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Spring Beef Prices Rally Feds $2-3 The National Livestock Weekly April 25, 2005 • Vol. 84, No. 28 “The Industry’s Largest Weekly Circulation” www.wlj.net • E-mail: [email protected] • [email protected] • [email protected] A Crow Publication Livestock bills unveiled in Congress — Packer ownership and control of livestock has once On April 15, U.S. Sens. Ken ban resurfaces. again become a front burner issue Salazar, D-CO, and Chuck Grass- in Congress. In addition, several ley, R-IA, introduced S 818, a bill — Marking of imported members of the House of Repre- that would keep packers from own- Easing of ‘downer’ cattle proposed. sentatives stoked the country-of- ing live animals for more than sev- origin labeling fight when they in- en business days prior to slaughter. ban weighed by USDA After being a secondary item of troduced a bill that would specifi- Joining as additional Senate spon- The U.S. Department of Agriculture (USDA) discussion over the past year, the cally mark cattle coming in from sors of the bill were Byron Dorgan, idea of banning packer ownership other countries. D-ND; Mark Dayton, D-MN; Mike is looking into the possibility of softening its Enzi, R-WY; Tom Harkin, D-IA; regulation that prevents all non-ambulatory Tim Johnson, D-SD; and John cattle from being processed for human food. Any Thune, R-SD. change in the rule, however, will probably not The legislation, according to happen until after the agency concludes its Salazar representatives, is similar stepped up surveillance program for bovine to the 2002 Farm Bill that was spongiform encephalopathy (BSE). According to Agriculture Secretary Mike Jo- “...the blanket passed by the Senate but over- ban on downer turned because of a lack of support hanns, there is no reason to ban all “downer cattle” from entering the food chain, particu- cattle was in the House of Representatives. financially According to an agriculture is- larly those that are well under the internation- al guideline for minimum risk of being infect- harmful to sues staffer with Salazar’s office, the producers who primary difference in the bill is the ed with BSE. Other USDA officials told WLJ last week that they are particularly looking at have done seven-business-day stipulation nothing wrong.” rather than 14 days that was in younger animals that were injured while be- the 2002 Farm Bill. ing prepared for slaughter. “There was feelings here that “If you’ve got an animal that’s clearly under 30 months of age that two weeks still gave too much op- broke a leg in transit, there is no threat of BSE whatsoever,” Johanns portunity for unfair manipulation said on April 15. “When we get to a point where we’re ready to wrap of the cattle markets, and that sev- up the increased surveillance and decide what next to do, I want to en days minimized that potential,” look at a range of issues.” the spokesperson said. “Everything Early last year USDAprohibited all cattle too sick or injured to walk else in the bill is pretty much the at a processing facilities from being processed for human food, even same as the (2002) Farm Bill ver- if the reason for them being “down” was because they broke limbs or sion, including cooperatives and had some sort of other structural ailment malady unrelated to an ap- smaller processors being exempt parent nervous system disorder. That ban was formalized shortly af- from the ban.” ter the first case of BSE was confirmed in the U.S. in Washington In addition to cooperatives, state on Dec. 23, 2003. processors that have only one pro- In addition to disallowing otherwise healthy animals from enter- cessing facility or process fewer ing the food chain, Johanns said the blanket ban on downer cattle than 120,000 head per year would was financially harmful to producers who have done nothing wrong. be allow to own cattle longer than On the fed cattle side of the equation, a 1,200-pound steer can bring seven business days. about $1,000 on the cash market, compared to approximately $200 Salazar also said the legislation when condemned for being a downer. On the salvage market, the cash does not ban the use of forward See Ban on page 5 See Bills on page 6 Spring beef prices rally feds $2-3 — Taiwan purchases $2 last week compared to the week tal 40-45,000 each by the end of loads one day over the first four positive margins again, with last previous. the week. days of last week, and that was Wednesday’s range being between taking effect. Northern tier trade revved up The most visible bullish market Monday with 298 loads of all type $10-15 per head, and additional — Fear of late spring Wednesday with approximately indicator last week was the $3 jump of product being shipped. gains expected through the end of front-end problems. 45,000 head trading in Nebraska in boxed beef prices last Monday “Product is starting to be pro- the week. Several sources thought at mostly $93-93.50 live, $150 through Thursday. Choice boxed cured for Mother’s Day and in the packer profits late last week might Stronger boxed beef prices, pack- dressed. Southern trade broke loose beef was at $158.36 per cwt as of eastern third of the country the get up to $25 per head. er profits, a projected jump in spring the next day with producers selling noon Thursday, while Select was up amount of disposable income avail- Processing volumes last week beef demand and a $1.50-2 rally in most of their cattle around $94 live, almost $142. Volumes were also able for food during the spring is 10- were stronger than the previous nearby live cattle futures helped out of a range of $93-95.50. Kansas called very good last week as cash 15 percent more than history would few weeks and was resulting in spike cash fed cattle prices mostly and Texas trade was expected to to- traded volume was only under 300 show,” said a Midwestern meat bro- packers needing to come to the ker. “Between the very inclement table for cattle that might be need- weather this winter and gas prices ed for slaughter spots the following deterring any travel plans the past Monday or Tuesday, analysts said. Why is packer a bad word? few months, money has been set Packers slaughtered 475,000 head Most of the antagonism in the Scheifelbein’s roots are in the cattle industry, grow- aside for spring activities, of which of cattle last Monday through beef industry is between cattle ing up on the 20th largest seedstock operation in the picnicking and grilling are popular Thursday, up 13,000 from the same producers and packers. The pro- country. and could be even more so this period the week previous. Analysts ducer feels as if he is being paid Scheifelbein feels packer is considered a bad word year.” were projecting a 600,000 head too little for his cattle and the because packers try to buy cattle as cheap as they In addition, news last week that slaughter week, which would be packer feels as if he is paying too can. Taiwan started allowing U.S. beef the first time in several months. much for cattle. “People hate us for that,” said Scheifelbein. He then back across its borders helped spark Average slaughter weights were boxed beef movement from proces- still up 25-30 pounds compared to Either way, both of these seg- went out into the audience and asked a producer who sors to exporters. Taiwan is allow- last year at this same time. How- SCHEIFELBEIN ments rely on each other to ex- sells cattle what they try to do. When the producer ist in the North American beef ing boneless beef from cattle 30 See Markets on page 11 replied that they try to sell them for as much as they months and younger that were industry, but Tim Schiefelbein, director of cattle can, Scheifelbein replied, “You, dirty rotten son of a processed after April 16. Reports in- procurement for Swift & Company wants produc- gun. I hate you for that.” dicated that the first air shipments ers to understand the bigger picture with this rela- As in any business relationship, Scheifelbein point- of U.S. beef would leave for Tai- tionship. ed out that the seller tries to sell the product for as wan late last week. Before Taiwan’s Scheifelbein spoke to a group of producers and beef much as he can and the buyer tries to buy it for as th ban because of BSE being con- industry members at the 54 annual Montana little as he can. firmed in one cow in Washington Livestock Forum and Nutrition Conference held in “That happens in any system,” he said. Howev- state on Dec. 23, 2003, the Pacific Bozeman, MT, April 19-20. Scheifelbein buys approx- er, Scheifelbein was quick to acknowledge that if he Rim country was the sixth largest imately five million head of cattle a year, which tries to buy cattle too cheaply, then the producer will export destination for U.S. beef. equates to approximately 20,000 head per day. See Packer on page 16 Packers were starting to show INSIDE WLJ Time Sensitive SIMONS — John Simons, pres- STOP LISTINGS — Many GUARDIAN MOVEMENT — An- TRANSGENIC COWS — Re- INDEX ident and CEO of Swift & Com- species are placed on the threat- imal rights activists are proposing searchers are working on meth- (priority handling) pany, Greeley, CO, announced ened or endangered species with- a change in the language of an- ods of altering genes in cattle to Beef Bits .
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