· The federal government is billing Westland/Hallmark Meat Co. $67.2 million for costs associated with the largest beef recall in U.S. history and could be held liable for as much as $117 million in the end.  According to USA Today, just in California, more than $1.1 million has been spent to destroy the beef and products containing it that were distributed via the federal school lunch program.  That includes 4.2 million pounds of beef and 155,000 cases of processed food. 

· Feeder cattle prices are 5-7% lower than this time last year, but have held up better than expected because of demand from cattle feeders and a slightly tighter supply. Analysts say that this will now change. The feeding losses, which could be as much as $100M per week and corn above $5.50 per bushel will force a sharp correction in feeder prices. They could fall below fed cattle prices, say analysts.  According to Cattle Buyers Weekly, feeding margins in January were negative by $168 per head and in February by $148 per head, says the Livestock Marketing Information Center. Its data for March was not available. But other analysts report current losses at $125-250 per head. Some Texas closeouts are at $110 per cwt., says Andrew Gottschalk, HedgersEdge.com. With cash prices at $86 per cwt., that would mean a loss of $300 per head on a strictly cash basis.

· Americans can cook most food at home for less money than it costs to eat out, but the costs of food at the supermarket are actually rising faster than menu prices at restaurants.  According to the National Restaurant Assn. restaurant prices increased 3.9% in the past compared to 7.6% food price inflation in the past year.

· Yield instead of grade?  Greater emphasis should placed be on how cattle yield, rather than how they grade given the current economic conditions. While we encounter high grain prices, getting cattle to a point where they have an acceptable yield may become more logical than holding cattle in order to attempt to make them grade Choice. As cattle lose their efficiency, costs of gain could rise above the fed price. This means cattle that are held in order to grade could be costing more than they will return when marketed, according to Cattle Fax.

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