Lou Moore forecasts
UNIVERSITY PARK - The red
meat industry is inturmoil.
Most producers ot ted cattle and
hogs have operated without profit
tor 2 years.
Packers are closing, or merging
in order to stay in business.
Pennsylvania has lost 3 major
plants in recent weeks—a beef
slaughterer, a hog slaughterer,
and a leading ham producer.
Many consumers, caught in an
economic squeeze, have less in
come and spend less ot it for red
meat.
The stage is set for major ad
justments m the red-meat in
dustry.
lowa Beef Merger
lowa Beef Processors, the
nations’ leading beef packer and
trend setter in boxed beef, has
agreed in principal to merge with
Occidental Petroleum. Acquisition
of IBP will cost Occidental about
$BOB million—not a bad price for a
meat company that has been in
business for only about 20 years.
Both firms claim the merger will
be good for them. lowa Beef says
that the tremendous financial
backing available through Oc
cidental Petroleum will enable it to
move into the pork business and
expand export markets quicker
than originally planned. Oc
cidental says they want to be
firmly entrenched in the food
business by 1990, because it thinks
food in the 1990 s will be as critical
as energy has become in the 1980 s.
This is just another step which
mcreases concentration in meat
packing and processing. By the
late 1960 s a total of only tour
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packers were buying about halt the
ted cattle in the leading feeding
states. Today, the tour leading
buyers account tor more than 65
percent of ted cattle purchases.
Except tor these four leading
firms, beef packers have been on
the defensive. In fact, an estimated
40 percent have closed their doors
since 1969.
is it true that the future belongs
only to the Occidentals, Cargills,
General Foods, and Continental
Grains?
Fed cattle tut $7O - again
During the second week of June,
a -few fed cattle at local markets
sold for more than $7O per hun
dredweight—the first the $7O level
had been exceeded since last
November.
Prices have advanced more thou
$lO per hundredweight suice eaiiy
April. Beef production increased 6
percent in the first quarter of this
year, but has declined 'about 2
percent during the current
quarter. Most of the increase was
attributed to heavier* weight
animals.
Further price increases for ted
cattle are expected this summer,
despite the reluctance of con
sumers to become eager buyers of
beet. The late-spring retail price of
beet of about $2.36 averaged about
a dollar a pound above pork. Such
a difference in price drives con
sumers to pork and poultry.
Mid-summer cattle prices should
reach at least the mid-$7O range.
While this is welcome news to
producers, it’s not much to cheer
about. Today a cattle feeder needs
a price of about $75 per hun-
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rapid changes
a troubled livestock
in
dredweight just to cover his costs.
But after 2 years of losses (in some
months almost fl 3 per hun
dredweight), many feeders will
smile as the break-even price
approaches.
Will the current recovery be
sufficient to encourage an ex
pansion in cattle feeding t
Pressure off feed prices
A slowdown m gram exports and
less corn used by domestic
livestock producers should insure
comfortable carryovers rather
than critical supply binds, as
earlier feared. A record winter
wheat crop is near harvest. Corn
planting has slowed m some
leading states because of rainfall,
but the rams should help bring a
big crop.
We have, in desperation, offered
the Russians up to six million tons
of gram before September 30th.
They are, at least to date, ignoring
our offer while signing long-term
agreements with Argentina and
Canada. We may have become a
supplier of “last resort” to the
Soviet Union.
Our livestock industry should
welcome larger gram supplies and
somewhat lower prices; lower
gram prices would decrease the
breakeven price for beet and hog
producers.
Hog prices improve
Slaughter supplies ot hogs have
been dropping in recent weeks,
causing prices to move con
sistently higher. Prices are ex
pected to exceed $5O during the
second halt ot 1981.
Even though the price is up
sharply in recent weeks, there is no
SQUARE FOOT
profit m the business. The break
even price for efficient producers
is about ?53 per hundred.
But the June pig crop report
BRATTLEBORO, Vt. - Smce
January, 13 A.I. studs have
volunteered 75 of their young
holstem bulls for a random blood
typing program, still in the
research stages.
The National Association of.
Animal Breeders (NAAB) and the
Holstein Association have
established the .project in order to
improve identification m cattle m
DHI tests.
“We have a program designed to
evaluate the accuracy of iden
tification of bulls entering active
A.i. service,” explained Richard
Nelson, spokesman for the
Holstein Association.
The Holstein Association will
select four daughters at random
per sire to be bloodtyped with their
respective dams, it available.
The daughters are a propor
tionate share of grade and
registered animals from the USDA
report with records that con
tributed to the bull’s proof.
“The proof of most bulls," said
Lancaster Farming, Saturday, July 18,1981—A17
industry
Sire ID checked
with blood test
me.
.•Am/,
indicates production cuts will
continue. The December-May pig
crop was down 9 percent and
producers have 12 percent fewer
breeding animals on farms.
Nelson, “is based on more grades
than registered.”
William Durfey, Executive Vice
President of the NAAB explained
that bloodtyping can and has been
applied m practical breeding
situations.
Because cattle have a great
number of blood types, the com
plexity of their blood groups
maximize the chance the right sire
will be identified.
“But, there is always the
possibility that more than one bull
would qualify as a sire,” said
Durfey.
The blood typing project will
help identify how much
misidentification may be oc
curring and what can be done to
improve any problem areas.
As a result of the project, the
researchers may find out just how
accurately dairy fanners keep
records, explained Nelson.
Meanwhile, encouraging dairy
farmers to keep accurate records
and calving dates is an on-going
process, Nelson concluded.