Japan has stabilized after earthquake/tsunami impact | Opportunity exists to reduce hide damage from branding | |
Export Update “We have seen bigger demand for U.S. beef in preparation for Japan’s Golden Week holiday which took place the first week of May,” Michalski explains. “However, May through July is Japan’s rainy season during which time the market is generally sluggish so it’s too early to tell how the year will go. Overall, ...continued on page 2 NatureSource® Base Price Did You Know... üUSPB expects to have limited availability of unitholder delivery rights to lease out during the remainder of fiscal year 2011. If you have delivery rights you are not going to deliver against during fiscal year 2011, please call our office at 866-877-2525 for assistance in leasing them to other producers. üFor the latest listings to buy or sell USPB Class A and Class B units, go to www.AgStockTrade.com. You can also view historical matches of offers to buy and sell units as well as sales that have been completed by selecting “Match History” at the top or bottom of each unit class page.♦ | The Cost of “We understand many cattlemen have to brand but if they were to move the brand from the rib area to high on the hip and reduce the size of the brand, a significant improvement in hide value would be realized,” he points out. “One large rib brand can cause us to loose two and half square feet of surface area out of a hide which means it will not work for the upholstery market. Approximately half of National Beef Leathers’ hides end up in the leather upholstery market. “A hide that has several brands can lose 45 to 50% of its value.”—Robert Hein, National Beef Leathers, LLC In many cases, cattle are branded numerous times including rib and shoulder brands that can take away 45 to 50% of hide value, according to Hein. Hides are graded as a No. 1, 2, or 3 based on quality with a No. 3 having less value. So on an individual hide basis, if a No. 2 hide is discounted 10% that would be about a $10 discount in today’s markets. The discount on a No. 3 hide, because of brand damage, would be approximately $30 compared to No. 1 hides. Hein reiterates that he understands many ranchers brand out of necessity. Branding is an important tool to help reduce cattle theft. But "a better branding technique—not burning the hide so deep, combined with better location and size of the brand would make a significant value difference to the industry as a whole."♦ |
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“The Korean market also has its challenges today because many Korean buyers bought too much pork and beef during Australia’s floods in anticipation of a shortage due to lack of supply from that country,” Michalski adds. “However, the Hong Kong/Vietnam markets have helped offset the challenges we face in Korea. We are experiencing growth in other markets such as Russia and Egypt. Russia’s growth is due in part to rising oil and gas prices and new quotas on U.S. beef for that country.”♦ | ||
Choice/Select Spread Widens Seasonally | ||
USPB Non-Conditional Unit Trade Report* | ||
DR = Delivery Rights; FY = Fiscal Year | FY 2011 | Most Recent |
# Class A Units (DR available this FY) | 580 | 30 |
Avg. Price Per Unit | $180.30 | $210.00 |
# Class A Units (DR available next FY) | 480 | 480 |
Avg. Price Per Unit | $203.00 | $203.00 |
# Class B Units | 550 | 300 |
Avg. Price Per Unit | $407.00 | $487.00 |
* Visit www.AgStockTrade.com for a history of USPB online unit sales. |
Export Update... | continued from page 1 | |||
Japan does want age verified beef, but that demand varies from customer to customer and the market isn’t as willing to pay premiums, especially when the supply is high right now. | ||||
BENCHMARK PERFORMANCE DATA TABLE | ||||
Base Grid Cattle Harvested in KS Plants 4/03/11 to 4/30/11 | ||||
(Numbers | Base Grid | |||
All | Top 25% | |||
Yield | 64.51 | 65.20 | ||
Prime | 3.17 | 5.68 | ||
CH & PR | 74.40 | 82.83 | ||
CAB | 24.39 | 33.23 | ||
BCP | 14.61 | 16.37 | ||
Ungraded | 0.94 | 0.60 | ||
Hard Bone | 0.49 | 0.21 | ||
YG1 | 10.49 | 6.82 | ||
YG2 | 39.46 | 35.52 | ||
YG3 | 41.48 | 47.15 | ||
YG4 | 8.03 | 9.89 | ||
YG5 | 0.53 | 0.62 | ||
Light Weight | 0.43 | 0.16 | ||
Heavy Weight | 1.49 | 1.01 | ||
Average Grid Premiums/Discounts ($/Head) | ||||
Quality Grade | $15.61 | $25.36 | ||
Yield Benefit | $20.39 | $36.70 | ||
Yield Grade | -$2.79 | -$4.46 | ||
Out Weight | -$2.44 | -$1.51 | ||
Steer/Heifer | $1.37 | $1.13 | ||
ASV | $11.08 | $20.87 | ||
Natural | $1.29 | $1.62 | ||
Total Premium | $44.51 | $79.71 |