Profits, dry ranges pulled cattle into US feedlots
Source: Agriculture On Line, 9-18-03
Huge profits on slaughter cattle sales and a lack of grazing led
producers to rush young cattle into feedlots in August for finishing,
livestock analysts told Reuters this week. As a result, analysts
expect Friday's Cattle on Feed Report from USDA to show that
August feedlot placements were greater than a year ago. A Reuters
survey of analysts resulted in an average estimate of 104.3% for
August placements from a range of 100.4% to 113.0%. The report
is due out at 2:00 p.m. CDT on Friday.
Click hot link for more information.
posted by Dr. Harlan Hughes 7:14 PM
An email From Florida 16 Sep 03:
I enjoy reading your articles in BEEF each month. I work with a number of ranchers in South Florida. Is there anyplace where all of your past articles are posted, or published where I can purchase them? I'm starting up a project with about 30 ranches and will be looking at production costs and a number of other items. The information you've produced would be very helpful. Please let me know. Thanks!
______, Most of my BEEF articles are posted to www.BEEF-mag.com and can be found by searching that web site. I have some other articles posted on my Market Advisor web page at that same site.
I also have many previous articles published on www.ag.ndsu.nodak.edu and you can find most of them by searching on "advisor AND hughes" and it should find most of the articles.
I also publish some items at http://beefeconomics.blogspot.com
Finally, I have some articles published at http://ag.arizona.edu/arec/wemc/TodaysCattlePub.html
You should be able to access all four web pages by double clicking these addresses.
posted by Dr. Harlan Hughes 4:22 PM
Beef Cattle Outlook By Wayne Purcell, VPI University
Sept 16 Outlook Report. See http://www.cattlenetwork.com/content.asp?contentid=163 for complete report.
Across the past few years in presentations around the country, I (Wayne Purcell) have been predicting that we would see record high cattle prices in the near future as we move toward holding heifers and starting to rebuild the cow herd as the hay and pasture situations start to show some improvement. I understood the cyclical expansion that was going to reduce beef supplies would be coming in the presence of increasing beef demand. We haven't had herd building to reduce beef supplies and increasing beef demand occurring together since the early 1970s, and I expected that we would be going into uncharted waters.
The BSE situation in Canada and the inability of Canadian cattle to come across the border has accentuated the situation, but we have seen over $90 in the futures and cash in the fed cattle market and over $100 in futures and cash in the feeder cattle market. Those numbers are almost unbelievable and they came in the presence of record high boxed beef prices with the heavier Choice boxes reaching levels of $160.80 in Tuesday morning's trade.
The modest corrections to the downside that occurred on Friday and Monday in the October live cattle contract is still occurring above the trend line that we can show on the chart if we hook the late May and the late July lows. I see the same pattern on the October feeder cattle contract where a trend line hooking those late May and late July lows is well below levels at which we see this market trading. I would repeat the advice of recent weeks in the letter.
Stay out of this market from the short side until it shows us some topping action. Let's make the market show us a top and do some churning and then give us something to work with on the charts before jumping back into this market and placing short hedges. If you are fortunate enough to be holding long hedges in feeder cattle or in live cattle futures, you might move to sell and take profits a bit more quickly because you are anticipating that we are at the upper end of the fundamentally based possibilities.
posted by Dr. Harlan Hughes 3:56 PM
RECORD FED CATTLE PRICES
Recently, fed cattle prices have posted new all time highs. Fed cattle prices have surged in recent weeks due to both supply and demand influences.
Beef supply in the U.S. market is tight due to four major factors (in order of importance): 1) slaughter steer and heifer weights well below a year ago; 2) reduced imports of beef and cattle from Canada; and 3) strong export markets (including the U.S. gaining some market share at the expense of Canada); and 4) an apparent slow down in beef imports from Australia due to an on-going drought in that country. Additional support for beef and hence cattle prices has come from very strong year-to-year gains in domestic consumer beef demand.
Several factors could moderate fed cattle prices over the next few weeks. After some false starts, Canadian beef (whole muscle boneless cuts from cattle under 30 months of age) should begin to flow at modest levels into the U.S. in mid-September. However, U.S. imports may remain below the levels anticipated a few weeks ago into October. Retailers and restaurants are busily changing their prices to reflect record high wholesale beef prices. Pork and poultry markets appear to be gaining some renewed interest from meat buyers (at the expense of beef). When these changes take hold, U.S. packers will begin to pull back weekly slaughter levels to below 700,000 head.
Source: Livestock Market Information Center, Denver, Co.
posted by Dr. Harlan Hughes 4:05 PM
HEIFER AND COW SLAUGHTER UP
Even if cow slaughter begins to post year-to-year declines at times this fall, as of January 1, 2004, the USDA will likely report that the U.S. beef and dairy cowherds have declined some compared to a year earlier. Also, the number of heifers nationwide held back for breeding herds may remain smaller than was anticipated just a few months ago.
From January through July of this year, Federally Inspected (FI) heifer slaughter totaled 6.6 million head, slightly larger than the respective time period a year ago. On a monthly basis, from January through April, FI heifer slaughter averaged about 5 percent below 2002's. However, in May heifer slaughter posted a yearly increase and continued to be well above a year ago during June and July. Preliminary data for August shows that heifer slaughter remained relatively large.
Beef cow slaughter could be below a year ago for much of the fourth quarter of 2003 due to some year-to-year declines in U.S. cow culling and no Canadian cows being processed in the U.S. Still, FI cow slaughter for 2003 will be close to 5.9 million head, nearly 4 percent above 2002's and the largest annual total since 1997 or 1998.
Source: Livestock Marketing Information Project; Denver, Co.
posted by Dr. Harlan Hughes 3:58 PM
SUMMER PASTURE CONDITIONS IMPACT U.S. BEEF HERD
In some major cattle regions of the U.S., pasture and range conditions deteriorated greatly as the summer progressed. Even though overall U.S. conditions were better than a year ago, nationwide grazing conditions were similar to those of 2000 and 2001, which also had widespread drought. So, nationally cow-calf operations have continued to delay breeding herd expansion. Most cow-calf operations in the Southeastern states received abundant summer moisture this past summer and in those states cattle herds will likely show clear signs of increase next year. Most Western states had a difficult summer grazing season, but it was typically a little better than 2002's.
Source: Livestock Market Information Center, Denver, Co.
posted by Dr. Harlan Hughes 3:52 PM
Author: Canadian Cattlemen's Association
Source: Canadian Cattlemen’s Association:
Canadian Cattlemen’s Association President Neil Jahnke and Executive Vice President Dennis Laycraft have returned from Washington where they met with the National Cattlemen’s Beef Association, American Meat Institute and Food Marketing Institute. Talks focused on moving ahead the rule making process to allow live cattle exports to the U.S. as soon as possible, and working toward a more harmonized North American beef industry.
The only Canadian beef products currently being accepted by the U.S. are boneless beef from cattle under 30 months of age, boneless veal and liver. While the United States Department of Agriculture has promised an expedited process for allowing imports of live Canadian cattle, the date when live cattle will once again be eligible for export is not yet known.
posted by Dr. Harlan Hughes 3:49 PM
BSE PROGRAM AND BORDER NEWS
Rule Making - USDA suggested this week that they would be issuing
their proposed rule in October regarding allowing designated Canadian
cattle under 30 months of age access into the US. It is still unknown how
long the comment period might be after that although some sources believe
it ca~ld be as short as 30 days. After the comment period USDA will sort
through and analyze the input leading to a final rule regarding the live cattle
trade. The final rule must then be cleared by the administration. USDA has
suggested they would like to have the rule published early in the first
quarter of 2004.
Source: CanFax electronic newsletter 12 Jan 03.
posted by Dr. Harlan Hughes 7:51 PM
U.S. National Animal ID System Being Looked At:
NCBA Director of Legislative Affairs Bryan Dierlam provided an
informational briefing to House Agriculture Committee staff on the Animal
Identification issue this Tuesday, September 9. The briefing covered the
development of the National Animal ID Work Plan, the role of animal
identification in animal health disease monitoring and surveillance, and
the way animal identification is used to add value to the beef and
livestock industry. In related news, NCBA participated in meetings this
week with the National Identification Development Team. The Team includes
representatives from government, industry sectors, and stakeholder
entities, and consists of a Steering Committee and five subcommittees in
the areas of communications, transition, standards, information, and
posted by Dr. Harlan Hughes 1:54 PM