Beef Market Advisor

Saturday, March 12, 2005

The Border Saga Goes On......

On Mar 11, the National Meat Assn. was granted its request in an
appeal to have dissolved a preliminary injunction that is keeping
Canadian cattle out of the U.S. The Ninth Circuit Court of Appeals
granted NMA its emergency motion that it be allowed to seek
intervenor status in the R-CALF v. USDA case. Moreover, the court has
agreed to NMA's request for opening and closing briefs by March 28.
NMA's opening brief will be due March 21 and answering briefs from
R-CALF and USDA will be due March 28. "We are very appreciative that
our appeal has been granted and will work with all parties for the
quick resolution of this litigation," says NMA Executive Director
Rosemary Mucklow.

posted by Dr. Harlan Hughes 11:19 AM [edit]

Friday, March 11, 2005

Is The U.S. Packing Industry Starting To Unravel?

U.S. Cattle Plant Travels to New Home in Canada
Fri March 11, 2005 3:11 PM GMT-05:00
By Roberta Rampton (Canada)

WINNIPEG, Manitoba (Reuters) - The first load of equipment from a U.S. cattle plant was slated to cross into Canada on Friday, where the farmers who bought it hope to make the best out of being shut out from the U.S. cattle market.

Rancher's Choice Beef Co-op Ltd. is moving the plant about 2,000 kilometers (1,200 miles) to Dauphin, Manitoba, from Ferndale, Washington, where it had been mainly idle since May 2003. That's when Canada found its first native case of mad cow disease, prompting the United States to ban imports of cattle, which both the plant and Canadian farmers relied on.

"It's a great feeling of satisfaction and feeling of accomplishment starting to set in," said Frieda Krpan, a farmer from St. Laurent, Manitoba, who is on the board of directors of the project. Krpan said the group of 3,100 farmers from three provinces who comprise Rancher's Choice is determined to find ways to make money from cows and bulls that currently sell for a pittance. "When this is so out of their (farmers') own control, there's a feeling of stubbornness starting to set in that we're going to make this work, come hell or high water," Krpan told Reuters as she drove toward the border to meet the first shipment of plant parts.

The project will cost C$16 million ($13.3 million), Krpan said. Manitoba's government has pledged C$11.5 million to the plant. Rancher's Choice hopes to be running by fall, with a goal of processing 250 cattle per day, or about 65,000 per year. The plant will provide at least 70 jobs and will give its owners a share of the profits from the meat sold, Krpan said. The group has been flooded with calls since a Montana federal judge extended the ban on Canadian cattle imports last week, Krpan said. The ban on young cattle was supposed to be lifted starting March 7, but an activist rancher group called RCALF obtained a preliminary injunction against it. Canadian cattle industry leaders have said the border could remain shut for another year or more, depending on legal machinations.

A group of U.S. meatpackers filed an emergency appeal of the Montana decision on Thursday, explaining they faced "imminent economic collapse" without access to Canadian cattle. Until the trade bans, Canada shipped about 70 percent of its processed beef to the United States, as well as 1 million head of live cattle per year.

Canada's beef industry has said it wants to become less reliant on the U.S. market in the future. It has boosted domestic slaughter by 10 percent since the trade bans to 3.9 million head in 2004. Expansions at large plants in Alberta as well as new, farmer-owned plants like Rancher's Choice could boost capacity as high as 4.6 million head by the end of 2005, industry analysts have said.

($1=$1.20 Canadian)

posted by Dr. Harlan Hughes 1:21 PM [edit]

Tuesday, March 08, 2005

The Courts Are In Charge In The Cattle Markets:

Comments From Wayne Purcell, Virgina Cooperative Extension Service, on 8 March 2005

The courts are in charge in the cattle markets right now and it is hard to offer advice in this type of environment. I have been bullish on cattle, live cattle and feeder cattle futures, and perhaps we can just look to what has happened and stay off short hedges on the live cattle contracts starting with June and beyond and stay on long hedges in the feeder cattle, both the March and the August. With the federal court action blocking the scheduled opening of the Canadian border on March 7, it may be months before the border issue is resolved. If by that time we have seen beef shipments to Japan starting again, we could see fed cattle prices in the summer months near $100 again, perhaps even higher. But if the Canadian border is opened and there is a reserve of cattle ready to come into the U. S., then we could see prices pushed down again. It is a difficult time to be trying to read these cattle markets.

posted by Dr. Harlan Hughes 4:18 PM [edit]

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