News Update
Sept. 4, 2009

Unemployment Rate Hits 9.7%

New figures released Friday morning from the Labor Department show the unemployment rate for August rose to 9.7%, with employers shedding 216,000 net jobs, according to The Washington Post.

The good news, White House Press Secretary Robert Gibbs told media outlets today, is the rate of job loss is declining. According to The Washington Post, economists consider the job loss rate “a more reliable month-to-month barometer of the economy than the unemployment rate.”

Since the beginning of the recession in December 2007, 6.9 million jobs have been lost.

Livestock Report: Lower Beef Cow Harvest Expected

U.S. beef cow harvest seasonally increases into the fall as individual producers make an economic decision as to which animals they will carry over the winter months in order to have a calf the following spring. The decision is informed in part by the current profitability of the operation, expectations for calf prices in the future, as well as expectations for input costs and, therefore, future expected margins. In the last two years, the last point has been an especially important component of the overall equation. Hay shortages and skyrocketing costs significantly affected producer profitability and were part of the reason why we saw an acceleration in U.S. beef cow harvest and a larger-than-normal fall cow run.

Poor pasture conditions cause producers to run through their hay stocks quicker and face the winter with an insufficient supply. In some cases, producers faced the option of buying hay in the open market at staggering costs. This year, however, promises to provide cow-calf operators with some relief. Hay prices are some 25% lower from their peak and are currently below both 2008 and 2007 August levels. Pasture conditions this year have held up much better than in recent years and the latest report from the U.S. Department of Agriculture (USDA) indicated that 52% of all pastures were rated to be in good or excellent condition, compared to 39% the year before and 37% average for the last week of August in the past five years. This is the best pasture condition rating in more than a decade, surpassing even the conditions in 2004. Good pasture conditions and, even more importantly, lower grain prices have pressured the cost of hay lower. Current expectations are for the U.S. corn harvest to be the best one on record, with all time record yields (based on recent private estimates). If that is the case, we could see hay prices drop further and likely remove some of the incentive to continue to liquidate the beef cow herd. To be sure, producers still are far from an environment that would be conducive to a full herd rebuilding, but we should continue to see lower beef cow harvest than in recent years. For the week ending Aug. 22, U.S. beef cow harvest was down 9.8% lower than a year ago but still some 11% higher than the five year average. Dairy cow harvest, on the other hand, remains above year ago levels, in large part due to the second round of the dairy herd retirement program. The program is expected to end soon but there is already talk of a third round.

— From the Chicago Mercantile Exchange’s (CME’s) Sept. 3, “Daily Livestock Report.”

USDA Announces Additional Weight Category for Livestock Indemnity Program

The USDA Farm Service Agency (FSA) today announced it will add an additional weight category to the Livestock Indemnity Program (LIP) for non-adult beef cattle, non-adult dairy cattle and non-adult buffalo/beefalo.

The over 400-pound (lb.) category will be split into two categories, 400 to 799 lb. and 800 lb. or more. This change will ensure that the assigned market values for non-adult beef cattle, non-adult dairy cattle and non-adult buffalo/beefalo over 400 lb. reflect the statutory requirement for the payment to be 75% of the market value for the livestock.

FSA state offices will establish new normal mortality rates for each of the new weight categories covered under LIP and FSA national headquarters will establish average fair market prices for each category.

Eligible losses must have occurred on or after Jan. 1, 2008, and before Oct. 1, 2011.

For more information on LIP and other USDA FSA disaster assistance programs, please visit your FSA county office or www.fsa.usda.gov.

Kansas Angus Field Day Set for Oct. 3

The Kansas Angus Association and Eby Ranch will host a full day of activities during the Kansas Angus Association Field Day Oct. 3 near Emporia, Kan. Field day hosts, sponsors and featured speakers will engage participants to “look to the future” of the Angus and beef industries. A full day of activities beginning at 10 a.m. and ending at 4 p.m. is scheduled and will include ranch tours, cattle displays by area Angus breeders, youth activities, speakers and a Certified Angus Beef® (CAB®) steak lunch.

Lance Zimmerman, Certified Angus Beef LLC, marketing manager/supply development, will lead off the afternoon presentations with “Selling and Supplying the Brand in a Challenging Economy.”

“A New Take on Marketing and Communication” will be presented by Crystal Young, assistant director of public relations and Creative Media coordinator, American Angus Association.

Chief operations officer (COO) for the American Angus Association Bill Bowman will end the day’s educational presentations with “Pulling it All Together: Genomic Enhanced EPDs.”

Eby Ranch has invited three Kansas Angus breeders that are eager to share their programs in preparation for upcoming fall sales to display cattle at the ranch during the field day. In addition, field day sponsors will be setting up booths and providing door prizes.

Angus breeders, beef producers and industry professionals are invited to attend. There is no fee for field day participants; however, preregistration is encouraged and appreciated by Sept. 21. Register online at www.kansasangus.org.

— Adapted from a release provided by the Kansas Angus Association.

— compiled by Crystal Albers, associate editor, Angus Productions Inc.