USDA crop report sorely missed

Shutdown delays October data; analysts look elsewhere
TINA PARKER ARKANSAS DEMOCRAT-GAZETTE

Faced with a lack of reports from the U.S. Department of Agriculture, analysts and farmers have turned to the private sector to obtain information about grain and livestock trade.

The USDA is closed because of the government shutdown, and its monthly crop report was not released last week. The crop report is the predominant source of information on agriculture supply and demand and is used to forecast market direction.

Urner Barry, a private company that has been in the protein-market-reporting business for 155 years, has obtained many new customers since the shutdown began. Joe Muldowney, vice president of Urner Barry, said the company has reporters who complete market reports, which normally coincide with USDA reports.

“People are looking for that information from a timely, accurate and unbiased source, and that’s why a lot of people came to us after the shutdown,” he said.

Despite private analysts’ data, Dan Cekander, director of grain-market analysis for Newedge USA, LLC, said the delay of the October crop report — which would have been issued at the end of last week — has created uncertainty.

“We missed one of the key production reports of the year,” Cekander said. “We spent all this time estimating, and we are getting to the harvest and finally finding out how much is out there and we don’t know the production numbers.”

Gary Blumenthal, president of World Perspectives Inc., an agricultural consulting firm, said USDA information is vital.

“Reports that the USDA issues are taken with great seriousness and millions of dollars are made or lost,” Blumenthal said. “For one, the information provides certainty and it provides legal construct, which gives lower volatility and less upheaval in the commodity market.”

He said that though there is a lack of data, it is a less risky time for a shutdown because farmers are coming out of a harvest.

“My estimate is this, it is probably having a less adverse impact than if it were in June and crops would rely on reports,” Blumenthal said.

Cekander disagreed.

“There are a lot of anecdotal reports from the yield and high numbers are being passed around,” Cekander said, adding that October gives the true direction of the yield.

“There’s not enough data in September to give enough of a yield direction — it’s just more accurate and that’s why we need the October report,” he said.

Without the concrete data, the information from analysts is speculation and could be confirmed or discounted when the government reopens.
Publication: Arkansas Democrat-Gazette;     Date: Oct 16, 2013;     Section: Business;     Page: 25   

Cooler days turn grazing toxic

Cattlemen on lookout for johnsongrass, other hazards
TINA PARKER ARKANSAS DEMOCRAT-GAZETTE

As cooler temperatures descend on the state, some summer plants can become toxic and poison livestock, foraging experts said.

Johnsongrass, a coarse green weed with a purplish hue that grows in the summer across two-thirds of the state, can be found in many Arkansas pastures and can become poisonous during changing weather conditions, such as after a drought or frost. Johnsongrass can create prussic acid — a type of cyanide gas. Other plants such as Dallis grass can also become infected with a neurological fungus.

“We have seen more [exposure] this year than in other years because of cooler temperatures and moisture content,” said Rocky Lemus, forage expert for Mississippi State University. “But ranchers don’t need to be worried; they need to be aware.”

Tom Troxel, associate head of animal science for the University of Arkansas Division of Agriculture, said that after conducting informal surveys with county agents, he counted almost 100 head of cattle lost last year because of prussic acid poisoning.

The frost wilts johnsongrass, which causes it to release prussic acid.

“When we get lower temperatures, the plant reacts to the cooler temperature and produces cyanide gas,” Lemus said.

Too much prussic acid will kill cattle outright and without warning, said John Jennings, forage expert from the University of Arkansas.

Lemus suggested removing livestock from a pasture with johnsongrass for seven to 10 days before allowing them to resume grazing, which will be ample time for the acid to dissipate.

Dallis grass’s toxicity is not from the grass but from a fungus inside the head of the flower. The seeds inside the seed head become infected with ergot, which is a neutralized fungus. The fungus lives in the soil and during the summer it germinates and creates spores that infect the Dallis grass flower. When the seed heads mature, the fungus turns brown. Honeydew, a type of sticky sap, is formed from the ergot fungus.

“Cattle have a habit of eating the seed head first and they get a super high dose of ergot and that’s when we see serious issues,” Jennings said. “It’s most commonly a case when cattle is turned on to a fresh field or there is new cattle.”

Ergot poisoning causes neurological symptoms that include trembling, staggering, delirium, convulsions or lameness.

“If they get too much of the fungus it gets to where they can’t eat or drink,” said Arkansas State Veterinarian Pat Badley. “If you find them in time and get them off the Dallis grass, they will recover.”

Jennings said that to reduce exposure to Dallis grass, mow pastures on a high setting before allowing the livestock to graze.

According to a report by the Cooperative Extension Service, there are numerous toxic plants that livestock graze and often are ingested without ill effects, but in certain conditions some plants cause greater hazards than others.

Publication: Arkansas Democrat-Gazette;     Date: Oct 9, 2013;     Section: Business;     Page: 25    

Drought takes toll on cattle ranches

Thinned stocks raise beef prices
TINA PARKER ARKANSAS DEMOCRAT-GAZETTE

The drought that plagued the nation’s crops and livestock for two years is still causing residual effects for ranchers and farmers. The cattle inventory has decreased to a 50-year national low, while the cost of cattle has reached an all-time high.

In 2012, cattle producers saw a loss of more than $120 million, mostly because of rising hay prices, reduction in hay sales, short corn crops and higher-than-average fuel prices. Those factors made it difficult for farmers to continue to produce cattle, and many were faced with a choice: sell part of their herd to be able to feed what they had left or borrow money from banks.

Gary Proctor, a farmer from Lincoln, opted to sell. Last year, he sold almost half his herd, and after this year’s 45-day dry spell, he sold several more.

Once conditions improved, Proctor began looking to restock his herd but reached an impasse. “There’s no cattle to replace it with — no one kept replacements,” he said.

When the demand for beef is high, cows are taken out of the production cycle and sold.

“It takes a long time to replenish once you sell adult cows,” said Johnny Gunsaulis, a county extension agent with the University of Arkansas Division of Agriculture. “The calves have to be two before they can begin to reproduce, and it could take three to four years to produce [beef].”

Travis Justice, executive director for the Arkansas Beef Council, cautioned that cattle production will con- tinue on a steep decline and “may take 15 years to stabilize.”

Nationally, the cattle population dropped to 89.2 million in 2013, a 4.9 percent decrease from 93.8 million in 2010.

“Data indicated a reduction in cattle, and given the intermediate data, we can predict another drop in the cattle count,” Justice said.

The number of cattle in Arkansas experienced a steeper decline to 1.6 million in 2013, a 16.2 percent decrease from 1.9 million in 2010.

Cattle counts vary by month, and population data generally has a six-month lag because the U.S. Department of Agriculture’s National Agricultural Statistics Service only conducts surveys twice a year, in January and July.

Because of the reduction in population, the price for beef has reached record highs, which consumers have already seen at the supermarket.

As of August, the national average for a pound of lean ground beef was $4.89, up from $3.58 in 2010, which is an increase of 36.6 percent, according to the Bureau of Labor Statistics.

“Some people were not able to feed their cattle normally; we saw a decreased harvest weight, which produces less meat,” Justice said. “Anytime there is a reduction in supply of a product, there is pressure to raise the prices.”

The cattle market has historically had ups and downs, but the current cattle count is concurrent with numbers from the 1950s.

The drought and an aging cattle farmer population is blamed for the downward trend.

Diane Balich, a large-animal veterinarian and rancher, said that production is not down for her because she raises registered cattle, unlike the national herd, which is commercial cattle. Registered cattle are typically one breed, and they are not cross-bred. However, registered cattle can be sold to farmers as replacement stock for commercial cattle, which is generally cross-bred for consumption.

“The decline has to do with money — there’s no money in cattle, so many people are getting out of the cattle business, young people aren’t interested, and banks aren’t loaning like they used to,” Balich said.

Tom Troxel, a University of Arkansas animal science professor, said that the interest he has seen from young farmers is limited because of the rising costs of cattle, land and equipment.

“It’s a difficult business to get in to because it’s so expensive,” Troxel said. “Cattle is going for $1,500 to $1,800 a head now, when in previous years it went for $800 to $1,000 or less.”

Balich agreed. “Everyone is losing money, and it’s not getting better. Yes, cattle is selling for twice as much, but it costs 10 times as much to raise them,” she said.

Cary Batholomew, farmer and rancher in Prairie Grove and field representative at the Stillwell Livestock Auction in Oklahoma, said that he hasn’t seen herds sell like last year, mainly because of the availability of hay.

“Corn prices are coming down, and there is lots of hay and lots of grass, so there haven’t been as many sell-offs,” Bartholomew said.

The events that transpired in the last few years has created the perfect storm and contributed to lower production and higher retail prices, Justice said.

“It’s just a numbers game now,” Justice said. “Our goal is to get back to the same production level like before, but we are limited by weather, the biology of the animal and production costs.”

Publication: Arkansas Democrat-Gazette;     Date: Oct 1, 2013;     Section: Business;     Page: 23