Beef Market Advisor

Saturday, January 29, 2005

Cattle Inventories Bottomed in 2004

by Dr. Derrell Peel, OSU Extension Today 1/28/2005 5:42:31 PM

The latest cattle inventory numbers appear to confirm that 2004 was the long-awaited cyclical bottom after an extended period of herd liquidation in the U.S. Total cattle inventories on January 1, 2005 were 95.8 million head, up one percent from 2004. This is still the lowest total U.S. cattle inventory since 1960.

Beef cow numbers increased one percent to a January 1, 2005 level of 33.06 million head. Heifer retention is indicated by a four percent increase in beef replacement heifers from a year earlier. This follows a similar four percent increase in beef replacement heifers in July of 2004 and suggests that herd expansion is firmly underway in the U.S. The 2004 U.S. calf crop was down one percent from 2003 and should begin to increase in 2005.

The estimated U.S. feeder supply was nearly two percent larger on January 1, 2005. Despite a smaller 2004 calf crop, reductions in feedlot placements and increased Mexican cattle imports contributed to a larger carryover of feeder animals. The estimated number of feeder cattle on small grain pasture in the Kansas, Oklahoma and Texas was 200,000 head larger than a year ago. Feeder cattle supplies in Oklahoma increased by 225,000 head, up 10 percent over 2004 and accounts for 49 percent of the total increase in U.S. feeder supplies from a year earlier. Nearly 31 percent of total estimated feeder supplies on January 1 were located in Kansas, Oklahoma and Texas.

Oklahoma cattle numbers increased 6 percent from a year ago to 5.4 million head. The Oklahoma beef cow herd increased 4 percent over a year earlier to a January 1 total of 2.055 million head. The number of beef replacement heifers in Oklahoma was up 1.4 percent.

posted by Dr. Harlan Hughes 3:03 PM [edit]

Koreans Now Using RFID Chips On Imported Beef

In an effort to quell consumer fears of BSE in Korea, the Korean Veterinary Research and Quarantine Service is tracing all imported beef with radio frequency identification (RFID) chips in a new pilot program. Beginning April 1, beef with embedded chips will be sold at several Galleria stores so consumers will be able to scan the beef and get a report on its country of origin, distribution path, etc. The system will also allow for immediate recalls if the government ever decides to ban imported beef from that country. The Korea Times reported that the system will eventually include native cattle.

source: Cow-Calf Weekly, 28 January 2005

posted by Dr. Harlan Hughes 8:25 AM [edit]

Friday, January 28, 2005

ID For Compliance And Profit

Kansas Farm Bureau's Beef Verification Solutions program is geared to help participants recoup the cost of complying with national ID.

When Robert Herl of Quinter, KS, sold two loads of steers a couple of weeks ago off the farm to a repeat buyer he got $2/cwt. over the market for the week. As soon as the deal was done, the first thing the buyer asked him was the calves' birth dates. A year down the road, Herl wouldn't be surprised if the buyer wants to hear the answer before making the trade.

"Feedlots and packers obviously want that information," Herl says.

He's referring to the growing number of buyers looking to verify age in order to make cattle eligible for the anticipated resumption of trade with Japan. That country's demand thus far is that only beef from cattle 20 months old or younger will be eligible. But, if it weren't that, it would be something else.

"You have to meet both animal health and market needs," says Mark Nelson, coordinator of Beef Verification Solutions (BVS), a unique producer-created and producer-driven program offered by the Kansas Farm Bureau (KFB) to its members. Nelson explains, "Our goal is to get cattle enrolled in the program so members will have the opportunity to comply with the National Animal Identification System (NAIS) and other verification programs."

Rather than offer members animal ID components, such as tags, readers and data management software, KFB members decided they needed to develop a total system members could use for more than just compliance with USDA programs. The resulting BVS program allows producers to submit required data to USDA for NAIS, but it also enables them to submit other production information, using the same tags, and develop a range of reports that can be used in management.

More specifically, KFB elected to use AgInfoLink as its data provider. By doing so, BVS participants can apply an electronic (RFID) ear tag to their cattle, but submit data to the system in longhand via AgInfoLink's CattleCard™ system. It's basically a card with a barcode for the matching electronic tag number, which the producer fills out and submits for someone else to input into a computer. In this case, cards are submitted to one of 16 verification centers in the state, which basically includes veterinarians, feed stores, other producers and the like trained to accept and input the data.

Or, producers can utilize the company's BeefLink™ software that makes it possible for them to collect data automatically and electronically. This is for producers with the numbers and requirements that make it possible for them to invest in electronic readers (scanners), electronic scale-heads and all of the rest.

Even by submitting the most basic data, such as premises ID and calf birth date, producers wind up with a source-and age-verification report they can use in marketing, while also complying with NAIS. Those who choose to submit more production information can have that plus a host of enterprise analysis worksheets, including dam and sire production history.

"The key is matching the visual ID to the electronic ID and making sure we can trace that to the animal's dam and sire," Nelson says. "That's the power for the producer."

Herl was one of the first to enroll cattle in the system.

"This is something we need to do, whether animal ID is voluntary or mandatory. It gives us a management tool to manage our cattle better, do a better job of record keeping, and probably opens up marketing opportunities for me," he explains. "With this program I can provide buyers with the information they want a lot easier."

On each count, Nelson emphasizes, "We're offering a system, not just the components of a system. It's a very flexible system of information collection, management and communication. We create the verifiable audit trail for other programs." Be it a program selling genetic certification, one marketing natural attributes, or the commodity market seeking to verify age for export purposes.

In fact, Herl believes, this year's calf crop will be the big test.

"Right now, you see auction barns offering sales for source-verified calves based on an affidavit signed by the producer. If the trail of those cattle is going to be audited, you about need to identify the individual cattle and be part of a system," he says.

His point is that cattle going out the gate with only an affidavit will be more difficult if not impossible to trace all the way back to the source, whereas cattle enrolled in a system like BVS are the product of an auditable trail.

Nelson sees it like this: "We've got two forces driving us toward national animal ID: NAIS and market forces. USDA isn't going to share market information with the McDonald's and Wal-Marts of the world, so you've got to have some other way to create a verifiable audit trail."

Of course, none of this is free. In the BVS program, those who choose the Cattle Card option pay approximately $4.50/head (RFID tag included).

Those who want or need the software for electronic data collection pay approximately $3.60/head (RFID tag included) but also pay for software registration and training.

With the program in the midst of its first educational/training sessions, KFB members have already enrolled 1,000 head in BVS. Understandably, though, most folks are taking their time.

"Member interest has been strong," Nelson says. "But, there's a lot of confusion about national animal ID and source verification."

That and Herl adds, "They know national animal ID is going to happen; they're just not sure when or who the leaders will be providing it. There's a lot of uncertainty."

Because Herl is so convinced ID is something producers will have to provide, and because he believes so much in the BVS program, he signed on to be a verification center.

"There will be a cost and producers will bear the cost, no matter what anyone says," he explains. "Why not participate in a program that provides a method to try to recoup that cost? Why not make the system work for you rather than just bear the added cost of it?"

Source: Beef Quality Strategies 27 Jan 2005

posted by Dr. Harlan Hughes 9:02 PM [edit]

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