DTN Early Word Opening Livestock

Meat Futures Staged to Open With Mixed Action

John Harrington
By  John Harrington , DTN Livestock Analyst
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Cattle: Steady Futures: Mixed Live Equiv $139.66 - .37*

Hogs: $1 LR Futures: Mixed Lean Equiv $ 86.58 - .53**

* based on formula estimating live cattle equivalent of gross packer revenue

** based on formula estimating lean hog equivalent of gross packer revenue

GENERAL COMMENTS:

Expect a typically quiet Tuesday in the cattle trade with neither bids nor asking prices well defined. Feedlot managers would obviously like to hold the cash line, but defending basis strength this close to Thanksgiving may be tough. Producers will be reluctant to price cattle this week before they get a better sense of board strength. Live and feeder futures should open narrowly mixed Tuesday with neither buyers nor sellers showing a great deal of determination.

The cash hog trade seems likely to open under pressure with most packer bids $1 lower or more. Given the estimated size of last spring's pig crop, it seems like a good bet the weekly slaughter totals could add another 100,000 head or more before 2017 actually puts in its biggest round of pork production. Lean futures seem geared to begin on both sides of unchanged thanks to a slow combination of short-covering and long liquidation.

BULL SIDE BEAR SIDE
1)

Feedlot managers distributed new showlists on Monday that were generally smaller than last week, especially in Texas and Colorado.

1) Beef packers will have smaller shopping lists over the next few days as they work to gather the slaughter needs of the smaller production schedule surrounding Thanksgiving next week.
2) Although periodically struggling with near triple-digit losses through Monday's session, most cattle futures managed to close generally 100 points above session lows. In short, we're definitely seeing some bottom-picking interest, no doubt tied to the premium status of feedlot cash. 2) Beef cutouts close significantly lower Monday, a predictable sign of pre-holiday weakness that could easily persist through the entire week.
3)

For the week ending Nov. 7, noncommercial traders increased their net-long position in lean hog futures by 7,400 contracts to 59,400.

3) If Monday's hog trade was any indication (i.e., where lower bids resulted in country movement), packers will not have to work very hard this week to cover even ambitious slaughter plans.
4) Although last week's hog kill (i.e., 2.495 million head) was somewhat larger than the previous week, it remained below where the spring pig crop estimate would suggest was available. 4)

The pork carcass value closed moderately lower, pressured by softer demand for hams, ribs and butts.

OTHER MARKET SENSITIVE NEWS

CATTLE: (The Fence Post) -- Breeding cattle being exported into Canada will sport a new ear tag with radio frequency capabilities starting Feb. 1, 2018. A new ruling issued by the Canadian Food Inspection Agency will require U.S. cattlemen exporting dairy or beef breeding cattle into the country to identify these animals with an NAIS-compliant 840 Radio Frequency tag, and a tattoo. These tags will be mandatory, beginning Feb. 1, 2018.

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The 840 AIN ear tags with Radio Frequency Identification technology will replace the metal USDA tags previously used to identify breeding cattle from the U.S. "Previously, all breeding cattle exported to Canada were identified with both a USDA metal ear tag and a USA tattoo," according to Donna Karlsons, who is a public affairs specialist with USDA's Animal and Plant Health Inspection Service.

The new program will eliminate duplicity, Karlsons said. "All cattle in Canada have been required to be identified with approved RFID tags since 2010," she said. "For U.S. exporters of breeding cattle, this will eliminate the need for re-tagging animals after their arrival in Canada."

Because it is a Canadian regulation, it will be up to their government to enforce it, Karlsons said. "If breeding cattle arrive at the border without RFID tags on or after Feb. 1, 2018, the Canadian government will deny entry in Canada."

For cattle breeders who sell breeding stock to Canadian buyers, Karlsons said they should update themselves on the new regulations. "We always recommend that breeders who have international buyers at their sales be aware of export requirements that other countries may have, including identification requirements, along with other animal health requirements such as specific tests or certification," she said.

HOGS: (nationalhogfarmer.com) -- The World Health Organization is urging farmers and the food industry stop using antibiotics routinely to promote growth and prevent disease in healthy animals. The new WHO recommendations aim to help preserve the effectiveness of antibiotics that are important for human medicine by reducing their unnecessary use in animals but also calls for countries to ban prevention uses of antibiotics.

"A lack of effective antibiotics is as serious a security threat as a sudden and deadly disease outbreak," says Tedros Adhanom Ghebreyesus, director-general of WHO. "Strong, sustained action across all sectors is vital if we are to turn back the tide of antimicrobial resistance and keep the world safe."

WHO strongly recommends an overall reduction in the use of all classes of medically important antibiotics in food-producing animals, including complete restriction of these antibiotics for growth promotion and disease prevention without a diagnosis. Healthy animals should only receive antibiotics to prevent disease if it has been diagnosed in other animals in the same flock, herd, or fish population.

Liz Wagstrom, DVM, the National Pork Producers Council chief veterinarian, stresses America's pork farmers are also concerned about the rise in antibiotic-resistant bacteria, but a ban on prevention uses of antibiotics in food-animal production is ill-advised.

"A ban on disease prevention uses of antibiotics in food-animal production being advocated by the World Health Organization would be ill-advised and wrong. Denying pigs, cows and chickens necessary antibiotics would be unethical and immoral, leading to animal suffering and possibly death, and could compromise the nation's food system," she firmly states.

U.S. pork producers understand the importance of ensuring responsible antibiotic use in animals to protect the efficacy of antibiotics for humans and animals. Wagstrom says "They share the WHO's concern about the rise in antibiotic-resistant bacteria, which is why they have taken steps over the past 30 years to ensure they're using antibiotics strategically and responsibly to keep animals healthy and to produce safe food."

Tuesday, America's pig farmers closely work with a veterinarian to comply with an FDA directive that prohibits the use of antibiotics important to human medicine for promoting animal growth, requiring feed and water use of those same antibiotics to be under veterinary prescription.

The U.S. pork industry's goal is to reduce the need for antibiotics by devoting time and resources to that end, including adopting good antibiotic stewardship practices and studying alternatives to antibiotics. America's pork farmers also participate in pork industry-developed programs that include responsible antibiotics use and support federal efforts to track antibiotic resistance in foodborne bacteria from humans, retail meats and food animals.

Still, Wagstrom says "Simply reducing on-farm uses of antibiotics, as the WHO suggests, however, likely would not affect public health and would jeopardize animal health. Its call for stopping the use of antibiotics that are critically important in human medicine for treating infected animals is antithetical to pork farmers' and veterinarians' moral obligation to care for their pigs."

The World Health Assembly adopted the Global action plan on antimicrobial resistance in 2015 and the Declaration of the High-Level Meeting of the United Nations General Assembly on Antimicrobial Resistance, adopted in 2016. Since 2005, WHO has published a list of critically important antimicrobials for human medicine, with regular revisions, to be used as a basis for promoting their prudent use. The overall objective is to encourage prudent use to slow down antimicrobial resistance and preserve the effectiveness of the most critical antibiotics for medicine. The guidelines, issued Nov. 7, incorporate this objective into its recommendations for antibiotic use in agriculture.

John Harrington can be reached at harringtonsfotm@gmail.com

Follow John Harrington on Twitter @feelofthemarket

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John Harrington

John Harrington
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