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News and views on stocker segment issues from BEEF magazine.
May 23, 2006 A Prism Business Media Publication
June 5 Conference To Spotlight Iowa Cattle Feeding

U.S.- Japan Officials Meet On Beef Ban

White Papers Issued From 2006 Livestock Congress

No Betting On The Come... For Now

Watch For Toxic Effects Of Stressed Pasture

Pasture Starts Season Further Back

Record Cattle-On-Feed Numbers Continue

Questions & Comments

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

Aaaargh! A typo in the last issue of BEEF Stocker Trends had the last confirmed BSE case being born AFTER the ban on feeding ruminant protein. Dental records estimate the cow to be 10 years old, which means she was born BEFORE the feeding ban. Sorry for the confusion.

June 5 Conference To Spotlight Iowa Cattle Feeding
Iowa State University (ISU) Extension's Value-Added Ag Program and Iowa Beef Center (IBC) are teaming up to host "Growing Iowa's Cattle Industry: Ethanol, Opportunities and Economic Development." Set for June 5, the program will assist lenders, economic-development leaders, and producers in exploring ways to work together to expand Iowa's cattle feeding industry.

Set for the Iowa Farm Bureau Federation Building at 5400 University Avenue in West Des Moines, the agenda begins at 9 a.m. The program consists of panels addressing different facets of the cattle-production business, including:
  • The cattle industry and renewable energy economics.
  • Overview of feedlot facilities, including design, costs, regulations and community buy-in.
  • Business and financial considerations.
  • Management needs, with guest speakers from Iowa's premier feedlots.
Registration is $40 before May 30, and $50 after.

For more info, visit or; or call 515-294-BEEF or email

U.S.- Japan Officials Meet On Beef Ban
Next month is apparently the earliest Japan will come to terms with the U.S. about resuming beef trade. Keep in mind, that's coming to terms, not actually opening the gates.

That's based on U.S. officials meeting with their Japanese counterparts in Tokyo last week. According to various reports, the Japanese last week accepted USDA's audit of packing plants, and now will share the information and gauge consumer comfort through a series of public hearings. Presumably, after that will come Japanese inspection of packing plants here.

Bottom line, the best guess for trade resumption continues to be later than sooner. Even with access to the Japanese market though, it won't change the fundamentals of the weakening beef market here (see next article).

In the meantime, U.S. officials also concluded preliminary negotiations with China last week to hammer out a deal for resuming beef exports to that country.

White Papers Issued From 2006 Livestock Congress
White papers focusing on foot-and-mouth disease, avian influenza and BSE are available for download from The papers are the result of think tanks held during the International Livestock Congress (ILC) in Houston, TX, in March.

"These white papers are the results of weeks of effort by our think-tank participants in coming to thoughtful conclusions about the effects and management of these diseases," says Rod Bowling, who chaired the program, "Global Prevention and Management of Foreign Animal Disease."

The International Stockmen's Educational Foundation (ISEF) was created in 1986 to conduct and support educational events that will benefit stockmen internationally. ISEF sponsors the ILC each year in Houston, TX.



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Market Perspective
No Betting On The Come... For Now
"The last few years, time has usually saved you if you're a margin operator (feeder or stocker), now it will be against you," says Derrell Peel, Oklahoma State University Extension livestock marketing specialist. "There's no more betting on the come."

That's the quintessential summary of cattle-industry economics now compared to last year. The market is running away from margin operators because supplies are increasing significantly relative to demand.

"The biggest difference today than at this time last year is we have about 10% more cattle on feed heading into the summer, which is record large for this time of year," explains Mike Miller, Cattle-Fax director of research and education.

Not only is a wall of increased supply set to hit the market during what are historically the softest market months of the year, it's coming at a time when high breakevens already have feeders losing around $100/head (more on yearlings, less on calf-feds, Miller says).

However, Peel believes the record April 1 cattle-on-feed numbers make reality appear darker than it actually is. Though numbers are up, he says it's not because the cattle inventory is 9%-10% larger than predicted but because more calves were forced into the feedlot earlier than anticipated by drought and a lack of stocker pasture.

"We started the year with a cattle inventory 1.7% larger than in 2005. We'll add maybe another 1-1.5% to those numbers with feeder calves from Canada. So, we have the capability for feeder cattle supplies to be 4-4.5% larger this year, but not 9%," Peel says.

Either way, Miller adds, "We're still in really good shape from a demand perspective, but probably not good enough to offset the supplies we see coming toward us."

In fact, retail beef demand is down 4.5% through the first quarter, according to preliminary Beef Demand Index figures. Consumption is actually up slightly, but a sharp decline in inflation-adjusted prices means demand is down, but still well ahead of 1998 when it finally turned the corner.

Analysts like Nevil Speer at Western Kentucky University wouldn't be surprised to see beef demand suffer more under the collective weight of record and near-record supplies of poultry and pork. That's on top of high fuel prices that increase the price of all consumer products, while making consumer wallets lighter to start with.

For anyone who thinks the outlook would be at least twice as bright if politics and ineptitude hadn't conspired to keep international beef trade in limbo, both Peel and Miller say having the international markets fully engaged would undoubtedly provide a psychological lift. However, it probably wouldn't have changed the industry's current position from a fundamental standpoint.

Stocker Management
Watch For Toxic Effects Of Stressed Pasture
As if running out of feed wasn't challenging enough, drought grows plant toxicity and its potential for poisoning livestock.

"Stressed pastures bring out toxic plant problems in several ways," says Dave Sparks, DVM, Oklahoma State University Extension food animal quality and health specialist. "At these times, toxic plants become more prevalent. Many toxic plants are able to withstand the stress of overgrazing better than more palatable forage plants. As the stress on the pasture continues, decreased competition means greater populations of toxic plants. Many of the toxic plants become more toxic under stress conditions such as drought or overgrazing."

In the same May 12 "OSU Cow-Calf Corner" article, (, Sparks explains short forage can also cause protein, energy, mineral or vitamin deficiencies. These, in turn, make cattle more vulnerable to plant toxicity.

Though there's no preventing drought, stocker producers can take steps to manage the risk of potential livestock poisoning that comes with increased plant toxicity.

Specifically, Charles Hart, Texas A&M University Extension (range specialist) and Bruce Carpenter (livestock specialist), say producers should learn how to identify toxic plants, use effective grazing and livestock management practices and take measures to control the plants when necessary.

As for identifying toxic plants, livestock symptoms and all of the rest, check out the Toxic Plant Database at: (

Once you've identified the toxic plants, Hart and Carpenter say these steps can help prevent poisoning:
  • Practice good grazing management, which is probably the most effective way to deal with potential toxic plant problems.
  • Use effective livestock-management practices, such as closely observing animals new to an area, grazing with the proper class of livestock, and implementing proper supplemental feeding strategies.
  • Recognize when plant control is necessary and what type of control is best. Control strategies that target infestations before they become large problems are generally the most economical.
Go to for more details in a fact sheet by Hart and Carpenter.

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Weather And Crops
Pasture Starts Season Further Back
Timely rains across the Southern Plains earlier this month lifted spirits and bought some producers more time to weigh their options, but it's still plenty dry.

"On a regional basis, pasture and range conditions in the Southern Plains are significantly worse compared to prior years, despite recent moisture," explain folks at the Livestock Marketing Information Center. "As of mid-May, about 42% of all pasture and rangeland was considered as poor or very poor compared to only 21% last year and the 2000-2004 average of 22%."

The same goes for the Western region where 8% more of the pasture is ranked as poor or very poor (18%) compared to last year, and in the Southeast where 13% is less than fair compared to 6% last year.

Likewise, drought is already taking a bite out of some crops. As an example, the Ag Marketing Service reported last week, "Harvest (for red winter wheat) is already underway in drought-stricken Texas, which will harvest the fewest acres in the state since 1925."

For the week ending May 14, according to the National Ag Statistics Service:
  • Corn -- 85% of the acreage has been planted, which is 3% behind last year and 8% ahead of the normal pace; 44% has emerged, which is 5% ahead of last year and 4% ahead of normal.
  • Soybeans -- 33% is planted, 10% behind last year and 2% behind the five-year average; 9% has emerged, which is 1% back of last year and the average.
  • Winter wheat -- 62% was at or beyond the heading stage. That's 7% ahead of last year and 7% ahead of the normal pace. In Kansas -- the largest producing state -- 85% was at or beyond the heading stage, 17% ahead of normal.
  • Spring wheat -- 79% of the crop is in the ground, which is 9% behind last year but 7% ahead of the average; 46% of the crop has emerged, compared to 53% last year and 42% for the five-year average.
  • Barley -- 78% of seeding is complete; 4% behind last year but 7% ahead of normal. Emergence advanced to 36%, 10% off last year's pace and 5% behind normal.
  • Sorghum -- 34% of the acreage is sown, which is 7% ahead of last year and 4% ahead of average.
  • Oats -- 94% of planting is complete, which is 1% behind last year but 6% ahead of the five-year average.
At this stage of the game, pasture conditions are lagging last year on average: Nationally, 52% was rated good or better compared to 55% during the same week last year, while 20% was deemed poor or worse compared to 12% last year.

States with the worst pasture conditions -- acreage rated poor or worse -- early on aren't much of a surprise, being areas where drought has lingered or eased back into gear: Arizona (76%), Colorado (48%), Florida (65%), Kansas (30%), New Mexico (59%), Oklahoma (39%) and Texas (44%).

On the wet side of the fence, states with the most lush pasture conditions -- rated good or better -- include: Alabama (85%), Arkansas (54%), California (100%), Georgia (54%), Idaho (82%), Illinois (86%), Indiana (82%), Iowa (73%), Kentucky (75%), Louisiana (55%), Maine (74%), Maryland (54%), Michigan (62%), Minnesota (83%), Mississippi (73%), Montana (63%), Nebraska (54%), Nevada (97%), North Carolina (55%), North Dakota (62%), Ohio (72%), Oregon (71%), South Carolina (54%), South Dakota (63%), Tennessee (73%), Utah (87%), Washington (86%), West Virginia (50%), Wisconsin (74%) and Wyoming (54%).

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Record Cattle-On-Feed Numbers Continue
While not necessarily unexpected, the more bearish prognosticators were exonerated Friday with the most recent USDA Cattle-On-Feed report pegging the May 1 inventory at 9% more than a year earlier (11.6 million head). That inventory is 11% higher than two years ago and is the largest for the period since the series began in 1996.

April placements were 2% below last year (2% above 2004), while fed cattle marketings for the month were down slightly from a year earlier (5% less than in 2004).

That news came after the week's trade, though, which saw recent rains and improved pasture prospects boost stocker cattle and calf prices as much as $5/cwt. According to USDA's Ag Marketing Service, yearling prices jumped $2-4/cwt. last week, buoyed at least in part by tight yearling supplies and higher futures prices on the week. Likewise, when the fed-cattle trade broke on Friday, feedlots pressed buyers for another $1-$1.50 compared to the week prior ($79-$79.50).

For the next several months, corn promises to play a more pivotal role in cattle prices. USDA's first supply and demand outlook for feed grains this year ( estimates the corn crop at 10.55 billion bu., 5% below last year. Total estimated corn supply at 12.8 billion bu. is down 3%, partially offset by beginning stocks.

On the other side of the net equation, corn usage is projected to climb 6% to a record 11.6 billion bu. For perspective, domestic corn use for ethanol grew 34% last year (2.15 billion bu.) and exports increased by 6% (also 2.15 billion bu.).

The estimated ending stocks of 1.1 billion bu. are half of a year ago.

Sum it all up and USDA's initial report estimates corn prices in 2006-2007 to range from $2.25 to $2.65/bu., compared the 2005-2006 range of $1.95 to $2.05.

If USDA's estimates are close, and if it's true that a 50¢ increase in the bushel price of corn (relative to same fed-cattle price) lowers the price of a 550-lb. steer by $7.50/cwt., you'd think buying leverage for calves might pick up a notch.

The summary below reflects the week ended May 19 for Medium and Large 1 -- 500- to 550-lb., 600- to 650-lb., 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.
OK 30,900 $127.65 $118.90 $106.90 $115.45 $105.51 $96.64
TX 24,000 $122.49 $111.02 $106.45 $115.22 $100.17 $92.49
MO 21,400 $128.36 $120.57 $108.88 $118.29 $109.09 $97.18
KY* 17,800 $114-124 $105-115 $91-1005 $106-116 $93-1033 $83.50-935
KS 10,500 $122.522 $121.57 $107.31 $122.11 $106.58 $103.02
SD 10,000 $122.172 $121.57 $109.81 $113.632 $109.24 $105.46
AL 9,100 $115-125 $106-113 $97-1064 $111-120 $97-107 $92-1014
TN* 7,600 $118.48 $108.93 $98.33 $109.90 $99.04 $95.514
AR 7,600 $121.96 $111.73 $101.77 $111.36 $105.34 $95.98
GA*(***) 7,300 $105-123 $95-114 $86-99 $96-125 $88-109 $90-1014
FL 5,200 $105-117 $100-1112 ** $87-112 $92-1132 **
MS* 4,400 $105-1151 $95-1053 $85-95 $95-1051 $84-953 **
NE 4,300 $133.58 $122.82 $111.42 $120.60 $114.50 $104.02
Carolinas* 4,200 $104-122 $92-1133 $85-975 $97-118 $80-118 $75-965
CO 3,200 $128.51 $115.44 $100.26 ** $91.55** $89.14
LA*ND 3,200 $104-122 $96-1162 ** $95-118 $98-1152 **
NM* 2,500 $114.252 $109.17 $102.68 ** $107.802 **
VA 2,500 $120.00 $112.19 $108.504 $110.35 $111.162 $100.214
WA* 1,700 $116.132 $114.10 ** ** $106.47 **
MT 3,200 $126.73 ** ** $110.772 ** $102.35

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

Questions & Comments
Please send questions to:

Wes Ishmael, Contributing Editor, BEEF Stocker Trends, at

Joe Roybal, Editor, BEEF magazine, at


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