DTN Early Word Opening Livestock

 
Cattle: Steady-$2 HR Futures mixed. Live Equiv: $140.02 - 0.81*
Hogs:   Steady-$1 LR Futures: 50-100 LR    Lean Equiv $77.25 - 0.89**
* based on formula estimating live cattle equivalent of gross packer revenue
** based on formula estimating lean hog equivalent of gross packer revenue

GENERAL COMMENTS:

It won't be surprising to see more bids and asking prices on the cattle table this morning, but the significant develop of actual trade volume before Friday would be more of a head-turner. For more than a month, feedlots have collected good dividends by staying late at the cash party. Some could be sobered if choice product continues to fade, but our guess is asking prices of $120-121 in the South and $190 plus in the North will stand tall for several more days. Live and feeder futures should open on a mixed basis as buyers and sellers await the week's cash verdict.

Hog buyers should have enough leveage this morning to kick off business with steady/weak bids. Daily kill continue to be huge. Assuming Saturday's slaughter total close to 225,000 head, the weekly chain could come close to 2.6 million head, perhaps a bit more. Lean contracts seem likely to open modeerately lower, initially pressured by plentiful market hog supplies and wholesale pork demand fighting to stay abreast of record tonnage.

	BULL SIDE		BEAR SIDE
1)	Thanks to a combination of good feedlot profits and muddy yard conditions in many feeding areas, producers enjoy excellent leverage. Current marketings tend to begat current marketings.	1)	The wholesale beef trade saw the choice box fall out of bed yesterday, sinking more $2. This may be a good inidication that the 2018 party relative to funding late year celebretion and featuring is over.
2)	China's agriculture ministry said on Wednesday two new African swine fever outbreaks were confirmed in Sichuan and Qinghai provinces. The new case in the city of Bazhong in Sichuan killed 19 of 117 pigs present on a farm, the Ministry of Agriculture and Rural Affairs said in a statement on its website.	2)	Hatcheries in the United States weekly program set 222 million eggs in incubators during the week ending December 8, 2018, up slightly from a year ago.
3)	For the week ending December 8, U.S. broiler growers in the United States weekly program placed 182 million chicks for meat production during the week, down 1 percent.	3)	The pork carcass valued faltered on Wednesday, pulled lower by eroding demand for fresh cuts and hams.
4)	For the week ending December 8, Iowa barrows and gilts averaged 284 pounds, one half pound less than the prior week yet 2.1 pounds lighter than 2017.	4)	Spot December lean hogs expires on Friday ended Wednesday's session nearly 30 points higher at 54.73, more than $10 below to-be-lead-month February. The big question will soon be "can the early winter premium hold?" The seasonal tendency is for the February contract to experience a long downward trend from here

OTHER MARKET SENSITIVE NEWS

CATTLE: (McDonald's Corporation) — As one of the world's largest restaurant companies, McDonald's has the opportunity to use our scale to tackle some of the most complicated challenges facing people, animals and our planet - and help drive industry-wide progress.

Today, McDonald's is announcing a policy to reduce the overall use of antibiotics important to human health, as defined by the World Health Organization (WHO), which applies across 85% of our global beef supply chain.

According to the WHO, antibiotic resistance is one of the biggest threats to global health, food security, and development today. With our new policy, McDonald's is doing our part to help preserve the effectiveness of antibiotics for human and animal health in the future.

"Antibiotic resistance is one of the greatest threats to mankind today. We commend McDonald's effort to develop a global policy guiding how antibiotics are used within its beef supply chain. The company has set an ambitious timeline for implementing this policy and it's heartening that it is setting reduction targets that will be transparent and reported publicly to its customers. It is our hope that the entire beef industry will follow McDonald's leadership and adopt similar policies that reduce and where possible eliminate antibiotic use, while still allowing veterinarians to treat sick animals," said Dr. Lance B. Price, Antibiotic Resistance Action Center, Milken Institute School of Public Health, George Washington University.

McDonald's understands that reducing the overall use of medically important antibiotics in beef is complex and cannot be accomplished overnight. Additionally, there is limited antibiotic usage data available across the global beef industry. That is why, in collaboration with our suppliers and beef producers, we are taking a strategic and phased approach:

First, McDonald's is partnering with supplying beef producers in our top 10 beef sourcing markets to measure and understand current usage of antibiotics across a diverse, global supply chain;

By the end of 2020, based on what we have learned, we will establish reduction targets for medically important antibiotics for these markets; and

Starting in 2022 -- we will be reporting progress against antibiotic reduction targets across our top 10 beef sourcing markets.

"McDonald's believes that antibiotic resistance is a critical public health issue, and we take seriously our unique position to use our scale for good to continue to address this challenge. We are excited to partner with our beef supply chain around the world to accelerate the responsible use of antibiotics, whilst continuing to look after the health and welfare of those animals in our supply chain," said Keith Keny, Global Vice President, Sustainability.

McDonald's has been developing this policy over the past year and a half, while consulting a cross-section of expert stakeholders from veterinarians, to public health leaders, to the beef producers responsible for taking care of the health of animals within the supply chain every day.

Our overall approach to responsible use of antibiotics focuses on refining their selection and administration, reducing their use, and ultimately replacing antibiotics with long-term solutions to prevent diseases and protect animal health and welfare. With this in mind, we remain committed to treating animals when needed.

"The path for creating and implementing a global antibiotic use policy for beef is unprecedented. I've been encouraged by the thoroughness with which McDonald's has engaged diverse experts while creating this policy and the seriousness with which they take this important issue," said Dan Thomas, MS, PhD, DVM, College of Veterinary Medicine, Kansas State University.

This latest announcement builds on fifteen years of progress since McDonald's first developed a position on responsible antibiotics use in 2003. In 2016, McDonald's USA reached its commitment to serve only chicken not treated with antibiotics important to human medicine, nearly one year ahead of schedule. Further, in 2017, McDonald's announced an expanded antibiotics policy for chicken in markets around the world, as well as a refreshed Vision for Antimicrobial Stewardship statement with commitments to create responsible-use antibiotic approaches for beef, dairy beef and pork.

"With the announcement of this new policy, McDonald's again demonstrates its leadership and commitment to responsible antibiotics use. The company has laid out a comprehensive and ambitious approach, and Pew looks forward to seeing how McDonald's implements this policy in the months ahead. Efforts like this are essential to slowing the emergence of drug-resistant bacteria and preserving the effectiveness of these lifesaving drugs," said Karen Hoelzer, DVM, PhD. Senior Officer, The Pew Charitable Trusts.

Today, McDonald's is also proud to join the U.S. Centers for Disease Control and Prevention (CDC)'s Antimicrobial Resistance (AMR) Challenge. Launched in September 2018, the AMR Challenge is a yearlong effort to accelerate the fight against antimicrobial resistance across the globe.

We are on a journey to build a better McDonald's. As we work in partnership with our supply chain and producer partners to address major challenges like antibiotic resistance, we'll continue to listen to our customers to make sure we're meeting and exceeding their expectations every day -- from the farm to our restaurants.

HOGS: (Safety+Health Magazine) — The U.S. Department of Agriculture used flawed worker injury data to advance its controversial proposal to remove maximum line speeds in pork-processing plants, according to the National Employment Law Project, an advocacy group.

In a Dec. 5 press release, NELP highlights a review by two experts from Texas State University showing that USDA compared injury rates from traditional plants with five plants that were part of a 1990s pilot program that allowed lines to run faster.

USDA's Food Safety and Inspection Service said its analysis showed lower mean injury rates at the plants in the program. However, Texas State University faculty members Celeste Monforton, a lecturer in the department of health and human performance, and Phillip W. Vaughan, a research scientist in methodology, measurement and statistical analytics, disagree with USDA's conclusion in comparing traditional plants with those in the Hazard Analysis Critical Control Points Inspection Models Project -- as known as HIMP.

"(Data limitations) make it impossible … to draw any statistically valid conclusion about worker injury rate differences," the researchers said in their report.

Monforton and Vaughan note that FSIS used annual injury rate statistics from OSHA's Data Initiative, which collected data from about 80,000 of 7.5 million establishments between 1996 and 2011.

"The dataset used by FSIS had consecutive years of data for only eight of the 24 traditional (pork-processing) plants," the researchers said. "Moreover, none of the traditional plants had data available for the full nine-year period (2002 through 2010)" used by FSIS in its analysis.

From 2002 to 2010, only 56 of the nation's 612 processing plants were required to submit their annual injury rate to OSHA, the researchers said. Some plants were required to submit data for only one year, while others had to do so for multiple years.

FSIS selected five HIMP plants as a comparison -- two of which did not provide worker injury data in consecutive years.

"For each of the five HIMP plants, the agency simply averaged injury rates across available years," the researchers said. "For the traditional plants, FSIS performed the same calculation." FSIS then compared the injury rates of the two types of plants to conclude that HIMP plants had fewer worker injuries.

Monforton and Vaughan also point out that the five HIMP plants were self-nominated, saying this likely means.

(BAS)

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