News  Update
Jan. 20, 2011

National Western Angus Bull Sale Draws Crowd

Angus enthusiasts consigned 27 bulls to the 2011 National Western Angus Bull Sale, Jan. 12 in Denver, Colo. The annual sale, which is the only sale managed by the American Angus Association, grossed more than $186,000 and averaged $6,917. A panel of three judges evaluated the bulls and selected division and overall champions.

A complete list of show and sale results is posted online at www.angus.org.

NCBA Sets 2011 Policy Priorities

The National Cattlemen’s Beef Association (NCBA) set 2011 policy priorities ahead of the 2011 Cattle Industry Convention and NCBA Tradeshow scheduled for Feb. 2-5 in Denver, Colo. According to NCBA Vice President of Government Affairs Colin Woodall, NCBA’s policy staff in Washington, D.C., identified five major priorities for the organization that will be discussed in great detail during the annual gathering of U.S. cattlemen and women. Woodall said the five priories are trade; transportation; environment; competition; and healthy herd — cattle and consumers. The all encompassing theme for 2011 is sustainability.

“The days of allowing others to define sustainability for this industry are over,” Woodall said. “We will discuss these five priorities at the upcoming convention and determine how we can develop policies that ultimately sustain the future of this industry for generations to come. Our five priorities are critical to [the] sustainability, profitability and longevity of the beef industry.”

Woodall said U.S. beef exports were near record levels in 2010, a trend he said is likely to continue in 2011. He said the signs are in place to suggest another strong year for beef trade but emphasized the importance of ratifying pending free trade agreements and pursuing additional opportunities for U.S. beef.

“Our members need to come to convention very optimistic about the future of this industry. Here we are sitting on near record prices and mega potential in the United States and in the global marketplace,” said Woodall. “Congress needs to ratify the pending trade agreements as quickly as possible.”

When it comes to transportation, Woodall said NCBA is focused on making transportation more efficient for cattle producers by passing policy that makes weight limits the same in all states.

Environmental issues will continue to be at the forefront of policy priorities, according to Woodall. He said many regulations from the Environmental Protection Agency (EPA) and, most recently, the Department of the Interior (DOI), will regulate cattle producers out of business without sound scientific justification.

Competition, Woodall said, is multifaceted but the timeliest component of this policy priority is the U.S. Department of Agriculture (USDA) Grain Inspection, Packers and Stockyards Administration (GIPSA) proposed rule on livestock marketing that will be, according to Woodall, the most invasive example of government overreach in the history of the beef industry.

In regards to the healthy herd priority, Woodall said the focus will be food safety, nutrition, disease management and the judicious use of antibiotics.

When we talk about sustainability, we need to focus on ways to make the industry better by working with farmers and ranchers to do what’s best for the land, consumers, animal well-being and more,” said Woodall. “There are some that like to pass blame to farmers and ranchers for a whole slew of issues. These people are out of touch and need to realize that sustainability is only attainable by enabling America’s farmers and ranchers — not by stifling their ability to do their job.”

— Release by NCBA.

Current Cattle Prices Not Likely to Fizzle Quickly

A number of producers seem to be feeling a bit of disbelief when it comes to current cattle markets, worrying about a vague sense that there is another shoe to fall.

“Such feelings are understandable given everything the cattle industry has been through in the past several years, combined with the amount of volatility in most input and output markets,” said Derrell Peel, Oklahoma State University (OSU) Cooperative Extension livestock marketing specialist.

Feeder and fed-cattle prices are at or near all-time highs and are poised to keep moving higher. Both feeder and live cattle futures suggest that higher prices are yet to come.

“It is easy to remember corn and wheat markets in 2008, which soared to astronomical heights for a brief period of time,” Peel said. “Are cattle markets in the same situation, set for a wild but short-lived ride into the stratosphere? Producers just don’t know; and that is causing some concern.”

Peel said that the beef industry has never been in a situation exactly like it is now. However, when the factors that put the industry in the current situation are considered, there is good reason to believe current price structures are not a flash in the pan that will fizzle quickly.

“Unlike grain markets in 2008, cattle markets are not reacting merely to the short-run impacts of market shocks,” he said. “There are numerous factors at work, most of which are long-term in nature and will persist for the foreseeable future. Although the phrase ‘perfect storm’ is overused, it may apply to the 2011 cattle market situation.”

The underlying supply situation that is the major driving factor has been developing since the early 2000s, when drought conditions across a significant portion of the United States extended the last major cyclical herd liquidation.

“Bovine Spongiform Encephalopathy (BSE) shocks in 2003 pushed the industry to new levels of intensity with tight feeder supplies offset by placing ever younger and lighter cattle into feedlots,” Peel said. “This reaction worked well as long as corn was cheap.”

By 2004, prices had reached a level that resulted in limited herd expansion in 2004 and 2005. In 2006, the world marketplace changed with grain prices jumping to new levels, which have continued fundamentally higher and provoked long-term beef industry adjustments that continue to this day.

Peel said the loss of profitability caused by high and volatile input prices since late 2006 also prompted additional liquidation, which has contributed to today’s extremely tight cattle inventory numbers.

“The point is that there are some very solid reasons why we are seeing record cattle prices and still have expectations for even higher prices,” he said. “Limited cattle numbers, high grain prices that temper carcass weights and the need to reduce heifer and cow slaughter all suggest that supplies will tighten significantly in 2011 compared to recent years.”

Furthermore, a continuation of strong export demand and indications of recovery in domestic beef demand will allow cattle and beef prices to move higher. How high? Nobody really knows, cautions Peel, but there are likely to be some tipoffs that producers and others in the beef industry can watch.

“The key is demand and just how much higher prices can be supported,” he said. “As is typical, the market will probably overshoot at some point and pull back a bit to reveal what the top really is.”

It does not appear that the beef industry is close to that level yet.

“Even when we do, we will likely stay at historically high levels for some time,” Peel said. “The situation that led us to this point has been a decade in the making and will not unravel very quickly.”

— Release by OSU Cooperative Extension.

2011 Beef Feedlot Roundtables at Three Locations in February

Beef feedlot managers, owners, employees and others in the industry will learn the latest in feedlot health, environment, economics and research at the 2011 Beef Feedlot Roundtables Feb. 8-10 in West Point, Lexington and Bridgeport, Neb.

The University of Nebraska-Lincoln (UNL) Extension roundtables will be offered Feb. 8 at the Nielsen Community Center in West Point, Feb. 9 at the Holiday Inn Express in Lexington and Feb. 10 at the Prairie Winds Community Center in Bridgeport.

Registration is from 8-8:30 a.m. with introduction and welcome at 8:30 a.m. by local extension personnel.

University and industry representatives will speak on feedlot health and environment topics, which include a feedlot school for 2011, managing cattle comfort, responsible antibiotic use and the CAFO rule.

The Nebraska Beef Council will give an update on new beef products and sponsor lunch.

Feedlot economics and research topics include feeding options with more expensive corn, sulfur and distillers’ grains and feedlot industry market structure and value-based pricing. The program will conclude with a research update and will adjourn by 4 p.m.

Preregistration is available by phone, fax, e-mail or mail and is requested by Feb. 3. Cost is $25 and will be accepted with a preregistration at the door. Cost for those who have not preregistered will be $40. For more information or a registration form contact Galen Erickson at C220 Animal Science, P.O. Box 830908, Lincoln, NE 68583-0908, phone 402-472-6402, fax 402-472-6362 or e-mail gerickson4@unl.edu.

— Release by UNL Extension.

— Compiled by Mathew Elliott, assistant editor, Angus Productions Inc.