Jim Robb Says Plainview Packing Plant Closure Indicative of Industrywide Realignment 

When Cargill announced it was closing its beef processing plant in Plainview, Texas, cattle markets across the board, predictably, took big hits. Jim Robb, director of the Livestock Marketing Information Center, says the reaction may have been a bit too severe.

"It could be a bit of an overreaction although the futures market was at a strong premium to the cash market. This plant represented about four percent of capacity in the United States. That's a very significant portion of the U.S. slaughter capacity. Clearly, they were not running at those levels, but nor are any of our other beef slaughtering plants. We've had fully 24 months of very difficult packer returns and this has really come to bare. Four percent may not sound like a lot of adjustment in slaughter capacity, but that's very significant. We're probably talking next year about a four to five percent year-to-year decline in total slaughter. Some of that will be a decline in cow slaughter. So this is a major adjustment."

Some industry analysts are wondering if the shuttering of the Plainview plant presages a geographical shift in the cattle business. Robb says he thinks it does.

"I think this really is indicative, this plant closing. This is a major, large plant in the Southern Plains. In the deep Southern Plains is where we're going to have the tightest feeder cattle supplies, especially as we see fewer and fewer Mexican feeder cattle and a smaller U.S. calf crop. So, I think, in the deep Southern Plains this is very indicative of also the excess capacity in the cattle feeding business, which we also have clear across the United States. There are some cattle feeding operations which have certainly slowed down their feedlot placements and some that have downsized their actual feeding capacity in the last couple of years. But there may need to be more of that also as we just have smaller and smaller cattle numbers and we really have excess infrastructure on both the cattle feeding side and the packing side."

Jim Robb joins us on the latest Beef Buzz.  Click here for more.

 

Rain Chances Increase Slightly for Next Week, Retreat the Following Week 

The latest U.S. Drought Monitor map only contained one small change from last week, but it was par for the course charted over the last ten months-it was a change for the worse says Associate State Climatologist Gary McManus. The change was an increase in the exceptional drought area in northeastern Oklahoma. That change was based on the lack of rainfall over the last 60 days up in that area, where less than an inch has fallen since Thanksgiving.

McManus says a minor rain pattern is setting up for the Sooner state over the next week, but predicted totals are anywhere from one-tenth to one-half of an inch. After that, unfortunately, a drier pattern will take hold with the first week of February showing increased odds for dry weather.

As a result, McManus says, fire dangers will remain high statewide.

Click here for a look at the latest Drought Monitor map.

Inhofe Responds to President's Inauguration Call for Climate Change Action

On Tuesday, U.S. Sen. Jim Inhofe (R-Okla.), a senior member of the Environment and Public Works Committee, spoke on the Senate floor in response to President Obama's inauguration speech calling for climate change action: 

"Yesterday President Obama made a beautiful speech. I think everyone agrees that he's a very persuasive speaker. And although I didn't agree with anything he said, still it was said beautifully. I want to read one part of the speech that because I don't want to get it wrong. He said, "We will respond to the threat of climate change knowing that the failure to do so would betray our children and future generations. The path towards sustainable energy sources will be long and sometimes difficult, but America cannot resist this transition. We must lead it. We cannot cede to other nations the technology that will power new jobs and new industries. We must claim its promise and that's how we will maintain our economic vitality and our national treasure." 

"That's a direct quote that came out of the president's speech. And it really is a lot of little subliminal things in there that people didn't pick up on but I did. And one is, and they talked ... leadership. Well, that's because all the things they tried to do to damage the economy, to destroy the economy in terms of the cap and trade agenda and all that, are things that other countries are just waiting for us to do. It's not that we're going to provide the leadership, China instead is sitting back hoping that that will happen in this country so they can have all the jobs that are chased away from our manufacturing base."

You can read more of Senator Inhofe's remarks and catch a video of his speech by clicking here. 

National Chicken Council, Growth Energy Scrimmage Over High Feed Price Cause

Super Bowl weekend is unquestionably the biggest time of the year for chicken wings. According to the National Chicken Council, more than 1.23 billion wing portions will be consumed during Super Bowl weekend this year. That's down about one percent, or 12.3 million wings, compared to last year's numbers, but not because demand for them is declining says Bill Roenigk, chief economist and market analyst at the Washington, D.C.-based National Chicken Council.

"Chicken companies produced about one percent fewer birds last year, due in large part to record high corn and feed prices," he said. "Corn makes up more than two-thirds of chicken feed and corn prices hit an all-time high in 2012, due to two reasons: last summer's drought and pressure from a federal government requirement that mandates 40 percent of our corn crop be turned into fuel in the form of ethanol. Simply put, less corn equals higher feed costs, which means fewer birds produced."

In a news release, Growth Energy, an industry group representing ethanol producers, threw a flag on Roenigk's statement, claiming the NCC was "roughing the facts."

The Growth Energy release says "40 percent of the corn crop is not used for biofuel production, that is a complete fabrication. The reality is that only a net of 17 percent of the corn crop is used for renewable fuel production, as the production of biofuels has a co-product, distillers grains. In the process only the starch is removed from the kernel, leaving all of the protein, oil and fiber resulting in a highly nutritious, less expensive animal feed."

Click here to read more of the NCC's game plan. You can read more from Growth Energy's playbook by clicking here.

Show Season in Full Swing in Preparation for Oklahoma Youth Expo

At fair barns all across the state, it's show season. Young people are showing their animals and getting ready for the Oklahoma Youth Expo in Oklahoma City in mid-March. Tyler Norvell, the executive director of the Oklahoma Youth Expo,  recently spoke with me about preparations for OYE.  He will also be my guest on "In the Field" this Saturday morning about 6:40 on News 9.

"The road to the OYE has definitely begun here in Oklahoma," he said.  "It's fun to go out and see the young people getting geared up for show season, with local and county shows trying to qualify... We're open to all young people who have a project to come to the OYE. So, we are really excited. We are right on par from previous years with animals nominated at nearly 18,000. So it's just great to see the number of young people involved in the program."

With the drought continuing and the economy in rural areas still slowing, many people were expecting to see a little less enthusiasm for the OYE this year. Norvell says if there's any lack of enthusiasm for the program, he hasn't seen it.

"We have not. We've kind of expected it, but it hasn't happened and that just goes to show what the program means to the families and the folks in rural Oklahoma."

The show starts on March 16, and the schedule has been altered from years past- quite a bit!  You can click here for more on this story, and listen to our full interview.  You'll also find a link to the OYE's new schedule of events.

 

Markets Now Looking for Signals from U.S. Weather, Anderson Says

In his preview to this week's SUNUP program, Kim Anderson analyzes a slight drop in wheat prices and offers help for producers calculating whether to graze out or harvest their wheat.

"What the market is watching now is weather, with either the hard red winter wheat crop or in Russia or in some other areas. India, they're talking about India with maybe another record crop, their seventh record crop in a row coming online. But most of the emphasis is placed on weather in the United States and around the world."

Closer to home, producers are trying to make the decision to graze out their wheat or pull their cattle off. Anderson advises looking to the July wheat contract for guidance.
   
"If they're going to calculate whether to graze out their wheat, I think $7.75 is a pretty good price to use on that. If you look at the July futures contract and subtract about 55 cents off of that you get about $7.85 is what the market is predicting now. So I think a good price is $7.75.

Click here to listen to Kim Anderson's analysis and to see a full lineup for this week's SUNUP program.
 

This N That- Big Boy is Grand Lamb, Mark Boyles Death and  Lots of Calendar Items

Lots of Oklahoma youth have been competing and doing really well at the 2013 National Western Livestock Show in Denver this week- but one Oklahoman stands out as being the best of the best- Garrett Goodwin of Ponca City has shown the Grand Champion Market Lamb at the 2013 event- the lamb named "Big Boy" was the winner in the Black Face division and will be a part of the televised sale of Grand Champions this evening at 6 pm Mountain time from the National Western.   

Click here for the livestock results page for the show- you can scroll down and check the "junior" divisions for lambs, goats, barrows and steers to see how a lot of other Oklahoma youth did.  You can also click here for the 9News website video page- this is the site for KUSA TV in Denver- they will be carrying the sale live this evening- there is a link at the top of this page that should take you to the live steaming feed at that time- you can watch and cheer on Garrett and his lamb "Big Boy" at that time.

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I was very sorry to receive word from Dr. David Porter about the sudden death yesterday of Mark Boyles at a hospital in Tulsa. Mark was the Canola Project Specialist for OSU's Plant and Soil Science Department within the Division of Agriculture- and he was one of the early advocates of using canola as a rotational crop for winter wheat in the southern plains. Everyone that I knew that had worked with Mark on the Okanola Project liked him and admired his desire to help Oklahoma farmers improve their bottom lines. As a colleague from the High Plains Journal shared with me on Facebook- he was always so patient in answering my dumb questions on the crop- that goes double in the case of the patience that Mark and Dr. Tom Peeper had with me as I got up to speed on canola production.   

Last summer at a canola educational event in Altus- we caught up with Mark and he was a guest on CanolaTV with us- click here for that segment and you will understand why he was one of the reasons why this crop was (and is) gaining traction in sharing more and more acres with wheat in rotation.  

Rest in Peace Mark.

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There are a ton of events to check out for next week- a series of sorghum educational meetings across northwest Oklahoma, the Winter Conference of No Till on the Plains in Salina, Kansas and Ag Connect in Kansas City to name a few. Click here for our calendar page on our website- look over the still substantial list of things happening in the final days of January and get involved!!!