Friday 27th January 2012

Cattle trade in the South at steady prices with last week: June 26, 2009

Chicago Mercantile Exchange live cattle contracts settled mostly 12 to 70 points lower, with only the spot June in the black. Trade was very quiet and traders were concerned over cattle that remained unsold. Spreaders sold the deferred months and bought the front months. June finished the session .52 higher at 82.47; August was down .15 at 82.40. Boxed beef cutout values were weak on light demand and moderate offerings. Choice boxed beef was down .76 at 138.93, and Select was .29 lower at 132.30.

Feeder cattle settled narrowly mixed from 10 higher to 17 points lower. August and September ended higher on underlying August chart support and spreading into September out of August, according to Dow Jones Newswires. Remaining contracts were modestly lower on the bearishness in the live pit. August closed .02 higher at 98.97, and September was up .10 at 98.75.

Feeder cattle receipts at Missouri auctions this past week totaled 25,175. Steers under 650 lbs trended steady to 3.00 lower, heifers weighing less than 600 lbs 1.00 to 4.00 lower, heavier weight steers and heifers were steady to 2.00 higher. Feeder steers medium and large 1 and 1-2 weighing 500 to 600 lbs traded from 90.00 to 118.00, 5 to 6 weight heifers brought 80.00 to 107.10 per hundredweight.

The weekly cattle slaughter was estimated at 673,000 head, 2,000 less than last week, and 40,000 fewer than a year ago. Cattle trading was active in the Southern Plains Friday on moderate to good demand. Compared to last week, live sales were steady at 82.00, and Kansas dressed sales were also steady at 129.00. Trading was light in Nebraska with moderate demand. Compared to last week, dressed sales were mostly 1.00 lower at 129.00, a few clean-up sales on a live basis traded at 81.50.

Hog slaughter for the week was estimated at 2,032,000 head, 30,000 less than last week, and 108,000 less than a year ago. Barrows and gilts at the terminals were very lightly tested at steady prices with an instance of 2.00 higher at Peoria from 33.50 to 42.00 on a live basis. Missouri direct base carcass meat price closed steady from 49.00 to 53.00. Barrows and gilts in the Iowa/Minnesota direct trade closed .34 higher at 56.86 on a carcass basis, the West was up .08 at 57.20, and the East was .33 higher at 55.14. Packers had zero processing plans for Saturday reflecting the poor packer margins and demand for product. Monday’s market is projected to be weaker.

Lean hogs settled37 to 202 points lower. The market started out stronger, but the early momentum did not last. There was very little good news in the hog market, but traders were hoping that the expected 2 to 3 percent drop in numbers in the hogs and pigs report may give the market some relief.  July closed .37 lower at 56.70, and August was down 1.10 at 57.70.Pork trading was slow with light to moderate demand and offerings. The lean carcass cutout was up .42 at 55.28.

Pork bellies finished the session unchanged to 40 points lower on some light buying support with light trade activity. July was down .40 at 58.40, August closed at 59.55 also down .40.

Dairy markets a little higher for the week

The dairy markets showing a little life at the end of the week. After no movement for three days, cash cheese nudged higher, for the week barrels gained a penny and blocks a quarter-cent. Class III futures for July gained 12 cents on the week, August 44 cents, September increased 44 cents as well, October was 31 cents higher while December gained 49 cents from last Friday.

Commodity Credit Corporation purchased another 5.68 million pounds of nonfat dry milk for the week. This brings the cumulative total since October 1 to 264 million pounds. The National Milk Producers Federation is asking USDA to temporarily increase the government purchase price for cheese and nonfat dry milk powder. Currently, Commodity Credit Corporation serves as a buyer of last resort paying $1.10 per pound for cheese barrels, $1.13 per pound for cheese blocks and 80-cents per pound for nonfat dry milk. National Milk is asking to increase the cheese price by six cents and the powder price by four cents in hopes that will increase the price for milk paid to producers.

Dairy Export Incentive Program awards for the week covered 25.8 million pounds of nonfat dry milk, 3 million pounds of butterfat and 293,000 pounds of cheese. Some disappointment so far in the lack of utilization of the DEIP. Last month USDA announced it was activating the program for the first time in years in an effort to move some product. Cheese Market News says if fully utilized, the program could remove more than 1.5 billion pounds of milk from the U.S. market. Randy Baxter with USDA’s Foreign Ag Service says they have not received as many requests as they had expected at this point however exporters have until 3 p.m. Monday to submit bids. Companies can complete the DEIP application on line, the bid is reviewed overnight and USDA calls the exporter the next morning to let them know if it has been accepted. The current allocation expires on Tuesday; hopes are USDA will announce another allocation on July 1st.

Total number of dairy cows slaughtered in the U.S. in May, 212,000, that is 3,000 less than went to market in April but 17,000 more than in May of last year. Remember, dairy cow culling slowed considerably in May as producers were waiting to see if their bids were going to be accepted by the CWT herd retirement program. Once the results were announced, culling picked up. In fact, in the first week of June, culling was 35% higher than a year earlier. For the first five months of the year, 1,189,000 dairy cows were taken out, 10,000 more than in the first five months of 2008. Of that total, 361,000 came from the upper Midwest while 352,000 came from California, Arizona, Hawaii and Nevada.

Missouri Ag Director on summer ag tour

Making the agriculture rounds this summer.  Missouri’s Ag Department Director, Dr. John Hagler, visited the Joplin Regional Stockyards, and other agricultural highlights this week.  Hagler says his summer tour is all about trumpeting all that agriculture means to his state and the nation.

AUDIO: Dr. John Hagler, Missouri Ag Department Director (3:00 min., MP3)

Changing for the better for all

Commentary

There is nothing I love more than talking to farmers. I was raised by farmers and married into a farm family, but I never tire of the inherent optimism and innate talent for growing things.There is an intrinsic resiliency and ability to adapt to change in farmers that must be in the DNA.

There are people reading this column who have witnessed amazing changes in farming. You’ve seen the change from horse power (literally) to steam power to diesel fuel power to 300 and above horsepower 4-wheel drive tractors.

Some of you remember 40-inch check row planters and are here today to see and farm with modern day DMI 24 row 30 inch folding planters.

We’ve gone from raising hogs in mud lots in huts to environmentally controlled barns.

We now have vaccines, antibiotics, and internal and external parasite control for all species of livestock that have great efficacy and create great efficiencies.

We have anhydrous ammonia, phosphate, potash, plus an array of herbicides and fungicides and pesticides to accelerate yield potential.

No more cutting weeds out of beans.

There are many more examples of visible results of change in this agriculture industry we all share. I love to listen to people talk about the day electricity came to their farm.

Change – for the better – is happening in other industries. Take for instance the medical industry, where we now have joint replacement and painless dentistry. Thank goodness!

Communications technology is changing by the minute. Computers with email and mp3 players and cell phones and this little gadget called a Blackberry that does it all!

Farmers have GPS and auto steer. It wasn’t that long ago an air conditioned tractor cab was a big deal.

We, as responsible stewards of the land, air, water and livestock on our farms have left or sought better management of pre-plant incorporated herbicides and organophosphates and carbamates in favor of Bt and glyphosate and other biotech tools and are catching just about as much heck for GMO traits as we did for the runoff of the ppi’s and the organic phosphates.

People are afraid of that which they do not understand.

Many of our critics and detractors don’t understand the science – the facts behind modern day agriculture and technology tools. They do not understand and so they fear change. I believe the reason they do not understand is because they do not share our histories and they do not know our stories.

We can go back to farming the way we used to without herbicides and pesticides and bigger equipment and stacked traits in seeds, but America’s farmers are expected to feed a whole lot of hungry people now. And by the year 2028, there will be 2.7 billion more mouths on this earth to feed.

Less than one hundred years ago, most of the people in this country lived on a farm or in a rural community. It is their grandchildren who may not understand why we do things the way we do on our farms.

It is their grandchildren we must reach with our story.

Closing Grain and Livestock Futures: June 26, 2009

July corn closed at $3.84 and 1/4, up 1 and 3/4 cents
July soybeans closed at $12.01, up 5 cents
July soybean meal closed at $405.00, up $7.70
July soybean oil closed at 36.08, down 46 points
July wheat closed at $5.34 and 1/4, up 1 and 1/4 cents
June live cattle closed at $82.47, up 52 cents
July lean hogs closed at $56.70, down 37 cents
August crude oil closed at $69.16, down $1.07
July cotton closed at 52.54, down 48 points
Dow Jones Industrial Average: 8,438.39, down 34.01 points

The babbling of the unenlightened

Commentary

Today’s Washington Post carries an irksome piece of scrivening by a writer named Steven Pearlstein, roundly bashing collective agriculture – some call it “food production” — for trying to balance the badly crafted climate change/cap-and-trade bill heading for a floor vote in the House today.  Under the headline, “For the Farm Lobby, Too Much is Never Enough,” Scoop Pearlstein – I use the nominative “Scoop” because Pearlstein refers to food producers collectively and patronizingly as “Elmer” throughout his piece – implicitly admits the House bill will bring economic pain and angst to one and all, so why shouldn’t food producers suck it up and suffer their fair share?  He calls agriculture “the world’s most selfish lobby.”

Scoop is offended farmers and ranchers are not included in the emission reporting requirements of the act because, as both the Bush and Obama Administrations discovered, it would be nearly impossible to calculate the individual greenhouse gas output of each and every farm in America. What Scoop doesn’t mention/might not know is that all of ag is determined to be so small a contributor to overall greenhouse gas emissions, that trying to measure and cap emissions just didn’t make economic or common sense.

One of the reasons food production is so small a contributor is the steps it’s taken over the last several years to control exactly what House Speaker Nancy Pelosi (D, CA) is browbeating her colleagues to pass today, namely reducing the carbon footprint.  Agriculture was aggressively reducing its footprint before anyone knew what a carbon footprint was. 

But Scoop finds it objectionable that Rep. Collin Peterson (D, MN), chair of the House Agriculture Committee, went to bat for rural communities when he determined the House climate change bill would place a disproportionate economic burden on farmers, ranchers and the communities in which they live.  Somehow, Scoop implies, it’s a good thing for farmers, ranchers and others to pay more – and perhaps significantly more – for their “fuel, fertilizer and electricity.” After all, he writes “other Americans will suffer similar effects.”  I infer that’s called “sharing the pain.” 

The fact farmers and ranchers – and those who own/manage private forestland – will be allowed to sell credits for the good things they do to “cut down on cow burps and farts…or put in devices to trap the methane released from animal poop” – Scoop’s words, not mine – means there are additional incentives to further reduce the ag footprint.  This is a good thing.  And, it puts food production on an even footing with every other industry out there that will be buying and selling carbon credits, according to the climate change bill.  Last time I looked that was called an even playing field.

The fact Peterson demanded and won a concession from Pelosi that USDA oversee the ag program, not EPA, is that agriculture in the 21st century has become such an arcane practice that it might just make better sense to have the folks with on-farm expertise actually determining if the program is working.  I’d also advise Scoop to sit down with the current leadership at USDA to get their take on whether their mission is “preserving, protecting and defending American farm subsidies.”  I’m guessing he might hear a bit more about consumers, farmers markets, organic and “locovarians.”

I will admit there are times when ag runs to the Hill with hat in hand when perhaps we should just ride out the crisis du jour. But for every time legislators say “yes” to a request for assistance, there are just as many if not more occasions when they tell us in no uncertain terms to “pound sand.”

What’s forgotten or perhaps not understood is that every additional cost paid by a food producer creates impact on food availability and the price to the consumer.  And the reality is, whether it’s “natural causes, market forces or government regulation” that drive up the cost of production, the longer that pain continues, the less likely it is that smaller farms and ranches will survive. So, to answer the unasked question, for the government to ignore the unique needs of food production is to accelerate consolidation of farms and ranches into larger and larger operations, and to penalize the consumer at the supermarket through fewer choices and higher prices.

Scoop is aghast we still recognize the House climate change bill as a seriously broken vehicle.  What Peterson did was duct tape a broken hose; someone has to now overhaul the engine. How dare we bite the hand Scoop thinks feeds us so well?

May red meat, poultry production down on the year

Red meat and poultry production during May were down from the previous year, according to USDA, as economic concerns continue to take their toll on demand and packers cut back slaughter rates.

Total red meat production was down 7% from a year ago at 3.919 billion pounds, bringing the year to date total to 20.140 billion bushels, 4% less than the January to May 2008 total.

Beef production was reported at 2.180 billion pounds, an 8% decrease from May 2008. So far this year, beef production is 10.561 billion pounds, down 4% from a year ago. Cattle slaughter for May was 2.850 million head, 4% below a year ago, with the year to date total now 13.598 million head, 5% less than last year at this time. The average live weight of 1,264 pounds was up 1% or 13 pounds from May 2008. The year to date average of 1,292 pounds is 20 heavier than the January to May 2008 average.

Pork production was 5% below a year ago at 1.716 billion pounds. The cumulative January to May 2009 total is 9.452 billion pounds, 4% less than the January to May 2009 total. May’s hog slaughter was 8.451 million head, 7% lower than a year ago and the year to date total is 5% behind last year’s pace at 46.370 million head. The average live weight of 271 pounds was 3 larger than the May 2008 average. So far this year, the average weight is 272 pounds, up 2 from a year ago.

Lamb and mutton production totaled 13.0 million pounds, a decrease of 13% from May 2008. The year to date total of 70.4 million pounds is down 7% from January to May 2008. The sheep and lamb slaughter was reported at 184,700 head, 11% less than last year with the year to date total at 1.005 million head, which is 3% below a year ago. The average live weight of 141 pounds was down 5 from May 2008. The year to date average is 140 pounds, 1 lighter than the January to May 2008 average.

May poultry production was down 9% from a year ago at 3.390 billion pounds, with the year to date total now at 17.020 billion, 7% less than January to May 2008. The total live weight of all poultry came out at 4.514 billion pounds, 10% lower than a year ago, bringing the year to date total to 22.733 billion pounds, a decrease of 8% on the year.

The total number of chickens slaughtered in May was reported at 704.514 million head, down 9% from last year, with the year to date total of 3.551 billion 7% below a year ago. The average live weight for chicken was pegged at 5.59 pounds per bird, down slightly from a year ago and the year to date average is unchanged at 5.57 pounds.

The turkey slaughter came out at 19.564 million head, compared to 22.475 million in May 2008. The year to date total is 10% behind 2008 at 98.278 million head. The average live weight for turkeys was 28.81 pounds, down around two tenths of a pound from last year. The year to date average is 29.54 pounds, compared to 29.58 for January to May 2008.

Ante-mortem condemnations were reported at 10.816 million pounds or .24% of the total live weight. Post-mortem condemnations totaled 35.429 million pounds or 1.03% of the inspected quantity.

Milk producers ask for USDA help

Just one day after getting a request to help pork producers, U.S. Ag Secretary Tom Vilsack is getting a plea for help for dairy farmers. The National Milk Producers Federation is asking USDA to temporarily increase the government purchase price for cheese and nonfat dry milk powder. Currently, Commodity Credit Corporation serves as a buyer of last resort paying $1.10 per pound for cheese barrels, $1.13 per pound for cheese blocks and 80-cents per pound for nonfat dry milk. The cash cheese price on the Chicago Mercantile Exchange on Thursday was $1.08 for barrels and $1.12 for blocks. National Milk is asking to increase the cheese price by six cents and the powder price by four cents in hopes that will increase the price for milk paid to producers.

Prices have been a few cents under the support price a number of times this year, processors do not normally make the types of cheese CCC buys so it takes time and money to convert a facility hence they will allow a few cents lee-way before converting.

Farm milk prices are running about half of what they were a year ago but production costs have not declined accordingly. While the base price for 100 pounds of milk is around $10.00 the cost of production is around $15.00 these days.

Use-value change pulled from Wisconsin budget bill

The Wisconsin State Senate passed the budget reconciliation bill last night but not before that change in use-value assessment was taken out of the bill. The Wisconsin Farm Bureau credits Senator Kathleen Vinehout, Assembly Speaker Mike Sheridan, Conference Committee member Representative Mary Hubler and a coalition of Assembly Democrats led by Ag Committee Chair Amy Sue Vruwink with getting the change out of the $62 billion package.

The proposed change was put into the bill by Senator Russ Decker who charged developers were avoiding taxes on land by planting a few crops until they started to build. Farm groups jumped to oppose the measure saying it would substantially increase the taxes on 750,000 acres of state farmland.

The Assembly will have and up-or-down vote on the measure today, it is expected to pass. It will then go to Governor Doyle who is expected to sign it by Wednesday, July 1st so the state qualifies for millions in federal dollars.

Mother, wife, farmer

Leanne Sutter identifies herself as a mother, a wife and a farmer. She grew up on a family farm and has been married to her husband for 25 years, and is living on his family’s home farm, a farm that has been in his family since 1965.Being a farmer is not without challenge – from marketing to weather – but Leanne is proud of her roots in agriculture and the farming opportunities she and her husband have been able to provide to their sons.It is important to Leanne that all member of her family are stewards of the land, water, air and livestock. When Leanne talks about how pigs are treated on her farm, she lights up. She is confident in knowing that her hogs are healthy. Sutter barns are ventilated, protecting the pigs from the outdoor elements while having all the fresh air they need. She told me that her pigs are low-maintenance. They are size and gender sorted so it is easy to detect sickness or injury. The pigs are well-fed, have plenty of water, are comfortable and overall, Leanne explains, “They seem very happy.”

As a mother, Leanne is happy that she has been able to instill in her children many of the same values that she got from her parents. A strong work ethic and determination to finish what you start are examples she cites.

As a wife and mother, Leanne wants to be sure she is providing safe food and water and environment for her family. She tells me the most rewarding part of being a farmer. She knows the end result of the work they do is a safe product for her family, her neighbors and all consumers.

Being part of the community has been important to Leanne. Having her sons come back and be a part of the family farm and that local community is extremely rewarding.

The Coalition to Support Iowa Farmers helped her family when the Sutter Family built a new hog barn. CSIF helped the Sutter family with neighbor relations during the very trying time. After it was all said and done, neighbors who were opposed to the new hog building have come around and the community awarded her family with the Chamber of Commerce Lifetime Achievement Award

AUDIO: Conversation with Leanne Sutter