Come and learn the latest risk management

options at an upcoming meeting:

Monday, March 17^th – Goose Lake, Iowa

Millennium Ballroom 7:00 PM

Tuesday, March 18^th – Dyersville, Iowa

Country Junction Restaurant 7:00 PM

Tuesday, March 25^th – Harmony, Minnesota

Wheeler’s 12:00 Noon

To RSVP or for further details call 877.207.1051 or

email info@nexusag.org.

Acquisition News

The proposed acquisition of the beef unit of Smithfield Foods and National Beef Packing Company by Brazil’s JBS leads livestock news this week, to be sure. And, even though JBS announced the $1.27 billion dollar deal will go through without U.S. Department of Justice opposition, some believe, in this election year DOJ scrutiny is almost a certainty.

If the deals are approved, the Sao Paulo-based meat company will be the largest beef producer in the world, holding about 32 percent U.S. market share and 10 percent of the world market. JBS projects that if the deals are approved, it will enjoy annual revenue of $21.55 billion, doubling its current yearly take.

University of Missouri’s Agricultural Economist, Ron Plain reports that the reason the JBS deal could even have been considered, is because whoever owns beef cattle kill plant has been unprofitable and could remain that way for years into the future. Therefore it became a good time for the companies to be open to an offer. But he is concerned that it becomes more likely more plant facilities could be shut down, due to excess kill capacity in the U.S.

Currently, the U.S. beef industry is attempting to cope with a slowdown of beef exports, excess processing capacity, and a sputtering U.S. economy.  In 2007, U.S. beef packers lost more than $500 million because of excess slaughter capacity

DTN Livestock Analyst John Harrington believes the deal could limit selling options for cattle feeders because there will only be 3 major packers instead of five once the sale is complete.

Senator Chuck Grassley, R-Iowa warned that further consolidation will reduce market options for producers. Senator Tom Harkin, D-Iowa, chairman of the Senate Ag Committee on Agriculture, Nutrition and Forestry, said he is urging the U.S. Department of Justice to asses the impact on producers and consumers.

What will it mean to livestock producers themselves? It’s simply too early to know much.

Other News

With Easter being early this year, beef salespeople are anxious to have consumers and retailers gearing up for grilling season by buying beef.  Mid-March should see higher demand along with higher beef prices.  Currently, demand and supply are well matched.

Thursday, the April contract closed on below the $90 threshold, the first time since December 15, 2006 that the nearby contract traded below that level.  Also seeing a decrease in value; the June, August and October contracts.  The market continues to show concern with the ability of packers to pass higher cattle prices onto their customers and consumers.

Consumer confidence sank to a mark of 33.1 in early March, down from 48.5 in February, according to the RBC Cash Index. The new reading was the worst since the index began in 2002.

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