2008 Outlook: Livestock
By Cheryl Warren
1/10/08 2:40 PM
OMAHA (DTN) -- Across the board, the biggest concern all livestock producers seem to have for 2008 is the high cost of feed.

While livestock producers may be enjoying good prices for their meat, eggs or milk, the high overhead costs involved with feed are driving profit margins down. Some livestock industry analysts attribute the increases in feed costs to an ethanol-driven rise in corn prices.

Robin Schmahl, hedge and marketing specialist and DTN contributing dairy analyst, said prices for all alternate feeds used by dairies -- such as distillers grain, blood meal, cotton seed, etc. -- are increasing, driving up the cost of production.

"There's nothing out there right now that is a good buy price-wise," he said. "The bottom line is that all feed prices are going up, and it's going to be a real issue in 2008 if we continue with underlying grain prices as they are."

Producers counting on DDGs to compensate for high-priced corn may be in for a surprise, since DDG prices almost always follow corn prices, said Terry Klopfenstein, professor of ruminant nutrition at the University of Nebraska-Lincoln .

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Beef Checkoff: Meat Cases Tell … The Rest Of The Story (CENTENNIAL, Colo. ) – In 2007, The Beef Checkoff teamed up with Sealed Air’s Cryovac Food Packaging and the National Pork Board to conduct an extensive audit of the nation’s retail meat cases. Checkoff dollars helped unfold the story in an effort to understand how meat cases are being shaped and answer the age old question: Is the industry responding to consumer desires, or are those desires driving what’s in the meat case? The conclusion: both.
More than 120 retail supermarkets and 10 club stores were audited in 48 metro markets across the country. Detailed information from more than 157,000 packages representing over 281,000 pounds of meat was captured to help further understand the growing transformation seen in the retail meat case over the last five years.
“What checkoff dollars aimed to accomplish through this survey was to help the participating organizations understand what consumers are seeing in the store and what in-stock information is, while identifying trends to help retailers meet consumers’ needs,” says Don Stewart, an importer from Highland Park , Ill. , and chair of the beef checkoff’s Joint Retail Committee. “With this knowledge, we can help put more beef in more grocery sacks and as a result, on more dinner tables.”
So what’s at the heart of the meat case story? Fresh meat’s share of the case increased. Growth of branded programs for meat increased while store brands gained predominance. Boneless product interest also grew – with whole muscle beef having the largest overall share. Value-added packages (products with flavorings or ingredients added) continued to grow while enhanced beef saw a decline. While natural and organic packages remained a niche category, their share did grow.
The in-stock condition for case-ready meats was generally better. Retailers also appear to be finding it easier to keep those items in stock. Nutrition labeling increased. The retail trade appears to be doing a better job of reducing costly out-of-stock conditions on some of their better-selling items. In fact, this survey found that only 2% of stores didn’t have stew meat on down to the improvement seen in Boneless Top Sirloin Steak where out-of-stocks were cut in half.
The survey also aimed at identifying emerging retail trends nationally that could be used to aid development of new marketing applications that might drive incremental fresh meat sales growth in the coming years.
“Consumer information is vital to help communicate the many benefits of today’s meat products and ultimately improve beef’s demand. The checkoff recognizes studies such as these as benchmarks on consumer trends then shares the data with retailers in an effort to assist them in moving more beef off the shelves,” adds Stewart. “Along with new technologies that help enhance product packaging and expand shelf life, retailers and producers are actively staying in tune with consumer needs. Not only are we helping to make the consumer buying experience easier, but furthering retailer success and the future of beef demand.”
And that’s the rest of the meat case story

Plan Now For Fertilizer Needs, Tight Supply Could Leave Producers Short

MANHATTAN, Kan. - Supplies of nitrogen fertilizers, as well as phosphorus and potassium fertilizers, are tight throughout the United States , making this the time to plan ahead, a Kansas State University agronomist said.

In fact, it is currently difficult to buy fertilizer nitrogen for winter wheat topdressing and/or this spring´s row crops unless the supply has already been lined up - regardless of what the posted prices are, said Dale Leikam, K-State Research and Extension nutrient management specialist.

"The tight supply situation applies to all the main nitrogen fertilizer sources - UAN solution, urea, and ammonia - as well as other phosphorus and potassium fertilizers. Fertilizer prices are continuing to increase and supplies will likely remain very tight for the foreseeable future," Leikam said. "Therefore, producers should keep in close contact with their supplier in order to line up their anticipated fertilizer needs. Waiting until it is time to apply crop nutrients to make arrangements for fertilizer needs could leave producers on the outside looking in."

The sharp increase in price and accompanying fertilizer N shortage is not a sudden development, the agronomist explained. Unprecedented market forces have markedly changed the fertilizer industry over the past decade which has set the stage for the current supply/demand imbalance and resulting high prices, he said.

"Over the past decade, much of our fertilizer nitrogen manufacturing capacity has shut down in the U.S. as a result of sharp increases and fluctuations in natural gas costs, lower-cost foreign competition, domestic environmental regulations, and so forth. In most cases, the domestic fertilizer manufacturing plants that have ceased operations will likely never come back on line despite the current higher fertilizer nitrogen prices," Leikam said.

As a result, more and more nitrogen fertilizer is now imported from countries in the Middle East, South America, the former Soviet Union , and other low-cost natural gas areas, he said.

"More than 50 percent U.S. fertilizer nitrogen supply is imported annually - and our dependence on foreign imports continues to increase. Also, global demand for this supply of fertilizer nitrogen continues to increase, especially in countries such as China and India with rapidly expanding economies," Leikam said.

Producers can do little about this situation except to keep in constant contact with their local fertilizer supplier and commit to needed products as soon they know what their needs are, the K-State agronomist said.