2013 Cattle Industry Convention: Rabobank Concludes Falling Mexican Cattle Supplies Threaten Weaker Feeders 

Over the last 30 years, Mexico has become an aggressive exporter of feeder cattle to the United States. The U.S. has relied so heavily on these imports to supplement supply that experts are now calling the levels of imported Mexican feeder cattle unsustainable.

According to a new report from the Rabobank Food & Agribusiness Research and Advisory (FAR) group, the availability of cattle for shipment is expected to post a steep decline in 2013, leaving the U.S. cattle feeding industry searching for ways to make up for this sharply reduced supply.

"Record high feeder and calf prices in the U.S., as well as a favorable exchange rate, were factors in a surge of exports to the U.S. over the last two to three years," notes report author Don Close, Vice President, Food and Agribusiness Research & Advisory, Animal Protein. "However, it was really the severe drought in 2011 that prompted such a notable increase in exports to the U.S. so that the levels became unsustainably high.

"As we finished up 2012, basically ten percent of the cattle on feed supply in the total U.S. would be of Mexican-origin. And if you look specifically, because of the freight advantages of the three-state TCFA area and Arizona and California, we've jumped up to as high as 25 to 27 percent of the total cattle on feed in that five-state area of being of Mexican import."

As a result, southern U.S. cattle feeders will be forced to look further north and be more price-competitive in the central and western U.S., in spite of the freight disadvantage. With the U.S. cow/calf herd already at a 50-year low, such new competition is likely to force feeders with weaker supply sources or weaker operating finances out of the market. Close says.

Click here to read more from Don Close.  You'll also find the audio of our full conversation.

2013 Cattle Industry Convention: Drought Squeezes Feedlots, Offers Opportunities for Cow-Calf Producers 

Tom Brink with JBS Five Rivers Cattle Feedlots spoke at the 2013 Cattle Industry Convention in Tampa, Florida, about challenges facing cattle feeders and packers. The liquidation of the domestic cow herd in response to the ongoing drought has decimated feeder numbers and has reduced the number of replacement heifers available at home and abroad. All indications are that things will get worse for the industry before they get better.

Brink spoke with me after his presentation and said the competition for feeder cattle among feedyards will force some very tough decisions.

"We have about 20 to maybe as much as 25 percent excess capacity depending on how you measure it. And so I think what I see a lot of feedyards doing is they're, in some cases, downsizing their yards. So, in other words, the yard that might be 30,000-head capacity may only be feeding 20,000 cattle. And they're keeping the yard open, but they are downsizing to fit the supply. Sometimes those adjustments happen a lot more slowly than you'd like to see them happen in a way, but it's hard for people to make those decisions because it's downsizing their business and downsizing their opportunity.

"You have to downsize your staff, unfortunately. You have to downsize everything that you can. And you can't change the facility and you can't the mill or some of those fixed aspects very fast." 

Click here for more on this story and to listen to my interview with Tom.

Anderson Says KCBT Move to Chicago Probably 'Much Ado About Nothing' for Producers

In his preview for this weekend's SUNUP program, OSU Grain Marketing Specialist Kim Anderson takes a look at the announcement by the Chicago Mercantile Exchange that the hard red winter wheat trade being handled on the Kansas City board will be moving to the Windy City.

"They're making noises like it's going to improve efficiency. They'll probably have more volume, a higher number of trades. But if you'll look back a year or so when we had the basis problems at the Chicago Board of Trade with the settlements for the corn, the beans, the wheat, we didn't really have those problems with the Kansas City Board of Trade wheat.

"I think the Kansas City Board of Trade has been relatively efficient over the past few years. I don't know that we will increase efficiency. We may narrow that bid-offer spread a little bit and that may improve the price maybe just marginally-a tenth of a cent, a half a cent-maybe for producers.

"But I think it will just be a move from Kansas City to Chicago. I don't think the producer will see very much."

You can hear more from Kim Anderson as well as see fhe full SUNUP lineup by clicking here.

USDA Extends Census Deadline, Reminds Producers It's Not too Late

Farmers and ranchers across the country are heeding the call to have their voices heard and their farms represented in the 2012 Census of Agriculture. With 1.4 million Census forms returned, the U.S. Department of Agriculture (USDA) is thanking everyone for speaking up for their communities, their industry and their future by sending in their Census form. For those who missed the deadline, USDA reminds producers that their farm is important and needs to be counted. As a result, Census forms are still being accepted.

"Information from the Census of Agriculture helps USDA monitor trends and better understand the needs in agriculture," said Agriculture Secretary Tom Vilsack. "Providing industry stakeholders, community leaders, lawmakers and individual farm operators with the most comprehensive and accurate U.S. agricultural reports, we all help ensure the tools are available to make informed, sound decisions to protect the future of American agriculture."

The deadline for submitting Census forms was February 4, and many farmers and ranchers have responded. However, those who did not respond by the original due date will receive another copy of the form in the mail to give them another opportunity. 

Click here for more.

Oklahoma Conservation Districts Encourage Landowners to Consider 'Prairie Chicken Insurance'

The recent announcement by the Oklahoma Department of Wildlife Conservation (ODWC) of an agreement reached with the U.S. Fish and Wildlife Service (FWS) to offer landowners options for assurance against additional requirements if the Lesser Prairie Chicken is listed as Endangered or Threatened species should be greeted as welcome news according to Joe Parker, President of the Oklahoma Association of Conservation Districts (OACD). The agreement, Parker said, amounts to insurance for a participating landowner against any additional action by the FWS if the Lesser Prairie Chicken is listed.

"We're pleased that U.S. Fish and Wildlife and ODWC were able to negotiate out an agreement that offers landowners a path to certainty if the Lesser Prairie Chicken is listed under the Endangered Species Act," Parker said. "With this action we can provide farmers, ranchers and other landowners the information they need to help them stay out of the regulatory cross-hairs while helping improve the wildlife habitat on their ground."

The newly created agreement is called the Candidate Conservation Agreement with Assurances Program (CCAA). Landowners who have approved management plans in place with the CCAA before the final listing decision is made on the Lesser Prairie Chicken will have the guarantee of assurances against certain liabilities and federal restrictions in the event that the species is listed as a threatened or endangered species.

Click here for more details.

Researchers at OSU Developing a 'Car Wash for Meat'

You enter onto an automated conveyor belt rolling through a darkened tunnel, while passing several pieces of equipment, each with a specific purpose ­- rinse, soap, foam and dry. You exit squeaky clean and free of flaws.

What if this same concept were applied to meat products to eliminate possible bacteria that could harm consumers and devastate a meat manufacturer?

Oklahoma State University's Robert M. Kerr Food & Agricultural Products Center is doing just that, researching what some are calling a "carwash for meat."

The FAPC is currently collaborating with Ross Industries, Inc., headquartered in Midland, Va., to research the use of antimicrobial spray treatments on blade tenderized meat.

"Many companies in the meat industry use mechanical tenderization to render cuts of beef a little tenderer than they currently are," said Peter Muriana, FAPC food microbiologist. 

You'll find more of this story on our webpage.  Click here to go there.
 

This N That- Light Rainfall Totals from Thursday, Lucas to be Honored and Drop Credit Good News

As we wrap up our time in Tampa today- if we were asked once yesterday- we were asked a thousand times if we were getting any rain "back home." Well, the answer at the end of the day is- a little bit- if you call home from I-35 east in Oklahoma.

We have the graphic from the Oklahoma Mesonet sites that shows where the rain fell in this latest pulse of moisture that moved quickly across the state- bragging rights for the largest rainfall totals goes to Centrahoma (down close to Atoka) with .57 of an inch of rain. Click here to take a look- and we also have a link to the latest forecast graphic that continues to call for wider rainfall this weekend on Saturday evening- let's keep praying!

**********

The 2013 Legislative Conference of the Oklahoma Farm Bureau will be a time where Oklahoma Congressman Frank Lucas will be honored by not just the state Farm Bureau- but by American Farm Bureau as well- AFBF President Bob Stallman will load up and haul the Golden Plow award to Oklahoma to hand over to the Chairman of the House Ag Committee Monday evening, February 18 in front of his Oklahoma congregation of farmer-rancher faithful- who have cheered the Roger Mills County rancher on for his fight to get a farm bill done in 2012.  Click here for full details of the Conference- that will look at both state and national issues for the general farm organization.

**********

Finally- we will be getting to his full comments next week as far developing a story for you- but the President of CEO of the US Meat Export Federation, Phil Seng, is almost giddy with the thought of finally getting fuller access into the lucrative Japanese market. In our conversation with him here in Tampa at the Cattle Industry Convention- he said a safe bet was that the US Drop Credit for beef cattle will rise because of the move by Japan.  Phil Seng says the Japanese consumers love beef liver and tongue and other variety meats- and he flat out said- the US Drop Credit (the compilation of the value of the hide as well as all of organ cuts of beef) will be headed higher- no doubt about it. Seng adds that the trade under the relaxed standards will ramp up quickly- as most of the players have had time to get ready- and he calls this a huge win win for Japanese consumers as well as US cattle producers.