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Packer Antitrust Lawsuit Dismissed

Tue, 26 Nov 2024 05:10:16 GMT

The antitrust class-action lawsuit alleging America’s largest beef packers conspired to fix cattle prices has been dismissed. Federal Judge John R. Tunheim of Minnesota’s U.S. District Court issued his ruling Monday and gave plaintiff’s 90 days to file an amended complaint.

“Because plaintiffs have not pleaded their direct evidence with sufficient detail and because they have not pleaded parallel conduct sufficient to support an inference of a price-fixing conspiracy, the court will grant defendants’ motions to dismiss,” Judge Tunheim said in the order.

The ranchers and consumers who brought the case “do little to allege how the individual defendants acted,” instead “arguing that the market did this or that,” Judge Tunheim wrote. That made it impossible to evaluate the “alternative economic explanations” offered by the meatpackers, he said.

Multiple lawsuits were filed in 2019 against the beef packers alleging price fixing between 2015 and the present. The original suit was filed by R-CALF USA and four ranchers in April of 2019 against Tyson Foods, Inc., JBS S.A., National Beef Packing Company, LLC, and Cargill Inc., alleging the companies conspired to depress the price of fed cattle they purchased, thereby inflating their own margins and profits.

Three days later in a Minneapolis court the same packing companies were accused in a consumer class action lawsuit of a similar price-fixing scheme. That suit claimed the packers forced consumers to pay inflated prices for beef products. In May a third lawsuit was filed by a cattle futures trader who claimed he “suffered damages from a manipulated live cattle futures and options market.” The suit alleged, “Plaintiff suffered monetary losses by transacting in live cattle futures and options at artificial prices directly resulting from packing defendants’ conduct, including their suppression of fed cattle prices.”

In July 2019, a judge ruled the three lawsuits could be consolidated into one.

The lawsuits alleged beef packers colluded to suppress beef prices in part by agreeing to reduce slaughter volumes and curtailing purchases. The plaintiffs said the collusion caused an unprecedented drop in fed cattle prices in 2015.

Other price suppression tactics the meatpackers allegedly have deployed include importing large numbers of foreign cattle, purchasing cattle during a narrow 30- to 60-minute window on Fridays and slashing slaughter volumes.

Plaintiffs’ lawsuit provided testimony of two confidential witnesses – one a packing company employee and the other a feedlot manager. But in dismissing the case, Judge Tunheim said the confidential witnesses and their claims were not sufficiently detailed.

“Because of the lack of detail regarding the firms by which the confidential witnesses were employed, plaintiffs do not adequately explain their jobs and how their interactions in those jobs would lead to them acquiring the knowledge they allegedly possess,” Tunheim wrote. “In all, the lack of detail about the confidential witnesses, combined with the mismatched nature of what they allege, lead the court to conclude their claims are not sufficiently detailed to survive defendants’ motion to dismiss.”

Related stories:

R-CALF Sues Tyson, Cargill, JBS and National

Packer Lawsuits Will Be Consolidated Into One

Beef Packers Face Another Antitrust Lawsuit

Grains Lower Except Nearby Soybeans: Cattle Trade Record Cash and Bearish COF Report

Mon, 24 Jun 2024 20:16:20 GMT

Cattle futures started mostly lower except for nearby live cattle as record high cash prices are pulling up the front end of the board verses the bearish placements number in the Cattle on Feed Report. However, feeders firmed shortly after that on lower corn and strong cash trade, plus tight numbers.

Scott Varilek, Kooima Kooima Varilek, says the record cash came even Friday afternoon after the report which is an indication of just how tight the numbers are in the country.

Cash last week in the North ranged from $306 to $315, with the dressed volume at $310-$312, up $4-$6 on the week and live sale prices were at $198-$199. Southern prices ranged from $189 to $191 live, which was up $3 to $5. So, the five-area weighted average will be another record.

“The numbers just aren’t there for the middle of June for those kinds of trades to happen is very impressive. We’re after peak demand time, you know usually we’re starting to tail off, show lists are starting to grow but we have a lot of interest in trying to sell early. So, guys are even selling some of these calves that are not ready yet,” he says.

As a result, he anticipates weights will start to drop off.

He says they aren’t sure where the 104.3% placements number came from on the USDA report, except that the record cash prices may have feedyards scrambling.

“If we look at it again and say where would all these extra placements come from, the only thing I can come up with is we do have quite a large sector of the market we’re bullish and we know how tight these numbers are, we know how long it takes to rebuild the cow herd and that’s not going to happen overnight. So, there is that anticipation that this is the best market we’ve ever had in the history of the cattle market, the highest prices. I want to be a part of it. So, you know there are empty yards and if you’re looking at an empty yard and you want some cattle in it because they’re getting very high, " he says.

Varilek adds that the higher placement numbers last fall should be starting to show up on show lists right now, but the numbers aren’t there which may indicate USDA did not get the numbers right last fall on the reports.

Hogs start mostly lower again after lower weekly closes last week and lower cash coming into the session. Varilek is not sure if the market will take a breather ahead of the end of the quarter or the Hogs and Pigs Report.

Grains are under pressure again as the markets don’t care about excessive rain in the northwestern Corn Belt and instead are focusing on the rains that fell in the Eastern Corn Belt over the weekend.

Former USDA Under Secretary for Food Safety says Negative Beef Tests for H5N1 Came as "No Surprise"

Tue, 14 May 2024 23:01:00 GMT

The Food Safety and Inspection Service gave the market and consumers a boost of confidence after confirming all 30 ground beef samples sent to the National Veterinary Services Laboratories for PCR testing came back with no H5N1 virus particles present. This came as no surprise to Mindy Brashears who served as USDA Under Secretary for Food Safety and is now a Horn Distinguished Professor at Texas Tech University.

“Really your meat is essentially sterile,” Brashears says. “That’s the muscle of the animal and this virus you usually find in the GI tract or in the respiratory system. So, I was not surprised that they didn’t find any in the meat products.”

FSIS is now also testing muscle tissues from culled dairy cattle that were condemned due to systemic pathologies. The results of these tests are yet to be published but are expected soon. Brashears anticipates a negative result.

“In the muscle it really should be essentially sterile when it comes off the animal,” she says. “It does get contaminated from the environment, but the meat industry already takes really high precaution to prevent cross contamination because of food borne pathogens such as E. coli and salmonella. Because of those precautions, I would actually be surprised if it does get into the meat or the food supply.”

If H5N1 is ever detected in beef cattle that meat will also be safe especially if properly cooked, Brashears says.

“All the precautions that consumers are already told to cook your meat, to prevent cross contamination that should also go a long way in killing this pathogen as well,” she adds.

In addition, milk and eggs are also safe due to pasteurization.

The cattle futures rallied in response to the test results after selling off earlier in the week when USDA announced the testing.

“These tests are what has been holding the market down,” says Scott Varilek, Kooima Kooima Varilek Trading. “That’s been the question – is it going to be in the beef or not? You know we import so much beef that gets ground up for ground beef that it could have been Australian for all I know.”

He says the other good news is during all this cash cattle trade has not faltered due to tight supplies.

“Earlier in the week there were two days before we knew this negative USDA test that we traded $187 kind of under the radar,” Varilek adds.

Plus, beef exports were a marketing year high Thursday morning at 22,500 metric tons, signaling international customers are confident the U.S. beef is safe.

Grain and Livestock Futures Mostly Lower for 2023. So, What’s Ahead in 2024?

Tue, 02 Jan 2024 15:55:14 GMT

Grain futures ended mostly lower for 2023. Spot month corn prices were down the most losing 30%, while soybeans only dropped half that amount, off 15% for the year. Soybean meal fell 18%, soybean oil 25%. Kansas City Hard Red Winter wheat slid 28%, Chicago Soft Red Winter wheat lost 21% and Minneapolis Hard Red Spring wheat 23%. Lean hog futures dropped 22%, leaving cattle one of the few winners of the year with Live Cattle up 7% and Feeder Cattle up 20%.

After grain markets set record highs in 2022 a rebound in United States production led to a commodity reset in 2023 similar to 2013. Randy Martinson, Martinson Ag, says that was especially true for corn with a record 15.234-billion-bushel crop, at the same time more than half of the U.S. was hit by drought during the growing season. “We had better production than expected, we had poor exports and so all that came into play to kind of push the market lower. The drop in corn at 30%, that’s the largest yearly percentage drop in 10 years. So that’s pretty significant and when you have a 2.1-billion-bushel carryover estimate the market doesn’t really need to do a lot.”

Soybean prices were down only 15% compared to the end of 2022. The U.S. soybean crop came in at 4.129 billion bushels for 2023, but compared to corn ending stocks are historically tight at only 245 million bushels. That, combined with strong crush margins most of the year and recent uncertainty about the Brazilian crop have held the soybean market together better than corn or wheat.

With the commodity reset there is also carry in the market with higher prices in deferred futures contracts. This year the market is telling farmers it doesn’t need the crop right now whereas in 2022 the market was bidding in the front months to attract bushels. That requires a different marketing strategy for 2023 stored bushels. Martinson says, “Right now producers should be looking to take advantage of that carry, especially in the corn market in the May or July time frame. Soybeans are different and farmers may want to look at marketing in the next month to six weeks before Brazil starts dumping their crop on the market.”

Corn and soybean markets have been trading sideways for the last few months and Martinson says to get a meaningful rally it will take some sort of supply or demand shock to the market. The current supply shock the market is waiting for is the results of Brazil’s crop, which has faced weather issues from drought in the north to flooding in the south. “That will come into full focus after the first of the year,” he says. Many private firms have already lowered Brazil production with the lowest at 153 million metric tons, but more will be known in January when harvest results start coming in.

On the demand side, the soybean market was pinning its hopes on renewable fuels growth according to Martinson, but in 2023 but bean oil was a poor performer dropping 25%, so that is the next demand story that could support soybeans.

For corn, export pace needs to pick up. It has had plenty of headwinds with high prices, a strong dollar and a host of transportation challenges including low water levels on the Mississippi River. However, the biggest demand shock could come from China if they ramped up their purchases similar to 2020-21. He says, “Looking at China they’re down big from last year for both soybeans and corn.” Turning that around is dependent on the outcome of the soybean crop in Brazil and the second crop safrinha corn if they abort acres because of the delayed planting season.

The wheat complex also had a tough year as traders became numb to Black Sea war headlines. However, the biggest negative was Russia flooded the market with cheaper wheat, undercutting the U.S. and other competitors in the export market. “The stronger U.S. dollar didn’t help with that,” says Martinson. The other factor was a better-than-expected winter wheat and spring wheat crop in the U.S. So, we had a lot more supply.” Plus, commodity funds were also short in all three wheat exchanges for most of the year, which added pressure.

Just like corn and soybeans, Martinson says the wheat market will be dependent on better demand to see a price improvement in 2024. “I am hoping that with the recent weakening of the dollar that picture will improve.”

AgDay TV Markets Now: Brad Kooima Discusses if the Cattle Market Can Make New Highs in 2024

Tue, 02 Jan 2024 00:29:57 GMT

AgDay TV Markets Now: Brad Kooima, Kooima Kooima Varilek, recaps a record year in the cattle market and discusses if new highs are possible in 2024.

December WASDE Neutral as USDA Makes Only Slight Adjustments

Mon, 11 Dec 2023 02:00:10 GMT

Generally, the December WASDE sees very few changes as USDA leaves major revisions until the final report in January. However, USDA did lower ending stocks in corn and wheat, as well as cut Brazil soybean production.

USDA left production unchanged on Argentina corn and soybeans plus Brazil corn despite lower estimates from CONAB and private firms. However, it did lower Brazil’s bean crop 2 million metric tons to 161 due to production issues. But market analysts say bigger weather problems are needed in Brazil to move soybeans higher.

DuWayne Bosse, Bolt Marketing says, “I think the trade is starting to realize that even with some drought in Brazil, and we’re lowering off those early high record expectations a little bit lower for Brazil, Argentina is going to have twice the crop they had last year because remember last year with their drought, it was cut in half. So, it was a horrible drought there. And if you take the two countries combined, you’re still going to end up with a monster soybean production out of South America. And that’s probably made the soybean market pullback to $13 last week here.”

Domestically, USDA left soybean ending stocks unchanged at 245 million bushels but lowered both corn and wheat ending stocks 25 million bushels by increasing exports. Bosse says for him it was a surprise USDA acknowledged that in this report.

“They increased demand export demand for corn by 25 million bushels. And they did the exact same for wheat, wheat and maybe just a little bit surprised, Michelle. I mean, I understand why they did it. China has been buying a lot of wheat lately, right? I mean, maybe in future reports. We got to increase it a lot. But that was just recent activity. And you’ll these reports aren’t put together last night, of course, are they they’re put together usually about 10 to 14 days ago. So nice to see maybe USDA knew this wheat business was coming?”

World ending stocks were raised slightly for corn at 315 million metric tons, lowered slightly for soybeans and lowered a half million metric tons for wheat. Cotton production was lowered 314,000 bales, with ending stocks cut by 100,000 at 3.1 million bales.

I’m Michelle Rook reporting for AgDay.

Hall of Fame Football Coach Credits Indiana Farm Roots

Thu, 23 Nov 2023 14:15:40 GMT

2023 Harvest of Thanks is a special edition of both AgDay and U.S. Farm Report. The show helps celebrate and honor traditions, while also sharing stories of gratitude. 2023 Harvest of Thanks is sponsored by Case IH and BASF .

“Come on, girls!”

(Farm Journal)

The call comes muffled beneath a yellow slicker as rain falls on a herd of cows being gathered by Toto, Ind., farmer Russ Radtke. Every muddy step is matched by fellow herdsman, Bob Troike, as they push the group into a lot for doctoring and a preg check ahead of being turned out on the winter rye. Most of their farming careers have centered around working as a team.

“Our dads got to know each other in the 70’s and started doing things together,” Radtke says.

“Russ’ dad wore out his combine picking our corn, while we hauled all of his corn to the elevator,” Troike remembers. “He would run our hay mower and tractors to mow our hay so he could have the hay mower and the rakes for their hay.”

Today, the two are still working together today, raising calves, feeding them out and selling freezer beef.

“When our dads were working together, we leased pasture ground and were up to 120 cows at one time,” Troike says.

Today the herd is smaller, but they still find reward in the work.

(Farm Journal)

With acreage and herd numbers too small to make this his full-time future, decades ago, Radtke turned to his second love, sports.

For Love of the Game

Topping a short rise along the highway in north-central Indiana, a glow brightens the horizon above rows of unharvested corn. The Knox Redskins bus sits in the Caston High School parking lot as fans fill the bleachers for a Friday night fight. A drizzle settles in as Coach Radtke exits the locker room with his team focused on the game ahead.

“We got an itch for it, and we enjoy it,” says Radtke about coaching football.

Rain or shine, this path wasn’t his original plan.

“Actually, I was going to Brigham Young University on a graduate assistantship to be a basketball coach and, all of a sudden, things changed,” Radtke explains. “I was loaded, we packed stuff in a U-Haul, I sold my house, my wife quit her job and then within 48 hours, I became a football coach.”

Now, 47 years later, Coach Radtke is the second-winningest high school football coach in Indiana history, topping 400 career wins this night with a 50-0 rain-soaked stomping.

“When I talked to Russ, last week before his game, he told me there are four things in my life,” says Chuck Freeby, sports director at local station WHME-TV 46. “There’s football, there’s farming, there’s basketball officiating and there’s family. That pretty much covers Russ Radke.”

(Farm Journal)

Radtke’s time in agriculture and on the family dairy helped to mold his discipline and work ethic.

“I get up at five o’clock in the morning, I’m at the school for work during the day, we have football practice and then I’m watching video and film,” Radtke says. “I might not even head for home until 10:30 at night.”

“He’s very analytical in the way he looks at things on a football field,” adds Freeby, explaining Radtke’s effective use of the option offense. “He’s always trying to look for an advantage.”

That focus has helped guide his team, with the support of two of his sons as assistant coaches, to a near-perfect season in 2023. They ended 13-1 and just one game shy of the state finals.

“I don’t golf, I don’t fish, I don’t have time for it,” Radtke smiles. “Other people can do it. Have fun. We have fun with what we’re doing right now.”

Passion for History

(Farm Journal)

The only other fun he has is amid his collection of restored antique and classic tractors. Most are Minneapolis-Moline in honor of the iron he grew up using on the family farm. There’s also a unique Oliver with tracks he dug out of a barn and restored. It was formerly used on the Indiana mint farm his wife was raised on.

“She doesn’t want anything to do with them,” Radtke says in regard to his machinery collection. “She might not even know how many I have.”

From tractors to bulldozers, even road graders, his collection of iron, like his legacy on the grid-iron continues to grow.

From field to field, and yard by yard, his Hall of Fame career starts and ends at the farm.

“It just gets in your blood, and I would give up coaching before I give up farming,” he says.

Watch More Harvest of Thanks Stories:

Rare Tractor Treasure Kept By Virginia Family For Nearly 100 Years Symbolizes the Grit And Toil of 7 Generations

Harvesting the Good Life: Pennsylvania Farmer Continues to Run Silage Chopper at 96 Years Old

Profit Tracker: Profit Margins Erode For Cattle And Hogs

Fri, 07 Jul 2023 19:15:54 GMT

Cattle and hog finishing margins are both positive for the sixth consecutive week, but margins have eroded significantly.

Cattle feeding margins posted average profits of $20 per head last week, $21 per head less than the previous week and $102 less than a month ago. Cash prices for fed cattle declined nearly $1 per cwt. on average to $103 per cwt., according to the Sterling Beef Profit Tracker .

Cattle marketed last week were purchased last spring at prices diminished significantly by the onset of the coronavirus pandemic. Feeder steer prices factored into last week’s Profit Tracker were $130.83 per cwt., which is $6.86 per cwt. lower than last year. Those lower feeder cattle prices produced an average breakeven of $102.33 for cattle marketed last week. The previous week’s breakeven price was $101.50 per cwt., and a year ago the breakeven was $110.39 per cwt. A year ago cattle feeders lost an average of $40 per head.

Packer margins increased $16 per head last week to $273. Last week’s beef cutout price averaged $205 per cwt., a decline of $1 per cwt.

Feedyard margins reported by the Sterling Profit Tracker, Sterling Marketing, Vale, Ore., are calculated on a cash basis only with no adjustment for risk management practices.

(Note: The Beef and Pork Profit Trackers are intended only as a benchmark for the average cash costs of feeding cattle and hogs.)

Sterling Marketing projects 2020 feedyard margins to average $10 profit per head, while annual packer profits are projected at $314 per head. Cash cow-calf margins for 2020 are projected at $57 per calf.

Farrow-to-finish pork producers have seen their margins improve this fall with rising lean carcass prices. Last week saw average closeouts post $17 per head profits, about $3 per head lower than the previous week, and $7 per head less than a month ago.

Lean hog carcass prices traded at $64.52 per cwt., $1.69 per cwt. less than the previous week. Lean carcass prices are $1.75 per cwt. lower than a month ago, and $13.28 higher than the same week a year ago. A year ago pork producers lost an average of $28 per head.

Pork packers saw average profits of $42 per head last week, down $17 from the previous week.

Sterling Marketing projects 2020 annual per head losses for pork producers at $18 per head, while projected packer profits are $59 per head.

(Editor’s note: Sterling Marketing is a private, independent beef and pork consulting firm not associated with any packing company or livestock feeding enterprise.)

Related stories:

Cattle Markets Hampered By Season’s First Storm

Profit Tracker: Huge Packer Margins

Fri, 07 Jul 2023 19:15:54 GMT

Feedyard closeouts for the Thanksgiving week were in the black for the 10th consecutive week, according to the Sterling Beef Profit Tracker . Under normal conditions that would be the headline generating observation from the Profit Tracker, but the beef complex continues to defy any resemblance of normal.

Last week beef packers found average profit margins of $519 per head, based on calculations by Sterling Marketing. That was an increase of $75 per head from the previous week, and despite the fact cash fed cattle prices increased $1 per cwt. to an average of $110.

Feedyards found average profits of $88 per head last week, down slightly from the $96 profits the week before. The decline was the result of slightly higher feeder steer prices factored into the calculations. A year ago cattle feeders were earning $108 per head. Feeder cattle represent 69% of the cost of finishing a steer compared with 73% a year ago.

Last week’s beef cutout gained nearly $9 per cwt., and that was after a $10 per cwt. gain the previous week. The result was a cutout price of $240 in the Profit Tracker calculation.

The cost of finishing a steer last week was calculated at $1,407, which is $92 lower than the $1,499 a year ago. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.

Farrow-to-finish pork producers saw their margins slop $3 per head to $6 profit. Lean carcass prices traded at $59.37 per cwt., down $0.73 per cwt., $5.15 lower than a month ago. A year ago pork producers lost an average of $41 per head. Pork packer margins averaged a profit of $35 per head last week, up $2 from the previous week.

Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2020 will average $51 per cow. For feedyards, Nalivka projects an average profit of $10 per head in 2020, and packer margins are projected to average $281 per head.

For farrow-to-finish pork producers, Nalivka projects 2020 will produces losses of $18 per head. Pork packers are projected to earn $48 per head in 2020.

Fed Cattle Prices Set Record, Taking Out 2014 Levels and The Tightest Numbers Are Yet to Come

Mon, 24 Apr 2023 16:47:20 GMT

Fed cash cattle prices hit record levels in mid-April, with the national weighted average steer hitting $180.29, exceeding the high set back in 2014. That was followed by April live cattle futures making all-time highs on the continuation chart. However, market analysts say this cycle is different than the last one in several ways, with some even calling it the bull market of their careers.

Record cattle prices were expected with historically tight numbers after prolonged drought in the heart of cattle country forced liquidation of the nation’s herd. However, it came earlier than many market experts predicted, forced by a tough winter in the northern cattle production areas. Brad Kooima, co-owner of Kooima Kooima Varilek in Sioux Center, Iowa, says, “We were pulled ahead on our yearling crop and because of the severe weather our calves aren’t anywhere near ready that you typically might have in April, and still aren’t by the way. This tightness of supply, I think, is finally trumping the packer who needs inventory. We’re going into the best demand period of the whole year. The weights indicate how current we are.”

This marketing hole may interrupt the normal seasonal pattern for cash prices, which usually peak in the spring and drop off into the summer according to Derrell Peel, livestock markets specialist with Oklahoma State University. “I actually think because of the underlying trend in these markets, as they’ve been going up for several months, that we may not see a lot of slump into the summer. Maybe it kind of plateaus here for a few months? But certainly we will continue to move higher and there are more record prices coming ahead in fed cattle markets.”

Kooima says this bull market is much stronger than in 2014 and he believes it could have a longer tail. “2014 around here is known as the bull market of my career until this one, which I think is going to exceed that one because when we get even more extreme numbers and you’ve got a lot bigger demand than we did in ’14. As long as something doesn’t happen to mess up the demand thing, you know, I’m talking about an international event.”

So just how high could fat cattle prices go since the cattle inventory isn’t even into the tightest numbers in the cycle yet? Kooima says, “If we could take the cash market to the mid-$180s on this run, which I think it looks like we’re going to. I do appreciate your point about the tightest supply is not even here yet. The way I would read the tea leaves here, the supply of cattle the first quarter of next year is much tighter than now making the assumption that there’ll be enough moisture that will have heifer retention. So yeah, it could get pretty crazy.”

The key will be how fast the cattle herd rebounds, which will be indicated by heifer retention. In 2014, the cycle was cut short as producers quickly expanded. Lee Schulz, livestock economist, Iowa State University Extension says, “But really a question I think is, does it look like more historical cattle cycles, where we see periods of declines in the inventory and relatively strong prices hold for several years? Or the last cattle cycle, where we bid away those profits and higher prices rather quickly, as we expanded very dramatically?”

However, expansion will be difficult in areas of the Central and Southern Plains where the drought has yet to break, limiting regrowth of pasture or hay ground. Brad Rippy, USDA Meteorologist, says, “Certainly the numbers we come see coming in from the Central and Southern Great Plains are rivaling some of our worst drought years. If you look at the numbers this week, April 16, pasture conditions coming in from southern plains, we see 58% rated very poor to poor in Oklahoma, closely followed by Texas at 57%. You have to remember that’s a statewide value.”

In fact, in Oklahoma, some drought-stricken counties in the north and west had their driest August to March period on record and drought has deepened so far in April. Peel says, “And so these guys are still faced with some additional cow liquidation. I’ve talked to several producers recently that now recognize that they’re going to have to do some additional culling and liquidation in those areas.”

That will keep feeder supplies tight and prices well supported. While feeder cattle futures have hit contract highs, they haven’t taken out the 2014 levels and neither has the cash market. Peel explains, “Feeder cattle markets are not in record high levels yet, they’re moving higher. We’re at the highest levels for say Oklahoma cash feeder cattle markets were at the highest level since sometime in 2015. Those markets also peaked previously in late 2014. And we will certainly exceed those highs at some point in time. It may be a few months down the road, but we’re going to get there in the coming months.”

The other key to regrowth will be profitability. Cow-calf producers may finally be seeing some black ink, but it’s only been the last couple of weeks many fed cattle operations made any money with the headwind of high feed and replacement costs. Scott Varilek, Co-owner, Kooima Kooima Varilek says, “There was negative closeouts at the $165 levels. I’m kind of thinking these last two weeks, this rally from $177 to $185 for the northern guys, might actually put some green ink on unless you know there’s a few of those horror stories of cost of gains that really got out of line, but there’s not a lot of meat on the bone here.”

Sustaining this bull market will also rely on demand. However, the difference between 2023 verses 2014 is that year demand for beef was poor overall with the average choice cutout prices more than 40-dollars below current levels. Hopefully that will keep the market well supported.

FFA Star Farmer Finalist: Success is No Accident

Wed, 22 Feb 2023 17:40:33 GMT

National FFA week is a good reminder of the fun and life lessons learned for a member of one of the nation’s largest youth organizations. For the kids considering their future FFA goals, take a page from Raegan Klaassen’s book: Start early and work hard.

The lights and prestige shone brightly as Raegan stood on stage in Indianapolis in 2021 as an American Star Farmer finalist.

(Farm Journal)

“I had so many emotions going through my head,” Raegan recalls. “I was happy, I was excited, I was very nervous and anxious.”

Those feelings of joy and accomplishment didn’t start during that moment last October. They started years earlier at home in Hydro, Oklahoma.
It was the family fields and pastures where Raegan poured perseverance and sacrifice into a trough of goals.

“I started on my family’s farm, working for my dad when I was in eighth grade and just starting FFA,” Raegan says. “That’s when I decided it was time for me to have my own operation.”

That spark became a flame thanks to encouragement from her ag teacher and adviser at Hydro-Eakly High School.

“We sat down and talked about some of the goals we wanted to have for her,” remembers adviser Chris Klaassen.

A voice that’s more than a teacher — he’s also Raegan’s dad.

“I’ve always felt like with my kids they’re no different than any other kid in the classroom,” Chris says. “They don’t call me dad. They call me Mr. Klaassen.”

Together the duo spent the next four years pursuing the goals that would eventually put her on stage in Indianapolis.

“It started out as small goals, like we wanted to have a breed champion at a livestock show and we wanted to win a speech contest,” Chris says. “Then that worked its way to we want to be Star Farmer of Oklahoma.”

With help and encouragement, Raegan built a crops and cattle business ultimately buying and breeding her way to a 30-head operation.

“I actually ended up running those calves on wheat pasture throughout the winter as a chance for them to gain weight before selling them in March,” Raegan explains.

Those winter wheat pastures are part of a 300+ acre rotation that includes peanuts and black-eyed peas.

“It was around my junior year of high school that I was able to get contracts with Del Monte Foods and Birdsong,” Raegan says.

Raegan graduated high school with a host of state awards, including sports, and a chance at the national Star Farmer award.

“It was a result of her work ethic,” Chris says. “I feel like she didn’t mind being in the barn at 5:30 or 6:00 in the morning to rinse and blow steers in order to get them into the cooler so we could be successful.”

(Farm Journal)

Those little moments piled up to create big opportunities. Today, with the stage behind her, this full-time college student and full-time farmer is still driving her business forward thanks to the lessons learned.

“Right now, I’m just putting the profits back into my operation to continue operating debt free,” Raegan says.

A business cultivated by passion and watered by memories she’ll never forget.

“Overall, just to be able to represent my community, represent my family and represent the state of Oklahoma is something that I’m proud of,” Raegan says. “I hope my state’s proud of me as well.”

State of the Cattle Industry: Supply Shock Results in 61 Year Low in Beef Cow Herd and Record Price Forecast

Tue, 14 Feb 2023 03:23:38 GMT

USDA’s Semi-Annual Cattle Inventory report confirmed a 61-year low in the beef cow herd, and barring some major change in the weather, the cattle inventory may not be done shrinking yet. Industry experts predict that could push cattle prices for all classes to record levels yet this year and beyond.

The historic drought has been devasting for U.S. cattle producers who have lost years of equity in their operations and genetics in their herds. The liquidation was deepest in the Southern Plains. Tucker Brown, cattle producer of Throckmorton, Texas says, “This year there’s been massive liquidation all over Texas. A lot of the times the folks that farmers and ranchers that have to get rid of everything are the ones that maybe waited too long to lower their numbers ran out of grass ran out of water.” He says his operation has fared somewhat better, but there is still a scar from the drought. “We’re probably down to about half the number of cows from where we were a couple of years ago, which is hard on the wallet, but for sustainability. We have to do that.”

USDA’s semiannual cattle inventory report confirmed the supply shock. All cattle and calves were at 89.3 million head, the lowest in eight years. But the beef cow herd was at only 28.9 million near record low. Kevin Good, vice president of industry relations and analysis with CattleFax says that herd will continue to contract this year. “We’re forecasting about a 5% drop in production this year compared to last year, that would equate to about 800,000 that dropped that slaughter and about 800,000 had dropped and non-fed slaughter as well.”

As a result, CattleFax released some optimistic price projection for all classes of the cattle business in 2023, and even some record prices by year end based on an increase in retail prices that will trickle down to producers. Good says, “A 10% increase in fed prices via $158 average. On yearlings eight weights in particular, as we go through the year we see that moving higher as we get into the second half of year in particular into new crop corn that should be substantially cheaper than it has been this last two years. If that’s the case, $195 annual average for nine weight translates amounted to $225 annual average for five and half weight steer calf.”

Good says this cycle will have a long tail, with strong prices all the way out to 2026. That’s because there is no sign herd contraction has slowed as there is still no heifer retention. “Heifers, on a feed basis they’re close to 40%, which is highest percentage. It’s been since 2000 or 2001. So no, the die is cast on the heifer side that we are liquidating at least through the first half of this year.”

To stop that trend cow, calf producers need some help from Mother Nature, namely grass and Brown says water is the other key. “Water is a big, big issue in Texas, especially the further west you go.” The other key to encourage rebuilding will be getting profits down to the cow calf sector. Something outgoing NCBA President Don Schiefelbein knows firsthand, but he’s encouraged. “It looks like we’re going to hold our break evens together this year which is a positive thing given what we’ve been through. So, I’m very confident over the next couple of years it’ll kind of rebound, we’ll be back in the black where we need to be, and we’ll have that leverage we so desperately needed the last couple of years.”

There is already a shift in profits away from the record margins packers were seeing the last couple of years, but it will take a while for that to trickle through the entire supply chain.

Dean Black, cattle producer of Somers, Iowa says, “The packer margins came down quite a bit and so hopefully we’re evening out across the board. So that everybody can get a little bit of profit because that’s what we need.” With additional processing capacity being built it may exceed supply, just as the cattle herd reaches its lowest point, which is a double edge sword. Schiefelbein says, “It’s real but long term usually once these plants get build leverage goes to cow calf producers and to me given what we’ve gone through the last 10 years as cow calf producers it’s finally time they get their share.”

Another key for the industry is retaining beef demand in the face of possible higher prices. Todd Wilkinson, President, NCBA says it’s a concern for him. “When you drive down the cow herd too far, suddenly the cost of that American consumer can be astronomical. We don’t want that to happen.”

The hope is beef can continue to gain momentum on the market share it’s gained in the protein sector the last 20 years. Good says, “The dollar growth for beef was more than the dollar growth for both pork and chicken combined in that 20-year period. So, demand has been stout.”

And not just domestically….beef exports were also a record in 2022 totaling 3.54 billion lbs., up 3% from the previous year, with a value of $11.7 billion, up $1.2 billion.

Dan Halstrom, president and CEO of the U.S. Meat Export Federation says, “It’s going to be a record on volume and value, we’re going to be up 3 to 4% on volume and value’s going to come in just under $12 billion in sales which is easily a record over last year’s $10.5 billion.”

Exports making up 23% of the value of the beef carcass. And if this continues it just adds to the optimism of better days ahead for the cattle industry.

Winter Storm and Arctic Blast Hit Wheat and Cattle Country: How Are Markets Responding?

Wed, 21 Dec 2022 19:46:06 GMT

Winter is packing a punch across much of farm country this week. After the Northern Plains saw ice and a few feet of snow last week, they are getting more precipitation. Meanwhile, an arctic blast is hitting wheat and cattle country.

However, the weather is being somewhat ignored by the trade. While winter wheat is dormant, market analysts say the markets need to be giving the weather more respect. Hard and soft red winter wheat came into the winter with one of the lowest ratings in history at only 34% good to excellent, and Texas, Kansas and Nebraska were only 21% good to excellent. Areas of western Kansas and southern Nebraska missed last week’s snow. However, market analysts say Kansas City wheat has very little, if any, weather premium built in.

Allison Thompson, with The Money Farm, says: “I don’t think we’re going to see a large premium built into winter wheat. Winter wheat seems to have nine lives and we’re kind of on our first life with the talk of winterkill. I do think it’s worth noting there isn’t a lot of snow cover down South this year, so these cold temps are definitely going to affect the crop.”

Those same arctic temperatures are going to reach all the way down to Texas impacting a large part of cattle-feeding country, decreasing performance. But market analysts say the cattle market isn’t trading that news either.

Brad Kooima, Kooima Kooima Varilek Trading, says: “This weather is being underappreciated by these techy computer traders, algorithm deals that don’t have manure on their boots frankly. They don’t understand the kind of weight loss and the kind of stress cattle went through on the first storm but especially what they’re going to go through this week when we get to 50-below zero.”

He says up until now weather has been ideal and cattle performance has been outstanding, but the cold will increase feed consumption and decrease weights.

Kooima says the February live cattle futures should be trading at $5 to $6 above the cash but instead are below cash. He says the markets have been caught up in year-end fund liquidation and recessionary or demand concerns.

Cattle & Hogs Mostly Higher on Follow Through Buying, Lower Corn: Grains Lower on Slow Exports, Sell off in Bean Oil

Thu, 01 Dec 2022 15:25:42 GMT

Cattle mostly higher on lower corn and steady cash, hogs mixed on better China news but disappointing exports. Grains start lower with slow weekly exports, some profit taking in beans and wheat and soybean oil is a big drag on talk of disappointing RFS biodiesel levels. Scott Varilek of Kooima Kooima Varilek has analysis.

DOT Denies Hours of Service Exemption for Livestock: Puts Burden on Cattle Producers

Wed, 30 Nov 2022 22:21:39 GMT

Farm groups have been working with the Federal Motor Carrier Safety Administration agency for months to allow additional time on the road for truckers transporting livestock, insects and aquatic animals and make them exempt from some Hours-of-Service rules. The livestock industry will retain the 150-mile air radius exemption on the front and back of a shipment, but the agency has denied the HOS request which puts producers at a real disadvantage. It also couldn’t come at a worse time with a trucker shortage and pending rail strike.

The agency rejected the exemption saying it wouldn’t meet an acceptable safety level for drivers. However, farm groups say it doesn’t take into consideration the well-being of the animals being transported and will put a burden on producers. Kent Bacus, Executive Director of Government Affairs, National Cattlemen’s Beef Association, says, “We’ve been operating with this extended relief for the last few years and being able to have that flexibility to determine how we want to ship cattle and what the best time is not only given the weather conditions and road conditions but also you know taking all that into consideration the livelihood of the livestock we’re in charge of.”

Rock Valley, Iowa, cattle producer Brad Kooima, agrees. “I am disappointed in the news. I think that there is a pretty strong group that’s going to try to get our waiver reinstated. Anybody that’s in this industry knows that this makes no sense for animal welfare.”

Bacus says NCBA will continue to look at any possible legal or Congressional recourse. “We have allies and people on Capitol Hill who understand our industry, who understand the significance of this. So, we may look at those options as well.” Plus, they’ll continue to petition the Federal Motor Carrier Safety Administration to reconsider or compromise.

From the Flames: A Lesson in Thanksgiving from a Man Who Survived a Raging Oklahoma Wildfire

Wed, 23 Nov 2022 21:20:43 GMT

Driving back to rural Dewey County, in western Oklahoma, floods Terry Burleson with memories and images from 3.5 years ago.

“How I escaped this wilderness on fire was by the grace of God,” Terry says.

Among the web of canyons and charred cedars, Terry survived. A miracle, left behind after nearly 300,000 acres burned in April of 2018. It started as a quick trip in the side-by-side to scout locations for a turkey hunt the following morning. Terry and two family members were rolling through the pasture when they saw the smoke.

“It seemed to be a long way off and we weren’t taking on any smoke,” he says. “So, it just felt like it was 10, 15 or 20 miles away.”

But in minutes, the fire was on top of them. It was being pushed by 50 mile per hour winds and now a wall of flames was racing across the landscape. Their road back was blocked and so they ran.

“From that point is where we, for whatever reason, decided to split up,” remembers Terry. “I don’t know why even to this day.”

Terry, not expecting to ever get out, was in loafers as he tried to sprint through the canyons. Somewhere during his sprint, Terry lost his phone. The other two men, via fence lines and dirt roads, found a way to safety. Terry ran for his life, up hillsides and down canyons. He ran until he couldn’t,

“My mind was telling me the fire was going to jump and at any moment I was going to be sandwiched,” Terry says. “I kind of gave up and I laid down to die.”

As he listened to the fire howling around him, he found peace.

(Farm Journal)

“I talked to my wife once, right when we got out of the Ranger,” remembers Terry. “I talked to her and told her we were out on foot; we were in it, and it doesn’t look good.”

He lay at the bottom of the canyon, as cedars exploded around him.

“I don’t know, I wasn’t scared and maybe that’s a God thing, too,” Terry says.

As the heat rolled over him, the burning drove Terry to his feet. He was gasping through the smoke as he climbed out of the canyon and eventually broke the tree line onto flat ground. A small road created the perfect fire line.

“The way that road angles and the way the wind was blowing the same direction, that’s the only thing that allowed that fire to backburn past me,” Terry says.

It wasn’t long before the flames came roaring back to life. This time it was on his side of the road.

“That grass was about waist high,” Terry says. “So, you can imagine the flames were probably 10 feet and created just a big wall.”

Terry worked his way from one safe spot to another, laying as flat to the ground as could, beneath the smoke. Eventually, he was forced back across the road and into the ashes. He was safe as the fire once again raged past him.

Several hours went by and as night began to settle in Terry got to his feet, disoriented, hurting and lost. By chance or by providence he turned left down that road.

“Something told me to go left,” Terry says. “I was very fortunate because when I turn the corner, I saw a water trough and a windmill.”

Water! Terry wet his face, but he didn’t drink. He says given his situation he was worried it might make him sick. Then he laid down, out of the smoke on the cool concrete ring. That’s where he stayed until daylight.

(Farm Journal)

Meanwhile, his family feared the worst. They were kept away from the area by authorities and the raging fire.

“Knowing what the wind was doing, seeing the fire and watching it on the news we were just holding out for hope, begging God that he survives and praying all through the night,” recalls Mark Price, a family member. “You can’t sleep, and everyone was worried, nervous, scared and frustrated.”

When daylight broke, Price rallied the others from the family.

“I said it’s time to go,” said Price. “We’ve got to go find him.”

That morning, a few hundred yards at a time, Terry followed the trail across the pasture to a dirt road and then started toward the western Oklahoma town of Camargo.

“When I got across this cattle guard that’s when I saw a pickup coming,” Terry says.

He sank to the ground, and the men offered him water. Five minutes later his family arrived.

(Farm Journal)

“When we pulled up to that cattle guard, I saw him sitting in the road and I threw it in park, jumped out, jumped up in the air and screamed, ‘He’s alive, he’s alive, thank God he’s alive,’” Price says. “Then I thought, I’ve got to call his wife. So I grabbed the phone and I called her. I said, we found him. He’s alive. Then I hung up.”

Price laughs he probably didn’t share enough information, which worried family at the time.

“I got in trouble for that, and they said, you know, you didn’t really give us a lot of information,” Price says.

Local ambulance director Katrina Bryant was the first to arrive.

(Farm Journal)

“Truthfully, [Terry] was in good shape,” Bryant remembers. “I was expecting to be doing a body recovery, and the way that fire was burning, we probably wouldn’t have found a body. We probably would have found ashes.”

She says the entire emergency team knew he was missing and seeing him alive lifted spirits.

“When they found him, the talk on the radio chatter was just renewed life,” Bryant says.

Terry spent 21 days in the hospital, suffering third-degree burns on his arms and parts of his torso. His head and face had first-degree burns.

Exactly how and why he survived is a question Terry has grown to live with.

“You’ll hear God’s in control and so either he is, or he isn’t. It’s one of the two. It can’t be both,” Terry says.

“I know if the same thing happened to me, he wouldn’t stop until he found me. And you know, that’s just it’s a story of brotherhood, a story of friendship,” said Price.

“I try not to get emotional about it,” Terry says, surveying the place once more. “To come back and see it is all still a little bit surreal.”

From fire and ashes to walking among the living, Terry counts it a miracle. He remains thankful for every step along the way.

Farmers Celebrate Harvest Milestones This Thanksgiving

Wed, 23 Nov 2022 21:20:13 GMT

Thanksgiving began as a chance to celebrate the end of harvest and a moment to reflect on the accomplishments of a year’s work while looking forward to a promising future.

That future is hopefully seeded with combines and cattle for Liz Forker’s daughter. The little one made her harvest debut this season.

“My grandpa was freshly back from a hip replacement surgery and he was driving the combine and my little one and I brought lunch out to everybody in the field,” says Forker. “We had stopped to just eat some pizza when I saw the Combine sitting there and it was kind of too good of an opportunity to pass up.”

The harvest headed for cow chow brought a moment of mindfulness this holiday season after a year of drought and life changes in the Forker family.

“This year, I’m obviously thankful for a new little one,” says Forker. “I’m thankful for the opportunity to raise cows with my husband and come back to my family’s farm and feedlot operation. We sold our first group of calves this year and God’s goodness provided us the grass to feed them in the midst of a drought which is a huge blessing.”

Her youngest, now the 7th generation is ready to succeed on this Nebraska operation.

“It’s always been a big deal to me to be the sixth generation on our family operation and just to have the opportunity to bring a little one back is a huge blessing,” says Forker. “I will never take for granted the things that people in front of us have done to make that possible and I think it’s a huge privilege.”

Meanwhile, it was not the first, but the 50th harvest for Paul Wetter. His son Jonathan was there to see it.

“Dad’s goal this year was to finish his 50th crop and, you know, he was out there on the last day, the 19th of October,” says Jonathan. “You know, we finished up and it was a good feeling for him and it was a goal met.”

The magical milestone was captured by photographer Lexie McDonough.

“When she called I was like, ok, pictures,” questioned Jonathan. “She just did a phenomenal job and the sunset turned out amazing that night.”

Picture perfect memories for a family to hold in their hearts as Paul prepares to say goodbye. He’s been diagnosed with pancreatic cancer. Paul’s 50th harvest will likely be his last. For him, the views from the combine cab are the best in the world. Described as a stubborn optimist, his lessons from harvest will forever linger.

“First of all, treat your neighbor like you’d want to be treated,” says Jonathan. “Anybody that knows my dad knows that he has the utmost integrity, and always has. Be a good steward of the land. The main one that I take away is just to be prepared. I’m not kidding when I say we’re ready to go to the field in the middle of July.”

This Thanksgiving be prepared for life’s next steps, whether they’re firsts or lasts. May your harvest be full of the memories and moments that make life worth cherishing.

Cattle Numbers Historically Tight: When Does the Market Realize It?

Wed, 16 Nov 2022 16:02:50 GMT

Cattle producers liquidated their herds this summer with drought across much of cattle country. They also faced poor pasture and winter wheat conditions. So, what does that mean for the fall cattle run and the market outlook?

Live cattle futures hit new contract highs on October 25 but have disappointed the bulls as they’ve been consolidating ever since. Meanwhile feeder cattle futures hit contract highs in mid-August and have never retested the highs even with historically tight supplies. So, when is the marketing hole finally going to hit? Market experts tell me while its past due, there’s clues it will hit in 2023.

With deep culling, daily cattle slaughter has continued to run in the 127,000 to 129,000 range and for the year slaughter is up about 1.5% over 2021. Some of its the increased cow slaughter. Mark Schultz, Northstar Commodity says, “Your beef cow slaughter is still running high 83,000 a little over 83,500 last week. You’re on pace to have an all-time record of the most beef cows slaughtered in this country for the calendar year of 2022.”

Cow slaughter should start to taper off soon and with large feeder cattle runs through the summer and fall those numbers have started to tighten as reflected in the price. Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist says, “Starting in mid no mid-October. We did see it start to see some year over year decreases in the feeder cattle runs. And we’ve also seen prices improve in the last half of October and going into November. We’ve seen a significant recovery and the prices I’ve certainly the fall low, I think is already in.” He says the biggest feeder numbers come late November and December, but he thinks more moved early in the south. Peel says, “I think there’s a good chance that we’ll be a little bit smaller than usual as we finish out this fall calf run.”

So, when will the tighter numbers start hitting the live cattle market? Brad Kooima Kooima Kooima Varilek says one key will be when heifers start being retained instead of placed in feedlots, but likely first quarter 2023. He says, “So I remain supply side optimistic for the next year or so maybe by April we could get this market on top of 160 if it falls right in my opinion.” And he’s more bullish longer term. “I think someplace in the next 12 to 16 months we’re going to a place of all-time highs, which is 174.”

That’s barring a black swan or economic event to hurt demand. Tighter numbers are also anticipated in Friday’s Cattle on Feed Report with on feed estimates down 2% and placements down 4%. At the same time, even with higher feed costs the latest Sterling Beef Packer Tracker has average profits of $222 per head for cattle feeders, the highest since late April.

USMEF Celebrates Export Relationship with Japan: Looks Ahead to Next 45 Years of Growth

Tue, 27 Sep 2022 19:20:00 GMT

Leaders of the U.S. Meat Export Federation traveled to Tokyo last week to mark the 45th anniversary of their Japan office.

Japan is consistently a top export customer for U.S. beef and pork both by value and volume. That relationship expanded under the U.S. Japan Trade Agreement, which led to meaningful tariff reductions and has greatly increased the value of each beef and pork carcass.

The U.S. has had tremendous success in Japan the past 45 years, but is now looking ahead to the next 45 years and how to further expand this red meat export market, according to USMEF Chairman Mark Swanson, who is also founder of Tru Grit KGMS Enterprises in Fort Collins, Colo.

“We’ve had the wonderful opportunity to visit some retail outlets, see the U.S. product on display in the supermarket chains and learn from our importing customers about the value they see in our product and how we might be able to continue to grow the demand for exports in the market,” Swanson says.

The 45-year relationship has built a loyalty for U.S. red meat in Japan, says Dan Halstrom, USMEF president and CEO.

“It’s not easy to get started in Japan. But once you do, and once you supply what you say you’re going to supply in terms of quality and consistency, the market is very loyal to our supply sources,” he says. “That’s one of the big takeaways, markets go up and down in price, but the Japanese market is always here buying on a consistent basis.”

The Japan market is also highly competitive, and it’s the relationship U.S. farmers have that gives them an advantage, says Dean Meyer, USMEF chair-elect and a livestock and grain producer from Rock Rapids, Iowa.

“There are 20 or 25 countries that want shelf space here, but what differentiates U.S. meat from meat around the world is that it’s safe, reliable and tasty,” he says. “What we’re really pushing now with the campaign is it’s raised on family farms.”

Mayer says that messaging has really attracted the attention of consumers in Japan, and it’s a success they plan to capitalize on.

In 2021, Japan was the second largest importer of U.S. beef by value at nearly $2.4 billion but the top customer by volume at 320 million metric tons. Japan was the third largest U.S. export customer for pork by volume and value at almost $1.7 billion.

NCBA Releases Plan For Voluntary Price Discovery Reform

Thu, 22 Sep 2022 05:28:54 GMT

The National Cattlemen’s Beef Association on Friday released its proposal to improve price discovery without mandating participation by producers or packers.

Produced by a working group of seven NCBA members along with staff, the report calls for a regional approach and a “75% plan,” which is designed to provide negotiated trade and packer participation benchmarks for the industry to strive toward.

In a letter to members , NCBA president Marty Smith acknowledged the “availability of current and accurate market information has a substantial impact on our ability to make informed marketing decisions as cattle producers. It is no secret that in recent years adequate price information has been in decline in the fed cattle marketplace. This is largely due to the decrease in negotiated trade across the cattle feeding regions.”

NCBA appointed a Live Cattle Marketing Working Group of NCBA members which reported its findings to the Live Cattle Marketing Committee at the 2020 NCBA Summer Business Meeting. Policy adopted at that meeting directed NCBA to appoint a subgroup to “construct a voluntary framework, which includes triggers based on regional levels of negotiated trade, to increase frequent, transparent, and measured negotiated trade to regionally sufficient levels to achieve robust price discovery determined by NCBA funded and directed research in all major cattle feeding regions, and established a deadline of October 1, 2020 to complete this work.”

The proposal released last week – called “ A Voluntary Framework to Achieve Price Discovery in the Fed Cattle Market ” – includes plans to increase negotiated trade and incentivize each of the major packers’ participation in such negotiated trade.

“In essence, the Subgroup will evaluate the weekly negotiated trade information for each of the USDA Agricultural Marketing Service’s cattle feeding reporting regions on a quarterly basis in arrears,” Smith wrote. “Eventually, the Subgroup will include in its evaluation an analysis of packer participation data, but this information is not yet published under Livestock Mandatory Reporting.”

The report also identifies several qualifications each region will need to achieve to avoid tripping price triggers:

Achieve no less than 75% of the weekly negotiated trade volume that current academic literature indicates is necessary for “robust” price discovery in that specific region,
Achieve this negotiated trade threshold no less than 75% of the reporting weeks in a quarter,
Achieve no less than 75% of the weekly packer participation requirements, to be determined in short order, and assigned to each specific region,
Achieve this packer participation threshold no less than 75% of the reporting weeks in a quarter.

NCBA is pursuing this voluntary approach in an effort to avoid government intervention through a legislative or regulatory remedy. Smith, however, notes that if the voluntary approach fails to achieve the price discovery sought by the industry, NCBA would be open to considering legislative solutions.

Specifically, Smith notes that if any of the previously listed triggers are tripped “in any two out of four rolling quarters,” NCBA’s subgroup will recommend the organization “pursue a legislative or regulatory solution to compel robust price discovery.”

“While certainly not a silver-bullet solution, I truly believe that this approach provides the industry a goal to strive towards and, perhaps more importantly, a path forward if progress is not demonstrated toward that goal,” Smith said.

Commentary On The Regional Triggers Report , Featuring Jerry Bohn, Brad Kooima, And Kevin Buse

NCBA’s Lane Discusses Relief Payments, Transition In D.C.

Thu, 22 Sep 2022 05:28:49 GMT

The COVID-19 pandemic hit cattlemen – like all of agriculture – hard. Ethan Lane, vice president of governmental affairs for the National Cattlemen’s Beef Association (NCBA) says the group has been pleased with the financial relief provide to cattlemen through the Coronavirus Financial Assistance Program (CFAP).

Speaking to AgriTalk host Chip Flory on Tuesday, Lane said, “for not having played this game before, I think we’ve been relatively pleased with the results.” The CFAP program paid cattlemen more than $4 billion in the first round of relief, and almost $2.8 billion through CFAP2.

“It’s not something we wanted to do, but boy it’s been a lifeline for many producers,” Lane said.

Lane noted that producers were paid $200-plus per head for cattle they owned prior to April 15, 2020, which “could have been a game-changer” for some.

Lane also said NCBA is working to clarify what producers need to do to be eligible for an upcoming package of financial relief that will pay on the April 16 to May 14, 2020, window. Cutting CFAP off at April 15 was detrimental to many stocker and backgrounding operators, and Lane said the next package helps with producers who incurred losses in the weeks following the April 15 cutoff.

The presidential transition occurring this month will also create turnover in the agencies, and “USDA is going to have to juggle that transition,” Lane said. “But we do know there are resources left. So we hope that USDA follows through on Congressional intent and pushes those resources out to the country.”

Lane is optimistic the Biden administration will work with cattle producers. He expects the new administration will be “more focused on issues like climate change, but they also recognize the importance grazing plays in being a solution to climate change, which is music to our ears.”

Lane also acknowledged there will be some difference in perspective on land use and private land rights, “age old clashes that we’ve been working on” for years. The beef industry is “a massive industry that has a tremendous impact and employs a lot of people. And we need to help (the Biden administration) understand how we can fit into that equation. And I think they are open to having that conversation.”

Regarding the presumptive new director at the EPA, Michael Reagan, Lane said many of the cattlemen that have worked with him previously have been outspoken about the fact he is willing to work with cattlemen. We’re going to engage with him and see where he wants to take EPA and some of those rulemakings that have been so pivotal over the last few years.”

Biden Says He Will Not Immediately Remove Phase 1 Trade Deal With China

Thu, 22 Sep 2022 02:56:41 GMT

(Reuters) - U.S. President-elect Joe Biden has said that he will not immediately act to remove the Phase 1 trade agreement, which President Donald Trump inked with China, the New York Times reported on Wednesday.

In an interview with a Times columnist, Biden said that the United States needed to get leverage back to use in negotiations with China.

“I’m not going to make any immediate moves, and the same applies to the tariffs,” Biden said. “I’m not going to prejudice my options.”

“In my view, we don’t have (leverage) yet,” he added.

The United States needs to develop a bipartisan consensus and increase government-led investments in research and development, infrastructure and education to better compete with China, according to the president-elect.

“I want to make sure we’re going to fight like hell by investing in America first,” Biden said.

Under the Phase 1 agreement signed earlier in the year, China agreed to increase purchases of American products and services by at least $200 billion over 2020 and 2021.

The deal also leaves in place 25% tariffs on a $250-billion array of Chinese industrial goods and components used by U.S. manufacturers, and China’s retaliatory tariffs on over $100 billion in U.S. goods.

Biden’s team will pursue policies targeted at China’s “abusive practices,” including “stealing intellectual property, dumping products, illegal subsidies to corporations” and forcing “tech transfers” from U.S. companies to their Chinese counterparts, according to the interview.

On Iran, Biden said he stood by his views that his administration would lift sanctions if Tehran returned to “strict compliance with the nuclear deal.”

Last month, Iranian Foreign Minister Mohammad Javad Zarif had said Iran would fully implement its 2015 nuclear deal if Biden lifts sanctions, which Zarif said could be done swiftly through “three executive orders”.

“In consultation with our allies and partners, we’re going to engage in negotiations and follow-on agreements to tighten and lengthen Iran’s nuclear constraints, as well as address the missile program,” Biden added.

(Reporting by Aakriti Bhalla and Shubham Kalia in Bengaluru; Editing by Christian Schmollinger, Sam Holmes and Raju Gopalakrishnan)

Charges Dropped Against Animal Rights Activist Who Trespassed at Iowa Select Farms

Thu, 22 Sep 2022 00:56:41 GMT

Charges have been dropped against an activist accused of trespassing on property of Iowa’s largest pork producer, AgDay’s Tricia Sloma reports. Matt Johnson is an animal rights activist with the group Direct Action Everywhere and was accused of trespassing on property owned and operated by Iowa Select Farms in May.

Prosecutors claim he helped secretly record the pork producer using ventilation shutdown to euthanize hogs last year because of the pandemic, Sloma says. County prosecutors moved to dismiss the charges last week at the request of Iowa Select.

The company said in court documents that its personnel had been subpoenaed but did not wish to testify. A company spokesperson told the Star Tribune it “could not be distracted by individuals who choose to break the law and grandstand.”

Related:

Animal Activists Attack Iowa Select Farms

Protect Yourself from Online Activism

Animal Rights Activists: Watch for the Signs

Truck Shortage Continues as Semiconductor Chips Still in Short Supply

Wed, 21 Sep 2022 04:13:27 GMT

If you’re in the market for a new truck, you may be waiting a while longer. Major auto and truck manufacturers have announced extended shutdowns and it’s the chip shortage still to blame.

Just this week, Ford Motor Company and GM announced layoffs would continue, due to trouble sourcing the semiconductor chips needed to produce new trucks and cars.

Ford says the F-150 production plant in Kansas City is shutting down for two weeks in July. That’s as workers just started trickling back in after the plant was idle from April 19 to June 14. Plants in Michigan, Kentucky, Illinois, Canada and Mexico are also seeing extended closures.

That’s impacting farmers and ranchers in the market for a truck. According to Farm Journal research, more than a third of farmers planned to purchase a new pickup this year.

Time Running Out for Legislative Fixes to Cattle Market: Divide Remains on Special Investigator at USDA

Wed, 27 Jul 2022 18:50:48 GMT

The clock is ticking on legislation in Congress designed to help level the playing field for cattle producers in a market many of them say is broken.

The House recently passed the Lower Food and Fuels Cost Act which includes a special USDA investigator to help look into possible violations of the Packers and Stockyards Act and whether producers are being treated unfairly. However, there’s divide on if this is the right approach to restoring competition in the cattle market.

USDA Secretary Tom Vilsack says they need more cattle market information regarding cash trades, to ensure fairness in the market, as well as greater enforcement of the Packers and Stockyards Act. He thinks the addition of this position may well help USDA accomplish that goal. “One way is by supporting the notion of having an investigative arm, if you will. The other way is to to bolster the staffing at Packers and Stockyards, which the president’s budget includes. So a combination of those two things would strengthen our ability. At the meantime, we’re going to try to strengthen the Packers and Stockyards Act to make sure that when and if we have to enforce it, that we’re that there’s clarity about what is and what isn’t appropriate and permissible under the Packers and Stockyards Act.”

However, NCBA is opposed to this legislation and adding a special investigator at USDA saying the agency already has a Packers and Stockyard division, they are just understaffed and underfunded by nearly 50%.

NCBA VP of Government Affairs, Ethan Lane, says, “And when you talk to those Packers and Stockyards employees what they tell us is that they have the authorities they need, they have the ability to subpoena, they have that prosecutorial authority when needed working with their partners at DOJ, what they don’t have is staff.”

Lane says adding personnel and resources would go much farther than creating another government agency that will cloud the issue. And they look at this bill as a solution in search of a problem.

However, he says time may simply run out to advance either the Special Investigator bill and the even more controversial Cattle Price Discovery and Transparency Act. The summer session will end in the next few weeks and it is unlikely to be taken up in a lame duck session of Congress.

Senate Panel to Vote on Cattle Market Bills

Tue, 21 Jun 2022 16:52:46 GMT

The Senate Ag Committee is scheduled to vote on the Cattle Price Discovery and Transparency Act this week. The cattle industry has been working with lawmakers for more than two years on a legislative reform for the cattle market. It was introduced by farm state Senators including Chuck Grassley of Iowa and Deb Fischer of Nebraska, Jon Tester of Montana and Ron Wyden of Oregon. It’s designed to improve competition and ensure more fairness through robust price discovery and transparency. However, farm country is divided over the bill.

Independent cattle producers like Craig Moss of Hull, Iowa, believe the cattle market is broken. He says its controlled by the big four packers. And that was never more evident than during the height of the COVID-19 pandemic. He says, “It really displayed what happens in this part of the world. They’ll keep their contracts flowing and the cash like I said is a residual supply. They’ll use it when they’ll use us when they need us and its difficult to even get stuff done in a timely manner.”

He says the increased competition and transparency in the Cattle Price Discovery and Transparency Act would help level the playing field. The bill creates a cattle contract library and mandates regional negotiated cash minimums packers would have to buy on a weekly basis. “I think the minimums is really to, I think the biggest benefit will to prevent further erosion of you know the cash trade percentage because it’s the last form of price discovery.”

Cattle producer Brad Kooima of Rock Valley, Iowa, worked with Iowa Senator Chuck Grassley on the market fix that is supported by many feeders in the north. It is the southern feedlots that are pushing back on the mandate. “I think the transparency side of it has a lot of traction. You know the next day weights, the formula library, that sort of thing. The whole hangup gets to be when you get to this mandate right? Where I mean you know nobody is going to tell us how many we’ve got to do that sort of mentality.”

And those mandates are the reason Farm Bureau and the National Cattlemen’s Beef Association oppose the bill. Ethan Lane, NCBA Vice President of Government Affairs says, “The majority of cattle producers around the country don’t support mandates. You know these AMAs, the Alternative Marketing Agreements, are tools that the vast majority of cattle producers are using now to make more money on their cattle, they receive premiums on those cattle to be rewarded for investments in genetics and improvements in quality.”

He says even cow calf producers use the AMA’s to provide signals that they are raising the right kind of cattle for the market and the for the consumer. But Kooima says AMAs aren’t for everyone. “I’m not saying there shouldn’t be an AMA there’s plenty of room for both of us. Just make sure that you make some integrity that there’s enough price discovery that you actually have a market.”

Lane also argues that the market provides adequate price discovery without a mandate. “You know we’ve seen a remarkable increase in the use of cash trade over the last two years thanks to voluntary efforts from the industry and we’ve seen those packer margins that were really the source of so much concern drop by as much as 700% from the peak during COVID. So we’ve seen the market take the moves it needs to take in order to correct.”

So, the question is what are the bill’s chances of passage? Kooima says, “Senator Grassley himself still acts confident that its at least going to be good enough to get a chance at a vote. I guess we’ll see what happens from there.” However, Lane says, “There’s very little support in the House for the Fischer Grassley Bill. This is really a Senate side conversation and more specifically it’s a Senate Ag Committee conversation. Support for this bill drops off dramatically once you leave the Senate Agriculture Committee.”

Despite the headwinds, cattle producers that support the legislation say they’re fighting to protect their livelihoods.

Kooima 5:46 My view is that if we don’t do something we’re going to continue to see this further deterioration of the negotiated trade. Along with that the further liquidation of more of the small, medium sized people like my customers and like the way I feed cattle and my family feeds cattle.

NCBA also opposes companion legislation, the Meat and Poultry Special Investigator Act that would create a new USDA office dedicated to enforcing competition rules under the Packers and Stockyards Act. That is also scheduled to be voted on by the Senate Ag Committee this week.

Cattle Losses Reported Due to Heat Stress

Wed, 15 Jun 2022 19:32:49 GMT

With heat indices climbing into the triple digits in cattle feeding areas, there have been some accounts of death losses. Unconfirmed reports have an estimated 10,000 head in Kansas and an undetermined amount in Nebraska. Those losses are attributed to heat stress and concerns will continue to grow as the heat wave persists.

Cattle losses like these are devastating for producers and happen even though they do everything in their power to manage heat stress in their operations. Dr. Dan Thomson of Iowa State University is a veterinarian and leading animal health and well-being expert. He says the heat and humidity combined to raise the thermal heat index for those cattle and created the perfect storm.

“During these bouts of extreme heat the cattle can’t dissipate the heat at night because there’s not night cooling and so this perfect storm hits. No different than a tornado hitting a cattle feeding facility or a derecho or whatever and we have these natural disasters,” Thomson explains.

The heat wave is expected to continue for several days. Thomson says producers will need to continue to be on high alert to try to manage that heat stress.

“There’s mitigation strategies that we place, whether its nutrition, strategies for increasing water tank space and decreasing movement of cattle, all these things we’re doing on a day to day basis.” Thomson says. Feedlot managers and their crews have been putting themselves in danger to save cattle in the extreme weather conditions, hauling water and providing bedding for the cattle, he adds. If not, there could have been higher mortality rates.

Cattle producers work hard to keep cattle comfortable so they perform at their highest level, but most importantly, for their well-being.