News Update

News Update
Feb. 7, 2006

Strong Profits Lead to Herd Expansion

Cow-calf producers responded to another year of record-high calf prices and continued to expand beef cow and replacement heifer numbers during 2005, Cattle-Fax reported last week. Despite the limited beef exports and one of the largest net beef supplies on record, prices for fed cattle, feeder cattle and calves were record-high during 2005.

The organization reports that, during 2005, the U.S. exported about 700 million pounds (lb.) of beef cuts compared to 415 million lb. in 2004 and 2.5 billion lb. in 2003. Mexico accounted for about two-thirds of 2005 beef exports.

Beef imports during 2005 were near-record and totaled about 3.6 billion lb. The largest increases in imports came from Canada and Uruguay.

According to Cattle-Fax, cattlemen should expect slightly lower prices for fed cattle during 2006, averaging $85 to $87. Fed cattle prices are expected to range from the mid-$90s at the spring highs and have risk back into the upper $70s at the summer lows. Feeder cattle prices are expected to average between $106 and $108 during 2006, which is $2 to $4 lower than 2005 levels. Prices are likely to trade in a fairly normal seasonal pattern and range from around $105 at the spring lows to near $115 or better at the highs. Calf prices are projected to trade in a range of $115 to $135 during the course of the year and average about $125 during 2006. Larger net beef supplies, increased cattle harvest and larger beef production will force prices lower during the year, compared to records set during 2005.

Cattle feeders, stocker operators, backgrounders and cow-calf producers should all experience slimmer operating margins during 2006 due to the larger available supplies. Market cow and breeding cattle prices are expected to be mostly steady during 2006. However, conditions could change if the drought persists in the Southern Plains.

Total cattle numbers increased nearly 2% during 2005 and totaled 97.1 million head on Jan. 1, 2006. Beef cow numbers increased for the second consecutive year and totaled 33.25 million head on Jan. 1, 2006 — up 330,000 head from a year earlier. Cattle harvest and beef production were about even with levels from a year ago. Steer and heifer harvest totaled 27.0 million head in 2005, while beef production totaled 24.6 billion lb. and was one of the smallest totals in the past 15 years. Fed cattle harvest during 2006 is expected to increase about 850,000 head due to larger on-feed totals and slightly larger inventory levels. Beef production for the year is expected to increase by about 1 billion lb. in 2006. Net beef supplies for the year are expected to increase during the year and be near record as increased market access and larger beef exports are expected to offset about half of the increase in domestic beef production.

— Release provided by Cattle-Fax.

ORIgen to Sponsor NACC

It’s hard to produce the highest value Angus cattle in the country without the proper genetics. Managers of Certified Angus Beef LLC (CAB)-licensed feedlots actively seek the kind of cattle that can do it all. Such cattle make money on the ranch, in the feedlot and in the food supply chain. Such cattle can dominate the National Angus Carcass Challenge (NACC).

That’s why ORIgen Inc. has joined the team of corporate sponsors in the 2006 NACC.

ORIgen will do a lot as sponsor, ORIgen Director of Marketing Turk Stovall says. “Besides cash to fund the contest, we’ll award $1,000 in semen credit to the NACC grand champion, $500 to the steer and heifer champion pens and $250 to each reserve champion pen,” he explains. “What’s more, we’re putting another $3,500 on the line, awarding from $1,500 to $500 in additional credit if at least one calf in any of those top five entries is sired by ORIgen seedstock partner genetics.”

The NACC aims to provide a fun, educational, and competitive carcass data contest for Angus producers, says contest coordinator Mark McCully, CAB supply development director. “It will expand their awareness of quality beef production, proper management and health practices, as well as the profit potential in networking.”

Other NACC sponsors joining forces to help producers discover the value in their Angus cattle include Allflex USA, Alltech, CAB, Drovers magazine, Merial and the American Angus Association’s AngusSource^SMprogram.

The NACC ranks carcass values of all pens, and winners are determined by placing harvest data on a fixed value contest grid.

For more information on entering the 2006 NACC, visit www.cabpartners.com or contact McCully at (330) 345-2333 or mmccully@certifiedangusbeef.com.

Cattle Industry Convention Coverage Online

Did you miss the nation’s largest cattle industry meeting last week? Visit www.4cattlemen.com for Angus Productions Inc.’s (API’s) online coverage of the 2006 Cattle Industry Annual Convention and Trade Show, which hosted approximately 5,000 cattlemen Feb. 1-4 at the Colorado Convention Center in Denver, Colo.

The site features synopses of the popular Cattlemen’s College®, sponsored by Pfizer; summaries of committee and subcommittee meetings; and coverage of award winners and trade show highlights.

Themed “Cowboy Up!” the convention featured joint and individual meetings by five industry organizations, including the National Cattlemen’s Beef Association (NCBA), the Cattlemen’s Beef Promotion and Research Board (CBB), the American National CattleWomen Inc. (ANCW), Cattle-Fax and the National Cattlemen’s Foundation (NCF).

Go to www.4cattlemen.com for more.

— compiled by Crystal Albers, Angus Productions Inc.