Happy Thanksgiving!

                          Chart courtesy of Daily Livestock Report

· November 1 Cattle on Feed: On Feed 98.3%, Placements 111.8%, Marketings 106.3%

· Idaho, Colorado, Oklahoma, Kansas and Nebraska all saw decreases in their cattle inventories for November 1 compared to a year ago while Iowa, South Dakota, Arizona and California saw increases.  Texas stayed even with 2006.

· There is a larger premium being paid in the south compared to the north because of these shifting numbers, according to Cattle-Fax.  Essentially, the packing capacity is in the south but the cattle are moving north.  The three year average of Texas to Iowa price premium is $0.68/cwt. year to date, prices in Texas have averaged $0.97/cwt. above Iowa.

· USDA is determining whether or not they will require processors to hold meat until government tests are returned guaranteeing that the meat is safe.  Currently, the rules state that the meat can be shipped before the test results are returned and if there is a positive test, then a recall is put into place.  A mandatory test-and-hold would all but eliminate recalls because the products wouldn’t be released to the public until they’re safe.  However, it would be difficult when marketing short shelf life products.

· On November 26, Canadian cows will again be allowed across the border.  Gregg Doud, NCBA chief economist, lists a few reasons that the impacts of this should be minimal: Lack of proper age identification will disqualify most Canadian beef cows.  While transportation costs, strength of the Canadian dollar and the excess packing capacity in Canada will also be deterrents.  And, there is not a large amount of cull cows waiting to be killed since the additional capacity Canada has added since 2004. 

· Doud states that this rule may actually affect feeder cattle more.  Wit the exchange rate and the cheaper cost of gain in the U.S. compared to Canada, there may actually be more feeders crossing the border.

· The 2007 hay crop of 140 million tons was the second smallest production since 1993.  Because of this, prices are forecasted to be $20/ton higher than last year.

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