August 28, 2015
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13
Dairy/Livestock
Cattle on feed up, slaughter down
By CAROL RYAN DUMAS
Capital Press
The number of cattle on
feed in large U.S. feedlots on
Aug. 1, at 10.0 million head,
was up 3 percent year over
year.
But placements and mar-
ketings in July were at their
lowest levels for the month
since the cattle on feed series
began 19 years ago, according
to USDA National Agricultur-
al Statistics Service.
Cattle on feed numbers
continue to give a false im-
pression that the U.S. is pro-
ducing more cattle. While the
inventory is slowly building,
the on-feed number is a man-
agement issue, said Derrell
Peel, livestock marketing
specialist at Oklahoma State
University.
As for “the flow of produc-
Capital Press file
Angus cattle lounge in a pen on a ranch near Merced, Calif., this
spring. While the number of cattle on feed is increasing, beef
production continues to decrease.
tion out of feedlots, the story
is the same as it has been for
many months,” he said.
Feedlots are holding cattle
longer to put on more weight,
and fed cattle coming out of
feedlots continue to decline
year over year, he said.
Year to date, slaughter
is down 7 percent with beef
production down 4.8 percent.
Heavier finished weights are
making up some of the differ-
ence, he said.
July dressed weights, at an
average 825 pounds, were up
19 pounds per head over July
2014, USDA reported.
July marketings of fed
cattle, at 1.725 million head,
were down 62,000 head and
3 percent from a year earlier.
Placements in July, at 1.547
million head, were down
12,000 head, a 1 percent de-
crease year over year, NASS
reported.
The July 1 cattle invento-
ry showed a year-over-year
increase in feeders outside
of feedlots, up 1.8 percent,
but that includes a 1 percent
increase in the calf crop —
much of which won’t be go-
ing into feedlots when weaned
this fall, Peel said.
Feeder supplies are going
to remain tight going forward
as cow-calf producers retain
replacement heifers and im-
ports of feeder cattle likely
decrease, he said.
Drawn by high prices, both
Canada and Mexico sent a
large number of feeder cattle
to the U.S. last year, at unsus-
tainable levels, he said.
Canadian exports of feeder
cattle to the U.S. were up 38.5
percent in 2014 to 495,000.
But feeder cattle from Cana-
da are down almost 3 percent
year to date, suggesting im-
ports will continue to moder-
ate, he said.
“A big part of that is largely
a function of shipping so many
more last year,” Peel said.
In addition, the Canadian
cattle herd is continuing its
10-year decline, down 2 per-
cent from 2014 to 13.0 mil-
lion head on July 1, he said.
Shipments of feeder cattle
from Mexico are also likely to
moderate but so far have con-
tinued to surprise, he said.
Drought fueled large ex-
ports of Mexican feeder cattle
to the U.S. — 1.42 million
in 2011 and 1.47 million in
2012. Those numbers moder-
ated in 2013 to under 1 mil-
lion, but were up a bit in 2014
to 1.1 million, he said.
“They are up about 14
percent in the first half of the
year, but I don’t think they
can keep doing it … it’s not
sustainable and they can’t be
building,” he said.
Relatively large imports of
feeder cattle from Mexico and
Canada have offset some of
the tightness in the U.S. feed-
er supply the last few years.
But moderating imports and
herd rebuilding in the U.S. is
going to continue to challenge
feedlots, he said.
Dairy-quality hay supply remains tight
By CAROL RYAN DUMAS
Capital Press
Alfalfa hay production in the
U.S. is forecast up slightly this
year, but drought and untime-
ly rains have already relegated
much of it to low-quality feeder
hay.
Forecast last week at
62,092,000 tons by USDA,
2015 alfalfa production is up
546,000 tons over 2014, but
quality is a major issue in many
areas.
Most of the U.S. experienced
a wet spring with mild weather,
great conditions for growing
hay. The issue was getting it out
of the field without being rained
on, said Jessica Sampson, an
agricultural economist with the
Livestock Marketing Informa-
tion Center.
“The general story across the
U.S. is that high-quality alfalfa,
dairy type hay, is pretty tight,”
she said.
Both harvested and unhar-
Alfalfa, alfalfa mixtures for hay
*Aug. 1
forecast
Area
Calif.
Idaho
Ore.
Wash.
U.S.
Area harvested
(1,000 acres)
2014
2015*
875
820
1,090
1,030
350
370
420
420
18,445 18,337
Source: USDA NASS
Yield
(tons)
2014
2015*
6.5
5.5
3.9
4.1
4.4
4.5
4.7
4.6
3.33
3.39
Production
(1,000 tons)
2014
2015*
5,688
4,510
4,251
4,223
1,540
1,665
1,974
1,932
61,446 62,092
Capital Press graphic
Alfalfa prices
received
(Dollars per ton)
June
Area 2014
Calif. $280
Idaho 220
Ore.
230
Wash. 220
U.S.
222
May
2015
$215
165
205
200
192
June
2015
$205
185
210
195
178
Source: USDA NASS
vested hay in many areas were
subjected to soggy conditions,
delaying harvest until hay was
too mature for dairy quality
or raining on cut hay before it
could be baled, she said.
“In general, it was a difficult
year to get that high-quality off
the field,” she said.
First cutting alfalfa in the
Northwest was challenged with
frequent, untimely rains, with
pervasive crop damage in Wash-
ington and Idaho, Northwest
Farm Credit Services reported
earlier in the season.
More than half of the first
cutting in the Washington-Or-
egon Columbia Basin was rain
damaged. Idaho hay growers
also experienced significant
damage, with most of the first
cutting in the Magic Valley
of south-central Idaho either
chopped or baled as feeder qual-
ity, the ag lender reported.
“Thunderstorms and spo-
radic rains created total havoc”
this season, said Arie Roeloffs, a
Wendell, Idaho dairyman.
Capital Press graphic
The first cutting was rained
on, ruining quality. Second cut-
ting faced the same issue, with
afternoon showers damaging
quality, he said.
Feeder hay is everywhere
and is running about $110 a ton.
But premium quality hay is tight
and is running $190 to $210 a
ton, he said.
Dairy producers have a lot
more hay on hand than last year,
however. They started stocking
Matthew Weaver/Capital Press file
Hay is baled in Eastern Washington in this file photo. The supply
of dairy quality hay remains tight because of drought and sporadic
rains that have damaged hay in the field.
up at the beginning of the year
when prices started falling in
response to decreasing exports,
he said.
Some decent new-crop hay
was available this season, depend-
ing on where the rain fell. There
isn’t enough dairy quality hay
available now, but the last cutting
could change things, he said.
Alfalfa acreage is down this
year and drought was an issue
in some areas, but conditions in
most areas led to higher yields
and higher overall production,
Sampson said.
The mild winter and less
need for hay combined with
good growing conditions for all
hay and the amount of rain dam-
age has resulted in an abundance
of low-quality hay and eroding
prices, she said.
On a national basis, pric-
es are in a downward trend for
both alfalfa and grass hay, and
the shortage of dairy quality hay
hasn’t been reflected yet in pric-
es. Dairymen have other options
in the ration, she said.
Workshops address drug-use changes
By CAROL RYAN DUMAS
Capital Press
New restrictions on the use
of antibiotics in food animals
will mean significant changes
in the way farmers, ranchers and
veterinarians operate.
New Food and Drug Ad-
ministration guidelines and ex-
pansion of the Veterinary Feed
Directive will prohibit over-the-
counter use of feed-grade an-
tibiotics without a prescription
and for anything other than to
prevent, control or treat a specif-
ically identified disease.
The changes have been thor-
oughly vetted on the feed and
pharmaceutical side but not in
producer and veterinarian com-
munities, said Sheldon Jones,
vice president of programs for
Farm Foundation.
To bridge the information
gap, Farm Foundation will be
holding 12 workshops across
the country over the next three
months specifically aimed at
meeting the needs of producers
and their veterinarians, he said.
Among the workshops are
one in Davis, Calif., on Oct. 13
and one in Twin Falls, Idaho,
on Oct. 22. The new restrictions
fully take effect in December
2016. The issue is probably on
producers’ backburners consid-
ering other high-profile issues,
such as EPA’s new waters of the
U.S. rule, but implementation is
not that far away, Jones said.
A long list of medically im-
portant antimicrobial drugs will
no longer be allowed for growth
promotion and will require a
prescription, veterinary over-
sight and recordkeeping as op-
posed to over-the-counter mass
distribution through feed and
water systems, he said.
“It changes the landscape,”
he said.
Prescription use of those
drugs through feed or water
systems will be allowed for
therapeutic reasons, such as pre-
venting shipping fever or avian
influenza under specific condi-
tions. But the restrictions will
change many current production
practices, he said.
Animal
pharmaceutical
companies have already agreed
to change labeled uses, which
will render those practices
off-label and illegal, he said.
Some livestock producers,
mainly pork and poultry produc-
ers who operate under company
guidelines, already have these
kinds of restrictions. But inde-
pendent beef and dairy produc-
ers might not be getting enough
information or the correct infor-
mation, he said. The workshops
are being conducted to give them
the information they need to get a
business model in place, he said.
The information gap is par-
tially regional, partially structural
and partially in veterinarian-defi-
cit areas, he said.
FDA and USDA officials will
be present at each workshop,
giving producers, veterinarians
and feed suppliers an opportuni-
ty to discuss implementation and
management challenges, said
Mary Thompson, Farm Founda-
tion vice president of communi-
cations. The organization is also
conducting an online survey for
producers, veterinarians and feed
suppliers to gauge awareness of
the changes and to learn more
about potential implications.
Farm Foundation will be
compiling comments from the
workshops into a report assess-
ing the economic and physical
challenges facing producers in
implementation. It will evaluate
informational and educational
needs, as well as veterinarians’
role in monitoring and manag-
ing antimicrobial drug use, she
said.
Cash dairy prices cool after big advance
By LEE MIELKE
For the Capital Press
T
he global-U.S. price sep-
aration was even more
pronounced last week,
especially in butter where the
spot price closed Friday highest
level since Oct. 14, 2014, $2.37
per pound, soaring 30 1/2-cents
on the week, up 38 cents since
Aug. 1, but still 45 1/4-cents be-
low a year ago.
Global Dairy Trade butter
was at $1.1525 on Aug. 18.
Only five cars traded hands last
week at the Chicago Mercantile
Exchange, as traders ignored
the bearish July Milk Produc-
tion report. But bad news in
Friday afternoon’s Cold Stor-
age report and losses on Wall
Street Monday spilled into the
CME where the spot butter fell
Dairy
Markets
Lee Mielke
4 3/4-cents and then lost 3 cents
Tuesday, dipping to $2.2925
per pound.
The “Great Fall of China,”
as The Drudge Report put
it, also pulled markets down
around the world, though there
was some recovery Tuesday.
Central butter makers re-
port active demand, according
to Dairy Market News. Cream
availability is tight. Some raw
milk shipments are clearing
into the southeast for Class I
demand, taking potential cream
from standardization out of the
region.
Cash block Cheddar closed
Friday at $1.74 per pound, up
4 3/4-cents on the week but
52 1/4-cents below a year ago.
The blocks gave back 3 cents
Monday and lost 4 on Tuesday,
dipping to $1.67, lowest level
since July 28.
The Cheddar barrels fin-
ished at $1.6950, down a quar-
ter-cent on the week and 56
1/2-cents below a year ago.
They plunged 6 1/2-cents Mon-
day and lost a penny Tuesday,
slipping to $1.62. Only three
cars of block traded hands at
the CME last week and 16 of
barrel. Twenty-two cars of bar-
rel had already sold as of Tues-
day this week and five of block.
Both are still priced well above
the GDT Cheddar at $1.26 per
pound.
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