Beef Groups to Press USDA for Private BSE Tests

[Sliverofhope]

Beef Groups to Press USDA for Private BSE Tests

Fri Jul 23, 4:58 PM ET

By Carey Gillam

KANSAS CITY, Mo. (Reuters) - A group of U.S. cattle industry producers and companies plans to petition the U.S.Department of Agriculture) for the right to test all their cattle for mad cow disease to comply with demands by Asian customers who currently are refusing to buy U.S. beef.

"A lawsuit is definitely an option," said Bill Bullard, chief executive officer of R-CALF United Stockgrowers of America, one member of the budding coalition challenging the USDA.

Japan, previously the biggest foreign buyer of U.S. beef with $1.4 billion purchased in 2003, halted imports last December when the first U.S. case of bovine spongiform encephalopathy (BSE), commonly called mad cow disease, showed up in Washington state.

http://story.news.yahoo.com/news?tmpl=story&cid=571&ncid=751&e=4&u=/nm/20040723/hl_nm/madcow_testing_dc

[Trillo]

1. What an ironic comment on the mis-state of the USDA.

I can understand the USDA standing in the way of too little (inferior) testing, but not additional testing once minimum safety has been reached.

[puerco-bellies]

2. There is something really weird going on..

Today feeder cattle prices hit an all time high <114.80>. This is so usual because our exports are down consumption is fairly stable to slightly higher so supply should be building. The only mitigating factor is slaughter numbers are somewhat weak but that seems suspect since cattle production (baby cows) has not slacked. This leads me to wonder.. "Where's the Beef!?!". I have "shorted" this market twice in the last few months and had my ass handed to me both times. I really want to go short again but my clients may not want to go down that road again. If they increase the testing for BSE we will surely find it and that's the only reason we are not now testing. The big beef producers would rather people die then profits suffer. Hopefully beef coalitions will be successful in forcing testing and any clients on-board before the findings will clean up. The rub is when?
P-B

[CHIMO]

3. There Is No

Live cattle coming from Canada. The loss of exports to Japan are balanced off against the live cattle from Canada.
In fact R-Calf are the group that is holding up an open border and forcing the Canadian producers into a competitive position for US export markets. The US export market will shortly be in competition with Canadian producers.

[puerco-bellies]

4. Live cattle true..

Your point is excellent but remember that the Canadians not only have a generous boxed import allotment, they (the Canadians and their U.S. import partners) have been caught exceeding that "boxed" quota by SEVERAL HUNDRED of percent, this offsets much of the "missing" Canadian contributed to beef supplies and ignores the added beef that U.S. exporters must inject into domestic beef supplies.

[CHIMO]

5. No Way

The live cattle market is much larger than the two major US slaughter houses can handle.
They are sitting pretty right now as they are getting the animals dirt cheap and selling into a high priced market. There is no way in hell that they can handle the live cattle market.
You should be looking at the facts.

http://www.cbc.ca/news/background/madcow/index.html

One starting point.

[puerco-bellies]

6. Um..

There are more than two slaughter houses in the U.S. The cattle that you say the meat packers are picking up for "dirt cheap" have hit all time price highs. What they (U.S. meat packers) are paying is reflected in the CBOT (Chicago Board of Trade)trading pits, which closely parallels spot cash markets, though you are correct if the cattle pricing you mentioned refers to Canadian slaughters houses purchasing Canadian live cattle.

As for the facts I look at, they are the cattle markets themselves. I do not specialize in the livestock pits, but I do actively trade them as a commodities broker. If the slaughter houses could pick up domestic cattle "dirt cheap" logic would dictate that that "dirt cheap" price would be reflected in the savagely cut throat (no pun intended) cattle commodities pits, and this is not the case. My facts are from the real world, in real time.
Respectfully
P-B

[CHIMO]

7. The Packers That

I am referring to are in Canada. They are US packers. The prices they pay are for Canadian cattle. They are selling into the US market.
If you look at the data the Canadian exports to the US, before mad cow, were larger than the US exports to Japan. If you are only looking at the US market then you are are not looking at the total market. Your feeder cattle is based on the US market. But if you are counting on the prices rising because of the loss of export markets you are neglecting to look at the market closure into the US. If you are getting data from US producers then I would be suspicious. As I stated above R-calf are one of the groups that are trying to keep out the US imports(both live and boxed).


QUICK FACTS
Canada has close to 13.5 million cows and calves. About 5.7 million (or 42 per cent) are in Alberta.

Canada's total beef exports amount to $2.2 billion annually, and have risen sharply in recent years. Since 1991, beef exports have risen from 100,000 tonnes to about 500,000 tonnes. Growth in exports has been greatest to Japan, South Korea and Mexico. Alberta's share of total beef exports is 39 per cent (worth about $860 million a year).

http://www.cbc.ca/news/background/madcow/index.html

Chicago market does not reflect the prices in Canada. Also packers paying a low price have no obligation to sell below market.
The market is not a market!

[puerco-bellies]

8. I suspected that you were referring to Canadian Markets

You are also correct by stating that the market is not a market, but in my world, and the one I was referring to is the U.S. domestic market. Not to be a provincial, but the domestic U.S. market is the only one I am concerned about. My knowledge of foreign markets is limited to what I think will impact the U.S. markets in a narrowly defined time span. I trade over 50 different markets (metals, grains, crude oil, etc.) and can only process (incompletely I might add) so much information. I bow down to your knowledge of the Canadian cattle markets and may ask you about them in the future.
Peace,
P-B

[CHIMO]

9. My Crystal Ball

Is foggy.
My experience in commodities, on a fundamental basis and technical basis is not worth much.
What I was trying to point out is that the net change in the US market is for a shortage in beef as the Canadian imports have been stopped and they were larger than the US Asian exports. Thus examining the market on a fundamental basis must take these things into consideration and not just the loss of exports.
Good luck in your trading. Hope there are some customers' yachts around.