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Articles from 2013 In January

Brazilian Scientists Show Safety of Ractopamine

Brazilian Scientists Show Safety of Ractopamine

Animal scientists in Brazil have found that a small dose of the feed additive ractopamine can boost pork production without changing how pork looks or tastes, according to a report this week by the American Society of Animal Science (

In the latest issue of the Journal of Animal Science, researchers report that a 5 mg/kg dose of ractopamine increased muscle mass and feed efficiency, and had no noticeable effect on pork marbling, fat content, toughness or color. The researchers came to this conclusion by testing pork from 340 pigs raised under commercial conditions.

“We found that if [pork producers] use 5 mg/kg of ractopamine in the finishing diet of swine, that should result in no detrimental effects on fresh pork quality and cooked pork palatability,” says Natália Bortoleto Athayde, an animal scientist at Sao Paulo State University in Brazil.

Ractopamine is a common feed additive in Brazilian and U.S. pork production. The additive increases the size of muscle fibers by increasing protein synthesis in muscle cells. Many pork producers use ractopamine because it allows pigs to grow larger with less feed.

However, some scientists have reported reduced pork quality with higher doses of ractopamine. To test this finding, Athayde and other researchers split a herd of pigs into three groups and gave them 0, 5 or 10 mg/kg of ractopamine during the last 28 days before slaughter. They then slaughtered the pigs and tested the pork pH, temperature, color, drip loss, marbling, intramuscular fat, cooking loss and tenderness. According to Athayde analyzing meat color is important because meat color changes can be a sign of stress in an animal.

The researchers found that though 5 mg/kg had no noticeable effects, pork from the 10 mg/kg pigs was lighter and less tender than pork from control group pigs. Athayde says this confirms previous studies showing that 5 mg/kg is an appropriate dose in Brazilian commercial pork production.

“Pork is the most common animal protein consumed in the world, and Brazil is currently the fourth-largest producer of this meat,” Athayde says. “We export about 15% of pork we produce and we believe it is extremely important to know the quality of the meat that we offer to the world.”

Athayde recommends further studies of how ractopamine affects animal behavior, consumer health and the environment.

The paper is titled “Meat quality of swine supplemented with ractopamine under commercial conditions.” It can be read in full at



Russian Ban on U.S. Beef, Pork Set for Feb. 11

Russian Ban on U.S. Beef, Pork Set for Feb. 11

U.S. Meat Export Federation (USMEF) officials have confirmed the Feb. 11 deadline for a Russian ban of both chilled and frozen U.S. beef and pork exports to that country.

USMEF sources indicate that a few days ago Russia’s Veterinary and Phytosanitary Surveillance Service notified USDA’s Food Safety and Inspection Service that it was considering no longer accepting any meat and meat products from U.S. packing plants after Feb. 10 – unless FSIS took action soon to ensure that exports are free of ractopamine residues.

In its latest report on exports, USMEF indicated that Russia was in the top pork markets for November 2012, with sales up 100% in volume and 78.7% in value.

Nick Giordano, trade expert with the National Pork Producers Council, says the organization is “coordinating very closely with others in the pork and beef sectors and with the U.S. government” in regards to this matter.

Giordano says a number of options are under consideration but that obviously, “it is a serious situation and NPPC is deeply involved.”

Dermot Hayes, economics professor at Iowa State University, projects that U.S. meat exports to Russia will fall by at least 50% because U.S. packers won’t find it profitable to set up ractopamine-free production lines and processing plants.

Elanco Animal Health produces a feed additive brand of ractopamine hydrochloride sold as Paylean. The product is also referred to as a repartitioning agent that takes nutrients away from fat deposition and puts or directs them toward lean tissue (muscle) accretion. It is labeled for use in pigs weighing 150 to 240 lb., fed for an average of 28 days and has no withdrawal period.

Paylean is approved in 26 countries worldwide.

Contracting Corn Supplies Stress Users

Contracting Corn Supplies Stress Users

Last week a Missouri ethanol refinery, operated by POET, announced it was suspending production because of the inability to find enough corn. Others may have taken the same action, but the reason may not have been as pronounced.

There is no surprise about spot shortages of corn following the drought of 2012, and more will be identified as the marketing year progresses. In fact, the low yields of central Illinois prevented sufficient supplies to larger ethanol plants, which have purchased trainloads of corn from higher-yield areas in Minnesota and the Dakotas.

In the southeastern United States, livestock producers have found their shortage is better supplied by offshore sources, such as Brazil, than try to obtain odd lots where possible in the United States. As a result of the trend, questions are raised about the stress on the corn user as a result of the tightening availability of corn, writes Illinois blogger Stu Ellis at

USDA’s Jan. 11 report on the final production estimates for 2012, along with the Dec. 1 quarterly grain stocks, give an indication of the significance of the shortage. Ending stocks are at record lows, corn imports are projected, and typical users are either going elsewhere for corn or seeking alternatives.

That is the assessment of Bob Wisner, Iowa State University ag economist, who says that despite the expectation for short supplies, prices have not begun to ration those short supplies yet. And he says that will have to happen between now and the end of August.

Livestock Use

One of the largest users, the livestock industry, created some market confusion at the outset of the 2012 harvest when early harvested corn was fed prior to the end of the 2011 marketing year. That caused estimates to be revised and questioned for the 2011 and 2012 crops. Some of that was offset by reductions in projected estimates of exports,  Wisner says. USDA has projected a higher than average volume of corn being fed during the first quarter of the year, due to increased livestock numbers, heavier market weights and substantial marketings.

But at the same time, feed alternatives are also in short supply, including corn from the 2012 second crop in Brazil and feed quality wheat from a variety of sources. Those may extend the ability of U.S. corn to meet export demand. But Wisner is not convinced of that. He says the main alternative to the short U.S. 2012 corn crop will be the 2013 second crop corn soon to be planted in Brazil. There is always the logistical challenge of getting it here, or anywhere for that matter.

With high use of domestic stocks in the first quarter of the year, there must be reduced feeding of stocks in subsequent quarters, but how much? Wisner says the 12% increase identified in the first quarter will have to be correlated with a feed reduction in the balance of the year. But he says that means there will have to be a larger reduction in livestock numbers than is now indicated. The only choice would be a reduction in cattle on feed, (and USDA just indicated January cattle on feed was only 96% of that from 2012.)

Corn Rationing

Wisner expresses concern about the need for rationing corn for feed throughout the balance of the marketing year.

  1. If feed use is up for the second quarter, then use will have to be down 49% for the last two quarters compared to year earlier numbers, which he says has crisis implications for livestock producers and will create stress on the ethanol industry.
  2. If feed use is up for the second quarter by only 2%, then the feed use of corn for the balance of the marketing year will have to be down only 28% than year-earlier numbers, which would still bring stress on all corn users.
  3. If feed use for the second quarter is down by 9% from year-earlier numbers, then there would only need to be a 15% reduction for the balance of the year, which will still mean a major challenge for all users of corn.


Corn Exports

Wisner notes that USDA statisticians reduced their estimate of corn exports to only 950 million bu. for the current marketing year in the Jan. 11 supply-demand report, which would be the least in 40 years, and would mean a 36% cut from 2011. And he says if the estimate falls short of the 950 million, more corn would be available for domestic use.

To date, exports are about 50% below prior year levels, and the 539 million bu. exported by early January would put the year total at 749 million bu. if the pace was retained. With lower exports and more feed availability, Wisner’s feed use scenarios would not be as stressful. He says the need for rationing would not be negated, but the feed reductions would be more modest.

But will exports continue to languish? Wisner says reaching the USDA projection would only require 411 million more bushels to be exported between now and the end of August. Based on the past year’s export pace for the balance of the marketing year, the export pace would need to slow by nearly 16%.

U.S. corn exporters have been facing stiff competition from feed wheat in several countries along with corn from the Ukraine, and second crop corn in Brazil that have been priced under the U.S. corn market. Those supplies will not last, and many have already diminished to the point that foreign exporters have closed down. Southern Hemisphere feed wheat, just now being harvested, is down about 25% in yield in production, and the European Union (EU) is expected to be in the market buying substantially more feedgrains than usual. However, the EU will not buy U.S. corn to avoid biotech issues.

Wisner’s Conclusions

Wisner concludes by saying the short corn crop has already reduced ethanol and export use of U.S. corn, but not feed use, despite higher prices. And he says without that, corn supplies could be tighter than already indicated. He will be watching for the next quarterly grain stocks report at the end of March, along with livestock inventory, and marketing weights to determine if the second quarter corn disappearance confirms any change in the trend from the first quarter.

He says export demand has been weak and if the global market wants Brazilian corn, it will have to sort it out from all of the Brazilian soybeans headed to export terminals, which he perceives as an increased demand for U.S. corn to be exported. The two issues that will have a bearing on demand—says Wisner—are the export price of alternative feeds and the potential for any shipping delays. While the latter is unknown, the former points to corn as a bargain:

$340 for Australian wheat

$340 for French wheat

$310 for U.S. soft wheat

$305 for U.S. corn.


Corn stocks will be tight before the end of the current marketing year, causing spot shortages. U.S. livestock feeding has been aggressive in light of short feed supplies, and unless there are cuts in the rate of feeding, livestock feeders will face critical decisions. Exports have been cut back due to high prices, but with the disappearance of alternative feedgrains, U.S. corn exports could resume by the end of the marketing year, putting more pressure on the supply.



Facing the Challenges of Foaming Manure Pits

An Iowa State University researcher explains the perplexing problem of manure pit foaming and offers producer safety tips.

Produce Caused Nearly Half of Foodborne Diseases

Leafy vegetables cause the most foodborne illnesses
<p>Leafy vegetables led the list when it comes to causing the largest share of food-borne illnesses.</p>

After scrutinizing a decade's worth of data on foodborne disease outbreaks, federal health officials estimate that produce was the vehicle in close to half of all illnesses and that poultry was the culprit in 19% of all deaths, according to an analysis from the Center for Infectious Disease Research and Policy (CIDRAP), University of Minnesota.

The report released this week by the Centers for Disease Control and Prevention (CDC) covers data from 1998 to 2008. It says that produce of all kinds was implicated in 46% of illnesses and 23% of deaths. A high number of produce-linked norovirus outbreaks was a major factor in the big contribution from produce.

In other findings, the analysts estimated that contaminated meat and poultry together were to blame for 22% of cases and 29% of deaths, while dairy and eggs accounted for 20% of illnesses and 15% of deaths. Fish and shellfish were implicated in 6.4% of illnesses and 6.1% of deaths.

The study was published as an early release from the March issue of Emerging Infectious Diseases.

In a question-and-answer article accompanying the report, the CDC said it is the most comprehensive effort to determine which foods cause illness on the basis of outbreak data, including outbreaks involving "complex foods"—those containing foods from more than one category.

“To the extent that these outbreak-based estimates reflect the commodities associated with all foodborne illness, they indicate that efforts are particularly needed to prevent contamination of produce and poultry,” the report states.

The findings come just a few weeks after the U.S. Food and Drug Administration (FDA) issued its long-awaited draft rule for preventing contamination of produce. The rule is one of the major steps to implement the FDA Food Safety Modernization Act, which was enacted two years ago with the aim of shifting the U.S. food safety system to more of a preventive footing.

More than 4,500 outbreaks
The CDC authors mined data from the agency's Foodborne Disease Outbreak Surveillance System, looking at all outbreaks from 1998, the first year with detailed information on foods, to 2008. There were 13,352 outbreaks with about 272,000 illnesses during that time.

The authors found that 4,887 outbreaks, with about 128,000 illnesses, had an implicated food vehicle and a single cause (pathogen). But they excluded about 300 outbreaks because there was too little information to categorize the food ingredients. They ended up with 4,589 outbreaks that met their criteria.

The team divided foods into three major groups, encompassing 17 commodities, as follows:

  • Aquatic animals: fish, crustaceans, and mollusks
  • Land animals: dairy, eggs, beef, game, pork, and poultry
  • Plants: grains beans, oils-sugars (refined plant foods), and produce, including fruits-nuts, fungi, and leafy, root, sprout, and vine-stalk vegetables

The 4,589 outbreaks identified by the authors included 120,321 illnesses caused by 37 agents. Norovirus caused by far the most outbreaks, 1,419, and illnesses, 41,257, as compared with a median of 29 outbreaks and 1,208 illnesses for all pathogens. The implicated food vehicle was complex in 49% of the outbreaks.

The team estimates that about 51% of foodborne illnesses were related to plant commodities, 42% to land-animal commodities, and 6% to fish and shellfish. Citing a previous CDC estimate of 9.6 million foodborne illness cases per year in the United States, that comes out to 4.9 million, 4.0 million, and 600,000 cases, respectively.

Of the 17 commodities, leafy vegetables led the list for the largest share of illnesses at 17%, but the wide range between the team's low and high estimates indicates that leafy vegetables were often part of complex foods. Next on the list were dairy foods, implicated in 14% of illnesses; fruits and nuts, 12%; and poultry, 10%.

The authors calculated that the outbreaks caused 57,462 hospitalizations. Forty-six percent of those were attributed to land-animal commodities, 41% to plant commodities, and 6% to fish and shellfish. Among specific commodities, dairy foods accounted for the most hospitalizations at 16%, followed by leafy vegetables, poultry, and fruits-nuts.

The total number of deaths was estimated at 1,451. The team calculated that land-animal foods accounted for 43% of these, plant-based foods for 25%, and fish and shellfish for 6%. As noted above, poultry topped the list of single commodities implicated in deaths, with 19%. It was followed by dairy, vine-stalk vegetables, fruits-nuts, and leafy vegetables.

Of the deaths attributed to poultry, most were blamed on listeria (63%) or salmonella (26%). The authors observe that the poultry-linked listeriosis numbers were swelled by three large outbreaks in the 1998-2002 period that were linked to turkey deli meat that was contaminated after cooking.

Concerning the 46% of all illnesses attributed to produce, the authors comment, “The large number of norovirus illnesses was a major driver of this result.” They said a previous study showed that produce-containing foods were the source of about half of norovirus outbreaks with a known simple food vehicle in 2008.

To read more of the CIDRAP report, visit

Tyson Foods Honored With Edward C. Jones Community Service Award In Recognition of Meals that Matter Program


Tyson Foods today was awarded the American Meat Institute’s (AMI) Edward C. Jones Community Service Award during the 2013 AMI International Production & Processing Exposition in Atlanta, Georgia. The award is named in honor of former AMI Board member, the late Edward C. Jones of Jones Dairy Farm, in Ft. Atkinson, Wis., who was a model of community service. 

Tyson has a long history of involvement in hunger and disaster relief.  Those efforts were expanded in 2012, when the company launched a new “Meals That Matter” disaster relief program.  As part of the program, the company launched a special mobile feeding unit equipped to enhance the company's disaster relief efforts.

The 53-foot semi-trailer was unveiled in April and will serve as a central supply unit at disaster sites to support the feeding efforts of multiple Tyson "cook teams" that bring grills and Tyson volunteers to help feed those in need. The trailer is outfitted with enough refrigerated space to store up to 20,000 pounds of chicken, beef or pork, a 5,500-watt generator and satellite communications.

Their new program was timely, as Hurricane Sandy would soon devastate the East Coast and send the trailer on its inaugural voyage. 

On November 2, 2012, Tyson’s Meals That Matter First Strike team, led by Pat Bourke from the transportation division, Sherri Austin from external relations, and Tyson drivers Don Richie and Jay Wheels, arrived in Bayonne, New Jersey, with volunteers from Shelbyville, Tennessee, to feed those in need. During the next few days, they were joined by teams from locations around the country to feed thousands of meals to storm victims and emergency responders.

On November 7, 2012, the operation moved to Staten Island, New York, where the pace increased to 8,000 meals a day at its peak.  Tyson also received aid from customers, Shop Rite,  Restaurant Depot and Compass.  The Tyson team worked outside for many long days in rainy, cold weather.  By the time President Obama visited Staten Island, more than 50,000 meals had been served to an extremely grateful community.  Team Members also pitched in with thousands in in cash donations to the Red Cross, which the company matched. 

Tyson previously assisted in disaster relief following the September 11 attacks, Hurricane Katrina, and the tornadoes and floods of 2011. 


“Clearly, the caring nature of Tyson team members is not new,” said AMI Chairman Nick Meriggioli, president of Kraft Foods., Inc./Oscar Mayer.  “Their significant new efforts this year through the Meals that Matter Disaster Relief program that played such an important role in Hurricane Sandy relief makes the company very worthy of the 2013 Edward C. Jones Community Service Award.”

USDA’s U.S. Meat Animal Research Center Meat Safety and Quality Research Unit Honored With AMI Foundation Scientific Achievement Award

The Meat Safety and Quality Research Unit of the U.S. Department of Agriculture (USDA) Agricultural Research Service’s U.S. Meat Animal Research Center (USDA-USMARC) recently received the American Meat Institute Foundation (AMIF) Scientific Achievement Award during the AMI International Production & Processing Exposition in Atlanta, Georgia. The award was presented in recognition of the Unit’s timely and important meat and poultry industry research. 


AMIF annually recognizes individuals from industry, academia, or government whose professional achievements make significant contributions to the meat and poultry industry.

Current USDA-USMARC meat science research focuses upon both meat quality and safety topics, including identification of areas of the genome that regulate carcass composition and meat quality, the development of instrumentation  to classify carcasses based on meat quality traits and lean meat yield, the effect of breed on carcass composition and meat quality, and the development of strategies to optimize meat quality, especially tenderness.  The unit is also analyzing the prevalence, level, and types of non-O157 STEC in cattle from different production systems at harvest and determining if production system or regional variations in non-O157 STEC serogroups exist.

Recently, the USDA-USMARC team conducted projects on detection of and postharvest interventions for non-O157 STEC that the beef industry used to demonstrate that a food safety management system in control for E. coli O157:H7 was also in control for other Shiga toxin-producing E. coli

“The Center’s groundbreaking research has served the meat industry well in producing a better product for our customers,” said AMIF Chairman Nick Meriggioli, president of Kraft Foods Inc./Oscar Mayer“This group’s active publication in peer reviewed journals, as well as the design of standard research protocols that are recognized as global standards, have contributed enormously to the safety of meat and poultry products.”


AMI represents the interests of packers and processors of beef, pork, lamb, veal and turkey products and their suppliers throughout North America. Together, AMI’s members produce 95 percent of the beef, pork, lamb and veal products and 70 percent of the turkey products in the United States. The Institute provides legislative, regulatory, public relations, technical, scientific and educational services to the meat and poultry packing and processing industry.


Illinois Pork Expo Offers Production Topics

The 2013 Illinois Pork Expo offers a wide slate of production seminars on Feb. 6 during the annual event on Feb. 5-6 at the Peoria (IL) Civic Center.

Topics include:

  • Options for reducing feed costs by Hans Stein, University of Illinois;
  • Utilizing manure for an environment-enhancing energy by Lance Schideman, University of Illinois;
  • Foaming in deep-pit manure storages: understanding the causes by Laura Pepple, University of Illinois;
  • Update on National Pollutant Discharge Elimination System permits by John Kim, director of the Illinois Environmental Protection Agency;
  • PRRS filtration and other novel approaches to controlling porcine reproductive and respiratory syndrome by Joe Connor, DVM, and Aaron Lower, DVM, Carthage (IL) Veterinary Service.
  • Tips to achieving 2% mortality and morbidity in wean-to-finish systems by Becky Bierlein, Purina Animal Nutrition.

A panel discussion will focus on market outlook for corn, soybeans/soybean meal and hog markets.

Marketing experts will describe ways to manage your marketing risk for crops, feed inputs and hogs.

For more information and to register, visit



Pinterest Powers Pork Connection with Consumers

Pinterest Powers Pork Connection with Consumers

The Pork Checkoff is inspiring pork’s biggest proponents, one little pin at a time, thanks to the astounding power of Pinterest.

“The popularity of Pinterest has really taken off in the last year, and this social media tool is opening up a whole new audience to us,” says Cathy Lee Fredrickson, digital marketing manager for the Pork Checkoff.

Pinterest is an online pinboard that allows people to “pin,” organize and share images, photos and videos that appeal to them. Launched in 2009, Pinterest has grown to more than 20 million users, according to, and it’s now the third most popular social networking site, behind Facebook and Twitter.

The vast majority of Pinterest users are women, and many share food photos and recipes, says Frederickson, who notes that the Pork Checkoff was one of the first brands to tap into the power of Pinterest via

“Pinterest offers a powerful way to connect the Pork Checkoff’s messages with consumers. It has also excelled at driving traffic to our Web sites since we joined Pinterest in January of 2012.”

Pork Makes the Party
To build even more social media momentum, the Pork Checkoff has added a Pinterest Tab on the upper right hand corner of the Checkoff’s Facebook page.

“When fans click on this Pinterest Tab, they can see the boards and pins we have curated on our Pinterest channel,” Frederickson says. “This makes our social content more visible to fans who may not know about our other social media channels.”

To catch consumers’ attention, the Pork Checkoff recently hosted a month-long Pinterest Party on the “Pork Makes the Party!” board. The Checkoff encouraged pork Pinterest fans to share their holiday inspiration and ideas. Members of the online community were also granted permission to personally pin to the boards to allow easy, immediate engagement.

To cross-promote this opportunity, the Checkoff posted a piece of a recipe image from its Pinterest boards to the Pork Checkoff’s popular blog. The blog’s followers were encouraged to search Pork Be Inspired’s Pinterest boards to find the full image match and either like, comment or re-pin the image on their own boards for a chance to win a prize pack.

“These social media efforts involve a small Checkoff investment, but they generate a lot of interest in pork,” Frederickson says.

Join the Pork Social Community
In 2013, the Pork Checkoff is making it even easier for consumers and creative cooks to access all of pork’s social media resources through the new Pork Social Community at

“We want to create a place where people can share their love of pork,” says Frederickson, who notes that members of the community can upload recipes and photos. “Social media has become an effective way to celebrate pork, and we’re excited about the possibilities.”



Japan Eases Beef Restrictions, Could Prop Up Pork Prices

Japan Eases Beef Restrictions, Could Prop Up Pork Prices

Japan’s health minister announced this morning that the restriction on beef imports from the United States would be relaxed beginning on Friday, Feb. 1, to allow importation of product from cattle up to 30 months of age. Exports had been limited to cattle less than 20 months old since 2005, when Japan began allowing U.S. beef back into the country after our discovery of bovine spongiform encephalopathy (BSE) in December 2003. The restrictions had significantly limited the pool of cattle from which Japanese exports could be drawn and, in turn, created a huge opportunity for Australia to ship beef to Japan.

Japan buys some high-end beef from the United States, but a significant part of our exports there are lower value cuts, such as plate (skirt steak). Expanding the supply of cattle from which exports may be drawn will reduce the prices Japanese buyers must pay, but should result in volume growth. Any positive impact on U.S. beef and cattle prices will, I think, have to come by the volume impact since any premiums that have been garnered for the under-20-month product will now likely be gone. I still expect this will be positive for beef prices and thus a gain for pork demand in 2013.

Year-End Cold Storage Stocks Up 12.1%

USDA’s January Cold Storage report indicates that total stocks of poultry and meat were 2.014 billion pounds on Dec. 31, up 12.1% from one year ago and 3.7% from Nov. 30 (Figure 1). A chart of inventories by species appears in Figure 2.

Turkey: This year’s increase was led by turkey inventories which were 40% larger than last year and 16% larger than at the end of November, which weren’t small. In fact, typically the lowest of the year, the November stocks were the largest since 2004, except for in 2008. Whole bird stocks were the biggest factor in the growth at +76% from one year ago and +22% from last month. Breast stocks were down slightly from last year, but still held at 5% higher than one month ago.

Pork: Pork inventories on Dec. 31 were 14.4% higher than at the same time last year but actually declined 0.8% during December. There was 554.4 million pounds of pork in freezers on Dec 31. For perspective, last week’s estimated pork production was 448 million pounds.

Ribs are the primary culprit in the growth of pork stocks, accounting for 50% of the year-on-year increase. Ribs account for about 20% of the total amount of pork in freezers and Dec. 31 rib stocks are at a record high. The report does not indicate exactly who is holding the various inventories, but our contacts believe that a large number of these ribs are already owned by end-users. Spareribs were quoted the week of Jan. 18 at $135.59/cwt., down nearly 15% from one year ago.

Chicken: Chicken stocks grew by 1.1% during December and stood at 679.3 million pounds at month’s end. That is 7.9% larger than one year ago. Nearly 70 million pounds of wings were in freezers on Dec. 31, 68% larger than last year but 8% fewer than last month. Wing prices are again record high in spite of these large stocks, implying exceptional demand leading up to the Super Bowl, traditionally the seasonal peak for chicken wing prices.

Chicken leg product stocks were 9% larger than last year, while breast meat stocks were 0.6% lower than one year ago and 5% larger vs. November stocks.

Beef: Beef stocks grew by 5% during December to 465.5 million pounds. That level is just 1.8% larger than one year ago. However, boneless inventories, which account for the vast majority of beef in frozen storage, were 1.7% lower than in 2011.

USDA’s January Cattle-on-Feed Report, released Friday afternoon (Jan. 25), indicated significantly smaller-than-expected December placements, higher-than-expected marketings, resulting in lower-than-expected Jan.1 inventories. See Figure 3 for key national data.

December placements of 1.664 million head were slightly lower than last year but analysts surveyed by Dow Jones before the report had, on average, expected placements to be larger than last year (Figure 4). The magnitude of the difference between the actual and expected numbers is bullish for fed cattle futures, especially for June onward.

Placements were closer to year-ago levels than they have been since the May 2011 placements were actually larger than one year earlier. Still, December marked the 10th month of 2012 in which placements were lower.

Seven straight months of year-on-year lower placements – four lower by 10% or more – mean that current inventories are very front-loaded. By our calculations, there were 3.706 million cattle in lots on Jan. 1 that had been on feed for 120 days or more. That number is 4.4% larger than one year ago. But, as of Dec. 31, lots held 19% fewer cattle (1.94 million head) that have been fed 90-120 days and 6.7% fewer (5.547 million) that have been fed 90 days or less (Figure 5). Once the current supply of over 120-day cattle are gone in late February or early March, fed supplies are going to tighten a bunch.

I still expect 2013 beef slaughter to be 4-5% lower than last year, but that number is very dependent on weather. If rains come to the southwest and northern plains, heifer retention will increase quickly and tighten cattle supplies in late-2013 and 2014 even further. If those rains do not materialize, there will be little for cows to eat, heifers will continue to flow to the slaughter supply and more cows will put extra product – primarily grinding beef – on the market.

All of agriculture is always dependent on weather, but have we ever seen a time when it represents such a knife edge for so many issues?