A2O-Lancaster Farming, Saturday, December 30. 2000
DETERMINING
MARKET TRENDS
John Berry
Ag Marketing Educator
Penn State
Lehigh County
Most livestock and crop pro
ducers are not “day-traders”
participants in the market on a
daily basis nor should they
be. A typical producer may enter
the market only a few times in a
marketing year, or only once, as
when selling the crop at harvest.
Because producers are not
day-traders, market trends are
one of the most valuable tools, or
indicators, that can be obtained
from correctly executed charts.
Trends determine the direc
tion the market might take for
an extended period of time.
A trend usually continues
until some major economic force
enters the market, causing a
change in direction. For exam
ple, if the U.S. has huge surplus
stocks of corn, producers can
expect a sideways (horizontal)
price trend until either a severe
drought or a dramatic increase
FDA Finalizes Safe Handling Labels, Refrigeration Requirements For Marketing Eggs
WASHINGTON, D.C.
Consumers will soon have more
safe handling information and
new refrigeration requirements
to help prevent foodbome illness
from eggs contaminated with
Salmonella Enteritidis.
The U.S. Food and Drug Ad
ministration (FDA) recently
issued a final regulation to im
prove food safety as it pertains
to eggs. The refrigeration re
quirement will be effective in six
months, while the safe handling
requirement will be effective in
nine months.
“The Clinton ad
ministration has con
sistently demonstrated
its commitment to
food safety and ensur
ing that the United
States continues to
have one of the safest
food supplies in the
world,” said Dr. Jane
E. Henney, FDA com
missioner. “Today’s
efforts should go a
long way toward pre
venting illness that has
been attributed to eggs
in the past.”
The regulation will
require shell egg car
tons to bear safe han
dling instructions
because of eggs’ asso
ciation with Sal
monella Enteritidis
(SE), a bacterium re
sponsible for food
borne illness.
Approximately one
out of every 20,000
eggs produced in the
U.S. is estimated to be
contaminated with
SE. The required
statement is as follows:
SAFE HANDLING
INSTRUCTIONS: To
prevent illness from
bacteria: keep eggs re
frigerated, cook eggs
until yolks are firm,
and cook foods con
oughly
in world demand lowers the sur
plus. Either of these develop
ments, or a combination of the
two, would cause the market to
move from a sideways trend to
an uptrend.
You can get a feel of the direc
tion the market is taking by
simply listening to market news
on the radio. But charts provide
a visual display of price move
ment that gives you, as a farm
business operator or owner, a
much better understanding of
market trends. This is similar in
principle to a road map, which
shows specific twists and turns
in the road, instead of just the
general direction the traveler is
going.
The three basic trend lines
sideways, uptrends, and down
trends also are classified as to
the time of trend patterns, be
cause markets never move con
tinuously in a smooth pattern.
There are short-term, intermedi
ate, and long-term trends. An
example of trends within trends
would be a short-term down
trend within a long-term up
SE outbreaks have been at
tributed to undercooked eggs
and foods containing under
cooked eggs served in homes,
private gatherings and commer
cial establishments.
“For consumers, eggs can be
an important source of nutri
tion,” said Henney. “You just
need to cook your eggs thor
oughly no sunny side up, no
over easy. This is a case when
it’s better to be safe than sorry.”
Persons infected with SE may
experience diarrhea, fever, ab
dominal cramps, headache,
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trend in the market. A short
term trend generally is defined
as lasting less than 20 days, an
intermediate trend from one
month to a maximum of six
months, and a long-term trend
continues six months or more.
Producers can plot trend lines
on either a daily or weekly
market chart. It’s an individual
decision on how much informa
tion is needed to fit the market
ing needs of a particular
enterprise, and how much time
can be spent in charting.
The sideways trend is usually
the longest running trend in the
grain market. This is generally
due to the presence of large sur
pluses accompanied by a steady
demand pattern that does not
lower the surplus level at a sig
nificant rate. Based on funda
mental factors, intermediate
and long term sideways trends
normally appear at the bottom,
or close to the bottom, of a trad
ing range. Sideways trends can
be frustrating for producers, es
pecially because they occur at
the bottom of the market. Sellers
are always waiting for uptrend
lines while buyers are holding
out for downtrend lines.
The Uptrend Line
Draw the line along the bot
toms of the market movement,
connecting as many points as
possible. The basic uptrend line
serves two important functions:
• It shows the steepness of
the upward direction.
• It is an indicator of how
high prices might go, as long as
the line is not broken.
nausea and vomiting. However,
children, the elderly and persons
with weakened immune systems
may develop severe or even life
threatening illness.
Additionally, the rule requires
that eggs be placed promptlv
under refrigeration at 45 degrees
Fahrenheit or lower upon deliv
ery at retail establishments
(supermarkets, restaurants,
delis, caterers, vending opera
tions, hospitals, nursing homes
and schools). Refrigeration at an
ambient temperature of 45 de
grees Fahrenheit or cooler slows
The uptrend line is also a sup
port line because it is drawn at
the close of rallies. This is im
portant: If the market closes two
days in a row below the line or if
the market is breaking through
the support, the market can be
expected to reverse its course.
Caution: The market may not
immediately run into a down
ward trend, because rising mar
kets generally have one last gasp
at trying to continue upward
before switching to a downtrend.
The Downtrend Line
Draw the line along the tops
of rallies and connect as many
Decision To Ban Products
WASHINGTON, D.C.
While no cases of bovine spongi
form encephalopathy (BSE) or
“mad cow disease” have been
found in the U.S., Dr. Craig
Reed of the USDA’s Animal and
Plant Health Inspection Service
said the agency’s decision to ban
the import of meat and bone
meal products from Europe is
based on “sound science and ex
tensive research.”
Reed, administrator of
APHIS, said the agency will
continue “to take aggressive
measures to protect the United
States from BSE introduction
and to ensure the security of
U.S. export markets.”
These measures include active
surveillance, testing, prevention,
education and emergency prep
aration, Reed said.
“In 1998, USDA entered into
a cooperative agreement with
the growth and development of
SE.
This rule is one part of the
larger Egg Safety Action Plan, a
farm-to-table approach for en
suring the safety of our nation’s
egg supply, which was an
nounced by the President on
Dec. 11, 1999. The plan, a joint
effort by the FDA and the De
partment of Agriculture, seeks
to reduce by 50 percent the
number of SE illnesses attribu
ted to contaminated eggs by
2005 and eliminate egg
associated SE illnesses by 2010.
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717-687-6224
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points as possible. Because the
market has difficulty penetrat
ing this top line, it becomes a re
sistance line. Expect a change in
market direction if the market
closes above the downtrend two
days in a row. Note: Downtrend
lines often turn into sideways
trend lines.
Conclusions
It is important to draw in both
long-term and short-term trend
lines. Knowing the direction
prices are moving is one of the
first steps in achieving a success
ful marketing plan. Trend lines
give a strong indication of what
can be expected in the future.
Harvard University’s School of
Public Health to analyze and
evaluate the Department’s ef
forts to prevent BSE. A report is
expected to be issued early next
yeqr,” Reed said.
On Dec. 7, the USDA took an
“emergency action” in prohibit
ing the import of all rendered
animal protein products, re
gardless of species, from
Europe. The move mirrored ac
tions taken by the European
Union in November to prevent
the spread of BSE. llie EU
banned the feed of nonruminant
origin, which they determined
was potentially cross
contaminated with the BSE
agent.
The same type of rendered
product from ruminant origin
has been banned from BSE in
fected countries since 1989 and
ail of Europe since 1997.
The Egg Safety Action Plan
will further enhance the strides
that have already been made in
redUQpig£ the incidence of S£.
Efforts by federal regulatory
agencies, public health preven
tion initiatives, egg producer
quality assurance programs, and
consumer education have signif
icantly contributed to the de
crease in SE incidence.
0
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Phone 687-4363
Fax 687-4303
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814-349-4333
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Discount
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