Chart courtesy of the CME Group Daily Livestock Report

Illinois Producers, join us at this upcoming meeting:

Tuesday, April 15^th – Carlyle, Illinois

Carlyle IGA Annex at 7:00 PM

To RSVP or for further details call 877.207.1051 or

email info@nexusag.org.

· March 1 Cattle on Feed: On Feed 102.0%, Placements 104%, Marketings 104%

·  Fed cattle are $100/head in the red currently and the Choice-Select spread is at an all time low (see chart above) and weights are steady at a time when historically they should be quickly decreasing.  As reported in the Daily Livestock Report, feeders are compounding the impact of record-high feedlot inventories by adding weight and are doing so at record-high costs of gain. The industry must deal with the immediate challenges before they can address the over-capacity and production issue.  There are too many cattle, too much beef and feed that costs too much.  None of those will be solved by feeding cattle one more week in hopes of a market rally that the extra output almost guarantees will not happen.

· Industry observers believe there is over a million head of excess feedlot capacity. Numerous feedyards are for sale but capacity is actually expanding, mainly in areas close to ethanol plants and the low-cost distillers grains.

· Beef Magazine reviewed the three industry challenges and therefore opportunities for growing demand in this months issue. Increase the number of customers, increase the average value of each transaction and ramp up the frequency of beef purchases.

· The bad news continues for cattlemen as four big down-side factors impact their livelihood. Contraction of the domestic economy, higher input costs, more pork and the absence of Japan and Korea consumers eating U.S. beef.  In other news, Japan lifted a beef import ban Thursday for Smithfield’s Tolleson, Arizona plant.

· Marked increases in both steer and heifer carcass weights were reported in the March 14th eNote.  Those increases, which equate to a 12 lb. increase in carcass weights over the seasonal average, is the same as adding 12,000 head to the weekly slaughter.

· How much is the price of gas impacting American consumers?  Compared to a year ago, $156 million is being diverted in fuel costs.  Andrew Gottschalk from HedgersEdge.com notes the significance of the fuel price taking money out of consumers’ pockets while adding to the cost of doing business.

· Loin top butt is the part of the loin that yields those flavorful and affordable sirloin steaks.   A typical loin primal yields about 30% top butt steaks and only 7% tenderloins. As the weather warms and grills get going, demand for the less expensive steak items increases.  Packers are able to charge considerably more for this item than they do during the rest of the year. This spring, the prices for this item have actually moved lower. On April 3^rd, the price for the loin was 35% lower than 2007 and 34% lower than the five year average.

· Is concentration enough to reject JBS deal?  According to Meatingplace.com, Douglas Ross, special counsel for agriculture in the Antitrust Division of the Department of Justice told NCBA’s Spring Legislative Conference that high levels of concentration doesn’t necessarily mean a violation of antitrust laws, and that specific evidence will be required to make a case.

NOTICE:  

Nexus Marketing (www.nexusag.org) is sending you this e-newsletter to keep you better informed.

Subscribe additional email addresses to receive the Nexus eNote by sending an email to subscribe@nexusag.org with the word “subscribe” in the subject line and the email addresses you wish to add in the body along with their name.

Unsubscribe from the Nexus eNote by sending an email to unsubscribe@nexusag.org from your email account with the word “unsubscribe” in the subject line and your name in the body.

©2007 Nexus Marketing