Activity in cattle-feeding country will be limited to the distribution of new showlists. We expect ready numbers to be somewhat larger than last week. Asking prices should start out sharply higher, possibly around $130 plus in the South and $205 plus in the North. Live and feeder futures should open moderately higher, supported by follow-through buying and positive technical considerations.
Opening cash hog bids are likely to range from steady to $1 higher. Packers seem to be having a little trouble staying ahead of slaughter needs, and it will be interesting to see if the country can maintain a firm undertone like we saw last week. Lean futures should open moderately higher with nearbys gaining on deferreds.
| BULL SIDE | BEAR SIDE | ||
| 1) |
For the week ending Jan. 30, noncommercials continued to increase their net-long position in live cattle futures by 3,500 to a total of 94,000 contracts.
| 1) |
Slower country movement last week could mean that larger showlists will be distributed by cattle feeders Monday. Additionally, large fall placement activity suggests that late-winter fed supplies will be plentiful.
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| 2) |
Net beef export sales for the week ending Jan. 25 totaled 25,200 metric tons, just slightly below the previous week and the second largest weekly total since last August.
| 2) |
The composite beef cutout, probably pressured by declining choice end meats, is expected to erode over the next couple of weeks.
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| 3) |
Spot February lean hog futures set another new contract high on Friday, suggesting that board traders expect winter cash to keep rolling higher.
| 3) |
For the week ending Jan. 30, noncommercial traders reduced their net-long position in lean hog futures by 4,200 contracts (i.e., now totaling 49,400).
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| 4) |
The seasonal index for February lean hog futures with 12 days remaining prior to expiration typically rallies.
| 4) |
Hog slaughter levels got back to normal last week, setting records for the start of February. Pork tonnage is set to seriously challenge the strength of late-winter demand.
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CATTLE: (IFarm Journal) -- A new feasibility study released on the adoption of a beef cattle identification and traceability system shows benefits to U.S. cattle raisers.
During the Cattlemen's College at the annual Cattle Industry Convention in Phoenix a report was given on the recently released Comprehensive Feasibility Study: U.S. Beef Cattle Identification and Traceability Systems. The study was conducted by World Perspectives, Inc. as part of the Beef Industry Long Range Plan for 2016-2020.
The study reiterates that stakeholders in the U.S. beef industry realize the issue of traceability and identification needs to be addressed, says David Gregg, consulting projects manager World Perspectives.
Results from the study were gathered by surveying more than 600 beef industry members. Further interviews were held with 90-plus beef industry stakeholders, across all sectors to get a more in-depth pulse for potential adoption.
Here are a few results gathered from the surveys:
•62% of producers support the idea that information (generated by an animal identification and traceability system) should be made available to government entities in the event of a disease outbreak.
•57% of producers support animal identification at the ranch of origin.
•49% of producers support the idea that information (generated by an animal identification and traceability system) should be stored in an easily retrievable format.
•46% of producers support recording/recoverability of birth premise data at point of slaughter.
"The beef industry has the opportunity to lead the discussion on where we go from here in the animal ID and traceability space," Gregg says.
Findings from the study indicate it would be nationally significant and economically efficient if anywhere from 45-90% of cattle were included in a traceability system. World Perspectives recommends an adoption rate goal of 68% for both the fed cattle supply and cow herd. This rate would both work for disease and export traceability.
The U.S. Department of Agriculture had similar findings in a 2011 analysis estimates 70% of livestock would need to be traceable to a premise of origin to effectively control a disease outbreak.
A national identification system wouldn't need to be government mandated, it could work on a voluntary level similar to the U.S. Process Verified Program. Identification and traceability also wouldn't have to all be through electronic tagging systems like radio frequency identification (RFID) tags, either. It could be technology neutral using a variety of identification systems.
Technology is always changing so it would be difficult to single out one method, says Dave Juday, senior analyst for World Perspectives.
Traceability could be premise identification, individual animal identification using different tags or group/lot identification.
It has been argued for a number of years that in order to compete internationally the U.S. needs a beef traceability system. Currently, 61% of global beef exports comes from countries with traceability systems. The U.S. and India (the majority of Indian beef comes from water buffalo) are the largest beef producers without any traceability and identification system.
"It would absolutely be a tool in the tool kit for our trade negotiators," Juday says. "When other major exporters sit down now they can say they have traceability standards and the United States does not."
Domestically it would also be beneficial with more consumers interested in where their food comes from.
HOGS:(National Hog Farmer) -- The U.S. District Court for the District of Columbia on Friday issued a ruling on a suit challenging the sale of the Pork, The Other White Meat trademarks. U.S. District Judge Amy Berman Jackson ruled that the review by Stout Risius Ross, financial advisory firm, did not adequately analyze the value of the trademarks and orders the annual payment from the National Pork Board to the National Pork Producers Council to cease.
The National Pork Producers Council sold the trademarks to the National Pork Board in 2006.
In 2012, Humane Society of United States filed a lawsuit in the U.S. District Court claiming the contract should have never been approved and the appraisal was not accurate. HSUS and other plaintiffs-- which included Iowa Citizens for Community Improvement, an activist group, and a lone Iowa resident who is a member of this group-- claimed that the trademarks were sold for an inflated price.
NPPC sold the assets, widely regarded as one of the most recognizable marketing brand assets in history, for $35 million. A USDA-conducted study later valued the trademarks at between $113 million and $132 million.
The court's decision followed a motion last January to dismiss the lawsuit filed by the USDA, which authorized the transaction as part of its oversight responsibilities under the 1985 Pork Act. The Pork Act set up the Pork Checkoff program and established the National Pork Board to administer it. The USDA's motion argued that the lawsuit, filed by the HSUS and two other parties, lacked merit, was barred by a six-year statute of limitations, that the plaintiffs failed to establish standing to file the lawsuit or show that they were harmed by the sale of the trademarks and that the agency's evaluation of the sale of the trademarks showed they provided significant value to the pork industry.
In a press statement, Ken Maschhoff, an Illinois pork producer and president of the NPPC, states "We are conducting a thorough review of the decision and evaluating our options. We are disappointed that the court partially denied the U.S. Department of Agriculture's motion to dismiss this frivolous lawsuit, one that was never based on a legitimate legal challenge to a federally approved transaction but instead was brought by an anti-meat activist group intent on eliminating meat consumption and harming a vast U.S. industry that employs hundreds of thousands of Americans and feeds billions of people at home and abroad."
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