News Update
April 25, 2011

Tune in Tonight for ‘The Sure Champ Angus Hour’

The American Angus Association in partnership with BioZyme Inc. — makers of Sure Champ — will air The Sure Champ Angus Hour tonight at 7 p.m. (CDT) on RFD-TV. The live program will feature three panelists who will discuss show cattle preparation and answer call-in questions from viewers. Click here to read more.

Steak Prices Show Strength of CAB Brand vs. Choice

As cash cattle prices shot up to record highs in March and the futures markets showed incredible strength, consumers were asked to pay record prices for beef. Shaking off worries about the economy, they responded positively.

Ground beef and cuts from the chuck and round led the increase, but middle-meat steaks moved higher, too. Faced with record-high prices for the most expensive cuts, more consumers opted to ensure the eating experience by turning to the Certified Angus Beef® (CAB®) brand.

“As middle-meat prices rose, the CAB/Choice spreads widened,” said industry analyst Julian Leopold of Leopold Foods. He has written the monthly “CAB Market Watch” column for licensees since January 2010, making note of relative prices for USDA Choice and CAB cuts.

Comparing year to year, CAB ribeyes rose 3.2%, from $5.58 per pound (lb.) in March 2010 to $5.76 this March, while the Choice ribeye managed only a 2¢ increase. That amounted to a 40% increase in the CAB/Choice ribeye spread to 56¢ per lb., Leopold noted.

He saw a similar pattern in the price relationships for CAB vs. Choice short loins and tenderloins. “The 16.1% increase in CAB tender prices, at $8.95 vs. $7.71 in March 2010, beat the 15.2% increase in Choice tenders,” Leopold said. “More importantly, the 52¢ CAB/Choice spread for tenderloins was even wider at 33.3%.”

The Iowa-based consultant made news in 2009 with an analysis of the relative wholesale prices for 15 CAB vs. Choice beef cuts, showing demand for CAB outstripped that for Choice for a five-year period that included the recession (http://www.cabpartners.com/news/research/CAB-Brand-Wholesale-Demand-Analysis.pdf).

What do the spring 2011 prices mean?

“Even in this higher-price environment — with record-high cutout prices, abundant grading and weekly increases in beef production — it looks like we’re seeing improved high-end beef demand,” Leopold said. “Can this continue with high-priced gasoline, several global economic uncertainties and widespread unrest in the Middle East? Only time will tell.”

— Release by Certified Angus Beef LLC.

‘Budget Crisis’ is Topic at MU Breimyer Seminar, May 16

“Implications for Agriculture of the Governmental Budget Crisis” will be discussed by economists, academics and political leaders at the University of Missouri (MU) May 16.

The annual Breimyer Seminar will consider the “real and current crisis,” said Ron Plain, MU Extension agricultural economist. “Years of overspending and promises of future retirement and health-care benefits for retired workers have created serious budgetary problems for government.”

Some 14 speakers will tackle the problems facing agriculture, Plain said. Speakers include economists, academics, politicians and farm organization leaders. The program starts at 9:30 a.m. and adjourns at 5 p.m.

“At some point, large reductions in government spending will be unavoidable,” Plain said. “This seminar will look at implications of these potential cuts for Missouri agriculture.”

The seminars were started by Harold Breimyer, who taught agricultural economics at MU after a career at the USDA in Washington, D.C. Tough topics facing agriculture were his favorites.

Breimyer served in USDA starting in the New Deal, which was formed to solve problems of the Great Depression.

Seminars named after him aim to draw diverse ideas on how to solve policy issues. Breimyer believed audience participants as well as scheduled speakers should be heard.

After Breimyer died in 2001, the popularity of the seminars brought about an endowment to continue the discussions.

Advance registration is required, with enrollment limited. The $30 fee includes refreshments and lunch.

To enroll, contact Joyce White, 220 Mumford Hall, MU, Columbia, MO 65211, or email whitej@missouri.edu or call 573-882-6533.

— Release by MU Cooperative Media Group.

Current Cattle Market Provides Producers With Increased ‘Flexibility’

Up is down, north is south and the opposite of what was once true is now a fact when it comes to some key decisions being faced by cattle producers.

“For many years I’ve heard cattle producers say that production is easy and marketing is hard; that has largely reversed itself given today’s record price levels,” said Derrell Peel, Oklahoma State University (OSU) Cooperative Extension livestock marketing specialist. “Most any animal one has to sell these days brings a good value in the beef marketplace.”

The overwhelming recommendation by Peel and his fellow analysts across the nation is for producers to focus on having something to sell and managing production to take advantage of current market opportunities.

“A producer still needs to assess his or her specific operational needs and choose what works best, but it’s pretty wide open,” Peel said. “High cattle prices are no guarantee of profitability, but high prices combined with production flexibility gives an individual beef producer more opportunity to control his or her fate.”

In short, cost of production will be higher and input markets are volatile, so a producer must evaluate input use carefully and be prepared to adjust production practices accordingly.

“Good business sense now means not necessarily doing things the same old way, though in some cases it may mean something as simple as a shift in emphasis,” Peel said.

For example, the value of reducing death loss by one calf is significantly more given today’s high cattle prices. This signals a producer to pay additional attention to his or her operation’s health program, even though such a consideration is always important.

Additionally, high fertilizer and fuel prices make pasture and hay management more important, and high feed cost makes supplement management more critical. Spend a bit of time considering implications of price-related management decisions and aspects tend to line up nicely into a plan of action.

This is not the first time that market signals have encouraged cattle producers to emphasize certain production practices over others. Historically, cattle cycles have signaled the need to focus on maximum cow-calf production during some combination of years and then switched to an emphasis on promoting the need to retain ownership or focus on stocker production.

“The advantage of the current market situation is that there is practically no tradeoff in market incentives,” Peel said. “Today’s market is basically rewarding any type of forage-based production of cattle so it makes little difference if a producer sells weaned calves, retains feeders or runs stockers in place of cows.”

In fact, the market signals that for much of the time in recent years limited feasible stocker systems to a narrow set of parameters — small beginning weights and limited total weight gain — have been replaced by expanded flexibility to choose a wider range of beginning weights, plus there is more opportunity to own cattle longer and take them to greater weights.

“I wouldn’t say there are no marketing challenges but placing an emphasis on productivity, efficiency and production costs should pay the greatest dividends in this unprecedented market environment,” Peel said. “Forage is worth more now. Producers who can grow and manage forage most efficiently and maximize the use of that forage through cattle will benefit the most in today’s marketplace.”

— Release by OSU Extension.

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