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CapitalPress.com
Feedlots managing large cattle supplies
By CAROL RYAN DUMAS
Capital Press
Cattle on feed, placements, marketing
and other disappearances, November
A lot of cattle are making
their way through the sys-
tem to slaughter, but feedlots
are keeping the markets bal-
anced with aggressive and
timely marketing.
USDA’s latest cattle on
feed report pegged the Dec.
1 inventory on large feed-
lots at 11.7 million head, up
2 percent from a year earlier
and the largest December
inventory since 2011.
But
placements
in
November were down 5
percent year over year, and
marketings were up 1 per-
cent for the largest Novem-
ber marketings since the
statistics series began in
1996, according to National
Agricultural
Statistics
Service.
“All in all, it was a pretty
favorable report,” Derrell
Peel, extension livestock
marketing specialist with
Oklahoma State University,
said.
While inventory was 2
percent higher than a year
(Feedlots with 1,000-head capacity or more)
Item
(1,000 head)
2017
2018
Placed on feed, Nov.
Fed cattle marketed, Nov.
Other disappearance, Nov.*
2,099
1,844
71
Item
(1,000 head)
2017
2018
On feed, Dec. 1
11,516
1,996
1,869
80
-5
1
13
Percent
change
11,739
2
*Includes death loss, movement from feedlots to pasture, and shipments to other feedlots
for further feeding.
Source: USDA NASS
ago, the industry started
the year 8 percent above
year-earlier levels due to rel-
atively big numbers of cattle
on feed in 2017, he said.
Feedlots spent the year
pulling down year-over-year
increases, moderating the
rate of increase in beef pro-
duction. That was especially
the case in the last three
months, with placements
down an average of 5.2 per-
cent September through
November, he said.
“Feedlots have done a
very good job staying cur-
rent,” he said.
Capital Press graphic
In addition to moderating
increases in cattle on feed,
carcass weights are consis-
tent with staying current.
After declining in 2017, car-
cass weights in 2018 were
expected to be heavier. They
were but not by much, he
said.
Lower weights at the end
of the year will result in a
year-over-year increase of
3 to 3.5 pounds in steer car-
casses and 6.5 to 7 pounds
in heifer carcasses in 2018,
he said.
Despite an increase in
cattle coming through the
2-2-3/104
Tree fruit companies
attract outside money
By DAN WHEAT
Capital Press
Percent
change
Matthew Weaver/Capital Press File
Cattle at a feedlot in
Pasco, Wash. November
marketings were the
highest since the statistics
series began in 1996,
according to National
Agricultural
Statistics
Service.
system, feedlots have han-
dled inventories about as
well as possible and moved
them through in a timely
manner. They could have
slowed them down, added
weight and increased beef
production even more, he
said.
From a supply stand-
point, 2019 will be “more of
the same but a little less,” he
said.
The industry will still
see increased cattle sup-
plies and beef production
but not as much as the last
three years. He expects the
beef cow herd to increase
less than 1 percent when the
Jan. 1 inventory is reported,
he said.
“I don’t see a lot more
supply pressure relative to
the last three years, but it
will continue at a steady
pace as we go ahead,” he
said.
Beef production will
likely peak in 2019. The
question is whether it will
plateau, drop down or poten-
tially pick up, he said.
“We’re in pretty good
shape to plateau this thing.
I think it’s sustainable given
the strength of demand
we’ve had,” he said.
Friday, January 11, 2019
YAKIMA, Wash. —
Several tree fruit compa-
nies in Central Washington
are being sold or have gone
out of business as costs and
competitive pressures con-
tinue to force consolidation
in the industry.
Out-of-state
private
equity firms are involved
in some of the acquisitions.
Principals in several trans-
actions did not respond
or declined to talk on the
record.
One of the latest trans-
actions involves Interna-
tional Farming Corp., an
agricultural
investment
firm in Kinston, N.C., that
is buying Legacy Fruit
Packers and Valley Fruit
III, both of Wapato, and
Larson Fruit Co. of Selah.
A Larson family mem-
ber verified the sales and
referred inquiries to Inter-
national Farming, which
declined comment.
Four years ago, Val-
ley Fruit and Larson
Fruit formed a new com-
pany, Legacy Fruit Pack-
ers, to build a $17 mil-
lion apple-packing plant
in Wapato. The deal was
reached to have enough
capital to build the new
packing plant to remain
competitive, Dean Gard-
ner, CEO of all three com-
panies, said at the time.
Valley and Larson main-
tained separate orchards
and cherry packing lines.
Legacy has sold its fruit
through its partnership in
Sage Fruit Co., a Yakima
marketing company that
also sells the fruit of Olym-
pic Fruit in Moxee and Val-
icoff Fruit Co. in Wapato.
According to a Lega-
cy-Sage website, Legacy
packs approximately 4 mil-
lion boxes of fruit annually
from 3,650 acres owned by
Valley and Larson. Leg-
acy, Valley and Larson
have over 530 full-time
employees.
Larson Fruit was owned
by the Larson family for
three generations. Valley
Fruit was also a third-gen-
eration company and
owned by the Verbrugge
family.
The industry has always
had outside investment,
said Jon Alegria, president
of CPC International Apple
Co. in Tieton. CPC packs
fruit for a large outside
investor that has owned
Washington orchards for
more than 25 years.
Industry returns were
good from 2005 to 2015,
which attracted more out-
side investors, but costs of
staying competitive have
been growing since 2005,
Alegria said, adding that
risks are increasing and
more outside investment is
needed to stay competitive.
“There’s more and more
outside money. It’s easily
tripled in the last three to
five years,” he said.
More apple varieties
are competing for limited
grocery shelf space and it
takes $60,000 per acre to
acquire and plant land ver-
sus $25,000 10 years ago,
he said. Land, labor and
more organic production
are all increasing costs,
making the industry more
capital-intensive, and that’s
why outside investment is
coming in, Alegria said.
Two of the largest
Washington tree fruit com-
panies are raising sig-
nificant capital, Michael
Butler, a Seattle invest-
ment banker, said in early
December. Mid-size com-
panies running at 30 per-
cent of packing capac-
ity don’t have the income
they need to pay debt on
new packing lines, he said,
and without controlling 10
percent of industry sales a
company can’t be a long-
term competitor.
Broetje Orchards, of
Prescott near the Tri-Cit-
ies, has sold to a Cana-
dian pension fund, sources
said. A Broetje spokesman
declined comment.
The family-owned com-
pany has more than 6,000
acres of apples and cher-
ries. In 2015, Broetje
agreed to pay $2.25 mil-
lion in civil penalties to
end several years of U.S.
Immigration and Customs
Enforcement
investiga-
tions. Broetje issued a news
release saying it agreed to
pay with no admission of
wrongdoing.
Lawrence Frank, pres-
ident of Yakima Fruit &
Cold Storage, Wapato,
declined comment when
asked if that company was
sold several months ago.
Gail Brown, general
manager of Strand Apples
Inc., Cowiche, said Strand
has reorganized but hasn’t
sold and is not going out of
business.
Vanguard International
Group, Issaquah, bought
Pride Packing Co., Wap-
ato, in 2017.
Fourth Leaf Fruit Co.,
Yakima, formerly C.M.
Holtzinger Fruit Co.,
ceased operations. Its tele-
phones have been discon-
nected and a website states
it is permanently closed.
David Henze, former
president, said he left the
company last April and
says he believes it closed
at the end of September.
A representative of the last
known owner, a Vancou-
ver, B.C., investment firm,
could not be reached.
Fourth Leaf was a
unique company with no
orchards of its own. It
relied solely on fruit from
independent growers.
“We were actually gain-
ing grower volume but it
wasn’t enough to support
the capital expenditures
we needed to do,” Henze
said. “It was an older facil-
ity. It had been maintained
well, but didn’t have a lot
of internal defect sorters.”
The company had small
volume, about 1.35 mil-
lion, 40-pound boxes of
apples annually. About
60 percent was exported,
which generally is not
as profitable as domestic
sales, Henze said.