Market Impacts: Avian flu news, chain speed reduction, more affecting cattle prices
- https://www.tsln.com/news/market-impacts-avian-flu-news-chain-speed-reduction-more-affecting-cattle-prices/
- https://www.westernagreporter.com/articles/avian-influenza-hpai-identified-in-dairy-cattle/
- https://www.dtnpf.com/agriculture/web/ag/news/article/2024/03/27/cattle-markets-reaction-hpai
TSLN reported that several factors have impacted the strong cattle market in recent weeks, causing what the industry hopes is a temporary blip. Commodity broker Dennis Smith, Archer Financial Services, said he’s seen three recent outside factors impacting live cattle prices, in addition to packer activity that is likely contributing to the price dip.
Smith says the packers purposeful slowing of chain speed, along with a fire outside of the National Beef packing plant, record placements reported in USDA’s On Feed report and the avian influenza news have all affected live cattle prices lately.
Smith said reports show that the big four packers usually slaughter cattle on Saturdays, but that they have slowed or stopped their Saturday kill in an effort to back up supply which reduces supply on the retail end, and also adds weight to slaughter-ready cattle, which can allow the packers to discount feeders for heavier carcasses – activity that Smith believes has been going on for a matter of weeks.
Dan Cahoy who owns several South Dakota grocery stores, said he sources his meat from smaller, independent meatpackers, and that he’s seen a slight price increase of about 10 percent in the past week, but not a huge jump in beef prices as the result of higher cattle prices, commenting that he doesn’t “know that beef prices even coincide with cattle prices.”
Cory Hart of Chasely, North Dakota, sold a load of cattle last week, and concurs with Smith’s take after seeing the price drop about $3/ hundred weight immediately following the news of avian flu being detected in dairy cattle, which he said this translates to about $1,000 less on a load of cattle.
Hart has more cattle ready for slaughter, and he’s concerned that if he waits for the market to correct itself after the recent disruptions, that his cattle will be overfed by then, and he will be forced to take discounts. “It’s a catch 22,” he said.
Several months ago, the big packers reported to feeders that they would allow heavier carcass weights before imposing discounts, which Hart believes is due to short supplies and the extra meat being needed. But the winter storms and cold in South Dakota and Nebraska held carcass weights a little lower than expected, which added to the price increase in February and March which likely also caused the packers to want to slow chain speed.
In addition to the reduction of slaughter numbers, Hart agrees that the Highly Pathogenic Avian Influenza H5N1 news of late has impacted prices more than it should have, commenting that he believes the story overdone.
Hart, who has met several times in the past two years with the USDA Packers and Stockyards agency staff, said the Act needs to be updated in the Farm Bill with new rules that limit packer ownership of cattle, which will require the big packers to bid more aggressively on independently owned cattle as, he believes, the packers own more cattle now than ever before.
Kansas Livestock Association CEO Matt Teagarden said the fire outside of the National Beef plant in Liberal, Kansas also impacted harvest for a few days as the beef in the coolers was affected by smoke, and in order to assess and properly handle the smoke-affected beef, the plant had to halt slaughter for a time.
Teagarden also identified the avian flu situation has indeed caused market uncertainty, but he remains optimistic about opportunities in the cattle industry in the coming months. Teagarden wants to clarify that, based on his understanding, the avian flu is not being spread cow to cow, but rather it passed on via “mechanical transfer,” such as through a milking machine.
Particularly, he wants to emphasize that it’s unlikely the disease is transmitted from human to human or mammal to mammal contact at all. It appears that in the extremely rare cases of humans being infected, they have been exposed to animals with the disease – either dead or alive.
Western Ag Reporter commented that the primary effect being seen by producers is the “significant loss in production,” but there’s also the unknown of “will these cows come back to the level that they were after they do recover?”
Although there has been no indication thus far, an obvious concern for the industry is the risk of HPAI in beef cattle. Although beef cattle are not managed the same as dairy cows, and “they’re not under the stress of being milked every day,” producers are being urged to keep an “intense eye” and monitor their herds at this time considering the challenge for beef cattle is not catching the infection in a timely manner as we’re not quantitatively measuring their milk supply and quality which has allowed the dairy industry to catch the infection so quickly.
According to TSLN, Teagarden acknowledged that the cattle market certainly has faltered from the “high water mark” of two or three weeks ago, but reiterated that all signs point to this not being a “spread” and that he remains optimistic about the market.
DTN also reported that despite all of this, beef demand should remain strong as feeder cattle supplies are still thin; the Northern Plains received moisture which should ease drought concerns in the region; and there are no indications that replacements heifers are being kept back to begin to regrow the U.S. cowherd.
DTN Livestock Analyst, ShayLe Stewart stated that she would be more understanding of the market’s meltdown if the dairy cattle were having to be euthanized, if the infected cattle were sluffing calves, or if the flu posed any risk to consumers; but that’s simply not the case.
Pork Producers Praise Vilsack for Support, Criticism of Prop 12
According to the Hagstrom Report, the National Pork Producers Council are praising Agriculture Secretary Tom Vilsack for his support of the industry at a roundtable discussion in Mankato, Minnesota last week.
In its weekly newsletter, NPPC said that Vilsack’s announcement of the availability of $1.5 billion in the Regional Conservation Partnership Program (RCPP) will “help agricultural producers advance conservation and climate-smart practices.”
The group also noted that the NPPC President participated in the roundtable discussion and that they pointed out that USDA had purchased about $105 million in pork products for food programs in the past year and that at the roundtable Vilsack repeated previous comments that he believes California Proposition 12, which bans the sale of pork produced anywhere that doesn’t meet the state’s animal housing standards, will cause chaos in the marketplace and that he supports “a congressional fix to it.”
NPPC commended Vilsack, hoping that lending his voice will “make Congress pay attention and come up with a federal solution through the farm bill.” They also credited the Biden-Harris administration’s USDA with working on market access issues “including ensuring China lives up to its international commitments to science-based standards” and having “engaged on the U.S. Environmental Protection Agency’s proposed permitting guidelines for meatpacking plants, which, if adopted as written, could shut down 76 or more facilities.” The NPPC also said, “USDA’s Food Safety and Inspection Service has worked with the U.S. pork industry to ensure sufficient harvest capacity at packing plants, including implementing a pilot program that allows faster processing line speeds at facilities.”
NCBA and PLC Opposes Plan to Relocate Grizzly Bears
Drovers announced that The National Cattlemen’s Beef Association (NCBA) and Public Lands Council (PLC) condemned the U.S. Fish and Wildlife Service’s (USFWS) indication that they intend to proceed with translocating grizzly bears to the North Cascades Ecosystem in northwest Washington state, despite longstanding and vocal objections from local communities and elected officials.
The final environmental impact statement released last month is not a final decision, but indicates that the U.S. Fish and Wildlife Service is likely to translocate bears to the area with a Section 10(j) rule under the Endangered Species Act in place — with the goal of eventually reaching a stable population of 200. A final decision is expected in the coming weeks.
Director of PLC and NCBA Government Affairs Sigrid Johannes said “Dropping new apex predators into rural Americans’ backyards is not something that the federal government should undertake without consensus. State and local stakeholders have made their serious concerns about this proposal known for years now, and plowing forward to the detriment of local farmers and ranchers would be unwise for both conservation of the species and health of the rural economy. We urge the administration to listen to local communities and reconsider this plan.”
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