Archive for the ‘cattle’ Category

Dave Zino – What is the NCBA Culinary Center

September 25, 2009

Dave Zino is the Executive Director of the NCBA Beef Culinary Center in Chicago. I had a chance to meet Dave at the Elanco Beef Consultants Forum 2009 in Banff earlier this month. Dave is a truly fascinating guy who has a real passion for how beef is cooked and trying to educate the public on how it should be cooked to truly enjoy the beef eating experience. Dave is an asset to the beef industry and I encourage you to watch the video below to get a better idea of the value the NCBA Culinary Center creates for the industry.

I encourage you to check out BeefItsWhatForDinner.com to see some of the great work that Dave and his team do. For all of you Facebook lovers become a fan of the Beef Its Whats for Dinner Facebook Page as well.

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Beef Market Update – Anne Dunford – 09-16-2009

September 17, 2009

Anne breaks down the Alberta – Saskatchewan Cattle on Feed Report and how the bearish feed market may be offset by the volatile Canadian Dollar. I also ask whether or not there are cattle to be placed in feedlots at lockable profits. Anne also discusses the impact that the US dairy situation has had on cow kill numbers in the US.



New Cattle Price Insurance Program Offers Alberta Producers Much-Needed Protection

September 10, 2009

The following is the official press release from AFSC on the Cattle Price Insurance Program CPIP. This truly is a revolutionary program that will allow Albertan cattle feeders to hedge some risk. I have not fully investigated the nuts and bolts of the program but I think on the surface it is a great step in the right direction.

Alberta-Only Program Launched

As Alberta beef producers prepare to move cattle off pasture and onto feed for the winter, many in the industry are glad to see the launch of Alberta’s long-awaited Cattle Price Insurance Program (CPIP) for fed cattle – saying it provides much-needed price protection that could offer welcome relief amid rising feed costs, weak cattle prices and a strong Canadian dollar.

“CPIP gives us a tool we can use today to put a bottom price on our cattle and manage our risk going forward,” says beef industry specialist Anne Dunford, who works with producers across Alberta to market their finished cattle. Dunford is general manager of Gateway Livestock Exchange in Taber, and was the senior cattle market analyst at Canfax for more than two decades.

‘Huge Volatility and Risks’

“Anytime we have a new tool to help manage price risk, it’s a good thing, especially in today’s environment of huge volatility and more risks than I think our industry has ever had to deal with over the last several years,” says Dunford. In the last few years, she says Alberta fed cattle prices have been severely impacted by factors like the global financial collapse, an oversupply of beef and pork that resulted from the H1N1 outbreak, mandatory Country of Origin Labelling (COOL), and extreme exchange rate volatility “which is taking the limelight today.”

Dunford says CPIP fills an important gap in the risk management tools available to producers because it’s made-in-Alberta risk management that gives them a minimum Alberta price for their fed cattle – protecting them from basis risk, which is the difference between U.S. and Canadian cattle prices.

Basis Risk Protection

“Most risk management tools are based on U.S. futures markets and directly reflect American cattle prices. So when there’s a border or trade issue that sends Canadian cattle prices tumbling sharply below American prices – like we saw with BSE and COOL – these U.S. futures market instruments leave Alberta producers exposed to severe losses caused by basis risk,” explains Jennifer Wood, CPIP Coordinator with Agriculture Financial Services Corporation (AFSC), the provincial Crown Corporation administering CPIP.

“Anyone who feeds cattle in Canada understands how extreme and unpredictable basis risk can be,” says Dunford, adding American producers don’t face the same kind of basis risk that Canadians do. “CPIP helps give us a leg back up to equality.”

“By insuring an Alberta price for their fed cattle, CPIP protects Alberta beef producers from basis risk. That’s why the program was created,” says Wood. CPIP began taking shape five years ago – not long after BSE closed the border to Canadian cattle – when Alberta Beef Producers sponsored initial research exploring the idea. Since then, Alberta Feeder Associations, Alberta Agriculture and Rural Development, and AFSC have joined in the development of the program. While the first CPIP products target finished cattle, work is underway on a yearling product that will extend coverage to feeder cattle “hopefully next year,” says Wood.

Alberta Minimum Price for Fed Cattle

CPIP offers Alberta cattle feeders two products: Basis-only Insurance to protect against a widening basis; and full Price Insurance, which covers all three components of price risk – the futures price risk, currency exchange risk, and basis. “It gives Alberta cattle producers a minimum price for fed cattle, so they know in advance the minimum they’ll receive once those animals reach market weight,” explains Wood.

Lyle Miller, part owner and manager of Highway 21 Feeders, a 20,000-head custom feedlot near Acme, says the Basis-only product appeals to him. “We use a lot of futures and options which leaves our basis open. Until now, the only way to cover basis was to contract with a packer. And at times what packers want to pay can be less than what people think their cattle are worth. That’s where CPIP could offer us some value.”

But many cattle producers aren’t comfortable using futures markets, says Miller. “So the full meal deal Price Insurance will be more attractive for them because it covers all of their price risk with one simple tool. It’s an alternative to contracting with a packer or just staying in the cash market and crossing their fingers and praying. And with CPIP, they won’t take huge losses from the big price swings we’ve been seeing.”

“Producers tell us they’d rather use insurance to manage risk than deal with the uncertainty of futures markets, which require a fair bit of expertise and can be almost a full-time job,” says Wood. “With CPIP, they just pick a coverage level, policy length, and pay a premium up front to insure a price for their cattle. It’s similar to a put option on the futures market, but it’s sold as insurance. There are no bid-ask spreads, margin calls, or minimum number of pounds to insure. Even the smallest cattle finishing operation can participate.”

Secure Online Program Delivery

CPIP premiums and coverage levels are calculated and sold each Tuesday, Wednesday, and Thursday afternoon, says Wood. “They’re tied to what’s happening in the futures markets, so they change daily. That’s why CPIP is being delivered entirely online – so producers can monitor premiums from their own computers, and react quickly when they want to purchase coverage or file a claim. Considerable time and effort has gone into building a fully secure and user-friendly system.”
The following if the press release from AFSC on the official release of the Cattle Price Insurance Program CPIP. This truly is a revolutionary facility to

Producer-Funded Premiums

CPIP premiums are completely producer-funded and based on a forecast of where Alberta fed cattle prices will be when the policy expires, says Wood. Those Alberta forward prices reflect Chicago Mercantile Exchange live cattle futures prices, Canada-U.S. exchange rates, and a forecast of the Canada-U.S. basis. She says coverage levels range from 75 to 95 per cent of the Alberta forward price. Producers can choose policies from 12 to 36 weeks long. “The policy length should match the time it will take their cattle to reach market weight,” says Wood.

Claims can only be made during the last four weeks of the policy, but producers aren’t required to sell their cattle to make a claim – giving them flexibility if the animals haven’t gained at the expected rate, adds Wood. Policies are settled using a weekly Alberta average fed cattle price index based on steer and heifer sales each week. “If the settlement index is lower than the insured price, a claim cheque will be mailed out when the policy expires. Or if the spread between the Nebraska cash price and the Alberta average fed cattle price is wider than their insured basis, they’ll be paid.”

Premium Rates Change Quickly

To get started, Wood says producers must visit their local AFSC office to obtain a username and password giving them secure online access. CPIP transactions can be conducted online, through an AFSC office or the AFSC Call Centre at 1-888-786-7475, she adds. “We’re advising producers to check premium rates and coverage levels frequently because sometimes they’ll look expensive, but a few weeks later, once the markets calm down, that can all change.”

Brent Heidecker, co-owner of Coro View Farms near Coronation, says he plans to log on to the CPIP website daily to watch premiums and coverage levels. Heidecker already uses futures and options to manage risk on his 5,000-head feedlot. He says some of the sample premiums he saw earlier this year while CPIP was still being developed were quite attractive. “CPIP will be a good tool to cover our basis risk and an effective way to protect us against some pretty catastrophic risk” such as trade disruptions or border closures, he says.

Ross Purdy, senior manager of agriculture and agri-business for the Bank of Montreal in Alberta, says his bank will also be keeping a close eye on CPIP. He says producers who use the program will probably find it easier to access credit when they need it most. “As we all know, prices in agriculture are subject to rapid changes and fluctuations. So if we have two producers – one that has price insurance, and the other not – we will probably have a higher comfort level lending money to the one with insurance,” says Purdy.

More information on CPIP is available at http://www.afsc.ca/.

Is Winter Wheat a Silage Option?

September 8, 2009

Ross McKenzie discusses if winter wheat is a good silage option. More and more farmers are curious if winter wheat will be good for silage. From a time management stand point, Ross thinks definitely.

TIME Article Proves People Are Not Interested in Facts

September 2, 2009

I had a subscription to TIME magazine and I will be cancelling it based on the unfounded rhetoric the magazine has recently published. Writer Brian Walsh penned the cover story entitled, “The Real Cost of Cheap Food.” To say that this one sided article has raised the ire of the agricultural industry would be an understatement. The story is the same old tired rhetoric that corporate America is the one to blame for the number of farms decreasing and that agriculture is responsible for obesity. And guess what, the article also mentions that organic is here to save the day.

In the following interview with the Mr. Walsh on Agritalk, his backstroke is quite evident and bounces all over the place trying to cover his lack of journalistic integrity. In the interview Mr. Walsh admits that he did not get the other side of the story and that TIME chose to run this one-sided story. In the interview (linked above), Mr. Walsh claims in the story that organic production could feed the world if given a chance. Mr. Walsh also claims in the interview organic production is better for you, tastes better and is easier on the land in his opinion”. when the Agritalk host asks him about animal antibiotics, he states his opinion and those of others but dismisses, the opinions of veterinarians in the business. TIME is supposed to be a news magazine not PEOPLE. The story lacks fact and does cause one to draw the conclusion that fact has taken a second seat to sensationalism in all media.
I encourage you to write TIME magazine and express your displeasure with this absolute attack on our industry. It is important that you speak up and not let people outside of agriculture speak for you and about you. Let your voice be heard!!!!

Please read Raoul Baxter’s post on MeatingPlace, discussing the inaccuracies of the TIME piece just in case you think I’m the crazy one.

Beef Market Update – Anne Dunford – 09-01-2009

September 2, 2009

Anne Dunford discusses the sentiment of the Us and Canadian feedyard owner and the impact that this is having on the feeder cattle market. Anne also breaks down the affect that COOL is having on exports of feeder cattle into the US from Canada and Mexico.

See Past Beef Market Updates

Beef Market Update – Anne Dunford – 08-19-2009

August 20, 2009

Summer is coming to an end and feedyards are starting to place grass cattle.  Anne Dunford of the Gateway Livestock Exchange talks about the fat cattle and feeder markets are being affected and how the fall may play out for the cattle industry in both Canada and the US.   Anne also predicts what will transpire when Stats Canada releases the July 1st inventory numbers.  

View past Beef Market Updates

ILC 2009: Dr. Alastair Cribb – Making Decisions Based on Science Versus Emotion

August 9, 2009

At the International Livestock Congress I talked to Dr. Alastair Cribb, Dean. Faculty of Veterinary Medicine University of Calgary about the balance between making decisions based on science versus emotion.  Sometimes this can be a very grey area and will continue to be in the future as both scientific advancement and emotions increase.  

See more ILC 2009 content

Feeding Cattle: Work in Progress

August 9, 2009
From drought to frost to hail, Western Canada ranchers have faced some significant challenges already this year. In a “normal” year, we gerenally only encounter one of these stresses as an issue, but this year producers have had to watch their pastures, hay land and crops alike undergo multiple stresses that have left some wondering what to do.
With most crops and pastures getting off to a very slow start due to cold temperatures and lack of moisture, there were cattle producers feeding late into the season. Now that crops are behind as well, it is looking like not all cereal crops will go through a combine, which may be an opportunity for cattle producers to procure some feed acres for silage or swath grazing.

ILC 2009: Dennis Laycraft VP at CCA – The Future Realities of MCOOL

July 30, 2009

At the International Livestock Congress, I spoke to Dennis Laycraft, Executive Vice President with the Canadian Cattlemans Association about the future realities of MCOOL. Many livestock producers on both sides of the border are very curious at to what will be the impact of this legislation. I have heard several Americans call MCOOL not food safety legislation but a marketing tool instead. This would be in drastic contrast to what RCALF has been arguing about. See Dennis chat about the history of MCOOL

More ILC 2009 Content