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News and views on stocker segment issues from BEEF magazine.
December 5, 2006 A Prism Business Media Publication
ISSUE CONTENTS
South Korea Continues To Frustrate

Welcome to Winter

Distiller's Grain Cautions

Getting And Keeping Employees

The OSU Stocker Receiving Management Conference & The Mid-South Stocker Conference

Prices Search For Stability

USDA's Bruce Knight On Voluntary NAIS

Questions & Comments


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


News
South Korea Continues To Frustrate
First, South Korean officials examined the first shipment of beef from the U.S. for more than a month before banning it because they found some miniscule bone fragments. Then on Friday, South Korea refused the second shipment -- this from a different company -- on the same grounds after about a week's worth of inspection.

"The ongoing saga to regain our lost export opportunities in South Korea has reached a new and unjustified road block with Korea's recent rejection of the first two shipments of U.S. beef to reach its coast," said representatives of the National Cattlemen's Beef Association (NCBA) last week. "With Korea's promise to resume imports of U.S. boneless beef, it appeared we were making progress. However, it's now clear these were empty promises, as South Korea simply refuses to play by the rules. Their partial reopening has been an uphill battle since the beginning of the year and the recent shipment rejections due to miniscule bone fragments is simply the last straw."

With that in mind, NCBA president, Mike John, sent a letter to President Bush asking his help in resolving the matter. NCBA is asking its members to write letters to the president along the same lines.



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Weather And Crops
Welcome to Winter
As much as 20 inches of snow last week slowed cattle trade and stymied the efforts of some farmers still trying to finish harvest.

"The hardest hit area stretched from the Texas panhandle to Illinois," say Ag Marketing Service reporters.

For the week ending Nov. 25, according to National Ag Statistics Service (NASS).
  • Corn -- 97% is harvested, which is 2% behind last year and 1% behind the five-year average. Harvest was nearly complete in all regions except the northern Corn Belt and Ohio River Valley.
  • Winter Wheat -- 94% of the crop has emerged, 1% ahead of last year but the same as the five-year average. Emergence was ahead of normal in most areas, but trailed behind in the eastern Corn Belt due to delayed planting. Indiana's crop was over a week behind normal, while Ohio's was two weeks behind and Michigan's nearly four weeks behind. 53% is rated good or excellent, compared to 52% at the same time last year; condition continues to decline.
  • Sorghum -- 94% has been harvested, compared to 95% last year and 92% for average. Harvest advanced 20 points in Colorado but was still behind normal. In all remaining States, however, progress was at or ahead of the normal pace.



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Issues
Distiller's Grain Cautions
Though distiller's grain (DG) can be a valuable, cost-effective component of growing rations, Chris Reinhardt, a Kansas State University feedlot specialist, cautions producers, "The phosphorus content (about 0.8-0.9%) of DG may increase the required calcium content in order to maintain a proper calcium to phosphorus ratio. Excess phosphorus also will result in increased phosphorus excretion in the manure and the associated need to dispose of this element. Excessive sulfur content (about .5-1.2%) can limit the potential use of DG due to mineral imbalances, health problems, reduced intake and possibly death."

Further, he explains, "The fat content of DG is beneficial to growing and finishing cattle as a concentrated energy source; but excessive fat in the diet of forage-fed animals can reduce forage digestibility, resulting in lower net energy consumption and lost body condition."

You can find more pros and cons in the article Reinhardt penned for the Kansas Livestock Association at www.kla.org/PDFS/Newsletter%2011-17-06.pdf.

Incidentally, Reinhardt also provided research to Certified Angus Beef, LLC (CAB) last summer for a project examining the effect of popular feeding trends on carcass quality. That research showed a 20-point drop in marbling on a 1,000-point scale, when cattle were fed a diet of 30% or more DG, compared to feeding them none.

"That may not sound like much of a drop, but it is significant, especially when grid premiums are on the line," says Larry Corah, CAB vice president. "For producers trying to hit a high-quality target, like the Certified Angus Beef(R) brand, this is one of dozens of little things that can add up."

According to Corah, distillers grains are commonly fed at 10% to 40% of feedlot diets, on a dry-matter basis.

You can find more out about DG in the CAB project at www.cabpartners.com/news/press/wp_feed_effect_080206.pdf.


Getting And Keeping Employees
"It's a challenge for rural employers to find employees with the skill sets they need," says Sarah Fogleman, Kansas State University Extension economist and a nationally recognized expert in agriculture human resources.

On the other hand, she says, "The economist in me says there's never a labor shortage, just too low of a wage and compensation package."

The truth probably lies somewhere in between.

Fogleman explains some cattle operations are finding success looking for help from non-traditional directions. Teachers for summer help leap to mind, as does a collection of part-time retirees who add up to a full-time position. A glaring example of this is a dairy in upstate New York whose nursery calf manager is a retired nurse who spent her career in the neonatal intensive care unit of a large hospital in New York City. She wanted to return to the country she remembered on her grandparent's farm. Suffice it to say, she can tell a sick one.

It also doesn't hurt to be what Fogleman terms an employer of choice.

If someone came through town and stopped at the Gas N' Guzzle on the highway, or the local restaurant, and asked if there was good place around town to work, would your operation be one of the handful of names mentioned?

"Brag about how you take care of employees. Offer school tours. Support the auction at the county fair," says Fogleman. "Do those things not only out of civic responsibility and pride, but also to become recognized not only as a farm or ranch in the community but as an employer in the community."

Still, much of the game comes down to personality. As Fogleman says, "Some employees will always be able to find people who want to work with them and some others will always struggle."

The Best Defense...
Once you've got them rounded up, Fogleman says, "The best thing employers can do -- and you can take this to the bank -- is calculate the value of non-cash benefits employees receive. Do it periodically, be it once a month or once a quarter. And send it home with employees so the spouses see it, too."

It's too easy for a couple of extra bucks per hour somewhere else to look like a better deal. Fogelman has had more than one employer tell her about folks who left for a higher wage, and then wanted their job back in a few months because they figured out they were money ahead because of the benefits they'd been receiving.

"That's not a compensation problem, that's a communication problem," explains Fogleman.

For the record, University of California research sums up employee wage expectations this way: They expect wages to cover basic living expenses, keep up with inflation, and to provide some funds for savings or recreation. Employees also expect wages to increase over time.

"The success of compensation packages isn't measured by the dollar cost to the employer. The success of a compensation package is measured in how difficult it would be to duplicate those same benefits from a competing employer," explains Fogleman. "This refers not just to cash wages but also to direct and indirect benefits, including such items as flexibility in scheduling or working conditions.

"So, step one for any employer who is trying to create a competitive compensation package is to develop an understanding of what their employees need. Step two is to gain an understanding of what competing employers are currently offering."

Whether perks and bonuses are as simple as pizza and suds when a particular goal has been achieved, or as elaborate as a percentage of the value of calves weaned past a target goal, Fogleman emphasizes bonuses should be just that.

"A bonus should not be what employees bank on to make a living," says Fogleman. "Wages should provide the living."

You can find more detail in the November 2006 BEEF story, "And All the Beef You Can Eat..."



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Events
The OSU Stocker Receiving Management Conference & The Mid-South Stocker Conference
Jan. 25 -- 2007 OSU Stocker Receiving Management Conference, Enid, OK. Registration is $25. Speakers include Tom Noffsinger, Dan Thomson, Mike Apley, David Anderson, David Lalman, Clint Krehbiel, D.L. Step. For more info, contact, Greg Highfill at 580-237-7677 or greg.highfill@okstate.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.


Markets
Prices Search For Stability
"Even though this week's trend was mostly higher than two weeks ago, the general mood of the feeder-cattle sector isn't as positive as it was during the holiday week," say USDA Ag Marketing Service (AMS) analysts. "The feeder cattle market seems to be struggling for a sense of direction or some kind of confirmation that we've found solid bottom-side support."

For the week, AMS reports feeder and stocker cattle selling for mostly steady to $3 higher than two weeks ago (the holiday week); these categories were mostly steady to $3 down in the Southeast. Fed cattle lost some ground, too -- $1-$2 on live sales (mostly $86) and $3-$4 in the beef ($135).

According to AMS, "Most reporting areas have indicated that buyers have become very selective, resulting in erratic price trends and uneven trading. This fall's lower price levels have allowed those buyers that are in the market to go after exactly what they want, instead of settling for the class of cattle that appears to have the best value."

The summary below reflects the week ended Dec. 1 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.
MO 44,300 $111.01 $101.91 $100.97 $99.40 $93.63 $92.67
KY* 31,000 $996-109 $89-99 $86-965 $83-93 $80-903 $76-865
TX 20,300 $106.37 $96.39 $102.32 $97.29 $94.59 $90.67
Dakotas 19,000
South Dakota
North Dakota

$116.76
$117.50

$110.822
$104.44

$101.357
$97.66

$104.50
$103.89

$102.132
$96.26

$94.616
$93.75
OK 17,800 $115.80 $103.06 $103.33 $98.14 $87.97 $90.82
AL 17,500 $102-109 $90-1003 ** $89-97 $80-883 **
IA 15,000 $111.65 $94.964 $99.79 $103.02 $101.142 $99.76
NE 14,800 $124.19 $118.112 $105.23 $109.67 $105.372 **
TN* 12,600 $97.38 $90.91 $87.80 $86.04 $832.09 $81.47
AR 10,100 $99-109 $88-983 $83-935 $84-941 $79-893 $79-895
GA*(***) 9,300 $85-105 $80-93 $75-87 $78-96 $73-90 $78-82
FL* 9,000 $82-103 $78-88 $70-75 $80-95 $75-87 $72-904
Carolinas* 8,100 $82-110 $75-91.503 $75-875 $72-88.50 $70-853 $65-765
MS 7,100 $90-1001 $80-903 $74-805 $80-901 $73-803 **
KS 6,700 $113.74 $111.11 $103.68 $101.32 $95.60 $94.75
WY 6,600 $118.63 $109.062 ** $101.68 $95.922 **
LA(ND) 6,500 $88-106 $88-1032 ** $81-101 $81-1002 **
CO 4,700 $106.72 $97.824 $93.417 $101.58 $94.17 $88.16
NM 3,900 $107.92 $96.43 $91.164 $97.06 $89.46 $81.52
WA* 3,100 $103.42 $95.942 ** $88.59 $88.712 $83.367
VA 2,600 $106.292 $97.06 $91.96 $93.73 $83.08 $88.264
MT 1,500 $112.63 $106.082 ** $98.61 $94.102 **

* 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.


Readers Write
USDA's Bruce Knight On Voluntary NAIS
I take exception to your recent characterization that USDA's commitment to keeping the National Animal ID program voluntary somehow constitutes a lack of resolve on our part to make this program a success ("NAIS Is Dead," Nov. 28 BEEF Stocker Trends). I also disagree with the notion that USDA quietly announced this decision via release of our new draft User Guide for producers.

I've gone on the record numerous times to explain why it makes good sense to keep the Animal ID program voluntary at the federal level. Most importantly, around the country, producers -- the backbone of the system -- have told USDA their preference is a voluntary system. It's their livelihood, their business information and, quite simply, it should be their choice to participate.

We're actively promoting the system and encouraging producers all across the country to register their premises. The community outreach event you mention in your story was designed for just this purpose -- sitting down with our state and industry partners to discuss the system and new communications tools designed to help them increase premises registration totals across the country. The number of premises registered across the country stands today at more than 333,000 and continues to rise each week.

The recently released draft User Guide is another key component in this effort. Producers interested in animal ID now have a comprehensive guide that explains what the system is and how it can help protect their operations and communities from the potentially devastating effects of serious animal disease events. Releasing the guide for public comment provides a way for producers to send us their insights into the program, while also helping them make informed decisions regarding their participation.

Contrary to your report of the animal ID system's demise, the program is gaining traction across the country. The best way to enhance its momentum -- and ultimate success -- is to keep it voluntary at the federal level; inform producers of the system's many benefits; and, at the end of the day, let them make the right decision for their operations and their livelihoods.
Bruce I. Knight
USDA Under Secretary
Marketing and Regulatory Programs


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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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.