News Update
March 4, 2011

New Guidance Practices in Food Safety Announced at Annual Beef Summit

New guidance practices for sampling, lotting and testing beef products were released this week at the ninth annual Beef Industry Food Safety Summit, hosted by the Beef Industry Food Safety Council (BIFSCo). The new “Guidance Document for Sampling and Lotting of Beef Products and Sample Analysis for Pathogens” will assist beef processing companies in implementing proven pathogen-testing programs as part of a multiple-hurdle food safety system aimed at advancing beef safety.

“Our number one goal is to eliminate pathogens from the beef supply by placing multiple hurdles along the beef production chain. Product testing is a way to validate that the multiple hurdles are working to reduce the incidence of potential pathogens in the food supply,” said James Reagan, chairman of BIFSCo and senior vice president of research, education and innovation for the National Cattlemen’s Beef Association (NCBA), a contractor to the Beef Checkoff Program. “This new guidance document brings together the industry’s best knowledge coupled with years of experience in developing efficient and accurate sampling, lotting and pathogen analysis systems. Effective and accurate sampling, lotting and testing schemes are essential in establishing sound food safety programs for the beef industry.”

The new guidelines plainly explain the proper procedures and methods that should be used to sample, lot and analyze different types of beef products, such as whole-muscle cuts, trimmings destined for ground beef production, as well as frozen ground beef. While the guidelines are voluntary, they simplify the process for companies that are revising their current sampling programs or creating new ones. They also identify the expectations and issues that should be considered when developing a program for pathogen testing.

The industry’s “best practices,” developed through BIFSCo, serve as a roadmap for implementing the most current safety knowledge to optimize safety programs and are available online, free of charge, to beef processors, packers, grinders and others involved in advancing beef safety at www.bifsco.org.

BIFSCo is funded in part by the beef checkoff. The beef producers, through the beef checkoff, have invested more than $29 million in beef safety since 1993. 

— Release by NCBA.

Beef Cattle Prices Continue Surge

Tight supplies and strong demand propelled fed-cattle values into another record-breaking week Feb. 28-March 4, but cattle feeders’ profits are not as lofty as some might expect, according to Kansas State University (K-State) agricultural economist Glynn Tonsor.

Average prices for cattle in U.S. feedlots hit $112-$113 per hundredweight (cwt.) March 2 — a $1-$2 increase compared to the previous week’s record-setting prices, according to the U.S. Department of Agriculture (USDA). That was $19-$20 per cwt. higher than the average price of about $93 a year ago and about $25 per cwt. higher than the five-year average (2005-2009).

“Fed-cattle prices are expected to generally increase throughout this year, but profits won’t necessarily rise or set historic records because of higher corn and feeder cattle prices,” said Tonsor, who spoke at K-State’s Cattlemen’s Day in Manhattan March 4.

Based on CME live cattle futures, Tonsor said second-quarter prices are expected to average about $115 per cwt., third-quarter expectations are around $117, and fourth-quarter prices are projected to average $119 per cwt.

With regard to beef supplies, Tonsor, who is a livestock marketing specialist with K-State Research and Extension, noted that many cow-calf producers will likely continue to respond to high prices by selling off cows. The shrinking cow herd ensures beef supplies will continue to tighten for months to come.

“That part of the support in (cattle) prices will not change for at least another 18 months as 2013 appears to be the earliest that will change in a national, aggregate sense,” he said.

Tonsor said despite the historically high prices feedyards are paying for cattle, some are willing to run at a loss as long as they cover their variable expenses. Both feedyards and slaughter plants have an over-capacity situation right now, which is helping boost light-weight steer prices beyond some breakeven calculations, he added.

Cattle prices also are being boosted by strong demand from U.S. as well as overseas buyers.

“Exports were strong in 2010 and there is every current indication that will continue throughout this year,” the economist said, adding that the weak U.S. dollar, compared with other currencies, has benefitted the export scenario.

In addition, the U.S. is importing less beef than it has in recent years, he added, noting that beef and veal imports in 2010 were below the previous year’s number and below the most recent five-year average.

— Release by Mary Lou Peter for K-State Research & Extension.

USDA Data Illustrates the Supply Picture

The USDA on Jan. 28 estimated the total number of cattle and calves in the United States as of Jan. 1, 2011, at 92.6 million head, 1% below 93.9 million on Jan. 1, 2010. That was the lowest Jan. 1 inventory of all cattle and calves since the 91.2 million on hand in 1958.

In the same report, the number of all cows and heifers that have calved was pegged at 40.0 million, down 1% from the 40.5 million on Jan. 1, 2010. Beef cows were tabbed at 30.9 million, down 2% from a year earlier. Milk cows were reported at 9.1 million head, up 1% from Jan. 1, 2010.

In addition, all heifers 500 pounds (lb.) and more were estimated at 19.5 million, down 1%, and beef replacement heifers were reported at 5.2 million head, down 5% from a year earlier.

The number of steers weighing 500 lb. and more as of Jan. 1, 2011, were down 1% at 16.4 million head and calves under 500 lb. were down 3% at 14.5 million.

The USDA report estimated the 2010 calf crop at 35.7 million head, down 1% from 2009 and the smallest calf crop since the 34.9 million born during 1950. Calves born during the first half of 2010 were estimated at 25.9 million, down 1% from 2009.

Grain Prices, Other Factors Play Prominent Role in Cattle Markets

Volatile grain prices are playing a role in cattle producers’ reluctance to expand herds, K-State’s Glynn Tonsor said.

“New crop December corn futures have traded up to $6.20 (per bushel) in recent weeks and with any threat to this summer’s corn crop we could trade at least at those levels or higher,” said Dan O’Brien, K-State Extension ag economist. “We’re on the razor’s edge in our projected ending stocks for the 2010-2011 marketing year, and current projections from USDA are for the tight supply to continue into the next marketing year.”

When conditions are profitable and are projected to stay that way in cattle production, it typically means producers expand their herds, Tonsor said. A current, possibly short-lived oddity about the current situation is that producers have been enticed to sell at the higher-than-usual prices rather than retain cattle for future expansion.

That might lead one to wonder, Tonsor said, if cow-calf producers are strapped for cash or if the average age of producers and possible retirement plans are coming into play. Furthermore, Tonsor asked, “Is heightened uncertainty at play? If $50-per-head expected profit used to normally trigger expansion, what does it take today?”

He outlined a host of other issues producers should watch beyond today’s immediate supply and demand situation, including animal welfare issues: “Social pressures are here to stay. Oprah’s recent show talked more about animal welfare than food safety, and cattle are not immune.” He referred to a recent segment on the Oprah Winfrey Show that dealt with animal welfare issues.

Tonsor cited recent studies suggesting that meat expenditures reallocate to non-meat purchases in response to increasing media attention to the topic of animal welfare.

Other areas to be mindful of include the comparative state of national animal identity and traceability programs with other global meat exporters and associated implications on current and future trade negotiations.

“South Korea, as of December 2010, ruled that all imported meat be traceable,” he said, adding that Canada has put into place a national program that facilitates age verification.

— Release by Mary Lou Peter for K-State Research & Extension.

Cuba a Viable Market for Texas Agriculture

U.S. food, agriculture and forestry exports to Cuba reached $361 million in 2010, and while down 31% from the previous year, Cuba remains a viable market for Texas, according to a Texas AgriLife Extension Service economist.

Parr Rosson said that Texas businesses are well-positioned to compete in Cuba because of the quality of products and proximity to the market. In some years, the U.S. supplies the majority of food imported by Cuba, he said.

Corn, wheat, rice, meat, poultry, cotton and forest products have a potential market in Cuba.

“Processed foods have made inroads in the travel and tourism sector, resulting in more exports in some years,” Rosson said. “New travel rules have made it easier for Texas producers and food exporters to go to Cuba on business. Increased demand by international travelers and the Cuban population will require more products to enter the country and create more opportunities for those who produce agricultural goods in Texas and across the country.”

Rosson and other experts will be discussing these trends and other issues at a March 31 workshop in Houston. The workshop will take place at 16925 Northchase Drive and is co-sponsored by the Texas-Cuba Trade Alliance, the Greater Houston Partnership, AgriLife Extension and the International Transportation Management Association.

“The Texas-Cuba Trade Alliance has experts to answer most questions about exporting to Cuba,” Rosson said. “For the first time, the workshop will examine oil-spill mitigation and safety, should more drilling occur off Cuba’s coast.”

Rosson said the workshop will help Texas businesses, including farmers and ranchers, learn how to export food, forestry and agricultural goods to Cuba.

“Many may not know that it’s now legal to export food, agricultural goods, lumber and medical products to Cuba,” Rosson said. “This workshop will present a broad view on how to do business with Cuba, new U.S. travel policy and what sectors are experiencing export growth.”

Topics and speakers include market potential in Cuba, Jorge Bolanos, chief, Cuban Interests Section; licensing and doing business with Cuba, Cynthia Thomas, president, TriDimension Strategies; new developments in U.S. Cuba policy, presented by a Port of Houston representative; and oil drilling safety issues, Lee Hunt, president, International Association of Drilling Contractors.

Ernest Bezdek, director of trade development with the Port of Beaumont, will provide an overview of trade missions to Cuba during lunch. Registration for both the workshop and luncheon is $65 if paid by March 14, and $80 afterwards.

For more information, contact Rosson at 979-845-3070 or e-mail prosson@tamu.edu. Information is also available at http://www.tcta.us/ .

— Release by Blair Fannin for Texas A&M AgriLife Communications.

— Compiled by Shauna Rose Hermel, editor, Angus Productions Inc.