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News and views on stocker segment issues from BEEF magazine.
September 19, 2006 A Prism Business Media Publication
ISSUE CONTENTS
USDA Extends CRP Grazing

Mycoplasma Management Reminders -- Part II

Corn Pegged at 11.1 Billion Bushels

Other Events

Sign Up Now For BEEF Quality Summit, Nov. 14-15

Beef Prices--Volume Push Market Down

Questions & Comments


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News
USDA Extends CRP Grazing
If you're grazing Conservation Reserve Program (CRP) ground, depending on where you live, you may have more time than the traditional emergency grazing deadline of Sept. 30.

On Friday, USDA announced an extended grazing period as late as Nov. 30 in some of the eligible states.

"Extremely dry weather conditions have created real hardships for farmers and ranchers in many parts of the country this year," says USDA Secretary Mike Johanns. "This emergency relief measure will provide feed and forage to producers who have lost hay stocks and grazing lands because of drought."

The 30 eligible states are Alabama, Arizona, Arkansas, Colorado, Florida, Georgia, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Wisconsin and Wyoming.

According to USDA, state Farm Service Agency committees and USDA's Natural Resources Conservation Service (NRCS) state technical committees must agree on the need for the emergency grazing extensions before they're finalized. Once approved, producers in the 30 states may graze CRP land until the following dates in 2006:

Oct. 20 -- Idaho, Iowa, Michigan, Minnesota, Montana, North Dakota, South Dakota and Wisconsin.

Nov. 10 -- Colorado, Illinois, Kansas, Kentucky, Nebraska, Missouri, Nevada, Utah and Wyoming.

Nov. 30 -- Alabama, Arizona, Arkansas, Florida, Georgia, Louisiana, Mississippi, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee and Texas.

In mid-July, USDA announced the expansion of eligible CRP acreage for emergency grazing and haying in Alabama, Colorado, Kansas, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas and Wyoming. The expanded area radiates 150 miles out from any county approved for emergency haying and grazing in any above-mentioned state.

Additionally, USDA says CRP rental payments will be reduced by only 10% instead of the standard 25% on CRP lands grazed in 2006.

In related news, the Internal Revenue Service (IRS) is giving producers more time to purchase livestock to replace what they had to sell due to the drought a few years ago.

"Some producers are coming to the end of their four-year replacement period," says Jason Jordan, National Cattlemen's Beef Association (NCBA) manager of legislative affairs. "This announcement means ranchers still dealing with horrific effects of the drought will not have to restock their herds until one year after the official end of their drought conditions."

Jordan explains a previous amendment to the Uniform Tax Code (supported by NCBA) extended the tax deferment period for weather-forced livestock sales, termed "involuntary conversions," from two years to four years. That same amendment also granted the Secretary of Treasury authority to further extend the deferral period.

According to NCBA, "IRS Notice 2006-82 explains how a taxpayer can determine whether additional time is available. In addition, the IRS plans to publish a list of counties that experienced exceptional, extreme or severe drought for the 12-month period ending Aug. 31, 2006."



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Stocker Health
Mycoplasma Management Reminders -- Part II
With the fall run of calves knocking at the door, it pays to keep in mind management associated with a decreased incidence of mycoplasma (non-responsive pneumonia and arthritis). As researchers at Kansas State University (KSU) noted in the mycoplasma survey they conducted among stockers and backgrounders in 2001, "As mycoplasma appears to be an opportunist occurring most frequently during times of stress or when a calf's immune system is weakened, management programs should focus on those procedures that can get calves started out in the right direction."

Recommendations by KSU researchers include:
  • Don't feed poor-quality hay, or hay in a form not easy for incoming cattle to eat. The relationship between poor nutrition and increased susceptibility to disease has long been recognized. Feed intake during the receiving period is typically low which potentiates the stress effects of shipment, processing and illness (Hutcheson and Cole, 1986).

    Calves need a high-quality, palatable diet on arrival. A high percentage of survey respondents were using native-grass hay in receiving diets. Not all native-grass hay is created equal. In Kansas, forage quality deteriorates monthly from peak protein values in May and June until September with crude protein values declining from a peak of around 9% to 4% (Baker and others, 1999).

    The best way to know what you're feeding is to get your hay tested before the cattle start arriving. You can then build a receiving ration to match the needs of stressed cattle using a readily available hay commodity.

    Protein concentrations in the entire receiving diet should be in the 13.5-14% range. Limiting dietary protein can decrease immune function and increase susceptibility to respiratory pathogens. Calves already sick have decreased appetites and need additional protein in their diets to offset lowered intakes.

    If using native hay in receiving diets, feed it in a form that minimizes the amount of time a calf has to work at eating. Unbroken, large, round bales require a lot more effort to eat and may limit the number of calves eating at one time. Breaking hay out into bunk-line feeders and top-dressing the protein and energy portion of the ration, or using a complete ration during the first two weeks, will increase consumption.


  • Provide a trace-mineral program that meets or exceeds recommended allowances for the weight of calf purchased. A nationwide sampling of zinc content in forage samples found only 2.5% to have adequate levels of >40 ppm (Corah and others, 1996). It appears most pasture-management programs require some form of mineral-supplementation program.

    Several trace minerals, including zinc, are critical for proper immune-system function. If the likelihood of receiving cattle from an area where forage zinc is low isn't risky enough, zinc serum levels will also decrease during transportation and stress. In a recent survey of feeder cattle by the authors, serum zinc levels on arrival were found to be deficient in 35% of incoming cattle sampled. In the same operation, 30% and 55% of cattle sampled at first treatment or at re-pull for treatment, respectively, were found deficient. Cattle didn't appear to have serum zinc levels return to normal until more than 60 days in the feeding program, even though ration levels were adequate.

    Pasture mineral supplementation programs will carry over into the feedyard program (Greene and Chirase, 1998). In a Nebraska mineral-supplementation study, cattle receiving supplemental trace minerals (zinc, copper, manganese and cobalt) during the summer-grazing period had significantly fewer sick calves and fewer treatments per episode than unsupplemented cattle (Grotelueschen and others, 2001).


  • Get control of a respiratory disease early. Metaphylaxis is the group treatment of high-risk cattle with antibiotics before clinical signs of illness are present. The survey indicated a significant difference in the frequency of use on affected operations as compared to operations not receiving affected loads. That begs the questions: "Did it cause the problem?" or "Did they use metaphylaxis in an effort to prevent affected loads because they'd had affected loads before?"

    Neither question is answerable. In the final analysis, metaphylaxis didn't appear to play a significant role -- data suggests that within operations using metaphylaxis there didn't appear to be any relationship between affected loads and unaffected loads receiving the procedure.

    Metaphylaxis is a proven management practice to help reduce sickness, chronics and death loss rates in high-risk cattle. Its usefulness has been shown over many research trials and remains a practical management tool for targeted loads of cattle.


  • Minimize additional stresses at processing. If you can't buy steers and clean-headed cattle, delay those procedures for about 30 days post-arrival. Cramming them on top of everything else at arrival just adds to the stress load.
The complete survey is available at www.beefstockerusa.org.


Weather And Crops
Corn Pegged at 11.1 Billion Bushels
If USDA estimates are correct, this year's corn crop will be the second largest in history at 11.1 billion bu. That's according to last week's Crop Production report. View it at: usda.mannlib.cornell.edu/usda/current/CropProd/CropProd-09-12-2006.txt.

The 11.1-billion-bu. estimate is 1% higher than the August estimate and would make for a crop fractionally larger than last year's.

The monthly report also lifted the estimate of soybean production for the year by 6% over August at 3.09 billion bu. That would also mean a larger crop than last year and the second-largest soybean harvest on record.

Overall, total hay production for the year is estimated at 7% lower than last year. Depending on where you live and how high the price is, that sure seems like a generous assessment.

For the week ending Sept. 9, according to National Ag Statistics Service (NASS).
  • Corn -- 91% is at or beyond the Dent Stage, compared to 88% last year and 81% for the five-year average. Progress is ahead of average in all states. Maturation is at 34%, the same as last year, but 2% ahead of normal. 6% is harvested, which is on par with last year and the five-year average. 59% is rated Good or better, compared to 51% last year.

  • Soybeans -- 27% of the acreage was at or beyond dropping leaves, 7% behind last year, but the same as average. 60% is rated Good or better.
  • Winter Wheat -- 9% of the crop is sown, 2% less than the same time last year and 3% less than average. Colorado is the furthest behind, 12% off the average pace.

  • Barley -- Harvest advanced to 97% complete, compared to 94% last year and 91% for normal.

  • Sorghum -- 96% of the acreage is in the heading stage, which equals last year and the average. Heading was complete or nearly complete in all states except New Mexico and Oklahoma. 72% was at or beyond turning color, the same as last year but 1% behind the norm. 36% is mature, compared to 33% last year and 38% for average. 33% is rated Good or better, compared to 47% last year.

  • Pasture -- 25% is rated Good or Excellent, compared to 32% last year. 24% is rated Poor and 23% is ranked Very Poor, compared to 23% and 13% respectively at the same time last year.
States with the worst pasture conditions -- at least 40% of the acreage rated poor or worse -- include: Alabama (65%); Arizona (58%); Arkansas (53%); California (67%); Colorado (44%); Kansas (43%); Mississippi (68%); Missouri (62%); Montana (61%); Nebraska (60%); Nevada (65%); North Dakota (64%); Oklahoma (70%); OR (48%); South Dakota (58%); Texas (77%); Wyoming (74%).

States with the lushest pasture conditions -- at least 40% rated good or better -- include: Florida (60%); Illinois (55%); Indiana (60%); Iowa (58%); Kentucky (61%); Maine (89%); Michigan (53%); New Mexico (60%); New York (65%); North Carolina (53%); Ohio (55%); South Carolina (48%); Utah (52%); Washington (40%); West Virginia (44%); Wisconsin (50%).


Events
Other Events
Sept. 28 -- Kansas State University (KSU) Beef Stocker Conference, KSU Beef Stocker Unit, Manhattan, KS. For more info, call 785-532-1267.

Oct. 11-13 -- Texas Cattle Feeders Association Annual Convention, Amarillo Civic Center, Amarillo, TX. For registration info, visit www.tcfa.org, e-mail info@tcfa.org, or call 806-358-3681.

Oct. 20-21 -- 5th Annual Statewide Project Grass Conference, Penn College, Williamsport, PA; 570/784-4401 or kris.ribble@pa.usda.gov.

Oct. 24-26 -- Noble Foundation Grazing School, Ardmore, OK; 580/224-6411 or mdcastleman@noble.org.

Oct. 26-27 -- King Ranch Institute for Ranch Management's 3rd Annual Holt Cat Excellence in Ranch Management Symposium, Texas A&M University-Kingsville campus, Kingsville; 361-593-5401 or krirm.tamuk.edu.

Feb. 13-14 -- Mid-South Stocker Conference, Cave City, KY, presented by the University of Kentucky and the University of Tennessee. For more info, visit www.midsouthstocker.org. You can also contact Jim Neel at 865-974-7294 or jneel@utk.edu; John Bartee at 931-648-5725 or jbartee1@utk.edu; or John T. Johns at 859-257-2853 or jtjohns@uky.edu.


Sign Up Now For BEEF Quality Summit, Nov. 14-15
Sign up now at www.beef-mag.com for BEEF magazine's 2006 BEEF Quality Summit. The Nov. 14-15 workshop in Oklahoma City's Clarion Hotel aims to provide attendees with the background, tools and the environment to make the connections for involvement, and the potential rewards offered, in the new beef-value chain.

The first day's program is devoted to outlining the opportunity available in the new beef-value chain, while the second day will focus on how to link your production into that chain. Among the topics are:
  • How U.S. beef consumers define quality.
  • Quality, profit and the cattle cycle.
  • International competition and opportunities for U.S. quality beef.
  • Current international beef-trade opportunities.
  • Producers will discuss how they're paid for quality.
  • Selecting a marketing partner.
  • Evaluating costs, trade-offs and risks of various markets.
  • Linking up with a marketing partner -- an opportunity to meet with participating marketing channel reps.
For more detail, visit www.beef-mag.com and click on the "BEEF Quality Summit" box in the top right corner of the opening page.



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Markets
Beef Prices--Volume Push Market Down
Between sharp reductions in boxed-beef prices and the CME's midweek nosedive, fed-cattle prices lost $1-$2 on the week at mostly $88-$89. Throw in auction volumes 68% larger than the previous week (303,000) and the feeder-cattle market was called weak to $3 lower.

That said, Ag Marketing Service reporters explain, "Demand remains good for all classes of feeders, especially for true yearlings and longtime-weaned calves which are quickly becoming the minority in offerings to increasing numbers of un-weaned calves."

Moreover, the most recent data from the Livestock Marketing Information Center (LMIC) underscores the added pressure higher feeder costs are adding to fed-cattle breakevens compared to a year ago.

"According to the July data, feedlots reported the average cost of gain for steers at $52.62/cwt., $2.53/cwt. higher than in 2005 and nearly 7% above the 2000-2004 average," say LMIC analysts. "The cost of gain for heifers was $57.14/cwt. vs. $53.58/cwt. last year and $3.92/cwt. higher than the prior five-year average. As of mid-August, feedlots reported a corn price of $2.60/bu., 9¢/bu. higher than last year but slightly less than the prior month. The mid-month price for ground alfalfa hay at $116.96/ton was over $41/ton higher than last year and the highest monthly price reported thus far in the series (began in July 1992)."

Find more details about the LMIC report at www.lmic.info.

The summary below reflects the week ended Sept. 15 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.
TX 40,500 $122.74 $119.48 $109.74 $115.62 $111.00 $113.17
MO 38,500 $134.55 $128.98 $121.04 $122.03 $120.27 $113.86
OK 36,900 $132.69 $125.28 $121.67 $121.13 $115.24 $112.39
KY* 24,800 $120-129 $108-118 $105-1155 $107-117 $100-110 $94-1055
Dakotas 21,900
South Dakota
North Dakota

$144.74
**

$130.47
$123.202

$124.15
$122.82

$129.25
**

$121.074
**

$116.42
$110.20
AL 19,200 $117-126 $111-117 $102-1095 $108-116 $101-108 $89-995
TN* 14,000 $121.21 $114.04 $107.78 $110.74 $103.97 $98.974
NE 12,100 $141.95 $122.182 $123.27 $128.20 $120.944 $116.91
FL* 11,600 $100-120 $98-106 $90-103 $90-112 $93-103 $94-1044
MS* 10,500 $115-1251 $105-115 $100-1154 $105-1101 $95-105 $90-954
GA*(***) 10,200 $105-129 $100-120 $95-1036 $100-122 $92-110 $90-1074
KS 9,300 $132.24 $126.15 $119.85 $124.08 $115.67 $112.36
AR 9,000 $122.71 $114.69 $109.34 $111.54 106.31 $101.03
LAND 8,000 $105-125 $103-1202 ** $100-116 $98-1182 **
IA 7,600 $138.82 $134.80 $126.01 $129.09 $120.72 $118.20
Carolinas* 6,900 $102.50-125 $100-1173 $90-1085 $100-112 $86-106.50 $76-101.505
WY* 5,500 $136.43 $130.512 $119.13 $125.25 $119.162 $111.686
VA 5,200 $125.25 $118.52 $113.72 $110.82 $105.26 $102.15
CO 4,700 $134.26 $123.69 $121.44 $123.66 $122.812 $112.51
WA* 2,700 ** $118.292 $102.76 $111.24 $107.992 $98.61
NM 2,100 $122.05 $117.532 ** ** $111.572 **
MT 1,800 $135.57 $124.342 ** ** $119.232 $108.16

* 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.


Contact
Questions & Comments
Please send questions to:

Wes Ishmael, Contributing Editor, BEEF Stocker Trends, at wesleysink@aol.com

Joe Roybal, Editor, BEEF magazine, at jroybal@beef-mag.com



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