally doesn’t start until September.
Last week’s auction receipts totaled 153,300, compared to 164,800 the previous week and 189,200 last year. Direct sales of stocker and feeder cattle totaled 23,000 with video/Internet sales at 34,100. The weekly total was 210,400, compared to 294,400 last year.
Slaughter cows and bulls were called stead. Cash corn prices declined 19 cents per bushel during the week, with Omaha closing at $6.23 per bushel on Friday.
Friday’s cattle-on-feed report was viewed as bearish by traders. The June 1 inventories were 101.7 per cent of a year ago at 11.1 million head. Placements during May were reported at 2.1 million head, 15 percent higher than a year ago. Marketings were counted at just above 2 million head, 0.6 percent above last year.
The Supreme Court upheld a key part of Arizona's crackdown on illegal immigrants on Monday, rejecting the Obama administration's stance that only the U.S. government should enforce immigration laws in the United States.
The nation's highest court, in an opinion by Justice Anthony Kennedy, upheld the state law's most controversial aspect, requiring police officers to check the immigration status of people they stop.
But in a split decision, the justices also ruled that the three other challenged provisions went too far in intruding on federal law, including one provision that makes it a crime for illegal immigrants to work and another that requires them to carry their documents.
Arizona, on the southwest border with Mexico, two years ago became the first of a handful of U.S. states to pass laws aimed at driving illegal immigrants out, including requiring police to check the immigration status of anyone detained and suspected of being in the country illegally.
The battle over the law goes to the heart of a fierce national debate between Democrats and Republicans over what to do with the roughly 11 million illegal immigrants in the country.
Critics have said the Arizona law could lead to ethnic and racial profiling of the fast-growing Hispanic population in the United States. Hispanics are the largest U.S. minority group.
Other parts of the Arizona law require immigrants to carry their papers at all times; ban illegal immigrants from soliciting work in public places; and allow police to arrest immigrants without a warrant if an officer believes they have committed a crime that would make them deportable.
The Supreme Court in April heard arguments over the Arizona law's fate.
Colorado has issued a new requirement for horses entering the state from New Mexico, where 11 premises have been quarantined due to a virus.
State veterinary officials said Friday that health certificates for horses, mules, cattle, bison, sheep, goats, swine and camelids from New Mexico now must include a statement from a veterinarian stating that no signs of vesicular stomatitis have been found in the animals and that the animals didn't come from a premise that was quarantined for the disease.
Vesicular stomatitis can cause painful sores in infected animals. It is believed to be spread through insects that migrate along river valleys.
Michigan Ag Connection
Routine bovine Tuberculosis (TB) surveillance testing conducted by the Michigan Department of Agriculture and Rural Development (MDARD) and the U.S. Department of Agriculture (USDA) recently confirmed a medium size dairy herd as bovine TB positive in Alpena County. Bovine TB is an infectious bacterial disease that affects cattle and white-tailed deer in Michigan's northeastern Lower Peninsula.
A public information meeting will be held on July 12, 2012 at 7:00 p.m. in Lecture Room 101 of the Donnelly Natural Resources Center at Alpena Community College, 665 Johnson Street, in Alpena, Michigan.
Northeastern Lower Michigan is designated as a Modified Accredited Zone (MAZ) and is comprised of Alcona, Alpena, Montmorency, and Oscoda counties. The MAZ is a USDA designation for the purposes of controlled cattle movement, TB testing, and disease eradication. The Alpena County farm is currently quarantined and no cattle may enter or leave the premises until testing clears the cattle and farm of bovine TB, either through premises depopulation, or a test and remove process.
In 2011, Presque Isle County's TB status became Modified Accredited Advanced (MAA), which is one step closer to becoming bovine TB Free. The MAA Zone now includes Antrim, Charlevoix, Cheboygan, Crawford, Emmet, Otsego, and Presque Isle counties. The Upper Peninsula is Bovine TB Free; additionally in 2011, USDA moved the lower 57 counties of Michigan's Lower Peninsula to TB Free status as well.
To receive information regarding disease outbreaks, or regulatory changes that impact your livestock, please join our Animal Health Listserv by visiting www.michigan.gov/emergingdiseases .
June 21, 2012
One of the new developments in the Senate's work on the farm bill on Wednesday was the approval of an amendment that limits subsidies for millionaires.
Authored by Oklahoma Republican Senator Tom Coburn, the amendment closes a loophole that allows the U.S. Department of Agriculture to hand out conservation payments to millionaires.
"There is nothing wrong with conservation programs, but most often these payments are paid in addition to what people are going to do anyway. What the Department of Agriculture has done is give well over $180 million to millionaires through our conservation payment programs they would have otherwise done themselves," Coburn said.
The amendment was approved in a vote of 63-36. But lawmakers rejected another Coburn amendment that called for the end of federal farm dollars going to pet spas and reality TV in India.
As it stands right now, the overall farm bill would spend nearly $500 billion over the next five years, with about 80 percent of the funding going to the Supplemental Nutrition Assistance Program, or food stamps. It would also end direct payments made to farmers regardless of whether they plant a crop, while ending commodity subsidies to farmers with adjusted gross incomes of more than $750,000.
Another provision would stop lottery winners and college students from receiving assistance from their families from getting food stamps.
Meanwhile, as the Senate continues its work on the farm bill, the House Agriculture Committee seems to be pulling back from looking at the legislation.
House Chairman Frank Lucas says he will move 'hell or high water' on a farm bill when lawmakers return after the July 4th recess, but not before then.
The CattleSite News Desk
Late last week, the Obama administration announced a change in immigration policy that could allow as many as 800,000 immigrants who came to the United States illegally as children to legally remain in the country.
The new policy will not grant citizenship, but it will remove the threat of deportation and grant them the right to work in the United States. According to the Department of Homeland Security, the policy change will apply to those who came to the United States before they were 16 and are younger than 30 if they have lived in the states for five years, have no criminal history, graduated from a US high school or served in the military. The policy change will accomplish portions of the Development, Relief and Education for Alien Minors Act, which stalled in Congress last year.
“We are pleased to see the White House use administrative authority to address an important component of the immigration debate. At the same time, we cannot ignore that the agriculture sector continues to face labor shortages and deeper changes are needed," said John Wilson Senior Vice President of Dairy Farmers of America.
"Dairy farmers across the country are in need of a reliable, stable and legal workforce. A 2009 study conducted by National Milk Producers Federation found that more than 40 per cent of workers on US dairy farms are born outside this country. Unlike most others in the agricultural sector, dairy producers do not have access to the H-2A guest worker programme as the industry is not seasonal. Dairy farmers ‘harvest’ at least twice a day, 365 days of the year.
"We will continue to urge President Barack Obama and his administration to take action that addresses the labor issues dairy farmers continue to experience. A safe, legal and reliable workforce is vital to allow our nation’s dairy farmers to continue to produce the safe, nutritious dairy products consumers demand.”
Cattle Trader Center
Dry conditions are spreading to the North and West and expanding in the Southeastern United States, causing consternation among crop and livestock producers as far north as the Corn Belt and increasing the flow of lighter cattle off pastures. Drought-induced feeder cattle exports from Mexico are entering the United States at a higher rate than they were at this point in 2011. Although well below 2011 levels year-over-year, weekly estimates of federally inspected other (beef) cow slaughter have also increased from mid-April lows.
While yearling and fed cattle markets have been steady-to-higher in recent weeks despite negative cash margins for cattle feeders, prices/markets for lighter and younger calves are becoming unsteady at best, reflecting the rapidly deteriorating summer pasture conditions. Cow prices have also begun to slip somewhat as post-calving- season culling gets under way and pasture and hay conditions deteriorate.
Projected cattle feeding costs through August 2012 range from the low $130s per cwt to the low $140s. At current fed cattle prices, these costs indicate margins that are well into negative territory, with projected losses of over $200 per head (High Plains Cattle Feeding http://www.ers.usda.gov/publications/ldp/LDPTables.htm).
Wholesale Choice beef cutout values have again increased, approaching previous record levels of almost $200 per cwt. However, prices for 50-percent lean beef are again approaching the low levels reached just after the publicity concerning Lean Finely Textured Beef, and AMS-reported weekly 5-day moving average byproduct values have slipped by more than 5 percent since early May. Processing beef prices also may have reached a temporary peak and could decline over the next quarter, although the longer term outlook for all beef remains positive due to declining inventories and prospects for lower feed grain prices this fall.
Dairy Herd Network
On Wednesday, the U.S. Senate passed an amendment to 2012 Farm Bill that sets up a process for amending the federal milk marketing order system. The amendment passed by a vote of 66-33.
Specifically, the amendment would allow dairy industry groups to present milk-pricing reforms to the U.S. Department of Agriculture for consideration in a public hearing setting, and order the Secretary of Agriculture to release the Department’s final proposal to Congress.
“Our amendment does not prescribe a solution; rather, it initiates a process by which the USDA would create a new federal dairy pricing program,” said U.S. Sen. Olympia Snowe (R-Maine), co-sponsor of the amendment.
Once the U.S. Senate passes its version of the Farm Bill, which could occur today after all of the proposed amendments are discussed, the attention will shift to the U.S. House of Representatives. It is in the House that the Dairy Security Act will come up. The Dairy Security Act could provide significant reform for the federal milk marketing system, which dates back to the late 1930s.
The Dairy Security Act would provide payments to farmers when the margin between milk prices and feed prices gets really tight. It would be a voluntary program, but the farmers who do sign up would be subject to possible production limitations in periods of tight margins.
ABC Rural, Australia
Australian beef exports to the US are back up, after falling to their lowest level in 40 years last year.
Latest import figures show the US imported 74 per cent more Australian beef for the year to April.
It doesn't surprise research and marketing body Meat and Livestock Australia.
Tim McRae, chief economist at MLA, says the drought in the US has reduced cattle numbers.
"We did, in 2012, expect the US to be one of our main growth markets," he said.
"The US is a huge competitor for us in North Asia, but they're also one of the world's biggest importing markets.
"They traditionally take lean beef, manufacturing beef. We produce a lot of that and just this year they've got a fall in production."
Business First via bizjournals.com
Three former executives of now-defunct Eastern Livestock LLC, formerly of New Albany, Ind., were sentenced Tuesday in connection with a an “ongoing criminal collaboration that swindled Kentucky farmers out of nearly $1 million,” Kentucky Attorney General Jack Conway said in a news release.
Eastern’s former CFO, Steve McDonald, 58, was sentenced by Barren-Metcalfe Circuit Judge Phil Patton to 10 years in prison, with the sentence to run concurrently with any federal prison sentence he might receive, according to the news release.
Company accountant Darren Brangers, of Louisville, and company affiliate Grant Gibson, of Lanesville, Ind., each were sentenced to five years by the circuit court, but the sentence was suspended pursuant to them paying restitution, according to the news release. Gibson is to fund $680,000 of restitution, and Brangers was ordered to fund $210,000.
Former Eastern Livestock founder Thomas “Tommy” Gibson, 71, is scheduled to be sentenced in Barren-Metcalfe Circuit Court on June 26, according to the release.
The four executives pleaded guilty in March to state charges of criminal syndication, engaging in organized crime, 17 counts of theft greater than $10,000 and 144 counts of theft of less than $10,000 but more than $500. See Full Article