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Cattle Supply And Demand Issues For 2022

Cattle Supply And Demand Issues For 2022

By FarmBureau Market Intel

Introduction

At first glance, 2022 cattle prices are higher than 2021….

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Cattle Supply And Demand Issues For 2022

By FarmBureau Market Intel

Introduction

At first glance, 2022 cattle prices are higher than 2021. At $140, slaughter steer prices are 17.5% above 2021 prices, but even with higher prices, farmers and ranchers will travel a rocky road to profitability, paved with inflation and higher input costs in 2022. This Market Intel addresses the USDA’s Cattle on Feed report released on Friday, May 20, 2022, the forces driving cattle prices higher and how inflation and input costs will affect the bottom line for cattle farmers and ranchers. It will further walk through the combination of supply and demand factors that will affect the 2022 market outlook for livestock producers.  

Supply - Inventory

The Annual Cattle Inventory Report published by USDA estimated overall inventory on January 1, 2022, is down 2% or 1,887,700 head from 2021. Cattle inventory is important with respect to the market outlook because it quantifies supply and where the industry lies in what is known as the cattle cycle. The cattle cycle is the waves of expansion and contraction of the total number of U.S. beef cattle in consecutive years.  The cattle cycle is a response to farmers’ and ranchers’ perceived profitability of the beef cattle industry over roughly a 10-year period. For this Market Intel, we are going to focus on the force behind cattle inventory, the breeding herd and calf crop.

The calf crop for 2021 came in at 35.1 million head, a 1.2% decrease from 2020. As of January 1, 2022, cow inventory totaled 30.1 million head, down 2.3% from 2021. Heifer inventory with total heifers at 19.8 million. 

The last piece of this puzzle is supply and slaughter. Commercial cattle slaughter for April was 2.81 million head, down slightly from 2021. Steer slaughter was 1.33 million, 4% lower than 2021. Heifer slaughter for the month of April came in at 825,200, .05% lower than this time in 2021. Cow slaughter for the month of March came in at 640,382, 7% higher than the same time in 2021. It’s important to acknowledge the decrease in slaughter in all commercial cattle and the increase in cow and heifer slaughter. This illustrates industry position in the cattle cycle. Figure 1. illustrates the current and past two cattle cycles.

Based on Figure 1., the beef cattle industry is entering the contraction portion of the cattle cycle. Cows and heifers make up the breeding herd, which is responsible for supplying the calves entering the cattle inventory at any point during the cattle cycle.  Increased cow and heifer slaughter will result in a smaller calf crop and inventory in the upcoming months of the cattle cycle. It is natural to conclude that future inventory will be down since the calf crop, cow and heifer inventory are all declining. However, the southern Plains are experiencing extreme drought and it is not uncommon to remove grazing animals from forage early for placement into feedlots under these circumstances. The movement of cattle from grazing to feedlot placement or vice versa can throw off inventory numbers.

Pasture and range land had a rough start in 2022, especially in the Western regions and southern Plains. Winter weather and rain have brought some greener pastures to the upper Midwest but USDA crop progress reported more than 50% of U.S. pastures are still rated poor to very poor compared to just under 50% reported in that condition last year. This can be compared to the five-year average of 26.6% of pasture and rangeland rated poor to very poor. A previous Market Intel published in May 2021, demonstrated how 2021 started off with record breaking drought. While more green grass in the Midwest is likely to slow the above average cow slaughter and placement of grazing animals into the feed to slaughter supply chain, much of the U.S. is still facing drought conditions in 2022. Figure 2.  & Figure 3. illustrate the difference in the U.S. Drought Monitor between May 18, 2021, and May 17, 2022.  There has been improvement in the overall drought situation, but much of the southern Plains are still rated as extreme or exceptional drought.

Cattle On Feed

USDA National Agricultural Statistics Service’s Cattle on Feed (COF) program is a monthly feedlot survey conducted on feedlots with a capacity of 1,000 or more head. The April COF report estimated feedlot placements to be 1.99 million head, slightly below 2021 levels.

The  May COF report, released on May 20, 2022, estimates cattle on feed as of May 1, 2022 to be 12 million head. This is up 2% from a year ago. The total number of cattle placed in feedlots is 1.81 million head, down 1% from last year.

While the report fails to explain how feedlot placements are even with last year while inventory numbers and calf crop are down, drought may be a part of the answer. Much of the Western United States, as well as the southern Plains, have experienced or are continuing to experience drought conditions. When this happens, it is not uncommon for ranchers in the Southern plains to move grazing cattle off wheat early. It is also a possibility that heifers previously listed as replacements are being placed into feedlots. Adjustments to Jan. 1 inventory numbers are not uncommon and may better reflect the situation as 2022 continues.

Demand

USDA Economic Research Service (ERS) forecasted 2022 total red meat and poultry consumption at 222.7 lbs. per capita, down from 224.2 lbs. in 2021. The per capita red meat and poultry disappearance is forecast to decrease. ERS defines per capita meat disappearance as the measure of the supply available for use in domestic markets including fresh and processed meats sold. When supply drops, beef prices may rise. If beef prices rise, consumer demand for beef may fall.

The spread between beef graded “USDA choice” and “USDA select” has narrowed in recent days. This spread is important because it can often illustrate consumer willingness to pay for choice beef, a product that costs a premium above beef products graded select.  All primal (wholesale cut) values have seen a decline in 2022. This can be interpreted as a consumer response to inflation; consumers looking to save money.

Imports

Domestic imports are an important factor in evaluating U.S. demand for beef. USDA ERS reports U.S. beef and veal imports were 353.77 million lbs. in March 2022, 29% higher than this time in 2021.

The greatest increase in U.S. imports is from Brazil. Record high U.S. beef prices, and drought conditions in traditional import countries such as Australia are the key motivators for this increase. Another reason the U.S. has been importing from Brazil is because China, one of the world’s largest importers of beef, placed an embargo on Brazilian beef imports in September of 2021. This embargo was lifted in December 2021. However, Brazilian beef continues to be directed to other markets including the U.S.

There are other factors contributing to the increase in imported beef. One of these factors is the strengthening of the U.S. dollar. When the U.S. dollar strengthens, it makes it cheaper for the U.S. to purchase products from other countries. In addition, the decrease in consumer willingness to pay higher prices for beef makes other, less expensive, sources more appealing.

Exports

Exports fall on the other side of the supply/demand spectrum from imports. USDA forecasts beef exports to decline 1.8% from 2021. This estimate might seem negative at first glance, but it’s important to note that 2022 beef and veal exports are still well above the five-year average. The strengthening U.S. dollar’s impact on imports –making U.S. purchases of foreign products cheaper – has the opposite effect on exports; it makes it more expensive for other countries to buy products from the U.S.

China, the world’s largest importer of beef as mentioned earlier, has been implementing its COVID-zero policy which included a nationwide lockdown that has continued for six weeks. The effects of this policy on the food industry vary by region. Hong Kong, for example, home to some of the world’s stringent COVID-19 restrictions, has begun to ease restrictions. Overall, beef markets are watching closely and waiting for China to relax restrictions, leading to increased demand for meat products.

Despite these obstacles, March trade data has indicated record U.S. beef exports totaling 303.7 million pounds, 1.2% above 2021. This is the greatest quantity of beef exported for any month of March. Even more impressive is record first quarter 2022 overall meat trade coming in at a whopping 845.8 million pounds, 6.2% ahead of 2021. China, South Korea, and Japan continue to lead the pack, being the top three destinations for U.S. beef. China posted a record 145.4 million pounds, 61.8% above 2021.

Input Costs & The Bottom Line

One of the greatest concerns faced by cattle farmers and ranchers in 2022 is rising input costs, more specifically feed. Iowa State University estimates total feed costs per head for finishing a 760 lb. yearling steer, in March of 2022, are $1,802.58. Feed costs account for 24% of the total cost of production for 2022 at $436.15, up 22% from 2021. The price of corn was estimated to increase 30.4% and hay up 45%. Non-feed costs were estimated to be record high at $144.19 per head in March up, 8% from 2021. This brings the break-even price to $138.66 cwt, up 12.8% from 2021. These rising costs will make profitability an uphill battle.

Conclusions

The 2022 cattle outlook is a mixed bag. On one hand, 2022 cattle prices are higher than 2021. On the other hand, cattle farmers and ranchers face rising input expenses, and uncertainty in the U.S. economy and the economies of key beef importers.

A strengthening U.S. dollar will make it more expensive for other countries to buy U.S. beef while at the same time making it more affordable for the U.S. to import beef from other countries. Yet, first quarter beef exports were reported at record levels, primarily to the Asian markets with China leading the way.

Supply is forecast to decrease; the industry is in the contraction phase of the cattle cycle while USDA has also forecasted a small decrease in consumer demand for meat. If we use history as a guide, then the cattle industry should be in the last couple years of contraction in inventory before beginning the expansion phase of the next cattle cycle.

Cattle farmers and ranchers are facing increases in both feed and non-feed input costs resulting in increased break-even prices. Whether cattle prices will increase enough to offset the increase in costs and provide profitability remains in question. All these factors create a complex cattle market outlook complete with many peaks and valleys for 2022.

Tyler Durden Tue, 05/24/2022 - 18:05

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Government

New Hampshire Governor Vetoes Ivermectin Bill

New Hampshire Governor Vetoes Ivermectin Bill

Authored by Alice Giordano via The Epoch Times (emphasis ours),

New Hampshire’s Republican…

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New Hampshire Governor Vetoes Ivermectin Bill

Authored by Alice Giordano via The Epoch Times (emphasis ours),

New Hampshire’s Republican Gov. Chris Sununu vetoed a bill that would have made Ivermectin available without a prescription.

Ivermectin tablets packaged for human use. (Natasha Holt/The Epoch Times)

The Republican governor vetoed the bill on June 24, the same day that the U.S. Supreme Court overturned Roe v. Wade. Some fellow Republicans questioned the timing.

It certainly seemed like a convenient way to bury a veto of a bill that won support from the vast majority of Republicans in New Hampshire,” JR Hoell, co-founder of the conservative watchdog group RebuildNH, told The Epoch Times.

Hoell is a former four-term House Republican planning to seek re-election after a four-year hiatus from the the New Hampshire legislature.

Earlier this year, the New Hampshire Department of Children Youth and Family (DCYF) tried to take custody of Hoell’s 13-year old son after a nurse reported him for giving human-grade ivermectin to the teen months earlier.

Several states have introduced bills to make human-grade ivermectin available without a prescription at a brick and mortar store. Currently, it can be ordered online from another country. In April, Tennessee became the the first state to sign such a measure into law. New Hampshire lawmakers were first to introduce the idea.

Both chambers of the state’s Republican controlled legislature approved the bill.

In his statement explaining the veto, Sununu noted that there are only four other controlled medications available without a prescription in New Hampshire and that each were only made available after “rigorous reviews and vetting to ensure” before being dispensed.

“Patients should always consult their doctor before taking medications so that they are fully aware of treatment options and potential unintended consequences of taking a medication that may limit other treatment options in the future,” Sununu said in his statement.

Sununu’s statement is very similar to testimony given by Paula Minnehan, senior vice president of state government regulations for the New Hampshire Hospital Association, at hearings on the bill.

Minnehan too placed emphasis on the review that went into the four prescription medications the state made available under a standing order. They include naloxone, the generic name for Narcan, which is used to counter opioid overdoses, hormone replacement therapy drugs, and a prescription-version of the morning after pill.

It also includes a collection of smoking cessation therapy drugs like Chantix, which has been linked to suicide, depression, and other neuropsychiatric conditions. Last year, Pfizer, the leading maker of the FDA-approved drug, conducted a voluntarily recall of Chantix. Narcan has also been linked to deaths caused by severe withdrawals that have led to acute respiratory distress.

Rep. Melissa Blasek, a Republican co-sponsor of the New Hampshire ivermectin bill, told The Epoch Times, that one could veto any drug-related bill under the pretense of overdose concerns.

The reality is you can overdose on Tylenol,” she said. “Ivermectin has one of the safest track records of any drug.”

The use of human-grade ivermectin became controversial when some doctors began promoting it for the treatment and prevention of COVID-19. Government agencies including the FDA and CDC issued warnings against its use while groups like Front Line COVID-19 Critical Care Alliance (FLCCC) heavily promoted it.

Some doctors were  disciplined for prescribing human-grade ivermectin for COVID-19 including a Maine doctor whose medical license was suspended by the state.

Read more here...

Tyler Durden Thu, 06/30/2022 - 20:30

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Spread & Containment

Aging-US | Time makes histone H3 modifications drift in mouse liver

BUFFALO, NY- June 30, 2022 – A new research paper was published in Aging (Aging-US) on the cover of Volume 14, Issue 12, entitled, “Time makes histone…

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BUFFALO, NY- June 30, 2022 – A new research paper was published in Aging (Aging-US) on the cover of Volume 14, Issue 12, entitled, “Time makes histone H3 modifications drift in mouse liver.”

Credit: Hillje et al.

BUFFALO, NY- June 30, 2022 – A new research paper was published in Aging (Aging-US) on the cover of Volume 14, Issue 12, entitled, “Time makes histone H3 modifications drift in mouse liver.”

Aging is known to involve epigenetic histone modifications, which are associated with transcriptional changes, occurring throughout the entire lifespan of an individual.

“So far, no study discloses any drift of histone marks in mammals which is time-dependent or influenced by pro-longevity caloric restriction treatment.”

To detect the epigenetic drift of time passing, researchers—from Istituto di Ricovero e Cura a Carattere Scientifico, University of Urbino ‘Carlo Bo’, University of Milan, and University of Padua—determined the genome-wide distributions of mono- and tri-methylated lysine 4 and acetylated and tri-methylated lysine 27 of histone H3 in the livers of healthy 3, 6 and 12 months old C57BL/6 mice. 

“In this study, we used chromatin immunoprecipitation sequencing technology to acquire 108 high-resolution profiles of H3K4me3, H3K4me1, H3K27me3 and H3K27ac from the livers of mice aged between 3 months and 12 months and fed 30% caloric restriction diet (CR) or standard diet (SD).”

The comparison of different age profiles of histone H3 marks revealed global redistribution of histone H3 modifications with time, in particular in intergenic regions and near transcription start sites, as well as altered correlation between the profiles of different histone modifications. Moreover, feeding mice with caloric restriction diet, a treatment known to retard aging, reduced the extent of changes occurring during the first year of life in these genomic regions.

“In conclusion, while our data do not establish that the observed changes in H3 modification are causally involved in aging, they indicate age, buffered by caloric restriction, releases the histone H3 marking process of transcriptional suppression in gene desert regions of mouse liver genome most of which remain to be functionally understood.”

DOI: https://doi.org/10.18632/aging.204107 

Corresponding Author: Marco Giorgio – marco.giorgio@unipd.it 

Keywords: epigenetics, aging, histones, ChIP-seq, diet

Sign up for free Altmetric alerts about this article:  https://aging.altmetric.com/details/email_updates?id=10.18632%2Faging.204107

About Aging-US:

Launched in 2009, Aging (Aging-US) publishes papers of general interest and biological significance in all fields of aging research and age-related diseases, including cancer—and now, with a special focus on COVID-19 vulnerability as an age-dependent syndrome. Topics in Aging go beyond traditional gerontology, including, but not limited to, cellular and molecular biology, human age-related diseases, pathology in model organisms, signal transduction pathways (e.g., p53, sirtuins, and PI-3K/AKT/mTOR, among others), and approaches to modulating these signaling pathways.

Follow Aging on social media: 

  • SoundCloud – https://soundcloud.com/Aging-Us
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For media inquiries, please contact media@impactjournals.com.

Aging (Aging-US) Journal Office
6666 E. Quaker Str., Suite 1B
Orchard Park, NY 14127
Phone: 1-800-922-0957, option 1

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Government

FDA asks for COVID boosters to fight Omicron’s BA.4, BA.5 subvariants

The U.S. Food and Drug Administration on Thursday recommended booster doses of COVID-19 vaccines be modified beginning this fall to include components…

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FDA asks for COVID boosters to fight Omicron’s BA.4, BA.5 subvariants

By Michael Erman

June 30 (Reuters) – The U.S. Food and Drug Administration on Thursday recommended booster doses of COVID-19 vaccines be modified beginning this fall to include components tailored to combat the currently dominant Omicron BA.4 and BA.5 subvariants of the coronavirus.

The FDA said manufacturers would not need to change the vaccine for the primary vaccination series, saying the coming year will be “a transitional period when this modified booster vaccine may be introduced.”

FILE PHOTO: Signage is seen outside of the Food and Drug Administration (FDA) headquarters in White Oak, Maryland, U.S., August 29, 2020. REUTERS/Andrew Kelly/File Photo

The new booster shots would be bivalent vaccines, meaning doses would target both the original virus as well as the Omicron subvariants.

The decision follows a recommendation by the agency’s outside advisers to change the design of the shots this fall in order to combat more prevalent versions of the coronavirus. read more

BA.4 and BA.5 are now estimated to account for more than 50% of U.S. infections, according the U.S. Centers for Disease Control and Prevention, and have also become dominant elsewhere.

The FDA said in a statement on Thursday that it hoped the modified vaccines could be used in early to mid-fall.

Pfizer Inc (PFE.N) with partner BioNTech SE (22UAy.DE) and Moderna Inc (MRNA.O) have been testing versions of their vaccines modified to combat the BA.1 Omicron variant that caused the massive surge in cases last winter.

Although they have said those vaccines worked against BA.1 and the more recently circulating variants, they did see a lower immune response against BA.4 and BA.5.

The companies had already been manufacturing their BA.1 vaccines, and said on Tuesday that swapping to a BA.4/BA.5 version could slow the rollout.

Pfizer/BioNTech, which on Wednesday announced a $3.2 billion contract to supply more COVID vaccine doses to the United States, said they would have a substantial amount of BA.4/BA.5 vaccine ready for distribution by the first week of October. read more

Moderna said it would be late October or early November before it would have the newly modified vaccine ready.

Reporting by Michael Erman in New Jersey and Leroy Leo in Bengaluru; Editing by Jonathan Oatis and Bill Berkrot

Our Standards: The Thomson Reuters Trust Principles.

Source: Reuters

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