World Cattle News:

[Mustang Sally Farm]

Friday, March 09, 2012
Further Support for the Beef Industry
CANADA - An additional investment of C$3 million has been made to the Canadian cattle industry to help improve their profitability and competitiveness.

Agriculture Minister Gerry Ritz made the announcement at the Canadian Cattlemen's Association (CCA) 2012 annual general meeting today where he underlined how important the beef industry is to the Canadian economy, with more than $6.2 billion brought to the farm gate in 2010.

"The new investment will further improve the flow of information across the beef value chain, leading to better management decisions, greater production efficiencies, reduced costs and improved overall competitiveness of the Canadian cattle industry," said Minister Ritz.

"The great work the cattle industry has done on traceability has built a strong platform for the Beef InfoXchange System and this investment will further improve the system."

Last March, Minister Ritz announced an initial investment of $5.3 million for the Beef InfoXchange System (BIXS), which allows the seamless transfer of animal and carcass data from producer to processor. This additional funding will enable the CCA to improve the quality of information available through BIXS and facilitate the transmission of electronic data from packing plants to the BIXS database.

"The flow of fundamental information to the BIXS database will enhance the completeness of the data and reinforce the value of the BIXS program offering," said Travis Toews, President of the Canadian Cattlemen's Association. "I thank Minister Ritz for ensuring the BIXS database is as robust as possible."

2012 has already been a year of successes for Canada's beef sector, including restored market access to South Korea for beef under 30 months of age and to China for bovine tallow for industrial use. These breakthroughs mark the first time in nearly a decade that such products have been able to reach these key markets.

Market access for Canadian tallow to China is expected to be worth $50 million annually, according to the Canadian Renderers Association, while the Canadian beef industry has estimated that restored beef access to South Korea could result in annual sales reaching $30 million by 2015 for Canadian producers.

"Economic growth is a key priority for our Government, and that's why we are creating new market opportunities for the Canadian cattle and beef industries," said Minister Ritz. "Canada is among the world's largest exporters of high-quality beef and we're working hard with the industry to make that business grow even stronger."

Minister Ritz underlined the Government's commitment to standing up for Canadian producers, both at home and abroad. He highlighted the very clear victory for Canada's livestock sector with the ruling by the World Trade Organization (WTO) on the US mandatory Country-of-Origin Labelling measure exemplifies the Government's determination to stand alongside the livestock industry against unfair treatment.

Minister Ritz continues to work with his US counterpart and industry to see that the necessary changes to comply with the WTO panel decision are made as soon as possible.

[Mustang Sally Farm]

Friday, March 09, 2012
Saleyard Cattle Prices to Rise
AUSTRALIA - Continued restocker demand, combined with relatively low slaughter rates, are expected to underpin average saleyard cattle prices in 2011-12. According to the latest Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) Agricultural Commodities March 2012 report, the average cattle saleyard price is expected to increase two per cent year-on-year, to 330¢/kg cwt.


However, over the medium term, ABARES forecasts a slight fall in average saleyard prices, with prices in 2016-17 expected to fall to around 312¢/kg cwt. The fall in value is expected to be the result of higher slaughter following an increase in herd numbers, as well as a rise in beef being sent to developing countries (due to greater competition in traditional export markets), that have historically offered lower returns than the major markets of Japan and Korea.

The Australian cattle herd is expected to rise five per cent year-on-year in 2011-12, to 30.2 million head, before increasing a further four per cent year-on-year in 2012-13, to 31.4 million head, and reach 31.8 million head by 2013-14. The forecast growth is expected to be underpinned by the retention of female breeding stock and favourable seasonal conditions.

Total slaughter is expected to fall two per cent in 2011-12, to 7.9 million head, before rising to 8.1 million head in 2012-13. Despite the fall in slaughter numbers, production is expected to rise 1% in 2011-12, to 2.1 million tonnes cwt – underpinned by higher male turn-off and subsequent heavier average carcase weights.

[Mustang Sally Farm]

Monday, March 12, 2012
Mexico to Increase Beef Export to Japan
MEXICO & JAPAN - Japan will allow larger quantities of Mexican beef to be imported at a reduced tariff rate, under the revised Economic Partnership Agreement (EPA). The amendment to the current EPA protocols will come into force from 1 April 2012.

According to Meat and Livestock Australia, the quota for Mexican beef will be increased from the current 6,000 tonnes per year, to 10,500 tonnes per year. Tariff rates will remain as previously agreed, at 30.8 per cent for chilled and frozen boneless products, except for the ‘other’ frozen category.

Japan applies a 38.5 per cent tariff for chilled and frozen beef from other countries, including Australia, with the right to increase the rate to 50 per cent if import volumes exceed levels set by the government.

Japanese imports of Mexican beef have accelerated since the Japan-Mexico EPA in 2005, with shipments in 2011 reaching 17,403 tonnes swt - up 46 per cent from the previous year and just 1,772 tonnes swt in 2004.

While it is still a minor beef supplier to Japan, Mexico is gearing up its promotional activities in the market. It was reported by the trade media Shokuniku Sokuho this week that Mexican beef exporters are planning to conduct seminars and promotions for chefs and consumers in Japan throughout 2012.

[Mustang Sally Farm]

Tuesday, March 13, 2012
CME: Beef Exports Down in January but Price Up
US - US pork exports began 2012 right where they left of 2011 — on the positive side of the ledger — while beef exports fell slightly in quantity versus January 2011 but grew in value and broiler exports increased over 9% versus year-ago levels.


All-in-all, not a bad start to the year, especially amid concerns that a stronger dollar might negatively impact U.S. meat and poultry exports. The charts at right show exports to key markets for each species on a carcass/ready-to-cook weight basis. Some highlights of the data released by USDA’s Foreign Ag Service (product weight and value) and Economic Research Service (carcass weight data) are:

Pork exports remained stellar in January, posting their second highest monthly volume ever (second only to November 2011) and their third highest value on record. Carcass weight equivalent exports jumped 36% versus one year ago with shipments to China/ Hong Kong leading the year-on-year growth at +156%. The 96.318 million pounds, carcass weight, shipped to this market was 9.6% lower than in December and continues the downward trend from the near-record monthly high reached in November so there is still some concern about how far monthly sales to China/Hong Kong may fall before stabilizing.

China was not the only growth area for pork — shipments to Japan were +19% vs. January 2011. Canada was +51%, Korea was +31% and Mexico was +16%.

On a product-weight basis, shipments of pork, pork variety meats and sausage casings were 28% larger than one year ago. The value of those shipments was up 43% from last year and accounted for nearly $60 for each hog slaughtered in January.

Beef exports were 4.4% lower than in January 2011 on a carcass weight equivalent basis. That is the first year-on-year decline for monthly beef exports since September 2009. Slightly tighter supplies and cutout values that were over 10% higher than last year were the primary reasons for the decline.

The year-on-year decline for beef exports cannot be blamed on any one market. As can be seen in the chart, there is no clear cut leader among markets for U.S. beef as four different countries were the largest destination for beef exports at some point in 2011. Mexico was our largest customer in January but shipments there were actually 2% smaller than last year. Canada was the #2 market and the 32.1 million pounds, carcass equivalent, sent there in January was a slight increase on 2011. Shipments to Japan were 3.5% higher. And in the “numbers can be deceiving” category: Beef exports to Russia were 87% larger but Russia only accounted for 3.6% of total U.S. beef exports in January.

On a product weight basis, beef and beef variety meat exports were virtually even with 2011 while the value of those shipments grew by 14% according to the U.S. Meat Export Federation.

“Other” countries remain a critical part of chicken exports, accounting for 40% of the total. Among these, Taiwan was our second largest customer in January while Cuba was #3. The United Arab Emirates and Vietnam also ranked in the top 10 while all of the second 10 U.S. markets are included in the “Other” category.

[Mustang Sally Farm]

Wednesday, March 14, 2012
Increase in Cattle Inventories Forecast for 2012
BRAZIL - A three per cent increase in cattle inventories in 2012 as a result of government financial support for cattle herd rebuilding, genetic improvements, pasture improvements, and sustained cattle prices has been forecast.


According to the USDA's Brazil Livestock and Products Semi-annual 2012, by the end of this year, cattle inventories are expected to reach nearly 204 million head.

2012 cattle exports have been forecast to rise, with increased shipments expected to Venezuela and Suriname due to competitive prices. Despite of a drop in cattle exports in 2011, the Brazilian Meat Packing Industry officially submitted a request for a 30 per cent export tax on live cattle exports to the federal government on 31 January.

2012 beef production has been forecast to rise by two per cent. Increased exports, continued growth in domestic demand and higher consumer purchasing power are expected to factor the growth in beef production.

[Mustang Sally Farm]

Thursday, March 15, 2012
Asia Must Import to Meet Growing Dairy Demand
GLOBAL - Asian countries have the need for continued imports from significant dairy producing countries, such as the United States, to meet burgeoning demand.


“Demand growth in Asia is expected to soar over the next decade as incomes rise and demand for animal protein increases,” the Hoogwegt Horizons newsletter reports.

Markets in Viet Nam and Korea are especially attractive for dairy because both countries are expected to experience significant growth in dairy consumption over the next decade. Per capita dairy consumption is currently much lower in Asia than the United States and other Western countries, but it's expected to grow drastically as the region’s large population base begins to gain a taste for foods like pizza.

Throughout Asia, the new and growing demand for milk and milk products will need to be fulfilled by imported products because many countries can't meet domestic production needs. The newsletter notes that 78 per cent of Vietnam’s milk needs are met by imports, along with 37 per cent for Korea and 75 per cent for Indonesia.

It warns, however, that the expected large increase in demand is unlikely to be sustained without significant increases in the volume of imports from dairy producers in the United States and a few other countries.

"The United States is uniquely positioned to supply this growing demand. We have the infrastructure to efficiently produce and process dairy products, and we have the ability to grow significantly to meet increasing global demand," said Jerry Slominski, International Dairy Foods Association (IDFA) senior vice president of legislative affairs and economic policy.

"But Republicans Collin Peterson’s milk supply management proposal would limit our industry's growth, curtail exports and hinder job creation. IDFA opposes any form of supply management, especially at a time of great market opportunity for our members and the entire US dairy industry."

[Mustang Sally Farm]

Friday, March 16, 2012
Korean Producers Struggle As Prices Collapse
SOUTH KOREA - Oversupply of cattle is expected to push prices further down in 2012, according to the USDA Foreign Agricultural Service.


Producers are facing increasing pressure as cattle prices are plummeting. Despite suffering from foot and mouth disease in late 2010 and early 2011, cattle numbers are strong.

Steer prices have fallen 35 per cent since 2010, likely due to an increase in cattle inventories, which have increased 70 per cent over the last 10 years, and 26 per cent over the last five.

To combat this the Ministry of Agriculture is offering incentives, to encourage producers to send poor performing cattle to slaughter, instead of keeping them for the breeding herd.

The Ministry hopes to reduce cattle numbers by 100,000 head in 2012 and a further 100,000 head in 2013, in a bid to level out cattle prices.

Offering 500,000 won/head ($444) for heifers and 300,000 won/head ($267) for cows has seemed to help stabilise the market. Cattle prices are still far below pre foot and mouth levels, which is also encouraging producers to liquidate herds.

All of this is expected to increase cattle slaughter, which is now estimated for 2012 at 1.1 million head, a 27 per cent increase on 2011.

Consumption of beef is always increasing. Supermarkets offer local beef (Hanwoo) at discounted prices to encourage consumption.

Estimations for 2012 suggest that consumers may favour US beef over Australian beef. However, the Korea-US free trade deal which came into play yesterday (15 March) is not likely to have a significant impact on US beef imports due to the tariff levels not being reduced by much.

[Mustang Sally Farm]

Global Beef Outlook: Tough time Ahead for Packers
Speaking to Matt McKamey from Rabo AgriFinance in the US, Charlotte Johnston TheCattleSite editor looks at cattle market projections for 2012.


Mr McKamey appears to be cautiously optimistic about cattle production over the next couple of years. Speaking at the National Cattlemens Beef Association annual convention, it was hard not to be optimistic. With the industry seeing sky-high prices last year, he is fairly confident that 2012 will see double digit returns for beef producers.

Despite a declining beef herd - which will limit supply, all time high beef exports and new Free Trade Agreements (FTAs) with South Korea, Mr McKamey's caution comes on the back of the global economic crisis, which he says we are not clear of yet. He also said that consumers hold the power, at any time they could decide to purchase another protein product.

One concern is how consumers will respond to increasing beef prices. Mr McKamey said that this was currently unknown. "So far it seems that consumers have been able to absorb the additional expense, but at what point will this stop," he said.

It is likely to be a tough year for meat packers, he said. They could potentially be dealing with losses, as cattle costs increase, how much of this can they pass onto consumers, or how can they pass some of the cost back to producers?

Demand for beef is still strong, despite per capita consumption falling over the past 25 years. Instead consumer demand for high quality beef has increased.

As a general trend beef production has been declining, as producers have liquidated herds in order to maintain their operations. The drought in the South has had and will have an impact on beef supplies, Mr McKamey said.

Saying this, cattle are producing more pounds of beef per animal, which is going someway to offsetting the decline in production.

March 2012

[Mustang Sally Farm]

Wednesday, March 21, 2012
Beef Supplies Short; Producers to Expand Herd
US - US beef producers have started the early stages of herd expansion as beef supplies remain very short, says Purdue Extension agricultural economist Chris Hurt.

Beef cow numbers have dropped by nine per cent, or three million head, since 2007. They dropped by three per cent in 2011 alone, meaning a smaller calf crop in 2012 and lower slaughter numbers through 2014. But strong finished cattle prices and moderating feed costs have driven some producers to start the expansion.

Producers have reduced their herds in recent years primarily because of escalating feed costs since 2007 and a drought in the southern Plains that dried up pastures and forages.

According to a January US Department of Agriculture cattle report, the most recent available, beef heifer retention has increased one per cent - a sign that producers are starting to expand. If US crop yields return closer to normal during the 2012 crop year, Hurt said feed prices could come down even more, which would encourage further herd expansion.

"This is the first increase in heifer retention since feed prices began increasing," he said.

While higher retention rates would seem to suggest lower finished cattle prices in 2012, Mr Hurt said the opposite is likely true. Beef producers retaining heifers results in lower slaughter supplies and, ultimately, lower beef supplies.

With a reduction in cow numbers, the calf crop could be down more than two per cent in 2012, and if heifer retention continues in 2012 and 2013, Mr Hurt said beef supplies might not increase until 2015.

"The modest heifer retention now is actually a price-enhancing factor in the short run," he said. "Look for finished cattle prices to push into the higher $120s in the spring, moderate to the mid-$120s this summer, and finish the year near $130. Spring highs in 2013 could climb to the low $130s."

Despite the high finished cattle price projections, Hurt said producers need to keep an eye on the weather and 2012 crop yields before they make further expansion plans. Producers in the southern Plains should watch drought conditions, while producers nationwide need to watch crop progress.

The National Oceanic and Atmospheric Administration is forecasting that a region of the western Corn Belt will continue to be very dry into the spring.

"That raises concerns for corn and soybean meal prices," Mr Hurt said. "Higher feed prices would depress cattle prices."

[Mustang Sally Farm]

Thursday, March 22, 2012
NZ to Increase Beef Production in 2012
NZ - New Zealand beef production is set to increase by 6.5 per cent in 2012, boosted by higher carcase weigths and excellent growing conditions.


Cattle slaughter was down slightly at the ned of 2011, due to good pasture conditions making it possible for farmers to carry more stock over the summer months.

As the dairy and beef herds increase, higher cow kills are expected due to replacements. On top of this the cow herd is expected to grow even bigger with an additional 80-90,000 cows in 2012, the majority going into the expanding dairy herd.

Domestic consumption will remain unchanged, which means that the extra production will be ready for export.

[Mustang Sally Farm]

Friday, March 23, 2012
Weekly Australian Cattle Summary
AUSTRALIA - This report is a collection of weekly cattle price summaries from each Australian state by the Meat & Livestock Australia (MLA).

West Australia (WA)
Weather conditions moderate

Weather conditions cooled substantially in the southwest of WA this week with a solid drop in temperatures recorded after the heat wave. Conditions in the north of the state remain reasonable with widespread rainfall seen throughout much of the interior, goldfields and down though to Esperance on the south coast. The majority of the Agricultural districts however recorded fine and dry conditions. This year’s calving is now in full swing with solid numbers now on the ground throughout much of the southern regions. Supplementary feeding is on the rise as feed levels decline as would be expected at this time of year.

The numbers of cattle sold in physical markets dropped this week due to a solid reduction in the volumes penned in the Great Southern and despite an increase in Muchea’s volumes. The southwest’s sale remained the smallest of the three weekly venues. As numbers constrict some agents have indicated that several of the weekly sales may revert to a fortnightly fixture during the winter as happened during the same period last year when throughput dropped away.

Vealer supplies were lower this week, while the supplies of trade weight yearlings were also very constricted. Heavy weight steer and heifer volumes remained minimal, with cow volumes again only moderate. Quality throughout the classes remained very mixed and plain with the supplies of prime slaughter grades again limited and this continued to support a buoyant processor inquiry.

Cow market rebounds

The majority of vealers sold this week remained in store condition with the majority being of medium and light weight as heavy weights were sold in relatively limited numbers. Feeder demand was more conservative and selective and this saw slight decreases in medium and heavy weight steer classes, while a plainer quality lightweights saw these classes fall sharply as restockers imposed discounts. The majority of vealer heifers on the other hand enjoyed a similar demand from both restockers and feeders with selected breeds recording premiums from the live export sector to a high of 227c/kg lwt.

The limited supplies of trade weight yearlings included an increased percentage of grain assisted drafts with few prime grass finished lots recorded. Demand from the local processing and retail sectors was buoyant with solid market conditions remaining in place. This was also the case in heavy weight steer, bullock and mature heifer classes with most of these firm to dearer in price. Cow quality remained mixed and demand from the processing sector again increased throughout the classes, which saw prime heavy weight sales up to 12c/kg dearer.

Victoria
Full selling week returns

Victoria returned to a full selling week, with numbers lifting 10 per cent. However, supply remains low with the processing industry still unable to secure adequate supplies after returning to a five day slaughter week. Strong demand led to better competition across the majority of markets, and in turn lead to further price increases.

The week started slowly with trade cattle prices firm to dearer, while grown cattle prices eased on Monday on a fortnightly comparison. However, this was short lived as demand was much stronger from Tuesday onward. Some excellent results were achieved for grown steers and bullocks depending on the complex. Light and medium weight steers and bullocks were 4c to 15c/kg dearer. Demand varied greatly for vealers and yearlings with processors being more selective early in the week, however by Thursday buyers were more flexible with specifications. Vealers sold very well, as did some of the yearling heifers. Some of this was driven by supermarket competition aided by an additional buyer at Bairnsdale on Thursday, a sale they have not attended for a long time.

Affecting cow prices was the emergence of a grinding beef order for the US market. All processors competed strongly for lean 1 score cows aiding a reasonable increase in the carcass weight price average to 304¢/kg cwt. Several weaner and autumn store cattle sales were held over the past week. Prices increased significantly and this forced more competition onto physical sales. This also assisted in some strong results for secondary cattle.
Prices increase

All categories performed better this week despite the increased yardings, with vealer heifers recording the greatest gains in price. There was less demand for yearling heifers and cows which were only fair to slightly better.

This was seen especially in vealer sales with a large number of B and C muscle vealers making 235¢ to 266¢/kg. Most others sold between 200¢ and 250¢ with D muscle steers and heifers from 175¢ to 228¢/kg. Supplementary fed yearlings sold as high as 255¢, but most light and medium weight steers and heifers made between 190¢ and 225¢/kg.

Strong competition between wholesalers and exporters saw grown steers and bullocks make to 213¢, most selling from 192¢ to 208¢/kg. Prime bullocks suffered a huge range of prices partly due to weight and breeding. Prices ranged from 172¢ to 206¢/kg. Because of the strong competition for cows, the top price was 176¢/kg. Better quality beef cows made mostly from 145¢ to 165¢/kg. Leaner 2 and 3 scores sold mostly between 120¢ and 148¢, although some very poor quality sold at lesser rates. Probably one of the more notable issues at most markets was buyers lowering the quality they purchased in order to secure supply.

New South Wales
Numbers tighten

Cattle yardings at the physical markets reported by MLA’s NLRS decreased 13% week-on-week after most selling centres penned fewer cattle. Overall supplies contracted in the central west, despite supplies at Forbes more than doubling as flood water recede. Solid rainfall over the Hunter Valley on the weekend contributed to the reduced consignments at both Scone and Singleton. Numbers were mixed in New England and throughput tightened at Casino after less grown cattle were yarded.

A higher proportion of lightweight vealer and yearling cattle were recorded in the physical markets, as producers continued to offload cattle in store condition. This has been a widespread trend across the state, with graziers happily offloading stock before the winter season. Despite this, a fair amount of medium and heavyweight yearling steers were presented in prime condition and sold to solid processor and supermarket competition. Grown cattle number contracted and quality was mixed in places – as cattle begin to show the signs of the cooler, variable weather. Cow numbers remained strong overall and most yardings were dominated by heavyweight consignments carrying adequate condition.

Demand for cattle was relatively stable, with direct to works rates showing a firm trend across all categories. Processors have a good amount of cattle booked in for the coming weeks, and if it remains dry supplies will only increase. Export grades were firm despite the A$, but the stronger demand for manufacturing beef helping hold the market stable. Competition in the physical markets was slightly higher, with restockers once again underpinning the strong young cattle prices.

Restockers chase light steers

Light vealer steers to restocking and backgrounding orders were keenly contested, with prices averaging up to 15¢/kg dearer. Restocker vealer steers mainly sold from 245¢ to 268¢, while the medium weight lines were firm on 235¢/kg. Vealer heifers to restock went against the trend, as prices fell 6¢ - to 217¢/kg. The better quality vealer heifers to the trade were firm to 2¢ dearer on 225¢ and the C3 pens settled on 220¢/kg. Light store yearling steers to restock and feed sold from 215¢ to 235¢, while medium feeder steer prices were stable on 208¢/kg. Heavy feeder steers were unchanged on 195¢ and the better covered lines to slaughter made 201¢/kg. Restocker yearling heifers topped at 236¢ and averaged 4¢ lower on 198¢/kg. The medium weights to feed made 195¢ and the heavy C3 pens to slaughter gained 4¢ -to 194¢/kg.

Medium weight grown steers to feed were in greater numbers and prices topped at 188¢ and averaged 182¢/kg. The heavy pens to export slaughter mainly sold firm on 185¢, while the better quality C4 consignments made 188¢/kg. Bullocks averaged 187¢ or $1,193/head. Medium weight cows eased 2¢ - to 143¢ and heavy D4 cows were firm on 153¢/kg.

South Australia
Increased Yardings

SA LE numbers increased after a two week break and featured very mixed quality runs. There was an easing price trend from the usual local and interstate trade and export buyers. However, feeder and restocker orders were active as they sourced many of the young cattle and some 1 and 2 score beef cows. The majority of the vealer steers finished with feeder activity at dearer levels, while the few vealer heifers sold at lower levels. Most yearling steers under 400kg were purchased be feeders. The heavy C3 steers were sourced by the trade at lower prices. Yearling heifers followed suit with many light and medium weights purchased by feeders, while the trade secured the balance.

Naracoorte larger improved quality yarding sold to a generally dearer trend, with most of the regular SA and Victorian trade and export buyers purchasing stock. Feeder and restocker orders were also quite active on a mixture of young cattle, plain quality cows and a few lightweight bulls. There were also some prime supplementary fed steers from Loxton that attracted very strong demand. Most categories were unchanged to 6¢/kg dearer, with isolated feeder purchases higher.

Mt. Gambier’s yarding of only 849 head was one of the smallest yardings in some seven months. However, apart from isolated sales of plain quality and some vealer heifers that were cheaper, most categories attracted improved prices. And outstanding pen of 330kg vealer heifers sold at 271¢/kg after some solid bidding. Medium weight grown steers topped the 200¢ mark, while some supplementary B-muscled yearling steers peaked at 237¢/kg.

Most Categories Dearer

Improved prices were evident across the majority of categories as the smaller numbers that are now appearing, particularly in the lower South East. Yearling heifers were the only exception and performed weaker.

Vealer steers in limited numbers to the trade sold from 180¢ to 250¢ at prices unchanged to 4¢/kg dearer. Feeders and restockers sourced C2 light and medium weight steers from 195¢ to 225¢, also at generally dearer levels. Vealer heifers to the trade sold mainly from 183¢ to 238¢ with isolated sales at 256¢ and 271¢/kg. Yearling steer C3 sales were from 170¢ to 211¢, with the B muscled 204¢ to 237¢ to be 1¢ to 10¢/kg more. Feeder purchases of C2 and C3 medium and heavy steers were from 160¢ to 215¢, also at dearer levels. Yearling heifer C3 medium and heavyweights sold between 170¢ and 200¢, or unchanged to 8¢/kg cheaper.

Grown steer C3 steers sold from 172¢ to 207¢, at prices 1¢ to 5¢ dearer and generally 330¢ to 365¢/kg cwt. The grown heifers were up 2¢ to make 190.7¢/kg. The D3 to C6 beef cows sold between 137¢ to 165¢ to be 1¢ to 6¢ dearer, and mainly 275¢ to 310¢/kg cwt. The bulls remained fair with prices between 140¢ and 191 to average at 153.50¢/kg.

Queensland
Rain reduces supply

Numbers at physical markets fell away by close to 40 per cent after heavy tropical rainfall across the central and northern areas of the state. The return of flooding rain severely reduced numbers at Mareeba and cancelled the Longreach sale plus almost all other selling centres in the central and northern regions. As the rain influence moved south and combined with another weather front from the west supply at southern selling centres also reduced.

The overall quality of the young cattle was mixed while the standard of the export classes of heavy steers, bullocks and cows was generally good, with the vast majority of the cows in the 3 and 4 score ranges. All the usual export buyers were present at markets early in the week and not all were operating. However, by mid-week the cancellations of sales and direct consignments due to the wet weather meant most export buyers were operating.

Prices for young cattle early in the week generally met firm demand, selling in line with the reduced prices of the previous week. Nevertheless the drop in supply by mid week turned prices around with vealer steers and heifers and lightweight yearling classes improving 5¢ to 10¢/kg. The only category to go against this trend were heavy yearling steers to feed. Heavy steers and bullocks to export slaughter at early week sales remain firm on the previous weeks reduced rates, while the shorter numbers by mid and late week sales lifted prices by 5¢/kg. Apart from adjustments in places due to quality cow prices remained generally unchanged.

Prices firm to dearer

A large number of calves returned to the paddock 4¢ dearer at 235¢ with a few pens at 259¢/kg. Vealer steers also returning to the paddock improved 5¢ and sold to 248.2¢ with a fair supply at 230¢/kg. Vealer heifers to slaughter improved 6¢ to average close to 213¢ and sold to 224¢/kg. Lightweight yearling steers returning to the paddock generally sold around 223¢ with a very occasional sale to 269.2¢/kg. Medium weight yearling steers to feed averaged 206¢ and made to 230¢/kg. Heavyweights to feed made to 208¢ with a good sample at 195¢/kg. Despite a fairly large supply of lightweight yearling heifers to slaughter penned, average prices lifted by 5¢ to 213¢, and restocker lines mostly sold around 214¢/kg. Medium weight yearling heifers to feed improved 3¢ to average 192¢ and sold to 207.2¢/kg.

Heavy steers to export slaughter averaged 5¢ better at 188¢ and sold to 197.2¢/kg. Bullocks sold to the same level with most 5¢ dearer at 190¢/kg. Medium weight 2 score cows averaged 130¢ and 3 scores made 144¢/kg. Good heavy cows were in demand all week and averaged 158¢ with the occasional pen topping at 169.2¢/kg.

[Mustang Sally Farm]

Tuesday, March 27, 2012
Mexico to Defend WTO Meat Labelling Decision
MEXICO - Following on from the US announcing that it will appeal against the World Trade Organisation's (WTO) ruling on Country of Origin Labelling (COOL), Mexico has said that it will continue to support the WTO's final ruling last November.


Last November WTO decided that US COOL on meat products treated Mexican and Canadian products less favourably, violating WTO trade rules.

The Mexican government has said that it will continue to support WTO and urge the US to develop COOL in accordance with WTO rules, in order to protect Mexican producers.

Mexico claims that the current COOL legislation is of detriment to Mexican imports into the US, and since its introduction US processing plants have limited Mexican cattle imports, as well as discounted the price by $60 per head of cattle.

The government said that Mexico is committed to restoring the conditions for Mexican cattle into the US market.

[Mustang Sally Farm]

Wednesday, March 28, 2012
Weekly Roberts Market Report


 Michael T. Roberts
 Extension Agriculture Economist,
Dairy and Commodity Marketing,
NC State University



DAIRY CLASS III futures on the Chicago Mercantile Exchange (CME) closed up on Monday with the exception of the April 2012 contract. MAR’12DA futures closed at $15.64/cwt; up $0.01/cwt. The MAY’12DA contract closed at $15.34/cwt; up $0.23/cwt. JULY’12DA futures closed at $16.12/cwt; up $0.14/cwt. Spot Cheddar block and barrel markets were quit. USDA’s Livestock Slaughter report released last Friday showed dairy cow slaughter at 525,000 year-to-date; 12,000 head more than this time last year. USDA’s more recent Milk Production report showed the US dairy herd increased by 27,000 head for the same period. Despite greater slaughter, the dairy herd continues to expand. Fundamentals do not support recent price increases. Milk production is increasing on a weekly basis with no peak in view. Current strength is most likely the result of traders wanting to get out of recently established short positions due to cheese price movement. Prices for Class III futures were: 3 months out = $15.53/cwt ($0.06/cwt lower than last report); 6 months out = $15.81/cwt ($0.10/cwt under a week ago level); 9 months out = $16.09/cwt ($0.06/cwt less than this time last week); and 12 months out = $16.12/cwt ($0.04/cwt under a week ago).




The All Milk Price for 2012 has declined over $2/cwt from January through February.
 
LIVE CATTLE futures on the Chicago Mercantile Exchange (CME) closed up on Monday with the exception of August 2012 and June 2013 contracts. The APR’12 contract finished at $124.550/cwt; up $0.050/cwt. JUNE’12LC futures closed at $121.100/cwt; even with Friday’s close. DEC’12LC futures closed at $130.075/cwt; up $0.200/cwt. According to pit sources cattle futures were mixed while traders took in last Friday’s bearish supply report and after the demise of a common ground-beef filler. Last Friday USDA showed a greater-than-expected number of cattle placed in feedlots coming off drought and dry grass from the southern Plains. The number of cattle marketed was lower than expected and also fundamentally negative for prices. On the other hand several pit sources thought this news was already factored into the market. Additionally, traders are trying to gauge the impact of the rapid phasing out of lean finely textured beef, which critics describe as “pink slime.” Many grocery store chains now say they won’t sell beef containing those trimmings. The American Meat Institute said Monday that it could take an additional 1.5 mi head of cattle to make up the difference in meat lost by phasing out those trimmings thereby fundamentally supporting the market even though in the near-term prices could be negatively affected. In a word, tight beef supplies could get even tighter. Cash cattle markets were slow on Monday but are expected to pick up later in the week since packers laid off buying last week. USDA on Monday put box beef prices at $191.74/cwt; down $0.91/cwt and $5.24/cwt lower than a week ago. According to HedgersEdge.com, the average packer margin was lowered $18.30/cwt to a negative $70.80/head based on the average buy of $126.55/cwt vs. the breakeven of $119.73/cwt. Late Monday, March 5, USDA put the 5-area average price at $126.60/cwt; $0.20/cwt over last report.
 


FEEDER CATTLE at the CME finished mixed on Monday. Nearbys were strong while deferreds were lower. APR’12FC futures finished at $152.550/cwt; up $0.125/cwt. The AUG’12FC contract closed $0.050/cwt lower at $156.100/cwt. Some profit taking occurred owing to recent news affecting live cattle fundamentals. The Oklahoma National Stockyard feeder cattle auction estimated receipts for Monday, 3/26/12 at 5,000 head compared to 7,502 last week and 7,940 a year ago. Compared to last week feeder steers and heifers were steady to $3/cwt higher. Stocker steers and steer calves $4-$8/cwt higher. Stocker heifers and heifer calves were $8-$10/cwt higher. Demand was moderate-to-good for feeders and very good for stockers and calves. The CME feeder cattle livestock index was placed at 154.21; up 0.16 and 0.37 over this time last week.

[Mustang Sally Farm]

Friday, March 30, 2012
 
Mexican Cattle Supplies Influenced by Drought

MEXICO - Mexico is in the midst of its worst drought in the last 70 years, with a considerable portion of the northern half of Mexico facing extreme or exceptional drought conditions, writes Meat and Livestock Australia (MLA).

As the dry conditions are expected to persist, Mexican cattle liquidation is anticipated to support domestic beef production, while suppressing beef imports into the market this year.

Mexico’s ministry of agriculture (SAGARPA) has forecast Mexican beef production in 2012 to decline two per cent year-on-year, but remain three per cent above the five-year average, at 1.77 million tonnes cwt. This lower production is expected alongside SAGARPA’s expectations of a near record number of live cattle exports in 2012, at 1.43 million head – mainly feeder cattle for the US.

While much of Mexico is either in a long- or short-term drought, and estimates of cattle losses are uncertain, the Mexican cattle herd (including the beef cow herd), was estimated at 20.1 million head as at 1 January 2012, the lowest since 1963 (USDA).

Beef imports into Mexico in 2011 declined 11 per cent year-on-year, to 186,922 tonnes swt, primarily due to a fall in volumes of chilled beef from the US (down nine per cent) and Canada (down 25 per cent) – the two largest imported beef suppliers in Mexico. Beef imports from Australia also fell 46 per cent in 2011, to 861 tonnes (Steiner Consulting).

In contrast, Mexican beef exports increased 45 per cent in 2011, to 104,431 tonnes swt, as a result of a surge in the chilled trade to the US (up 49 per cent) and frozen shipments to Russia (up 542 per cent). The US and Russia were the two largest export markets for Mexican beef in 2011.

The rise in Mexican beef exports to the US in 2011 was driven by a combination of factors, including increased supplies of Mexican beef, high beef prices in the US, and the relatively stronger US$ against the Mexican peso. Russia, while traditionally sourcing beef from Brazil and Argentina, has increased orders from Mexico (and other suppliers) amid the shortfall in South American supplies in recent years.

Mexican beef exports to Japan in 2011 declined 40 per cent year-on-year, to 16,732 tonnes swt. While Japan was Mexico’s third largest beef export market, Mexico remained a relatively small import supplier in Japan, with volumes accounting for three per cent of total Japanese beef imports in 2011.

[Mustang Sally Farm]

Improper cow nutrition proves costly for beef producers
Purdue University Extension   |   Updated: January 28, 2011


Thin cows can be economically devastating as beef producers head into spring calving season, said Purdue Extension beef specialist Ron Lemenager.
 
"Spring calving cows need to be in moderate body condition at the time of calving because it has a pretty significant effect on how quickly these cows will return to estrus after calving and, subsequently, when or if they conceive," he said. "If cows are thin at calving, producers can expect long postpartum intervals, which means they will calve later the following season."
 
That means instead of having a 365-day calving interval, producers may face 13-14 month intervals and, ultimately, a loss of productivity.
 
Thin cows also tend to have lower colostrum quality, which means calves aren't able to develop the passive immunity they need to protect them against disease, cold stress and other stress factors.
 
"In addition, these thin cows are going to have lower milk production, resulting in lighter weaning weights of their offspring," Lemenager said.
 
Ideally, cows should be carrying a moderate body condition score, which falls at 5-6 on the 1-9 BCS system. In order to evaluate whether cows are at a healthy BCS, Lemenager said producers need to look past the winter hair coat the animals are carrying right now.
 
"There are three places on the cow that are the best indicators for body condition, starting along the top line. If you can see bone structure along the top line right under the hide, the cow is probably pretty thin," he said. "The second place is in the rib section. If the cow shows the 12th and 13th rib, she's borderline. If you can see more ribs – the 10th, 11th, 12th and 13th, the cow is too thin.
 
"The third place to look, and it's the least affected by muscle, fill and hair, is right along the loin edge between the 13th rib and the hooks. If a producer can see bone structure at the edge of the loin, the cow is too thin."
 
At this time of year, spring calving cows have advanced into the last trimester of pregnancy. Because of fetal nutrient requirements, correcting low body condition scores can be a challenge, but it's not impossible if producers can strategically supplement the animals.
 
Because corn prices are so high right now, Lemenager recommends beef producers look at some alternative feeds such as soybean hulls, distillers grains and corn gluten feed, which may be more economical. A chart to help producers make those decisions is available at www.thebeefcenter.com. Also included on the site is a how-to video for checking body condition scores.
 
"Producers should be looking at cows monthly and using BCS as a wake-up call," he said. "They are a good indicator of nutrition and reproduction. If cows look to be gaining or losing BCS, producers need to evaluate and adjust rations to optimize performance and minimize expenses."