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The National Livestock Weekly October 13, 2003 • Vol. 82, No.52 “The Industry’s Largest Weekly Circulation” www.wlj.net • E-mail: [email protected] • [email protected] • [email protected] A Crow Publication Record highs, $100 feds sold he bulls didn’t just open Cattle traded in a wide range week before. Formula cattle were and it appeared they were going to $20 per head. the gate for new record with Northern Plains dressed sales priced last Thursday at $143.19 on keep slaughter down in order to Also, the industry is current on Thigh live cattle trade last ranging between $145-157.50 30,000 head, with an average car- prop up price for Select product, of cattle inventories, with the excep- week, they tore up the corrals, ad- dressed and $93-105 live. The $105 cass weight of 781 pounds. which there have been surplus sup- tion of some carryover from the vancing the live fed cattle market was on a group of heifers going to The cause for much of this rally plies. There has also been specu- week ending October 3. That was $5-7 dollars. For the first time ever, an Omaha packer. Southern Plains was attributed to the recent find- lation the industry is running out cited as the primary reason pack- fed cattle traded for over $1.00 a feeders weren’t getting along quite ing of a 23-month-old-Japanese of cattle for packers to slaughter. ers came to the table hard and fast pound. Northern Plains trade ran as well as their northern counter bull that died from a possible new Packer margins found negative early buying cattle at new levels parts, and traded in a range be- strain of BSE. Traders, particu- between mostly $94-98 live, $152- territory last week for the first time last week. tween $89-96. larly speculators at the Chicago in several months. Non-existent Analysts are starting to call the 155 dressed. Southern Plains feed- Trade volume was quite good, Mercantile Exchange (CME), margins are most likely related to ers traded predominantly at the with over 230,000 head selling by thought the Canadian border may October 1 Cattle-on-Feed (CoF) re- $92-93 level, with some trade up to the end of Wednesday’s trade. The experience delays in fresh meat lower slaughter levels. The Pack- port and suggest September mar- $95. The October live cattle contract week before most trade was on Fri- shipments and delay live cattle er Margin Index showed packers ketings will be roughly nine percent had a strong week advancing near- day, which was light. And, all ne- movement. earned a scant twenty cents per over a year ago. Placements are ly $6, with limit up trading of $1.50 gotiated, formula and contract sales On a more fundamental note, head at mid-week based on a $90.98 expected to be up seven to eight everyday through Thursday, clos- made through Wednesday totaled the packing industry cut slaughter break even. However, other ana- percent, with cattle on feed down ing at $95.82 381,700 head, up from 155,500 the two weeks ago to just 653,000 head, lysts were showing packers losing two percent from a year ago. Per- haps the most important number is the number of cattle on feed more Feed ban than 120 days, which is projected compliance Dairy buyout underway to be down 25 percent from last — Causing slump in cull cow market. year. close to 100% According to Chuck Levitt, By Steven D. Vetter Alaron Trading Corp., the nearby By Sarah L. Roen WLJ Editor supply is 16.4 percent below the WLJ Associate Editor While fed and feeder cattle markets continue to meet record high prices, the cull cow five-year average. Anxiety over the global spread market is seeing $2-3 week-to-week decreases during the past three weeks. The late Sep- Bob Wilson, Hedgersedge, said of Bovine Spongiform En- tember startup of a nationwide dairy cow reduction plan is cited for the drop. See Markets on page 15 cephalopathy (BSE) continues to The herd retirement part of Cooperatives Working Together (CWT), a produc- force more beefed up preven- er-funded program administered by the National Milk Producers Federation tion measures. In the U.S., the (NMPF), is in full swing, and will be until the end of October. NMPF last week Food and Drug Administration indicated approximately one-half of dairy cows destined for slaughter were Mexico lifts (FDA) stepped up enforcement processed or are in the midst of being shipped to packers. of a six-year ban on mammalian “The auditing process to verify producer bids and count cattle under the Canadian protein in ruminant feeds. FDA program is about two-thirds done,” said Christopher Galen, NMPF spokesper- recently issued a progress re- son, last Wednesday. “We are on schedule to have the auditing done the beef ban port, giving the U.S. feed in- next ten days to two weeks, and will hopefully have all cows processed by dustry very high marks for com- the end of the month. Hopefully, there are no tricks after Halloween.” — U.S. asked to pliance with the ban. According to Jerry Kozak, president and CEO of NMPF, approximately allow transport of According to the late Sep- 33,000 head, representing almost 300 herds, of “retired” dairy cows are tember report, less than one per- See Dairy on page 10 product. cent of renderers, feed mills, By Sarah L. Roen protein blenders, and other WLJ Associate Editor firms handling material pro- Mexico officially opened its hibited from ruminant feed, borders to Canadian beef im- weren’t complying with the feed Canadian live cattle ports with the publication of a ban. Last year’s compliance re- Notification in the Official port, released in mid-April, gave Gazette of Mexico’s Ministry of failing grades five percent of the Agriculture. However, Canada time. regs under review has several hurdles to jump be- The 1997 rule prohibits use of firmed mad-cow, scientifically countries with reported cases of fore regaining its full position in most mammalian protein in — New BSE case rais- known as bovine spongiform en- BSE, such as Canada, is flawed Mexico, including how to trans- feeds for ruminant animals, in es concerns about 30- cephalopathy or BSE, in a 23- and needs to be corrected immedi- port the product through the order to help prevent estab- month protocol. month-old Holstein steer. That find- ately. This case indicates imports U.S. lishment and spread of BSE ing goes against previous scientif- less than 30 months of age harbor through feed in the U.S. Of par- — Live cattle rule re- According to Ben Thorlakson, ic premise the disease does not in- a greater risk than previous scien- ticular concern, is processing of chairman of the Canadian Beef lease expected by end fect animals under 30 months of tific evidence suggested.” Export Federation (CBEF), central nervous system tissue of month. from ruminants, which can still age. While most scientific evidence transporting Canadian product be fed to non-ruminants, but By Steven D. Vetter MAFF said the most recent case shows no proof of BSE in animals across the U.S. will require spe- not to other ruminant species. WLJ Editor was a different strain. Moreover, under 30 months of age, USDA of- cial permits and additional pa- ficials report other cases of the dis- perwork. But, the beef can eas- FDA divides the “grades” in- Despite new uncertainty sur- the animal did not show symptoms to three categories. The high- of the disease. The disease was con- ease in younger animals. They did ily move through the U.S. in rounding mad-cow disease, USDA bonded carriers when they car- est grade a facility can achieve last week submitted for review its firmed because of Japan’s manda- say there are no confirmed infec- is NAI, or No Action Indicated. tory testing of all cattle destined for tions in animals 20-months or ry products currently accepted proposed rule governing future im- by the U.S. This grade is earned when, ac- ports of Canadian live cattle to the slaughter, protocol first initiated younger, globally. cording to FDA, “no objection- in October 2001. USDA sources were hesitant to Normally, Mexico prohibits White House Office of Management the importation of beef from any able conditions or practices were and Budget (OMB). Additional concern was raised say whether current Canadian beef found during the inspection, or because the infected animal was import protocol, or proposed cattle country known to have had USDA sources told WLJ the pro- Bovine Spongiform En- the significance of the docu- posal allows Canadian feeder and born after the mandatory ban on ru- trade with Canada, would be af- mented objectionable conditions minant by-products used in rumi- fected by the Japan case. Howev- cephalopathy (BSE) disease. fed cattle under 30 months of age See Mexico on page 8 found does not justify further to come into the U.S. if they are des- nant feed products. er, the issue is being evaluated. actions.” tined for slaughter only. However, Several U.S. cattle organizations Reports also surfaced last week A grade considered as pass- that proposal, and current regula- say the new case of BSE highlights Japan might require U.S. beef ex- ing, but needing improvement, tions allowing boneless boxed beef the need to rework regulations gov- ports to come from certified U.S. cat- is the Voluntary Action Indi- from Canadian cattle under 30- erning importation of Canadian tle that test negative for BSE, par- cated (VAI), given when minor months of age, are under even more beef and cattle.