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Nexus eNote

Beef
Week Ending	9/28/07	9/21/07	Year Ago	% of Prior Week	% of Prior Year
Slaughter	654,000	645,000	636,000	101.4%	102.8%
Beef (million lbs)	513.8	506.6	497.2	101.4%	103.3%
Choice Value	146.68	145.73	141.34	100.7%	103.8%
Select Value	137.47	137.25	132.66	100.2%	103.6%
Choice/Select Spread	9.21	8.49	8.68	108.5%	106.1%
Dressed Steer Weight	869	867	868	100.2%	100.1%
Dressed Heifer Weight	777	775	779	100.3%	99.7%

Live Cattle
Week Ending	9/28/07	9/21/07	Year Ago	% of Prior Week	% of Prior Year
Live Steer Weight	1,340	1,340	1,318	100.0%	101.7%
Live Heifer Weight	1,198	1,203	1,193	99.6%	100.4%
5 Area Cattle Price	95.34	93.71	90.63	101.7%	105.2%
Nearby Cattle Futures	96.95	96.70	90.67	100.3%	106.9%

Grain
Week Ending	9/28/07	9/21/07	Year Ago	% of Prior Week	% of Prior Year
Nearby Corn Futures	3.73	3.76	2.64	99.2%	141.3%
Nearby Soybean Futures	9.91	9.79	5.53	101.2%	179.2%

Nexus eNote

§ Cattle-Fax anticipates that food and commodity prices will continue to increase since what is driving the prices up is demand. Below is a list of the percent change in prices from Aug/Sep 2007 vs. Aug/Sep 2006.

Corn 55.9%	Wheat 45.9%	Chicken 17.5%
Soybeans 51.5%	Milk 21.4%	Beef 6.6%

§ Beef packers are making decisions based on market share and cash flow these days rather than their bottom line. Packers lost $32.43/head last week but are fighting for market share. Plants, especially JBS Swift are looking to maximize capacity utilization by continuing a healthy slaughter pace.

§ The September 1 Hogs and Pigs report showed a 3% increase compared to 2006.

§ The American dollar is weakening while the Canadian dollar has increased by 53% and the South Korean won have increased 30% since 2001. To the cattle industry, this is a positive situation. The weak dollar slows imports but increases exports; especially when other countries currency is appreciating in value.

§ What do Americans think about COOL? Of 1,000 Americans polled, 69% indicated they’re checking labels for nation of origin compared to 53% a year ago. 87% have confidence in American made and distributed products but only 47% think the US is doing a good job ensuring imported goods meet standards for safety and quality.

§ Consumer confidence is slipping. It’s currently at its lowest level in two years and October isn’t expected to be any better. Consumer confidence impacts the beef industry by the choices consumers make in the grocery stores and in restaurants. Although producers love to see high live cattle prices, this necessitates packers to increase the price of retail beef. The high cost of beef, in the face of much cheaper and plentiful supplies of pork and chicken, could significantly impact beef sales over the coming months.

Nexus eNote

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