Cattle Herds Risk `Liquidation' as Canada Hay Costs Double … – Bloomberg

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In The Cattle Markets: Lots of Down-Side Risk Ahead – Drovers Magazine

Labor Day is upon us, at least from the perspective of retailers needing to secure beef volume for sales and featuring. The beef complex look ready to drift lower as, after this holiday, the seasonality in demand will wain and the seasonality in production will continue to escalate.  Slaughter weights have continued their increases during the summer and will likely continue into the fall until the peak around October. The volume of cattle on feed over 90 and over 120 days continue to the high compared to last year and prior years. Fed cattle marketing were strong through June as revealed by the last month’s Cattle on Feed report and appear to be strong through July – especially heifers – as revealed by July’s weekly Livestock Slaughter reports.  There does not appear to be an emerging problem with supplies but the steady seasonal increase in beef volume will continue. We have also seen strong volumes of beef cow slaughter through this summer in response to the drought in the southern plains. As a consequence, hamburger prices were very weak through the summer. Perhaps this slaughter will moderate during the fall calf run. But improvements in hamburger prices are unlikely with the prospective increases in beef trimming volumes.

Events in substitute meat markets and trade demand also appear unlikely to provide substantial relief for beef prices. Pork production will be up a solid 5% this coming fourth quarter with consumption up a likely 2.5%. Poultry production and consumption are forecasted to be up moderately but the main word to focus on is, “up” from the prior year. Beef exports have been solid through the summer and if they continue through the fall then this could result in about an additional 40 million pounds per month removed from the domestic markets this year compared to last. This is a little less than 2% of typical monthly production during fourth quarter months.  Forecasts of beef production during the fourth quarter are to be up better than 3%.

In the end, there appears to be a lot of sources of downside risk and little potential for improved prices.

The Markets

The bullish signals from last month are at an end. Aggressive sales are warranted with multiple sell signals in all feeder cattle contracts. All of the fall feeder cattle contracts rallied through much of the summer and have run into resistance established last February. Further, any trend line established through the summer rally is now broken. Thus, resistance held and any up-trend was broken: sell and sell. On top of that, October and November show textbook head and shoulders top patterns. Live cattle do not reveal as decisive signals. October and December have rallied the last two months off of lows established in May.  $112 looks like hard resistance for October and $116 for December. Volatility this past summer doesn’t allow for a clean textbook up-trend but, if there is one, it’s not broken yet. The next week or two will tell.

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Texas cattle groups dispute over tick treatment ban – Charlotte Observer

Texas ranchers and several government agencies say a recent decision to ban a tool to treat a deadly tick could put cattle at risk.

The Waco Tribune-Herald reports that Texas Agriculture Commissioner Sid Miller last month halted the use of 15 cattle fever tick spray boxes in South Texas for lacking ventilation. The boxes spray livestock with a chemical to eliminate ticks that spread bovine babesiosis.

The Texas Animal Health Commission says the disease kills 90 percent of the animals it infects. The commission has identified nearly 920 cattle exposed to fever ticks in 82 counties since September 2016.

Commission Director Andy Schwartz says the boxes allow safe treatment.

But a spokesman for the Texas Farm Bureau says cattle are in jeopardy and cattle raisers need a short-term solution.

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Commissioner Sid Miller cracks down on cattle spray boxes citing … – Bryan-College Station Eagle

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Bryan-College Station Eagle

Commissioner Sid Miller cracks down on cattle spray boxes citing …
Bryan-College Station Eagle
Texas Agriculture Commissioner Sid Miller on Thursday urged state and federal agencies to work with him to address the possible misuse of the pesticide, …
Texas intervenes in pitched cattle tick fight – Brownsville Herald …Brownsville Herald

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High turnout for dairy cattle shows at the Ozark Empire Fairgrounds – KY3

Springfield, Mo.– People are showing livestock this weekend at the Ozark Empire Fairgrounds and dairy exhibitors are making a statement out at the barn.

This year there are a lot more dairy cattle in the barns compared to last year.

This year there’s 250 head of cattle that are being shown and that number is up 72 head compared to last year.

There are 52 different dairy exhibitors, several families, and some from out of state.

It’s a time of year where people can come together and enjoy the weekend doing what they love.

“I know the most important thing I think of is my family and having to spend time with my dairy family is the most important and having that fellowship with our cows is the best thing that I look forward to on Sunday,” exhibitor Stephanie Bos said. “I know a lot of exhibitors have worked really hard to get the numbers back up. We’ve been struggling here recently getting numbers here in the dairy barn and actually, this barn is full and we have another barn full of dairy so it’s a really good thing in our eyes that the industry isn’t dying.”

“We’ve been coming here forever and this is our start of the whole year get these cattle broke in and we’ll see where it goes from there,” owner Bobby Bruffey said.

The open show on Sunday, July 29, 2018, starting at 8 a.m. and it will go until 2 or 3 p.m. in the arena.

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Friona Ind. Buys Two Cattle Empire Feedyards | – AgWeb

Cattle Empire, LLC announced the sale of two of its feedyard locations with a combined one-time capacity of 139,000 head in Haskell County, Kan., to Amarillo, Texas-based Friona Industries, L.P.

The addition of the two Cattle Empire yards boosts Friona Industries to the nation’s second-largest cattle feeding entity, with a one-time capacity of 577,000 head in eight yards in Texas and Kansas. Two years ago Friona purchased two Texas feedyards from Cargill with a total one-time capacity of approximately 140,000 head.

Cattle Empire sold its Yard 1 and Yard 2 locations, retaining its Yard 3 and Yard 3 North locations with a one-time capacity of 51,500 head. The company will now focus on expanding its customer cattle feeding segment, according to a statement from Cattle Empire. Cattle Empire will continue to be 100% family-owned and -operated with the third generation of the Brown family, Trista and Rebecca, now joining the ownership group.

“By retaining Yard 3, which has long been our main facility for customer cattle, we will be able to focus our efforts on improving and expanding that business,” said Roy Brown, CEO. “We will continue to use new technologies and progressive strategies to offer our customers marketing advantages and innovations to help their cattle and businesses thrive. We will use our 40 years of cattle feeding experience as one of the largest cattle feeders in the nation to provide customers with the strategy and efficiency of a large operation combined with the specialization and individual care of a small family feeder.”

“We are very excited for the future of Cattle Empire. This is an important time to be in agriculture and in the beef industry,” said Rebecca Brown. “We look forward to continuing to do what we’ve always done best, and that is feed cattle to provide the world with a delicious and wholesome beef product. Our family has been doing this for 40 years, and I still think we’re getting better at it every day.”

“Our family and business have been part of the Haskell County community for generations,” said Trista Brown Priest. “We look forward to continued involvement and partnership in making our community a great place to live and work. We also welcome Friona Industries to this area, and we know they will be a wonderful addition to our thriving community.”

The Cattle Empire corporate office will be moved to the Yard 3 location at 2425 Road DD, Satanta, Kan., 67870.

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New Kansas Initiative Looks To Track Cattle Diseases – KUNC

Kansas is taking the lead on a project aimed at tracking cattle disease with the hopes of protecting the U.S. beef industry.

Cattle Trace is a public-private partnership that will develop infrastructure to try out a disease-tracking system. It was announced late last month in Ellinwood, Kansas, by Gov. Jeff Colyer, Agriculture Secretary Jackie McClaskey and Kansas livestock industry officials.

“Kansas is home to the finest beef producers and operations in the nation,” Colyer said June 30. “We are proud that the Kansas beef industry has taken the lead in this important project that will enhance our ability to protect cattle health here and across the nation.”

According to the Kansas Department of Agriculture, tracing cattle disease is key for biosecurity of the U.S. beef cattle industry, which has about 94 million head and tens of billions of dollars. Plus, Kansas is the site of the National Bio-and Agro-defense Facility, which is being constructed on the Kansas State University campus and is expected to open by 2022.

Quickly identifying and locating at risk-cattle will be paramount in minimizing damage to the cattle industry as a whole, said Brandon Depenbusch, who is vice president of cattle operations for Innovative Livestock Services and a member of the Cattle Trace steering committee.

“We have the opportunity to develop a cattle disease traceability system on our terms. The capabilities of Cattle Trace will enable us to do the right thing for animal health and biosecurity, and for the entire U.S. beef cattle industry,” Depenbusch said.

Another important part of the Cattle Trace program is to build infrastructure that allows the industry to communicate data easily and effectively, according to K-State’s Beef Cattle Institute Director Brad White.

He said that infrastructure will first involve tagging calves and collecting data to determine which calf is sick and where it’s located. And the third objective is to ensure that the project works for all segments of the industry, such as cow-calf operations, auction markets, feedlots and packers.

Cattle Trace will begin enrolling cattle this fall and that the goal is to tag 55,000 calves, White said. At least 10 feed yards, as well as cow-calf ranches and beef processors will participate in the pilot project.

But for the U.S. beef industry to adopt the system on a broader scale, it will need to be simple, fast and affordable.

“We are working to build a system to test today and one that will serve the U.S. beef cattle industry in the future,” he said.

Cattle Trace is a collaborative partnership between Kansas State University, the Kansas Livestock Association, the Kansas Department of Agriculture, U.S. Department of Agriculture and individual producer stakeholders.  

Angie Haflich is the director of regional content at High Plains Public Radio, based in Garden City, Kansas. 


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Study finds new genomic regions associated with weight gain in Nelore cattle – Phys.Org

Brazilian research aims at enhancing quality of beef and raising Nelore’s food efficiency. Because they are rooted in tropical lands, Nelore cattle do not gain weight as easily as the breeds forged in regions with harsh winters.

A pioneering research project has identified genes potentially associated with functions such as growth and weight gain in the Nelore breed. These functions are key to beef production. The researchers pinpointed genomic regions that had changed owing to selection, referring to these as genomic signatures of selection.

“We found six genomic regions containing genes associated with weight gain in the Nelore breed. Some of these hadn’t been reported in the scientific literature, even for other breeds of beef cattle,” said Diercles Cardoso, a postdoctoral fellow of São Paulo State University’s Agrarian & Veterinary Science School.

“Four of these regions are classified as signatures of selection and are in chromosome 14, which was already known to contain genes for growth in the bovine genome,” Cardoso explained. “However, we identified two other signatures in chromosome 16. This was somewhat unexpected. It may be that genes in these two regions are associated specifically with growth traits in Nelore cattle and therefore offer immense potential for improvement of the breed in terms of weight gain.”

Cardoso is lead author of an article published in the journal Genetics Selection Evolution presenting the results of his Ph.D. research, which was supervised by Professor Humberto Tonhati. The identification of the genes began with the collection of blood samples from animals belonging to three Nelore selection lines maintained under an experimental program run by APTA’s Beef Cattle Center at Sertãozinho, São Paulo State. The program was set up in 1980 to show producers the benefits of selection for growth traits and evaluate the economic benefits of selection for growth on the overall productivity of beef cattle herds. One of the three lines is a control and is not subjected to selection for weight gain. In the other two, known as Nelore Selection and Nelore Traditional, sires that perform best in weight gain tests are selected annually for reproduction. Every year, between three and eight of the best bulls are used for reproduction in the lines selected for weight gain (Selection and Traditional).

The FAPESP scholarship holder used blood samples from 782 animals born between 2004 and 2012—92 from the control line, 192 from the Selection line, and 498 from the Traditional line. The samples were processed in the laboratory to extract DNA and then submitted to genotyping, a process that examines the individual’s DNA sequence to identify markers of genetic variation through single nucleotide polymorphisms (SNPs).

Using SNP chips, Cardoso analyzed DNA from all sampled animals and compared the genotypes of animals in the control line with those of animals in the other two lines using three independent methods. The first identified 48 genomic regions that displayed signs of being linked to weight gain functions. The second and third methods identified only seven and 17 regions, respectively.

Cardoso compared the three sets of results and arrived at six regions that were identified by at least two of the methods. These were the six signatures of selection found to be associated with the animals’ weight. He now plans to study the functions of the genes in these regions in search of evidence that they are indeed associated with growth in Nelore cattle.

Taurine and indicine

All types of cattle breed belong to same species, Bos primigenius, which is divided into two subspecies, B. primigenius taurus (taurine) and B. primigenius indicus (indicine, zebu or humped). Animals of the former subspecies are better adapted to climates with harsh winters, as they gain weight in warm months, accumulating reserves to survive until winter is over and green pasture returns.

The Nelore cattle, which makes for 80 percent of all cattle reared in Brazil, belongs to the indicine subspecies. B. primigenius indicus originated in India, located in the tropics—that explains Nelore cattle’s well-succeded adaptation to Brazilian climate.

The other side of the coin is that being a tropical breed and not needing to gain weight in order to survive the mild winters in the tropics, Nelore is naturally lean and gains less weight than taurine breeds. Hence the need to find specific genes responsible for weight gain in Nelore.

The study was conducted under the aegis of the Thematic Project “Genomic tools for genetic improvement of economically important traits in Nelore cattle”. As its coordinator, Albuquerque said that the project allowed for the deployment of a database for genotyped animals, including data on traits associated with beef quality. “Enhanced quality of beef cattle means meat that’s more tender and has more marbling, which is intramuscular fat, the intermingling or dispersion of fat within the lean, making the meat tastier. Brazilian beef is very lean because most beef cattle are free-range, allowed to graze in open pasture rather than being fattened in feedlots, and also because until now the Nelore breed hasn’t been selected for meat quality. These traits need to be improved.”

Between 2011 and early 2017, the Thematic Project invested in studies designed to help improve meat quality and enhance Nelore food efficiency—the capacity to convert food into weight gain.

“The idea is to obtain an animal that eats less, gains weight faster and produces high-quality meat. At the end of the project, we’d genotyped over 8,000 animals and measured a range of economically important traits such as food and reproductive efficiency, as well as meat quality,” said the coordinator for the FAPESP-funded project.

Explore further:
Genetic study investigates ways to increase productivity and tenderness of meat

More information:
Diercles F. Cardoso et al, Genome-wide scan reveals population stratification and footprints of recent selection in Nelore cattle, Genetics Selection Evolution (2018). DOI: 10.1186/s12711-018-0381-2

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Live Cattle and Feeder Cattle Basis – Drovers Magazine

Most agricultural commodities are traded on the cash market in some form or fashion whether that is taking feeder cattle to the local auction market or hauling corn to the local grain elevator. Similarly, most of these same commodities are traded on the Chicago Mercantile Exchange (CME) in the form of futures contracts. Thus, there is a cash market and a futures market trading simultaneously throughout the year for the same commodity. However, the price of the futures contract is rarely exactly the same as the local cash price being offered, and the difference between the cash and futures contract price is different depending on one’s location. The difference between the cash price and the futures price is known as basis (cash minus futures equal basis).

Why does basis matter, and what does it mean for me? Please continue reading.

The futures market is supposed to provide a broader view of the underlying fundamentals in a market. In other words, the futures market is evaluating the current supply and demand situation as well as evaluating the future supply and demand situation of a commodity. When expectations are brought into the equation, market prices change based on those expectations. However, local cash markets may have a slightly different supply and demand situation than the broader market which subsequently influences the cash price received resulting in the basis value.

Basis has been at the forefront of many cattle industry participants minds the past couple of months due to the extremely wide basis in live/finished cattle. Live cattle futures has contracts for February, April, June, August, October and December. As the market moves closer to the end of a contract, the cash price and the futures price should converge. However, that is not always the case, and what about a situation when it is the first of May and the closest contract is the June contract? The figure included with this article illustrates monthly live cattle basis for 2018 and the monthly five year average basis (2013-2017). As can be seen in the figure, the basis in March and April of 2018 has been extremely strong relative to previous years which mean futures contracts are selling at a heavier discount in 2018 than in the previous five years. 

Basis for live cattle tends to be strongest in May. The strong basis in May occurs for a couple of reasons. The first reason is strong beef demand as grilling season starts. The second reason is because the June futures contract is pricing in the increased supply of finished cattle that will be coming to market in June. This increase in supply is largely due to calf-fed animals placed on feed in the fourth quarter of the previous year. Thus, June futures typically sell at a large discount relative to cash live cattle trade in May.

The accompanying graph depicts the strong May basis the past five years. However, May basis the first couple of weeks in 2018 was closer to $20 per hundredweight which is more than double the five year average. This record setting basis was spurred by strong beef demand and futures traders with a fear that a mountain of beef is on the horizon. By the time this article is published, cattle market participants may know if the mountain of beef has arrived or if the mountain is more of a mole hill.

The strong basis promotes cattle feeders to market inventory in the near term as opposed to in the future because the expectation is for cash prices to decline. Thus, moving from the month of May to June, the futures market is insinuating finished cattle prices will decline about $20. However, convergence of the cash price and the futures price is more likely to come from a decline in cash prices and an increase in futures prices. Which one moves the most is yet to be determined.


This price action is important to feeder cattle producers because cattle feeders have to purchase feeder cattle based on the price expectation of live cattle five to seven months down the road. If the previous six months are any indication of the next six months then live cattle futures will continue to be severely discounted until close to the expiration of the futures contract which will soften feeder cattle prices.

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