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US Feeder Cattle Numbers Up

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CattleAnnie

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Feb. Cattle Report Neutral to Friendly (02/18/05 15:15)

OMAHA (DTN) -- More cattle were marketed in January and more were placed in feedlots than many analysts had anticipated, according to USDA's monthly cattle on feed report released Friday afternoon.

USDA said the Feb. 1 inventory of cattle and calves on feed for slaughter in the U.S. was up 2 percent from a year ago and up 6 percent from Feb. 1, 2003

Ahead of the report, analysts had estimated the total would be 1.5 percent to 3.5 percent higher. Placements in feedlots in January were up 7 percent from January 2004, but 10 percent below 2003. Pre-report guesses had ranged from no change to 18 percent higher.


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CattleAnnie

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~More news~

Edition for Saturday, February 19, 2005 Twin Falls, Idaho


Cattle markets enter downtrend
Market watch
Brian Hoops



LIVE CATTLE

It has become apparent that the USDA will reopen the Canadian border on March 7 to animals under 30 months of age. There is still a small possibility that a lawsuit that has been filed will halt the reopening, however, this will not be heard by a court of law until March 2.

In addition, the monthly cattle on feed reports have stated producers intentions to increase placements this spring and summer. This will also increase supplies of beef available this spring and summer. The market is preparing for these additional supplies of beef by removing premium from prices.

Technically, the live cattle market is starting a downtrend, and we should expect rallies to become selling opportunities as the funds are holding huge long positions and will need to sell out of these positions and go net short. Seasonally, highs are made between February and March, and this seasonal tendency looks to hold true this year. Hedgers should begin selling or buying put options on any weather-related rallies.

Recommendations

Hedgers: Hedged 50 percent of January-February production at $91. Hedge 50 percent of June at $83 and 50 percent of August at $81.

Cash marketers: Remain current with marketings. Don't back up inventory.

Traders: Exited long April live cattle for $820 profit. Buy December/sell June live cattle at even.



Take care.
 

CattleAnnie

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~ And yet more news (aka. the joy of nightshift in calving season)~

Statistics Canada says mad cow crisis saw livestock exports plummet in 2004

Steve Lambert
Canadian Press


February 18, 2005


WINNIPEG (CP) - With a crucial U.S border opening just weeks away, Canada's beef producers have been handed some hard numbers on the toll the mad cow crisis has taken.

New Statistics Canada figures released Thursday indicate that due to the crisis and plummeting sales, farmers have been forced to deal not only with low revenues, but also with the high cost of maintaining record-sized herds.

"The BSE crisis has resulted in record numbers of cattle on Canadian farms," the agency wrote in its annual report on livestock estimates.

"It has also crippled the nation's value of beef exports to the world."

Cattle and beef exports in 2004 totalled $1.9 billion - less than half the amount recorded in 2002.

Because markets were hard to find, the national cattle herd swelled to a record level - 15.1 million head - in January of this year.

The crisis has left many farmers struggling.

"Your inventory grows, your cash flow depletes and it just puts you in a very, very awkward position," said Keith Robertson, executive director of the Manitoba Cattle Producers Association.

Robertson said the situation has been slow to improve since May 2003, when one case of mad cow disease - bovine spongiform encephalopathy - was found in Alberta.

That discovery prompted the United States and other countries to close their borders to Canadian cattle. Limited exports of some beef products resumed in the fall of 2003, but total industry losses are pegged at $7 billion.

The U.S. is set to lift its ban on live cattle under 30 months on March 7. A decision to allow in beef products from older animals - 30 months and older - has been delayed given recent discoveries of more mad cow cases in Canada.

Younger animals are considered at lower risk of contracting mad cow disease.

Robertson said the March 7 border opening is encouraging but added "there is still a very cautious attitude out there."

An industry analyst agreed there may still be hurdles for Canadian producers.

"The devil's in the details," said Ken Perlich, an instructor of agricultural economics at the University of Lethbridge in Alberta.

"What kind of brands (the U.S.) is going to want on, what kind of inspection services they're going to want performed on cattle - that's going to really tell the tale as to how many of those excess cattle will cross the border after March 7."

Alberta's agriculture minister, Doug Horner, has said he expects a lag time to get the cattle trucking industry revved up again. Nevertheless, there are projections that between 700,000 and 900,000 young animals will be sent south in the year following the border reopening.


Perlich said governments and some industry groups bear some responsibility for the large herd size.

"There was some underlying feeling that the border would open quickly and people may not have changed up their production habits," said Perlich.



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