View this email as a Web page Please add BEEF Stocker Trends to your Safe Sender list.

News and views on stocker segment issues from BEEF magazine.
February 20, 2007 A Prism Business Media Publication
ISSUE CONTENTS
Feeder Prices Continue Rebound

National Stocker Award Competition Begins

Wheat Conditions Improved, But...

Speculating On Corn

Stocker Impacts From Ethanol

Weather & Numbers Bolster Market

April 1 -- Applications due for the 2007


About This Newsletter
To unsubscribe from this newsletter go to: Unsubscribe

To subscribe to this newsletter, go to: Subscribe

Be sure to check out www.beefstockerusa.org for all your stocker cattle information and management needs.



ADVERTISEMENT
SUREHEALTH® continues to gain approval.
Beef export countries demand proof of age, and the only way to achieve this is through a Quality Systems Assessment (QSA) program like the optional one offered through MERIAL ® SUREHEALTH ®. The SUREHEALTH program is the only nationwide calf preconditioning protocol that requires third-party veterinarian certification and is backed by a limited 21-day limited warranty. Click here for more information.

® MERIAL, SUREHEALTH, the SUREHEALTH and CATTLEHEAD LOGOS are all registered trademarks of Merial. © 2006 Merial Limited. All rights reserved.

News
Feeder Prices Continue Rebound
Prices for feeder cattle are finally finding some strength for one elemental reason, says Derrell Peel, Oklahoma State University Extension livestock specialist -- supply.

"The annual cattle inventory confirmed we have essentially the same feeder supplies this year as in 2006," says Peel in his recent "Livestock Market Comments."

"After the initial shock of higher corn prices comes the realization that high-cost grain doesn't mean feedlots don't want to feed cattle. It mostly means they want to feed different cattle, feed them somewhat differently and, most importantly, price them differently as placements entering the feedlots."

He says feedlots will be looking for heavyweight feeder cattle this year, of which there aren't many to be had.

"They'll have to wait until stocker producers have time to put on additional weight as stockers before more heavyweight feeders will be available," Peel says. "We're really talking about this fall before we can transition from a fast-paced lightweight calf market to a heavier weight yearling market."

In terms of supply, recall that the national cattle inventory had increased only 0.3% as of Jan. 1, compared to 2006. According to the Livestock Marketing Information Center, "The reported U.S. calf crop (Jan. 1) has been stable since 2003. So the calculated number of feeder cattle outside feedlots that aren't designated for breeding-herd purposes remains relatively tight. As of Jan. 1, 2007, the calculated available feeder cattle supply outside feedlots was 28.4 million head, up 0.9% from a year ago."

In sum, Peel explains, "Stocker producers will have very different incentives this year compared to the last several years. Instead of moving cattle to feedlots quickly and at lighter weights, there will be an incentive for cattle to enter feedlots heavier and feed for fewer days in the feedlot. This will slow down the rate of turnover of cattle out in the country and speed up the turnover rate in the feedlot."

That means feedlot inventories will likely continue to shrink through the first half of the year at least, he adds.

"For the last 3-4 years, we've maintained feedlot inventories by feeding fewer cattle for more days and now we need to feed the same small set of cattle for fewer days."

Expect feeder and calf prices to increase a bit more seasonally in the next month. Summer forage prospects will dictate how much they'll weaken seasonally into the summer. Moving into the spring, feeder markets will be very sensitive and likely volatile in response to corn market conditions, Peel says.


National Stocker Award Competition Begins
Mark April 1 on your calendar. That's the deadline for submitting an application for this year's National Stocker Award (NSA) competition.

If you're unfamiliar with the NSA, it's open to any stocker or backgrounding operation that derives the majority of its cattle-based income from the stocker and backgrounding businesses. You can nominate yourself or someone else.

The overall winner wins $10,000 in cash, and two other divisional winners receive $2,500 in cash. For more info or an application, go to www.nationalstockeraward.com. For a hard-copy application, contact Marilyn Anderson at 800-722-5334.


Weather And Crops
Wheat Conditions Improved, But...
Depending on whom you talk to, wheat pasture prospects have picked up, though the prospects of spring forage are still plenty dicey given the lingering drought.

For the week ending Feb. 11, the National Ag Statistics Service had this to say about selected states:
  • Light snow across the Northern Plains and eastward into the Ohio Valley improved snow cover, better insulating winter wheat from temperature extremes. The extreme cold and snow across the nation's northern latitudes and mid-section continued to cause severe stress to livestock and curtailed outdoor activities.

  • In California, recent rains and warmer weather improved growth of winter forage, wheat and other grain crops in some areas.

  • In Texas, mostly dormant wheat remained in fair to good condition having benefited from recent precipitation and warming temperatures. Although the favorable weather conditions also contributed to pasture growth, supplemental feeding of livestock continued statewide.



ADVERTISEMENT
Don't take a chance. Treat all incoming cattle with IVOMEC® Plus (ivermectin/clorsulon)

Liver flukes are spreading and every load of incoming cattle could be carrying them. The liver fluke problem is hard to diagnose and rarely shows in clinical signs. Only IVOMEC® Plus (ivermectin/clorsulon) kills liver flukes and other internal and external parasites, all in a single dose. Product information.

®IVOMEC and the CATTLE HEAD LOGO are registered trademarks of Merial. © 2006 Merial Limited. All rights reserved.

Issues
Speculating On Corn
(Stocker Issues)

Consider it the new industry pastime: swapping theories about how ethanol's impact on the corn market will either forever change the way cattle business is conducted long-term, or how a lot of high-priced ethanol plants will be gathering rust in a few years.

As for the latter, Mike Woolverton, Kansas State University Extension grain economist, explains, "Some producers have expressed concern that after luring them with tantalizing visions of historic profits, the corn market will collapse. Two things might cause that to happen, neither of which seems likely."

First, says Woolverton in his "Grain Outlook," if corn producers overshoot and plant 12 or 14 million more acres, and if growing conditions give record-breaking yields across the country, corn price would drop from the current level.

"One or the other of those might happen, but the likelihood of both happening this year seems small," Woolverton says.

The other possible hole in the dam could come in the form of ethanol margins so low that some existing and impending plants would cease production.

According to Woolverton, "The subsequent decrease in demand for corn would cause price to fall. In order for that to occur, oil price would have to fall more than it has in recent weeks; even then, Congress would likely raise the ethanol-in-gasoline mandate levels to prevent injury to grain producers, farmer/investors and rural communities that would result from a demise of the ethanol industry."

For more of Woolverton's insights see www.agmanager.info/marketing/outlook/newletters/archives/GRAIN%20OUTLOOK_02-01-07.pdf


Stocker Impacts From Ethanol
"After years of shortening the stocker phase, cattle feeders will likely see more time between the cow-calf and feedlot segments as lower-cost weight gain systems are sought," says Larry Corah of Certified Angus Beef® LLC (CAB). "We see a new price structure for corn, escalating land prices and cattle marketed on individual merit. All these factors impact the stocker industry dramatically."

Besides the changing competitive dynamics for calves and grass, Corah emphasized to producers attending the recent National Cattlemen's Beef Association meeting that potential for carcass and feedlot performance coming from the stocker segment of the industry will be magnified. Consequently, paying closer attention to some finer points of stocker production could pay more dividends.

For instance, Corah points to an Iowa Tri-County Steer Carcass Futurity study showing that cattle treated once for bovine respiratory disease (BRD) had a mortality rate 3% higher than those never treated. Cattle with two treatments had nearly a 10% mortality rate.

The average daily gain (ADG) of cattle with no treatments was almost 0.3 lbs. more than those incurring two treatments.

"This translates to a difference in dollars returned per head," Corah explains. "The total disparity between those cattle treated twice and those never treated equals more than $200 in lost profit."

Likewise, Corah explains Nebraska research showed an even greater impact from supplementing stockers on grass.

"With today's growth and quality genetics, use of a pasture creep or other supplementation can add a pound to ADG and increase later ability to grade without deterring feedlot performance. What's more, it can boost carrying capacity by 40% on increasingly expensive land," Corah says.

Moreover, Corah suggests these implanting strategies in the stocker pasture can improve carcass quality:
  • When cattle are adapting to the stocker program, delay implanting.

  • Avoid aggressive implants during this period.

  • Question whether implants are even needed during the stock phase.
Furthermore, Corah explains Oklahoma State University studies show that effective deworming in the stocker phase can lead to a 20% increase in marbling and ability to grade Choice after finishing.

According to Corah, the stocker industry must move beyond the old strategy of merely maintaining calves for later compensatory gain. Cattle that barely get by as stockers are often severely compromised in their ability to grade.

Keep in mind, however, that though more than 500 million lbs. of CAB product were marketed last year, the percentage of cattle qualifying for the program continued to decline.



ADVERTISEMENT
SUREHEALTH® pays.

Preconditioned calves are in demand. MERIAL® SUREHEALTH® is the only national veterinarian certified preconditioning program. It's backed by the Merial SUREHEALTH limited health warranty and now offers optional source and age verification. SUREHEALTH is a USDA-approved Quality Systems Assessment (QSA) program. Click here for more information.

® MERIAL, SUREHEALTH, and the SUREHEALTH and CATTLEHEAD LOGOS are all registered trademarks of Merial. © 2006 Merial Limited. All rights reserved.

Markets
Weather & Numbers Bolster Market
"Bitter cold temperatures with wintry precipitation have put feeder offerings in a buyer-friendly condition," say Ag Marketing Service (AMS) reporters.

"Cattle are mostly thin-fleshed and have developed hardness from the harsh weather that will help them stave off sickness and give outstanding feedlot performance. New-crop calves are starting to show up on the market in larger numbers and stocker buyers are aggressively bidding on them. Many backgrounders believe the availability of lightweight calves will be tight this spring and they're trying to get a head-start in their purchasing before the emergence of grass and the ensuing March Madness."

All told, feeder steers and heifers sold steady to $3 higher last week, while calves picked up as much as $5.

In response to tighter beef supplies -- substantially lighter carcass weights courtesy of the lousy winter -- fed-cattle markets gained, as well. For perspective, carcass weights declined 27 lbs. from the middle of December to the first of February. In the North, dressed prices were $1-2 higher at $146-147/cwt.; steady to $1 higher on a live basis at $90-$91. In the Southern Plains, fed-cattle prices were basically steady with the prior week at mostly $91.

As a word of caution, though, AMS points out, "The extreme shortage of hay could make it expensive to hold these stockers until pastures will support them. The lack of hay is also causing a continued deep culling of cow herds with a large number of bred cows still coming to town and most of them going to slaughter. The number of cows and bulls harvested in 2006 was nearly 11% larger than the previous year."

The summary below reflects the week ended Feb. 16 for Medium and Large 1 -- 500- to 550-lb., 600- to 650-lb. (calves), and 700- to 750-lb. feeder heifers and steers (unless otherwise noted). The list is arranged in descending order by auction volume and represents sales reported in the weekly USDA National Feeder and Stocker Cattle Summary:
Summary Table
State Volume Steers Heifers
Calf Weight 500-550 lbs. 600-650 lbs. 700-750 lbs. 500-550 lbs. 600-650 lbs. 700-750 lbs.
Dakotas 38,100
South Dakota
North Dakota

$120.86
$117.47

$111.46
$112.09

$100.50
$97.99

$107.26
$107.91

$98.18
$96.66

$93.24
$90.97
MO 31,900 $119.11 $108.45 $99.39 $103.13 $94.85 $92.26
OK 30,600 $117.14 $105.51 $99.10 $104.99 $95.11 $92.68
NE 24,300 $122.34 $117.512 ** $108.67 $103.172 **
KY* 18,200 $98-108 $89-99 $83-935 $83-93 $79-893 $76-865
TX 16,000 $113.31 $102.48 $98.66 $101.82 $94.40 $90.82
IA 10,700 $120.86 $115.782 $100.617 $106.89 $100.802 **
AL 8,600 $106-115 $92-983 $86-93.505 $93-107 $85-92 $79-875
GA*(***) 8,200 $92-115 $84-103 $77-94 $82-108 $77-89 $72-83
TN* 8,100 $107.42 $93.68 $89.51 $93.52 $85.77 $82.28
KS 6,600 $128.61 $115.73 $100.31 $108.86 $97.11 $95.15
CO 6,200 $116.19 $112.312 $99.33 $102.62 $94.614 $91.18
AR 5,800 $112.30 $103.47 $94.78 $96.24 $88.65 $88.754
WY 5,500 $124.19 $118.242 ** $103.59 $102.752 **
MS* 5,000 $100-110 $85-95 $80-954 $90-951 $80-90 $78-804
Carolinas* 4,800 $93-113 $85-99 $77-90.50 $80-102 $74-89 $73-83
NM 4,500 $111.45 $101.84 92.21 $94.66 $91.01 **
FL* 4,200 $92-107 $82-92 ** $87-99 $80-84 $77-79
LA(ND) 2,900 $97-110 $91-1102 ** $92-107 $85-1022 **
MT 2,700 $120.07 $107.82 $96.10 $102.78 $98.68 $90.91
VA 1,900 $107.762 $97.484 $88.30 $88.48 $87.24 $87.67
WA* 1,700 $106.81 $96.99 94.03 88.43 87.24 87.67

* Plus 2
** None reported at this weight or near weight
(***) Steers and bulls
(?) As reported, but questionable
NDNo Description
1500-600 lbs.
2550-600 lbs.
3600-700 lbs.
4650-700 lbs.
5700-800 lbs.
6750-800 lbs.
7800-850 lbs.


Calendar of Events
April 1 -- Applications due for the 2007
National Stocker Award -- for more details and an application, see www.nationalstockeraward.com; for a hard copy of the application, contact Marilyn Anderson at BEEF, 800-722-5334.


ADVERTISEMENT



You are subscribed to this newsletter as #email#

To get BEEF Stocker Trends in a different format (Text or HTML), or to change your e-mail address, please visit your profile page to change your delivery preferences.

For questions concerning delivery of this newsletter, please contact our Customer Service Department at:
Customer Service Department
Delta Farm Press
A Prism Business Media publication
US Toll Free: 866-505-7173 International: 847-763-9504 Email:beef-mag@pbinews.com
US Toll Free: (866) 505-7173
International: (402) 505-7173

Prism Business Media
9800 Metcalf Avenue
Overland Park, KS 66212

Copyright 2006, Prism Business Media. All rights reserved. This article is protected by United States copyright and other intellectual property laws and may not be reproduced, rewritten, distributed, re-disseminated, transmitted, displayed, published or broadcast, directly or indirectly, in any medium without the prior written permission of Prism Business Media.