Enrollment Open for 2017 Farm Safety Net Programs

Farmers can now enroll in farm bill safety net programs for 2017. The enrollment period started today (Tuesday) and will continue until next August. Farm Service Agency Administrator Val Dolcini says producers on farms with base acres under the Agriculture Risk Coverage or Price Loss Coverage programs can enroll. Dolcini says the FSA issued more than $7 billion worth of payments this year for the 2015 crop to assist farmers who suffered price and revenue losses. If a farm is not enrolled during the 2017 enrollment period, the producers on that farm will not be eligible for financial assistance from the ARC or PLC programs for the 2017 crop should crop prices or farm revenues fall below the historical price or revenue benchmarks. Producers who made their elections in 2015 must still enroll during the 2017 enrollment period. Farmers can enroll in the programs by contacting their local FSA office.

Growing Feed Wheat Demand Could Ease Storage Crunch

Grain handlers are anticipating an uptick in orders for feed wheat, which should allow them to move excess wheat inventories as farmers bring in a record fall harvest. A new report from CoBank says low wheat prices and oversupply means wheat is destined to become a staple in livestock's feed rations for at least the next year or two. A CoBank economist says because of low prices, wheat will “remain competitive with other feed grains for the foreseeable future." Current USDA forecasts indicate that wheat feeding and residual use will climb to 260 million bushels in 2016, up from 152 million bushels last year. With cash wheat prices continually finding new lows, USDA's feed-wheat estimate could likely see upward revisions given wheat's high stocks to use ratio, according to the CoBank report. The use of more feed wheat also will lower stocks of an oversupplied commodity, according to the report, which could lead to better price stabilization.

Egypt Streamlines Wheat Inspection Process

Wheat traders are pleased by Egypt’s new wheat inspection process that will likely be easier to navigate and may lead to lower prices. Bloomberg reports Egypt’s General Organization for Export and Import Control will be the sole state body responsible for wheat inspections at shipping and arrival ports, replacing government inspectors. The move follows a boycott by traders who refused to tender wheat for export to Egypt over an ergot fungus contamination zero tolerance policy that was enforced twice this year by the nation. The global standard contamination limit of ergot is .05 percent. The inspection process replaces the previous system that required approval from three different government bodies, each with their own standards. Egypt is the worlds biggest wheat buyer and the new process will likely lead to lower prices for the country, according to traders, because they will not need to factor in a high-risk premium. 

Canada and the European Union sign trade agreement

Over the weekend, Canada and the European Union signed a trade agreement that will eliminate nearly all import duties, including those on beef.In a statement, the European Commission estimated the Comprehensive Economic and Trade Agreement (CETA) will save European exporters of industrial goods and agricultural products more than €500 million euro ($550 million) a year and called it “a landmark accord that sets the benchmark for future agreements.”Under the pact, only products and services that fully respect all EU regulations will be able to enter the EU market. This means that CETA will not change the way the EU regulates food safety, including GMO products or the ban on hormone-treated beef.Canada has agreed to recognize the special status of the EU's Geographical Indications, agreeing to protect a list of more than 140 European goods in Canada, such as Prosciutto di Parma and Schwarzwälder Schinken. A range of goods will have fewer administrative hurdles to jump, avoiding double-testing on both sides of the Atlantic, benefitting smaller companies in particular.CETA is a result of seven years of negotiations and has faced stiff opposition. The pact still must be ratified by the European Parliament and the legislatures in each EU country, which could take years.However, once the European Parliament approves CETA, which is expected in a few months, most of it will take effect on a provisional basis pending final ratification by EU members.  The announcement comes as negotiations on the Transatlantic Trade and Investment Partnership (TTIP), which would aid U.S. exporters, continue to stall. 

USCA Announces Launch of CattleMarketNews.com

 (WASHINGTON) – The United States Cattlemen’s Association (USCA) is pleased to announce the launch of "CattleMarketNews.com".  The site provides commentary and feedback on the state of the market from individuals actively engaged in producing, marketing and trading cattle, in addition to USDA price reporting and trade statistics. 
 
“The current volatility of the cattle market has been driven in part by a drastic decline in negotiated fat cattle sales, the rise of the algorithmic trader, and an overall disconnect between the actual fundamentals and trends,” noted USCA President-Elect Kenny Graner.  “Markets operate the best with informed and active participants; Cattle Market News is intended to help drive this action.”
 
“Currently, a weekly Tip Sheet is compiled and circulated to USCA members.  However, in the initial stages of the site’s rollout, the news and Tip Sheet will be offered at no cost on the Cattle Market News website.  The overall concept of the site will evolve based on industry feedback and input.  Our goal is to help cattle producers out during this difficult and challenging time within the cattle industry,” concluded Graner.

OSU Feeder Cattle Analysis

Derrell Peel, Oklahoma State University extension livestock marketing specialist
The unexpectedly rapid and harsh adjustment in feeder cattle prices in 2016 has raised many questions about the status of herd expansion late in the year and beyond.Have changes in producer expectations altered herd expansion in 2016 and, more importantly, for 2017 and beyond? Begin with a review of the story so far.  On January 1, 2015 the inventory of replacement heifers was a record 20.8 percent of the beef cow inventory.  Beef cow slaughter in 2015 was a record low level of 7.6 percent of the beef cow herd inventory.  The combination of large replacement heifer inventories and low cow slaughter facilitated the 3.5 percent year over year jump in beef cow inventories in 2015.On January 1, 2016 the inventory of beef replacement heifers was 20.7 percent of the herd inventory; nearly as large a percentage as the record 2015 level.With large replacement heifer inventories available, the beef cow herd was poised to continue strong herd expansion in 2016.  USDA did not provide a July Cattle report so no mid-year update of herd expansion was available.  Quarterly cattle on feed inventories show that heifers in feedlots increased year over year in April and have been higher by a consistent amount of roughly 4.5 percent year over year in the July and October quarters as well.The October 1 heifer on feed inventory was still 8.5 percent below the previous five year average for that date.  Heifer slaughter was below year earlier levels into early June and has shown year over year increases so far in the second half of the year.  Weekly heifer slaughter has averaged 11.7 percent year over year increases since July.  The result is year to date heifer slaughter that is up 2.5 percent over 2015 and with continued year over year increases for the remainder of the year is projected to finish with an annual total up roughly 3.5 percent year over year.  Beef cow slaughter started 2016 with the low levels from 2015 but quickly changed to year over year increases by the end of the first quarter.The second and third quarters showed even stronger year over year increases resulting in a year to date increase in beef cow slaughter of 12.1 percent compared to last year.  Strong beef cow culling through the rest of the year is projected to bring the 2016 annual beef cow slaughter to a roughly 13 percent year over year increase.More beef cow slaughter is expected because 1) last year’s net culling was unsustainably low and 2) the one million head increase in cow numbers last year inevitably means more cow culling. However, the projected rate of 2016 beef cow slaughter would represent a net beef herd culling rate of less than 8.5 percent of the herd, well below the average level of nearly 10 percent.In other words, beef cow culling has not returned to normal levels and the 2016 beef cow slaughter level is consistent with continued modest herd expansion this year.The rate of beef cow slaughter and modest year over year increases in feedlot heifer inventories since April do not yet indicate herd liquidation but may point to little or no additional herd expansion in 2017.The ratio of steer to heifer slaughter increases during herd expansion and typically peaks and begins declining several months to more than a year ahead of the cyclical peak in cow inventories.  The ratio of steer to heifer slaughter (12-month moving average) peaked most recently in July, 2016 (at the highest level since February, 1975) and declined slightly in August and September.This most likely suggests a herd inventory peak at the end of 2017 but will depend on how fast the ratio changes in the coming months. 

Canadian Food Inspection Agency has quarantined about 30 ranches in southeast Alberta

The Canadian Food Inspection Agency (CFIA) has quarantined about 30 ranches in southeast Alberta after a case of bovine tuberculosis was detected in a Canadian cow slaughtered in the United States.In late September, the USDA notified the CFIA that a case of Bovine TB had been detected in a cow from Alberta when it was slaughtered in the United States.The CFIA has initiated an investigation and is working with provincial agriculture and health authorities. CFIA veterinarians and inspectors are contacting  cattle producers in the area near that cow’s origin.  Tracing work is underway to identify animals that may have been exposed to Bovine TB at individual premises and/or the Buffalo-Atlee and Suffield Block community pastures, according to a statement on the CFIA website.Canadian media reports said 30 ranches had been quarantined.Cattle movementIn a note to Canadian ranchers, CFIA stated that only premises that have been placed under quarantine are prevented from moving animals without permission. Producers in the general investigation area that have not been contacted by the CFIA are allowed to move animals (including sending cattle to auction markets and feed lots) but must comply with livestock identification requirements. Premises that are under quarantine must not move any animals without permission from the CFIA.As the disease investigation proceeds, additional premises may need to be quarantined while cattle are tested for Bovine TB, CFIA warned ranchers.Bovine TB is a reportable disease in Canada and has been subject to a mandatory national eradication program since 1923. While Canada is considered to be officially free of Bovine TB today, isolated cases may occur. This finding does not affect Canada's current status with all provinces considered to be Bovine TB-free as per the criteria established in the Health of Animals Regulations, according to CFIA.ContagionBovine TB is a contagious disease. Animals usually acquire the disease by inhaling or ingesting the organism. While Bovine TB primarily affects ruminants (cattle, bison, elk, deer, goats, and sheep); it can affect all types of mammals, including humans.Generally, findings of Bovine TB do not pose a threat to public health in Canada. This is due to the extremely low prevalence of the disease in Canada. However, individuals who have extended, close contact with an infected animal while it is alive are at risk of contracting the disease. Anyone who was in close contact with animals confirmed to have the disease is advised to contact their physician and/or local health authority.Bovine TB affects wildlife mammals, which may transmit the disease to back to livestock.Although the CFIA does not have a program specifically designed to control disease in wildlife populations, the CFIA collaborates with other involved agencies (e.g. Provincial authorities, Parks Canada) to conduct wildlife surveillance in the vicinity of an infected livestock herd.