02page1.qxd 10/24/02 5:00 PM Page 1 The National Livestock Weekly October 28, 2002 • Vol. 82, No. 02 “The Industry’s Largest Weekly Circulation” www.wlj.net • E-mail: [email protected] • [email protected] • [email protected] A Crow Publication September placement data good news — Placements good tember placements also added to ing September. While that figure is for feeder cattle, the bullishness. two percent more than last year, it In terms of near-term fed mar- was between four and 20 percent marketings “neutral” kets — late October and November below analysts’ pre-report expec- September Feedlot for near-term feds. — analysts said September mar- tations. In addition, the figure is al- keting data really didn’t create most 20 percent below the number Placements By Steven D. Vetter much of a price trend one way or the of cattle placed into feedlots during WLJ Editor other. Analysts also said delivery to September 2000. For the entire (Weight distribution for total U. S.) Reactions to USDA’s most recent packers over the next couple of U.S., September placements were Cattle-on-Feed (C-o-F) Report were, weeks will be a key price indicator pegged at 2.19 million head, also across the board, bullish, particu- over the next month or two. two percent more than last year. 2002 800 lbs. & heavier (23.08%) larly with the much lower-than-ex- According to USDA’s seven-state September marketings, for the pected number of feedlot place- report — for Arizona, California, seven-state report, totaled 1.57 mil- ments in September. This suggests Colorado, Iowa, Nebraska, Kansas lion head, two percent above last spring fed cattle supplies will be and Texas — 1.85 million head of year, but eight percent below two smaller than originally anticipated. cattle were placed into feedlots dur- years ago. The range of pre-report The weight distribution of Sep- estimates from analysts ranged be- 700- 600 lbs. tween 97 percent and 104 percent. 799 lbs. & For the entire U.S., September mar- (26.60%) under Markets rally, feds up $2 ketings were pegged at 1.85 million (28.06%) head by USDA, one percent more — Fed cattle markets were much stronger last than last year, but seven percent week. less than 2000. Northern Plains feeders were early aggressive sellers and still are The seven-state number of cattle on feed, as of October 1, was 9.09 working hard to clean up heavyweight inventories. On a dressed ba- 600-699 lbs. (22.26%) sis, northern Plains cattle traded $2 higher at mostly $105, with some million head, five percent fewer going to $107 in Colorado. than the same date last year and Southern Plains feeders didn’t trade until Thursday and were four percent below two years ago. That figure was called bullish by an- 800 lbs. & heavier (28.18%) able to push the live cash market to $67, with some heifers trading 2001 alysts, whose range of pre-report es- at $67.75. Cash trade volume was on the lighter side, with only timates was 94-98 percent, with a 109,000 head tallied through Thursday’s reporting period. majority of those estimates being Formula cattle priced on Thursday were at $102.58 on 12,100 between 97-98 percent of last year. head, with an average carcass weight of 799. Wednesday’s formula For the entire U.S., the number of 700- 600 lbs. cattle were priced at $104.42 on 86,600, with an average weight of cattle on feed, as of October 1, was 799 lbs. & 805 pounds. pegged at 10.4 million head, six (26.17%) under Packers continued to maintain heavy slaughter schedules, with percent below last year and five (24.72%) just over 700,000 head passing through packing plants. Slaughter percent fewer than two years ago. levels are stronger than normal for this time of year as packers are Placement maintaining good margins at $22.60 per head. The boxed beef trade bullishness was steady and the futures markets took on a bullish tone after an optimistic Cattle-on-Feed Report. The perceived bullishness from the September placement data (See Markets on page 15) 600-699 lbs. (20.93%) (See C-o-F on page 7) Important ESA hearing slated Nov. 1 — Judge appears to Forest Service (USFS) and feder- tion of habitat deemed necessary for tiffs. He basically ruled USFS vio- drawing board and do a better job give ESA precedence al grazing opponents. The hearing the Mexican spotted owl. The rem- lated the Endangered Species Act of protecting endangered wildlife involves the immediate future of edy hearing follows a recent court (ESA) by allowing overgrazing on from livestock-caused damage to over grazing rights. livestock on grazing allotments decision that, on the surface, ap- approximately 80 percent of graz- streams and grasslands.” By Steven D. Vetter within 11 national forests in those pears to soon threaten the avail- ing allotments on 11 national Collins’ decision went directly WLJ Editor two states. ability of federal grazing on 15 mil- forests in Arizona and New Mexi- against a recommendation from a The hearing was set in order for lion allotted grazing acres. co. The plaintiffs argued overgraz- federal magistrate recommending Federal graziers from Arizona some sort of resolution to take place On October 16, U.S. District ing threatened the Mexican spot- he deny the plaintiff’s motion for and New Mexico are anxiously between USFS and the environ- Court Judge Raner Collins, Dis- ted owl. summary judgment and grant the awaiting the results of a November mental consortium, led by the For- trict of Arizona, Tucson, granted Collins’ decision was a summa- defendant’s (USFS) motion for sum- 1 remedy hearing between the U.S. est Guardians, regarding protec- summary judgment for the plain- ry ruling, which means he found mary judgment in its favor. USFS provided no evidence of mer- According to the plaintiffs, the it in its defense. USFS recovery plan for the Mexi In his 13-page decision, Collins can spotted owl should include fur- Reactions mixed to futures changes wrote that USFS should have im- ther restricting grazing because it — CME decision to reduce specu- the first Friday of the contract month. This change plemented the 1996 grazing stan- reduces the amount of available lative limits cheered, railed will apply to the December 2002 through October dards soon after they were adopt- prey, promotes destructive fires, 2003 contract months, according to CME. Market ed. But because USFS didn’t, he degrades vegetation along streams against. traders are already saying this decision is having an ruled “The Forest Service is not in and slows the growth of produc- By Sarah L. Roen effect on the current market. But, what kind of an compliance with the Endangered tive owl habitat. WLJ Associate Editor effect is the question. Species Act.” Ranchers from across the West According to a statement from are worried Collins’ ruling means A decision made by the Chicago Mercantile Ex- The limit for speculators in the spot month was 300 contracts, up until it doubled beginning with the John Horning, director of Forest cattle still on grazing allotments change (CME) last week to reduce spot month spec- Guardians, the Forest Service since within the targeted areas will need ulative limits on live cattle futures contracts has some June 1998 contract. This change was reported by beef industry market analyst Andy Gottschalk as the con- 1996 hasn’t followed through on to be moved immediately. Howev- members of the beef industry pleased and others dis- implementing grazing standards er, whether that will happen was tributor to the weakest annual average basis (-$1.53 appointed. The reason behind both emotions seems on the targeted forests — stan- (See ESA on page 8) to be the opposing opinions regarding the potential futures minus cash) on record. In early 2000, CME dards that were designed to protect for this decision to manipulate the futures market proposed increasing speculative position limits again the spotted owl and were approved and increase risk for producers. to 900. NEWS by the U.S. Fish and Wildlife Ser- NEWS Prior to CME actions, the spot month speculative Several producers, packers, and industry affiliates vice. limits on live cattle futures had been 600. Effective made strong negative comments on this proposal. “On 80 percent of the allotments, upon approval from the Commodity Futures Trad- Letters received by the CFTC in opposition to the USFS hasn’t done what they said ing Commission (CFTC), the contract speculative lim- increase cited reasons like the basis performance be- they would do,” Horning said. “This its on live cattle futures will now be 300 as of the ing endangered and a subsequent price convergence. landmark ruling will require the close of business on the first business day following (See CME on page 6) Forest Service to go back to the (priority handling) (priority handling) INSIDE WLJ WLJ WEB SITE UPDATE — RETAIL $ DATA — USDA’s Eco- E. COLI PREVENTION — Re- MONUMENTS UPHELD — A INDEX Western Livestock Journal re- nomic Research Service recent- cent beef recalls have spurred federal appeals court recently dis- Pasture Management . .P-2 cently added a daily news up- ly released its first report that the need for the industry to come missed two lawsuits that chal- Sale Reports . .P-9 date feature to its web site. For shows actual retail scanner data up with new technologies to pre- lenged decisions made by for- Markets . .P-14 the most recent news develop- from meat sold on a monthly ba- vent foodborne pathogens.