USDA Hay Report - Jan. 23, 2009

Hay prices this week generally steady to lower.

AMARILLO, TX., Jan. 23, 2009 -- Compared to last week: Hay prices generally steady to weak in a slow to moderate trade. However, chopped alfalfa 5.00-10.00 per ton lower. High quality alfalfa for horses or dairy farms continues to be limited in supply.

Feedlots placements have been below normal and many suppliers have extended the contract period to accommodate feedlots. Some firmness noted due to the increased use by wheat and oat pasture operators as they use hay for supplemental feeding.

Decreasing dairy/milk prices has many dairy farms cutting back production and hay requirements. Several feedlots resorted to grinding corn stalks, Milo, and other rough hays particularly earlier in the season when hay prices looked like they were going higher.

Most of the state continues dry with very short soil moisture and tanks and ponds continue to dry-up. Supplemental feeding of hay continues but some Producers have run out of water and have been forced to sell-off livestock or haul water.

The state of Texas Department of agriculture has the Hay and Grazing Hot Line set up for buyers and sellers, number is 1-877-429-1998. The web site for TDA is www.tda.state.tx.us.

Prices for hay and pellets quoted per ton except where noted.

Panhandle:
Alfalfa:
Small Squares: Delivered:
Premium to Supreme quality 240.00-300.00, 8.00-10.00 per bale;
Good to Premium quality 200.00-240.00, 7.00-8.00 per bale.

Large Squares: Delivered:
Supreme to Premium quality 200.00-250.00, instances to 265.00;
Good to Premium quality 190.00-200.00;
Fair to Good quality 160.00-190.00;
Fair quality 135.00.

Chopped Alfalfa:
Delivered to feedlots:
North: 180.00-190.00.
South: 185.00-190.00.

Sorghum Hay:
Large rounds: Delivered: 100.00-110.00.

Oat Hay:
Large Bales: Delivered: 155.00.

Bluestem Grass Hay: Delivered: large rounds: 120.00.

Haygrazer: Delivered: large rounds 125.00-135.00.

West Texas:
Alfalfa:
Small Squares: FOB:
Premium to Supreme quality 240.00-300.00, 8.00-10.00 per bale;
Good to Premium quality 200.00-240.00; 7.00-8.00 per bale.

Large Squares: Delivered:
Premium to Supreme quality 200.00-250.00;
Good to Premium quality 190.00-200.00;
Good quality 160.00-190.00.

North, Central and East Texas:
Alfalfa: Small Squares: Delivered:
Premium to Supreme quality 240.00-300.00, 8.00-10.00 per bale;
Good to Premium quality 7.00-8.00 per bale.

FOB:
Good to Premium quality 5.00-7.00 per bale in the barn.
Large Squares: Delivered:
Premium to Supreme quality 200.00-250.00;
Good to Premium quality 190.00-200.00.

Coastal Bermuda:
Small Squares: FOB:
Premium quality 6.00-7.50 per bale;
Fair to Good quality 5.00-6.00 per bale.

Large rounds: FOB:
Premium 70.00-80.00;
Good quality 50.00-70.00;
Fair quality 40.00-50.00 per roll.

South Texas:
Coastal Bermuda:
Small squares: FOB or delivered locally:
Good quality 5.00-7.50 per bale.

Large rounds: FOB:
Premium quality 70.00-85.00;
Good quality 50.00-70.00;
Poor quality 30.00-40.00 per roll.

See the full report at http://www.ams.usda.gov/mnreports/am_gr310.txt.

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Texas Cattle Producers Facing ‘Perfect Storm’ of Challenges'

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COLLEGE STATION, TX., Jan 23, 2009 -- Extreme drought and ever-increasing costs are presenting Texas cattle producers challenges they haven’t experienced in decades, said industry experts.

“The Texas cattle industry is simultaneously having to deal with drought, increasing operational costs and a declining cattle market,” said Dr. David Anderson, Texas AgriLife Extension Service livestock marketing economist in College Station.

A combination of factors is producing a perfect storm for many of the state’s cattle producers, Anderson said.

“Along with the drought, cattle producers are having to deal with near-record high corn and soybean meal prices and increased prices for other inputs,” he said. “Producers have had to provide much more supplemental feed and nutrition to their cattle, and costs for these have gone up dramatically in recent years.”

Anderson added that while fuel prices have gone down over the past several months, they still constitute a large expense for cattle operations.

“Feed costs remain high across the board,” he said, “and hay, which is grown locally, is also in short supply due to the drought.”

Dr. Larry Redmon, AgriLife Extension state forage specialist, said the current drought conditions are much like 2006.

"We have not cut the hay we normally would have for two reasons – drought and high fertilizer prices,” he said. “Not only is our hay crop down, but it also has lower nutritive value. Those who are feeding it are likely having to feed some supplementation.”

Forages that went into the dormant, winter season were already in a “stressed and short condition." Redmon said.

“As they come out in the spring, they may be slower to come on since there is hardly any moisture stored underground in the soil profile,” he said. “As we come out of the dormant season those stressed plants will put out a few shoots and cows will be standing right on top of them ready to graze them. If we don’t get some good rainfall and if managers don't carefully consider their stocking rate, warm-season pastures this spring will have a difficult time due to excessive grazing pressure and lack of moisture.”

Winter pasture mostly has been a failure, he added.

Recent reports of cattle dying due from drought-related circumstances in different parts of the state have further demonstrated the extent of those challenges producers currently face, said Dr. Rick Machen, AgriLife Extension livestock specialist in Uvalde.

"The cattle deaths in different areas of Texas are likely drought-related; beef producers have liquidated cow numbers and reduced stocking rates to balance forage supply and demand and avoid further losses," said Machen. “Forage availability is limited in many areas. Poor growing conditions and reduced nitrogen fertilization have resulted in lower-than-normal hay quality.”

Machen noted that the Texas Veterinary Medical Diagnostic Laboratory at Texas A&M is working to help determine additional steps producers may take to help prevent further cattle deaths related to the drought.

“The three Fs – feed, fuel and fertilizer – are the major costs associated with our cattle operation,” said Rachel Bauer, AgriLife Extension agent for agriculture and natural resources in Bastrop County, and a cattle producer. “Over the past year, our operational costs have increased significantly.”

Bauer, who lost several head of cattle due to drought conditions in that area, noted that these cattle were provided with supplemental feed and nutrients to keep them healthy.

“Unfortunately, sometimes cattle go beyond their ability to recover,” she said. “There have been limited supplies of hay, and feed costs are too high to make it economical for producers to provide grain to cattle throughout the year.”

Bauer added that many cattle ranchers are realizing they need more hay than expected to weather the long term and must prepare to grow sufficient forage for cattle to feed on this coming spring.

“They have to ensure the cattle are in good condition and healthy enough to breed,” she said.

“While things may look bleak for the cattle industry now, the longer-term outlook is much better,” said Anderson. “Many cattle ranchers have been reducing the size of their cow herd and putting themselves in a better position for the future. Once the economy improves, demand for beef will increase and so will the price.”

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Texas Banks Receive Bail-Out Money

Four Texas banks receive almost $135 million in TARP funds.

WASHINGTON, D.C., Jan. 22, 2009 -- The U.S. Treasury Department announced details this week of a $1.5 billion investment in 39 banks made through its Capital Purchase Program.

Treasury created the Capital Purchase Program, a part of the Troubled Asset Relief Program, to help to stabilize and strengthen the U.S. financial system. Treasury allocated $250 billion under TARP's Capital Purchase Program to invest in U.S. financial institutions.

To date, the Department has made $193.8 billion of investments, receiving preferred stock and warrants from participating institutions. Investments have ranged from as small as $1 million to as large as $25 billion, financing community banking and Community Development Financial Institutions in 43 states and Puerto Rico.

In the most recent disbursement of $1.5 billion, the Treasury department invested over $134 million in four Texas banks:

* Texas Capital Bancshares, Inc., Dallas                      $75,000,000
* Metrocorp Bancshares, Inc., Houston                         $45,000,000
* TCB Holding Company (Texas Community Bank), The Woodlands   $11,730,000
* Treaty Oak Bancorp, Austin                                   $3,268,000

The money to the Texas financial firms was not the largest investment made in the package. That honor went to First Bancorp, of San Juan, Puerto Rico. That institution received a whopping $400 million of taxpayer dollars.

Institutions that sell shares to the government must comply with restrictions on executive compensation during the period that Treasury holds equity issued through the program.

The banks must also agree to limitations on dividends and stock repurchases.

Information about Treasury's Troubled Asset Relief Program can be found at http://www.treas.gov/initiatives/eesa/.

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Economic Uncertainty Impacts Livestock, Poultry Prices

Latest USDA livestock outlook yields mixed news for consumers and producers.

WASHINGTON, D.C., Jan. 22, 2009 -- The livestock outlook released by the United States Dept. of Agriculture (USDA) today was a mixed bag of predictions, saying the poor economy would soften demand in most markets in the first part of 2009, which should net consumers lower prices. But it also mentioned declining production costs and supply levels as bright points for producers, predicting a general strengthening of price support by the years end.

The report says pork and lamb prices will remain stable throughout 2009, claiming a reduction in demand due to national economic conditions.

Poultry prices are expected to continue to decline for the first half of the year, causing a decrese in production which should swing prices higher by years end.

Egg prices, already fairly high, are predicted to climb slightly in the first quarter, then decline seasonally.

Beef prices, consumer friendly of late, are predicted to rise as production levels fall and exports increase, lowering the supply.

Detailed excerpts from the report follow, as well as a link to the complete report.

Pork/hogs:
Recession-squeezed consumer budgets will likely constrain increases in pork and hog prices this year, despite expected reductions in production foreshadowed by the December 1 Quarterly Hogs and Pigs.

Lamb:
Fourth-quarter 2008 commercial production of lamb and mutton is estimated at 42 million pounds, about 13 percent below the fourth quarter of 2007. Lamb and mutton
imports, which in the past have offset tight domestic supplies, are also forecast to slow considerably in the fourth quarter. Despite tight supplies, prices were unable to break out of the price range held for most of 2008 due to the softer-than-expected fourthquarter demand.

Poultry:
With continued lower chick placements, broiler meat production is expected to
decline in fourth-quarter 2008 and through the first three quarters of 2009. With falling production, prices for many broiler products are expected to gradually show some upward pressure, but will be held back at first due to high stock levels. Whole turkey prices remained relatively strong through the end of December. Whole hen turkey prices averaged 87 cents per pound in the fourth quarter and 88 cents per pound in 2008, the fifth consecutive year that average prices have risen. Egg prices remained at relatively high levels through the end of 2008, as a continued smaller table egg laying flock has resulted in lower production. Egg prices in 2009 are expected to gradually strengthen through the Easter period and then decline seasonally.

Beef:
Both commercial cow slaughter and calf slaughter remained at high levels
throughout 2008 relative to total U.S. cow inventories. These slaughter levels will likely result in lower production for 2009 and beyond, potentially providing support for fedcattle prices. Lower prices for energy and feed could mitigate cow and cattle-feeding inventory declines to some extent, while increased exports of U.S. beef could provide further support for cattle and beef prices.

Download the complete report here.

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Crocket Livestock Auction - Jan. 20, 2009

Feeder and slaughter cattle prices steady to slightly lower on active demand in the face of a feeder glut.

CROCKETT, TX, Jan. 20, 2009 -- Compared to last week: Feeder steers and heifers unevenly steady, with some classes 1.00 lower. Slaughter cows 1.00 lower. Slaughter bulls 2.00 higher. Trade and demand strong and active. Bulk supply Medium and Large 2-3 300-600 lb feeder steers and heifers. Slaughter cows made up 11 percent of the offering, slaughter bulls 1 percent, replacement cows 1 percent, and feeders 87 percent. The feeder supply included 67 percent steers and 33 percent heifers. Near 20 percent of the run weighed over 600 lbs.

Cattle and Calves: 1,561
Week Ago: 1,561
Year Ago: 701

Steers:
Medium and Large 1:
200-300 lbs 134.00-136.00, individual 145.00;
300-340 lbs 120.00-128.00,
350-400 lbs 109.00-119.00;
400-445 lbs 96.00-106.00, few to 119.00,
450-500 lbs 93.00-103.00, few to 116.00;
500-545 lbs 92.00-101.00, few to 107.00,
550-600 lbs 91.00-99.00;
600-640 lbs 84.00-94.00, few to 98.00,
650-700 lbs 82.00-91.00, calves 88.00-96.00;
700-800 lbs 74.00-84.00, few to 88.00;
800-900 lbs 79.00-83.00.

Medium and Large 2:
200-300 lbs 115.00-122.00, thin 131.00-142.00;
300-400 lbs 95.00-105.00, few to 114.00, thin 115.00-127.00;
400-500 lbs 89.00-98.00, few to 107.00, thin 108.00-118.00;
500-600 lbs 82.00-92.00, few to 98.00;
600-700 lbs 74.00-82.00, few to 88.00, calves 79.00-88.00, few to 93.00;
700-800 lbs 73.00-82.00.

Medium and Large 3:
200-300 lbs 105.00-112.00;
300-400 lbs 90.00-100.00, few to 106.00, thin 110.00-114.00;
400-500 lbs 84.00-91.00, few to 101.00;
500-600 lbs 82.00-92.00.

Heifers:
Medium and Large 1:
200-300 lbs 110.00;
300-400 lbs 90.00-100.00;
400-420 lbs 92.00-98.00,
465-500 lbs 80.00-88.00;
500-600 lbs 77.00-86.00, few to 88.00;
600-700 lbs 76.00-79.00, individual 88.00, calves 78.00-83.00.

Medium and Large 2:
200-300 lbs 99.00-100.00;
300-400 lbs 79.00-89.00, few to 94.00;
400-500 lbs 79.00-89.00, few to 95.00;
500-600 lbs 77.00-85.00, few to 89.00;
600-700 lbs 71.00-79.00;
700-800 lbs 72.00.

Medium and Large 3:
300-400 lbs 77.00-87.00, few to 90.00;
400-500 lbs 70.00-80.00, few to 85.00;
500-600 lbs 73.00-79.00;
600-700 lbs 70.00.

Slaughter Cows:

         %Lean Weight    Avg. Dress   Hi Dress    Lo Dress
Breakers 75-80 1200-1600 43.50-47.50              38.50-40.50
Boners   80-85 1200-1600 42.50-47.50  48.50-49.50         
Boners   80-85 1000-1200 41.50-46.50  47.50-48.50 35.50-40.00
Lean     85-90 1000-1200 37.50-42.50  44.00-45.50 29.50-33.50
Lean     85-90  800-1000 32.50-37.50  39.50-44.00 27.50-31.50

Slaughter Bulls:
Yield Grade 1-2 1265-1910 lbs 51.50-56.50
High Dressing 1680-1910 lbs 57.50-59.50
Low Dressing 1375-1675 lbs 47.00-50.50

Replacement Cows:
Medium and Large 1-2:
young 855-860 lb cows 2-8 months bred 530.00-610.00 per head;
middle aged 1015-1375 lb cows 5-8 months bred 640.00-800.00 per head;
aged 1175-1440 lb cows 7-8 months bred 570.00-700.00 per head.

Cow/Calf Pairs:
Medium and Large 1-2:
middle aged 1200-1330 lb cows w/180-300 lb calves 700.00-850.00 per pair;
aged 930-1315 lb cows w/130-140 lb calves 600.00-750.00 per pair.

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GM Teams With Cattle Raisers, Offers Savings On Vehicles

Texas and Southwestern Cattle Raisers Association (TSCRA) members can save an additional $500 on most new General Motors (GM) vehicles, including hybrids.

FORT WORTH, TX, Jan. 20, 2009 -- The $500 private offer is valid toward the purchase or lease of eligible new 2008, 2009 and 2010 model year GM passenger car and light duty truck models.

The program requires members to take delivery by Jan. 4, 2010. The program is compatible with some current consumer incentive programs, but not with other private offers.

"Just like the cattle industry, GM vehicles are a tradition here in Texas and throughout the rest of the country," TSCRA Executive Vice President Eldon White said. "We are pleased to join with GM once again to offer these valuable savings to our members."

The program covers a variety of vehicles, including all models of Chevrolet and GMC pickups, and many Cadillac, Buick, Pontiac, Hummer and Saab models.

Members are urged to visit their local GM dealer for complete program details or visit www.gmfleet.com/tscra.

Participants must be a member of TSCRA for at least 30 days to participate in the program. All TSCRA members meeting the 30-day criteria in Texas, New Mexico or Oklahoma may participate.

Members may visit www.gmfleet.com/tscra for more information.

The program is transferable to another individual residing in the same household, but it is not valid on prior purchases, and incentives are subject to change. The program also excludes Cadillac CTS-V; Chevrolet Corvette ZR1; Hummer H1; Saturn vehicles and medium duty trucks.

Texas and Southwestern Cattle Raisers Association is a 131-year-old trade organization whose 15,000 members manage approximately 4 million head of cattle on 51.5 million acres of range and pasture land, primarily in Texas and Oklahoma. TSCRA provides law enforcement services, livestock inspection, legislative and regulatory advocacy and educational opportunities for its members.

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Government Contract Workshop Set For February

Contractors and business owners interested in working with the federal government following Hurricane Ike can learn more about the subject by attending a free workshop in Galveston in February.

AUSTIN, TX. Jan. 21, 2009 -- The Bid and Proposal Preparation Workshop will be held Thursday, Feb. 5, from 6:30 p.m. to 9:30 p.m. at the Macedonia Missionary Baptist Church, 2920 Ave. M ½, Galveston, Texas.

The event is sponsored by the Federal Emergency Management Agency (FEMA), Galveston Councilwoman Dr. Linda Colbert, Councilman Tarris Woods, the Macedonia Missionary Baptist Church and the U.S. Small Business Administration (SBA).

Participants will learn how to:
* Effectively respond to bids, Requests for Proposals (RFPs)and Requests for Quotations (RFQs);
* Develop a strong proposal;
* Utilize local available resources.

The event is free and open to the public, but pre-registration is required by calling 1-409-771-5258. Attendance does not guarantee a contract award. More information is available online at www.fema.gov/business/contractor.shtm.

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Lonestar Steel Workers Face Possible Cut Backs

U.S. Steel predicts 50 workers to be affected by production line closures.

NEWS RELEASE, Jan. 5, 2009 -- U. S. Steel Tubular Products, Inc., a subsidiary of United States Steel Corporation announced today that it will exit the drawn-over-mandrel (DOM) tubular products business and close the DOM lines at its Texas Operations Division in Lone Star, Texas. This will result in a pre-tax charge of approximately $25 million in the fourth quarter of 2008.

In 2008, U. S. Steel Tubular Products shipped approximately 50,000 tons of DOM products, which accounted for less than 3 percent of the company's tubular shipments for the year. All current booked orders will be produced and shipped consistent with original commitments. U. S. Steel Tubular Products is notifying its customers of its decision to exit the business. DOM products are used by automotive manufacturers, mining operations, fluid power component manufacturers and steel service centers.

Approximately 50 employees will be affected by the closure of the DOM lines.

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NPPC Sues EPA On Emissions Reporting Rule

Pork Producers file lawsuit on behalf of large livestock operations against new EPA reporting requirements.

WASHINGTON, DC, Jan. 19, 2009 -- The National Pork Producers Council today filed a lawsuit in federal court challenging the U.S. Environmental Protection Agency’s decision to require livestock farms to file reports under the Environmental Protection and Community Right To Know Act (EPCRA). NPPC also is alleging that EPA violated the due process rights of farmers by failing to develop an adequate system to accept the reports, making compliance with the law impossible.

Under a rulemaking issued Dec. 18, EPA decided that large livestock farms would be required to file mandatory reports on air emissions by first making phone calls to their state and local emergency response authorities, then by filing a written notification of emissions estimates. Farms that fail to comply will face penalties of $25,000 per day. The rule goes into effect Jan. 20, 2009, the first day of the Obama administration.

“In sticking the agricultural community with this unworkable rule,” said NPPC President Bryan Black, a pork producer from Canal Winchester, Ohio, “EPA not only failed to provide any guidance to farmers on compliance with the new regulation or develop an adequate system to handle the volume of reports that would be filed, but it actively engaged in efforts that undermined the ability of farmers to comply with this new, stringent rule.”

Among those efforts, EPA told state officials not to accept reports and provided on its Web site false and out-of-date information on filing reports. Additionally, the agency did not issue guidance for complying with the rule until 4:30 p.m. Jan. 16 – the last business day before the filing deadline – giving America’s 67,000 pork producers and hundreds of thousands of other livestock farmers only 30 minutes to receive, read and interpret the guidance and to develop and file the appropriate emissions report.

In the lawsuit it filed in the U.S. Court of Appeals for the District of Columbia Circuit, NPPC is challenging EPA’s decision to exclude livestock operations from the EPCRA agriculture exemption and asking the court to enjoin EPA from enforcing the rule until the agency develops a system that will allow producers to comply.

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Athens Livestock Auction - Jan. 9, 2009

Steers and heifer prices climb, slaughter cattle market remains steady.

ATHENS, TX, Jan. 9, 2009 -- Compared to three weeks ago: Feeder steers and heifers under 400 lbs 8.00-12.00 higher, over 400 lbs. 3.00-5.00 higher. Slaughter cows steady to 2.00 lower. Slaughter bulls steady. Trade and demand good. Bulk supply Medium and Large 1-2 400-700 lb feeder steers and heifers. Slaughter cows made up 9 percent of the offering, slaughter bulls 1 percent, replacement cows 5 percent, and feeders 85 percent. The feeder supply included 59 percent steers and 41 percent heifers. Near 16 percent of the run weighed over 600 lbs.

Cattle and Calves: 1,395
Week Ago: 445
Year Ago: N/A

Steers:
Medium and Large 1: 300-400 lbs 113.00-118.00; 400-500 lbs 97.00-100.00, few to 108.00; 500-600 lbs 90.00-94.00, few to 96.00.
Medium and Large 2: 300-400 lbs 106.00-111.00; 400-500 lbs 91.00-97.00; 500-
600 lbs 82.00-86.00; 600-700 lb calves 75.00-82.00; 700-800 lbs 71.00-77.00.
Medium and Large 3: 400-500 lbs 84.00-90.00.

Heifers:
Medium and Large 1: 300-400 lbs 95.00-100.00; 400-500 lbs 89.00-91.00; 500-600 lbs 84.00-87.00.
Medium and Large 2: 300-400 lbs 86.00-90.00; 400-500 lbs 80.00-83.00; 500-600 lbs 77.00-82.00; 600-700 lb calves 71.00-77.00.
Medium and Large 3: 300-400 lbs 74.00-78.00.

Slaughter Cows:
Boners, 80-85%, 1200-1600#, Avg Dress 39.00-46.50
Boners, 80-85%, 1000-1200#, Avg Dress 39.00-45.50
Lean, 85-90%, 1200-1600#, Avg Dress 35.00-38.00
Lean, 85-90%, 1000-1200#, Avg Dress 32.50-37.50
Lean, 85-90%, 800-1000#, Avg Dress 32.00-35.00, Lo Dress 25.00-29.50

Slaughter Bulls:
Yield Grade 1-2, 1300-2100#, 49.00-54.50
Low Dressing, 1000-1300# 42.50-46.50

Replacement Cows:
Medium and Large 1-2: young 750-1140 lb cows 5-8 months bred 55.00-83.00 CWT; middle aged 900-1465 lb cows 5-8 months bred 42.00-58.00 CWT; aged 865-1350 lb cows 4-8 months bred 35.00-46.00 CWT.

Cow/Calf Pairs:
Medium and Large 1-2: middle aged 800-1300 lb cows w/50-200 lb calves 630.00-1010.00 per pair; aged 950-1270 lb cows w/100-200 lb calves 670.00-740.00 per pair.

Source: Texas Dept of Ag Market News-USDA Market News, Amarillo, TX

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