Friday 27th January 2012

Pork and beef cutout values close lower on Friday

The cash cattle market remained pretty much inactive on Friday with buyers and sellers pretty much calling it a week. The show lists next week could be some larger due to unsold numbers carried over. On the other hand the offering will include many green cattle with packers still hard pressed to find sufficient ready numbers. Slaughter cattle on a national basis for negotiated trades through Friday morning totaled about 121,000 head plus. The previous weeks total was 233,797. Cattle slaughter for the week was estimated at 678,000 head, 11,000 more than a week ago, and 20,000 more than last year. Boxed beef cutout values were weak, with very light demand and light offerings. Choice beef was down .44 at 163.86, and select was down .68 at 157.56.

Chicago Mercantile exchange live cattle contracts settled 17 higher to 42 points lower. The move to October contracts created pressure on the expiring spot month. Boxed beef cutouts were mixed at midday and there is concern that overall demand may weaken as we get closer to the Labor Day holiday. There was some renewed buying interest late in the session on the gains in the stock market. August settled .37 lower at 98.05, and October was down .42 at 98.10.

Feeder cattle settled 12 to 45 points lower on the higher corn values and uncertainty in the live cattle market. September settled .40 lower at 116.27, and October was down .45 at 117.00. September ended .40 lower at 116.27, and October was down .45 at 117.00.

Feeder cattle receipts at Missouri auctions this past week totaled 27,149 head. Compared to last week, feed steers and heifers were very uneven from 2.00 higher to 3.00 lower, but most sales were fully steady, heifers were steady to 2.00 higher, Holstein steers were steady to 2.00 lower. Demand and supply were moderate. Feeder steers medium and large 1, 708 head averaging 578 pounds traded at an average of 126.86, 568 heifers averaging 575 pounds brought 116.19 per hundredweight.

Barrows and gilts in the Iowa/Minnesota direct trade closed 2.10 lower at 79.01 on a carcass basis, the West was 1.84 lower at 79.03, and the East was down 1.34 closing at 79.00.The Missouri direct base carcass meat price closed steady at 75.00. The weekly hog kill was estimated at 210,000 head 37,000 more than last week and 173,000 less than last year. A pre-holiday sell off in wholesale meat prices is not unusual, especially given the explosive behavior of the pork cutout value over the last several weeks. Such an adjustment doesn’t necessarily mark the beginning of an extended downward slide after Labor Day. Indeed, the relative expense of both chicken and beef could soon work to stabilize the pork carcass value at historical high levels according to DTN’s John Harrington.

Pork trading was slow to moderate with light to moderate demand and mostly moderate to heavy offerings.. The pork carcass cutout value was down .22 at 93.51.

Lean hogs settled 25 to 107 points lower on the slipping pork carcass cutout value and lower cash prices. October, December, February and April contracts all slumped to 1 ½ to 2 ½ week lows. October settled .97 lower at 74.82, and December was down 1.00 at 72.57.

Pork bellies were unquoted in pit trading.

Closing Grain and Livestock Futures: August 27, 2010

September corn closed at $4.21, up 4 and 1/2 cents
September soybeans closed at $10.22, up 9 cents
September soybean meal closed at $307.80, up $1.50
September soybean oil closed at 40.20, up 71 points
September wheat closed at $6.62 and 1/2, up 6 cents
August live cattle closed at $98.05, down 37 cents
October lean hogs closed at $74.82, down 97 cents
October crude oil closed at $75.17, up $1.81
December cotton closed at 86.07, down 8 points
September Class III milk closed at $15.88, up 14 cents
Dow Jones Industrial Average: 10,150.65, up 164.84 points

Government officials discuss ‘disturbing trends’

Approximately 1,300 people are attending today’s USDA-Department of Justice ag competition workshop in Fort Collins, Colorado, and top officials of the two agencies are on hand for the event.

In his opening remarks, Agriculture Secretary Tom Vilsack discussed what he called “disturbing trends” in agriculture.  He says those trends must not be allowed to continue.

“Because if we do, we’re going to end up with a handful of farmers, a handful of packers, a handful of processors and a handful of grocery stores,” says Vilsack, “and at that point, I think consumers will suffer as well.”

AUDIO: Tom Vilsack (6 min MP3)

U.S. Attorney General Eric Holder says Justice is serious about addressing concentration issues.  He pointed to DOJ’s lawsuit that caused JBS to abandon its efforts to acquire of National Beef.

“This was an important step, but we realize that it was only a small step,” Holder says. “We would like to hear any lingering concerns.  We would like to know what more we can do.”

AUDIO: Eric Holder (6 min MP3)

For her part, the head of the DOJ’s antitrust division, Christine Varney, says the system is broken. “America’s farmers put food on the table for all of us—and there’s something wrong in the system when the farmers can’t make a living—when they cannot pass that farm down to their children,” she says.

AUDIO: Christine Varney (1 min MP3)

The fifth and final ag competition workshop will be hold in Washington, D.C. in December.

Ag reporting 101

Commentary

I’m wondering if there’s any money to be made offering remedial journalism classes for big city reporters, kind of a “Covering Food and Agriculture 101?” And I’m not talking “lifestyle,” “restaurant evaluation” or just plain old recipe coverage, I’m talking how farming operates in the real world.

The reason I ponder such things — and I am known for pondering stuff most people never even think about — is because I’ve watched this week general media reporters botch up ag-related coverage.  Far be it from me to accuse anyone in the media of a bias, as in covering a story in a certain way to make a point. No, I prefer to think those who practice my previous profession just don’t get it when it comes to ag writing or, for that matter, covering the food business per se.

I had a journalism professor who was the avenging angel of business journalism, a man who dedicated most of his career to fostering among nascent journalistas a love for covering profits and losses, boardroom shenanigans, and, believe it or not, he used to preach to us that “business can be sexy!”

Well, if IBM can be sexy, life on the farm, in a feed mill, a meat plant or a processing facility can be sexy.

To give a kind unsexy example, I tracked the coverage this week of an announcement by FDA that out of more than 600 samples taken at the Iowa egg farms involved in the salmonella recall, preliminary results showed four had popped positive as matches to the suspected strain making folks sick in 17 states. Of those four, two were feed samples taken from the egg farm’s company-owned and operated feed mill.

FDA said “there’s no cause-and-effect relationship” between the feed samples and the outbreak, but major media outlets across the country ran stories about “the likely cause” and “feed is the culprit.” Several major outlets reported the samples were from “feed sold to the farms” when in fact the feed was manufactured by the farm, with some ingredients purchased on the outside.

I spoke with one FDA official who admitted when he saw the lineup of reporters for the briefing, he recognized them as “food reporters,” and said, “These folks are going to draw a straight line connection when there is none.”

Another example is FDA’s announcement late last week of a scientific review panel to look at the application by a biotech company for approval of genetically modified salmon eggs, fish roe that will produce fish that will reach market weight in half the time as conventional salmon. Nearly every reporter wrote that FDA was about to approve transgenic salmon — not eggs, but the fish. The company in question doesn’t raise fish, but that fact was lost in the media frenzy.

My point is if you’re going to write about an endeavor as arcane as production agriculture you have to understand it. You have to know the difference between a commercial feed mill selling to hundreds of customers and the guy who’s integrated and makes his own feed for his own animals. And if you’re going to write about fish eggs, you really need to know the which comes first, the egg or the adult fish.

Maybe it would help if every group put together a primer for their industry, kind of “The ABCs of Animal Production” or “The Basics of Growing Crops.”

Or maybe we need journalism schools, recognizing not every general assignment reporter can be an expert in all things, that teaches budding journalists to least ask the right questions.

Midday cash livestock prices

Cattle country is quiet on Friday with not even a bid reported. Some cleanup trade is possible today, but it is looking like business is done for the week. Asking prices for the cattle left on the show lists are around 100.00 in the South, and 157.00 plus in the North. Show lists appear to be quite green, easily allowing producers to carry over a good number of cattle.

Boxed beef cutout values were mixed at midday. Choice boxed beef is .29 higher at 164.59 and select is .67 lower at 157.57.

Feeder cattle receipts at Missouri auctions this past week totaled 27,149 head. Compared to last week, feed steers and heifers were very uneven from 2.00 higher to 3.00 lower, but most sales were fully steady, heifers were steady to 2.00 higher, Holstein steers were steady to 2.00 lower. Demand and supply were moderate. Feeder steers medium and large 1, 708 head averaging 578 pounds traded at an average of 126.86, 568 heifers averaging 575 pounds brought 116.19 per hundredweight.

Barrows and gilts in the Iowa/Minnesota direct trade opened 1.85 lower at 79.26 on a carcass basis, the West was down 1.38 at 79.49, and the East is 1.04 lower at 79.30.The Missouri direct base carcass meat price is steady at 75.00.

 A pre-holiday sell off in wholesale meat prices is not unusual, especially given the explosive behavior of the pork cutout value over the last several weeks. Such an adjustment doesn’t necessarily mark the beginning of an extended downward slide after Labor Day. Indeed, the relative expense of both chicken and beef could soon work to stabilize the pork carcass value at historical high levels according to DTN’s John Harrington.

For updated market reports throughout the day tune to your local Brownfield affiliate radio station.

U.S. rice stocks above year ago levels

USDA reports rough rice stocks in all positions as of August 1 totaled 30.376 million hundredweight, up 23% from a year ago. Long grain made up the bulk of the total at 64%, followed by medium grain at 32% and short grain at 4%. Off farm stocks accounted for 29.176 million hundredweight, while on farm made up the remaining 1.200 million.

Milled rice stocks were pegged at 4.38 million hundredweight, 7% above last year, with around the bulk of the total, 3.370 million, whole kernel rice, along with 1.010 million hundredweight of second heads, screenings and brewers’ rice.

Becknology Days underway

For the folks at Beck’s Hybrids, Scott Beck says Becknology Days is an opportunity, first of all to meet their customers, and for those customers, Scott says Becknology Days is an opportunity to learn what’s new and what corn hybrids or soybean varieties will work best on their farm.

“We market in a geographic marketing area that’s a 5-state area, so we’re not trying to produce products that work across the whole Corn Belt, we’re trying to find the right products for customers in our marketing area,” Scott Beck said. “We really enjoy the opportunity to meet with them, find out how their products are doing and then offer them some of the new things we’re offering.”

Becknology Days ends on Saturday, August 28, hours are 9 a.m. to 4 p.m.

AUDIO: Scott Beck, Beck’s Hybrids (6:20 MP3)

Iowa hog producer goes antibiotic-free, cage-free

Pork producer Dirk Westrum of Stratford, Iowa has a 1,200 sow farrow-to-finish hog operation.  In a recent interview at the Iowa State Fair, Dirk told us how he is now producing antibiotic-free, cage-free, natural pork for a niche market—and he also talked about the nifty new feeding technology he is using. 

AUDIO: Dirk Westrum (3 min MP3)

Cattlemen disagree on ‘government intrusion’

Should the federal government be more involved in the relationship between livestock producers and packers?

That’s the the overriding issue being discussed at Friday’s USDA-Department of Justice ag competition workshop in Fort Collins, Colorado.  Last Chance, Colorado cow-calf producer Gerald Schreiber says, yes, it’s time for the feds to do their job.

“We have not had a referee,” Schreiber says. “We’ve had a Packers and Stockyards Administration that’s never had any impetus to be the referee that they’re supposed to be for our industry and the consumers.”

AUDIO: Gerald Schreiber (5 min MP3)

But fellow Colorado cattle producer Robbie Baird LeValley of Hotchkiss says additional government intrusion in the marketplace is not needed—or wanted.

“The agriculture marketplace has given our family the opportunity to raise beef, improve our product, enter into value-added contracts, receive payment for that improved product, and expand our business into a direct marketing enterprise,” Baird LeValley says. “Each step has been a private business contract between a willing buyer and a willing seller.  It does not warrant additional increased scrutiny in private business contracts, nor increased litigation, nor increased government intrusion.”

AUDIO: Robbie Baird LeValley (5:30 MP3)

Both sides on the debate held rallies on Thursday night.  Both events drew large crowds.

Nebraska State Fair begins new chapter

Still in awe! That is how former Nebraska State Senator Ray Aguilar of Grand Island describes the grounds at the new state fair in his city—and he thinks a lot of people will have that same reaction.

 “Well I hope like everyone else, their mouths drop a little bit and there’s just kind of a big ‘Wow!’ factor, because that’s what it is,” Aguilar says, “and the more you look, the more ‘Wow!’ comes to mind as you see all the modern, updated, technologically modern facilities they have here.”

Aguilar has been told livestock entries have increased since the fair moved to Grand Island.

“I’m not surprised at all because if you’ve had the opportunity to look at some of the cattle facilities and sheep facilities, they have the ability to move so many animals through there, wash them all, put them back in their stalls, and it’s just amazing they do all that in a short amount of time,” Aguilar says. “Nowhere else in the country, I don’t think, has that capability.”

Aguilar admits he has some jitters about the first year having the State Fair in Grand Island. 

“Well I think everyone does when it comes to moving the traffic through, getting organized with all the parking, and getting people here for the first time,” he says.  “The first year you’re pretty sure there’s going to be a lot of bugs, but we’ll get them worked out. That’s what we do best, resolve problem issues, and we’ll do the same here.”

The Nebraska State Fair begins its 10-day run on Friday evening.

Terry James of the Nebraska Radio Network filed this report.