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June 2008 Archive for Out to Pasture

RSS By: Steve Cornett, Beef Today

Read the latest blog from Steve Cornett.

Again with the Koreans and downers.

Jun 26, 2008
  We have a new “deal” for selling beef to Korea. The Humane Society of the United States has a video of downer dairy cows.
            It’s all like a cow version of that Groundhog Day movie. Dejavuvuvu. Vu.
            The good news is that, comparing news coverage this time to last time, it seems to have become more of a dog-bites-man story. Though the HSUS tried to drag the school lunch program back into the fray, the link was tenuous at best, and Caviness Pack is not in danger of losing its contracts because they happened to buy cattle at Portales.
            Caviness is a state-of-the-art facility, built specifically to take advantage of the growing supply of dairy cows in the Great Plains region. I’d be real, real surprised to see any evidence of downer cows getting through their system.
            Speaking of Caviness, the downer cow thing is getting pretty close to home for this reporter. In the days when cars had fins and Caviness was the local butcher in Hereford, they were our local locker plant. I’ve bought and sold cattle through some of these sale barns.
            I don’t have much trust for the HSUS, but I don’t doubt that what the video shows is accurate. What are you going to do when you get a half ton of limp dog meat down in a chute?  You get the Bobcat if you’ve got one. I’ve done it, and with cattle that are a long way from being “downers” as the HSUS brands all these cattle.
            We’re not here to condone animal cruelty, mind you. Sale barns should have designs and equipment to allow workers to get cattle up without dragging them around corners by one leg.
            But not every cow that sulks down is a “downer” that should be euthanized, either. More than once I’ve seen perfectly healthy calves go down in a chute and refuse to get up. Once you get them up, they go on to live perfectly healthy lives. And, in fact, next time they go through the chute they’re as portable as any other animal.
            The HSUS seems to think anything that doesn’t hop to her feet when asked should be knocked in the head on the spot. Sheez, how many teenagers would we have to euthanize in their beds if we followed the same rules on kids.
            And yes, now that you ask, my father DID occasionally threat the hotshot to get my brother and me out of bed. He may even have tried it once or twice when the ice water and hollering and yelling and cussing didn't suffice to get us up to greet the dawning day. . I don’t recall any Bobcats, but I do recall being dragged into the floor by arms and legs.
            I’m glad the HSUS was not  there to demand we be euthanized. Because we weren’t sick, simply demonstrating a personality trait.
            The HSUS is not playing fair when it suggests—as its video clearly does—that all “downer” cattle are sick, but nonetheless hot-shotted up at the Portales sale and then hauled a thousand miles to California where, one would have to presume, they would be forced to rise yet again to pass inspection before being turned into beef.
            Maaaaybe. But I don’t see much economic incentive in putting cows on trucks knowing they’re not healthy enough to make the trip.
            If HSUS wants to argue that getting cows up is inhumane, that’s one argument. But they should acknowledge it has nothing to do with beef safety just for the sake of maintaining credibility.
            Meanwhile, let’s all be aware that the HSUS is watching. These videos are worth googles of dollars in free PR to them, and you can bet they’ll keep trying. Let’s all live by the maxim that we shouldn’t do anything to cattle that we wouldn’t want to see on the national news.
            And let’s all ask our local marketers to do the same. I'm all in favor of a deal where they bill sellers and/or shippers when they've forced to euthanize animals. Then maybe you--and maybe I--would be less inclined to ship cows we knew might not make it.
            Well. On to some analysis of the Korea thing.
Well. What to say? We have a new deal.
Well. Good.
We should be hopeful. Let’s see what happens.

A bullish bear or bearish bull?

Jun 17, 2008
A respondent to an earlier blog accuses your correspondent  of being too negative the cattle market. Well, it depends on what you mean. I’m not bearish the cattle market. I don’t really disagree with his premise about the near-term rise in cattle prices.
            But longer term, I am a bit bearish on the cattle industry. I suspect we’re a long ways from out of this mess. I don’t know when it will happen, but the market price of cattle finally has to reflect the reality of dollar-plus costs of gain and short numbers in feedlots. Great. But we may still be wading mud when it happens.
            If you happen to be in the commodity trading business, higher prices are fine. Shucks, they're as good as lower prices for you. If you're bulled up, just get long. The problem with it is that cowpeople aren’t going to get much profit out of the higher prices. Not in the short-term, anyhow. What they get is more risk and more capital requirements..
            Here’s a piece from Bloomberg that pretty wells sums up the situation.
            If fed cattle can bust $1, as the board indicates they may, that will be great. But if Cost of Gain is $1 and fed cattle are $1, you know what that means a steer calf is worth, after--after--he’s been held months after weaning.
            I’m not sure everybody can afford to produce calves for a dollar a pound. I’m sure we can’t produce as many of them, if only because we’ll have to move the cows to one side to give the steers grass until they get big enough to finish on 90 or so days’ feed--and that has to come after we’ve also plowed up all our better land to grow crops.
            Eventually, sure, we’ll come out of this with profitable prices for cattle. The question is how many producers will have cattle for sale when it happens. We need the Korean mess fixed. We need the new markets and we need them to come at prices that will let us compete with everybody else bidding for feed grains. Otherwise, this "American niche" of grainfed beef is in jeopardy of being far less lucrative than we'd hoped.
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