Beef Market Advisor

Friday, June 18, 2004

World Meat Congress: Countries spar over BSE trade barriers

fby Brendan O'Neill on 6/18/04 for

WINNIPEG, MANITOBA — The hot topic at the 15th World Meat Congress Wednesday was how major beef export markets are dealing with bovine spongiform encephalopathy, and how this issue affects international trade.

"The risks of finding a case of BSE are so punitive that it discourages the effort to find another case," said Dennis Laycraft, executive vice president of the Canadian Cattlemen's Association.

Laycraft illustrated the devastating effects of even one case of BSE, noting that in 2002, Canada was the third largest beef exporter in the world. When a single Canadian animal was found with BSE, the resulting trade barriers decimated its market.

"The international panel praised Canada, saying our investigation was to be a model for other on how to handle a BSE outbreak," Laycraft said. "The Canadian crisis was the result of knee-jerk border closures, not a lack of consumer confidence."

Offering a completely 180-degree view was Claudio Sebsay, Argentina's under-secretary of agricultural and food policies, who proudly explained that Argentina had never had an animal test positive for BSE, and due to his country's "epidemiological vigilance" in the early 1990s, "It is unlikely to find BSE in Argentine cattle."

Along those lines, Sebsay said that his country will use that to its advantage, touting Argentine beef not only as natural, organic and without hormones, but also completely BSE-free, which he said was a point of differentiation.

OIE weighs in on BSE

Alejandro Thiermann, president of the World Organization for Animal Health's animal health code commission, offered advice to those concerned about how best to prevent and limit BSE outbreaks.

"The removal of SRMs is the single most important way to prevent BSE-infected material from being consumed by humans," he said. "Prevention requires surveillance. Without surveillance you cannot make a risk-based decision."

Thiermann then stressed that all the beef bans seen recently came directly from individual governments, and said that the OIE has never recommended a ban on exports from BSE-positive countries.

"BSE guideline are based on level of risk, not the number of cases," he added

posted by Dr. Harlan Hughes 9:07 AM [edit]

Thursday, June 17, 2004

Ag Census reveals trends

Source: Drover's Alert by the Drover's Journal, Jun 10, 2004

The USDA has released data from the 2002 Census of Agriculture, revealing a number of significant trends. Some key findings include:

Ninety percent of farms are operated by an individual or family. The number of corporate farms declined by 18.4 percent from 1997 to 2002, reversing a trend that had continued since 1974.
Direct sales to consumers increased 37 percent from 1997, totaling $812.2 million in 2002.

The value of organically produced commodities reached $392.8 million in 2002.

The estimated market value of land and buildings on the nation’s farms rose 24 percent from 1997 to 2002.

The average age of principal farm or ranch operators was 55.3 years, compared to 54 years in 1997. For more information go to and click on “Census of Agriculture.”

The Ag Census also revealed a loss of 8,159 beef cow operations since 1997. All of the decline came from the smaller size groups, those with fewer than 100 cows.

Operations with more than 100 cows gained in number of operations. Specifically, the USDA counted 804,595 beef cow operations with one or more cows in 1997. The number was 796,436 in 2002. The number of operations with 100 or more cows grew from 72,891 in 1997 to 73,752 in 2002.

Operations with 1 to 49 cows represent 30.1 percent of the cows, while operations with 50 to 99 cows represent 18.0 percent of the total. Operations with 100 or more cows own 51.9 percent of the nation’s 33.4 million cows. The average herd size of all operations is 42 cows, and the average size of the herds with more than 100 cows is 235.

posted by Dr. Harlan Hughes 2:58 PM [edit]

Beef Industry Insight

by Nevil Speer, Western Ky University in his 6-10-04 Newsletter

Undoubtedly, the most dramatic shift within beef's production sector has taken place
among larger feedyards in the United States. As the figure below depicts, during the past five
years the top 30 feedyards have expanded one-time capacity by nearly 607,000 head. More
significant, the top 5 feedlots in the country account for increased bunk capacity of 371,000 head
- over 61% of the total growth. Assuming inventory turnover of 2.25 times per year, the top 30
feeding companies now combine for annual fed cattle marketings of nearly 12.7 million head;
well over half of 2003's 23.4 million fed cattle marketings.

Concomitant with expansion, these larger feeding companies have also adopted new competencies:
isciplined risk management, targeted grid marketing, and realization of economy of scale efficiencies.
The culmination of which reduces risk exposure while creating more consistent and predictable returns.
And as a result, these feeding companies have evolved from average buyers to market "marginalists", or
specialists, who largely dictate the pace of, and establish foundation for, an increasingly
competitive feeder cattle market.

While that proves beneficial for cow/calf producers (especially in recent years), the sector
is traditionally pressured by mounting capital requirements coupled with small and ever-shrinking
margins. Those financial challenges, pooled with complexities previously outlined,
have prompted many producers to quit the business. Between 1993 and 2003, the
number of beef cow/calf operations in the United States declined 11%: 904,000 to 792,000
operations. Most significant, that decline overwhelmingly stems from operations with a relatively
small number of cows (less than 50) - an exodus explaining over 98% of total reduction in number
of operations. The decline, though, has NOT resulted in herd liquidation; U.S. beef cow inventory
in 2003 is nearly equal to 1993's census. Rather, the effect has been cowherd reallocation.

posted by Dr. Harlan Hughes 9:09 AM [edit]


Average cattle slaughter weights have been ratcheting higher during the past few weeks with indications that weights will be well above year ago for the month of June. Typically, cattle weights begin their seasonal increase in May and continue to rise until peaking out early in the fall quarter. This year, average cattle weights in May held fairly steady. However, based on recent data it appears, that rather slow fed cattle marketings in recent weeks have kicked-off a strong rebound in slaughter weights. How high fed cattle weights go this summer and fall will be a significant factor influencing beef production and fed cattle prices.

Source: Livestock Monitor from WLIP, Jun 15, 2004

posted by Dr. Harlan Hughes 8:59 AM [edit]

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