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Central Livestock Marketings
Central Livestock Association
PO Box 419
South St. Paul, MN 55075
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Permit No 72
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SECOND QUARTER – June 2010
To educate, inform and connect with
members, patrons and supporters.
2 0 1 0
Marketings
In this Issue
3— West Fargo Special Sale Ad
bout 12 months ago, several news
pundits and economic “experts”
were pointing to early signs of a
general U.S. economic
recovery. The stock
market had already
begun what would
become a remarkable
rebound in values,
and many in the livestock
Jeff Reed
trade expected livestock
prices would follow closely behind. In past
recessions, livestock and meat protein prices
have often recovered early in the aftermath of
recessions, and ready supplies of all livestock
looked very manageable.
5— Central Livestock FFA Recognition
5 — Farm Tech Days Raffle Ticket
6— Central Livestock Virtual Market Tour
6— CLA Photo Contest
7— Zumbrota Customer Appreciation Coupon
7— Minnesota TB Update
8— Zumbrota Stockmen’s Supply Coupon
This coupon good for $50.00 off Smidley Steer
Stuffer, and $100.00 off any livestock chute
Editor: Jena Swanson
Contributing Writers: Jeffrey Reed,
Jena Swanson, Bethany Hahn
Graphic Designer: Angela Franzen
Send comments or suggestions to: [email protected]
Board of Directors
Zumbrota
Bill Bertram, President, Valley City, N.D.
Brian Brix, 1st Vice President, Albany, Minn.
Keith Johnson, 2nd Vice President, Sharon, N.D.
David Krueger, Secretary Hastings, Minn.
Morris Carlson, Sandstone, Minn.
Darrel Sogn, Hudson, S.D.
Larry Traun, Durand, Wis.
Tim Sanborn, Mazeppa, Minn.
Harlin Hecht, Paynesville, Minn.
Stockman’s
Supply
Call (507) 732-7860
What a Difference a Few Months Makes!
2— Central Livestock Expert Outlook
By Jeff Reed, Chief Operating Officer, Central Livestock
A
Instead, livestock producers continued to
spend most of 2009 in the depths of a major
livestock recession, which left hog producers
of all sizes, cow/ calf and feedlot operators,
and dairy producers reeling with high
production costs carried forward from 2008,
and well below break even selling prices for
their product. How much of the price problems
were related to H1N1, and how much was a
result of the problems in the general economy
will be debated. Balance sheets eroded for
many producers to painful levels, and many
also found their lenders reluctant to finance
livestock, given the recent trends and challenges.
Those of us who have been around agriculture
for awhile have learned, and have been
www.centrallivestock.com
Conveniently located at Central Livestock’s market
reminded once again, that livestock prices
and economic price relationships, can and do
change very rapidly. The price turn around
we have experienced in recent weeks on
hogs, fed cattle, feeder cattle, bred stock,
and sheep have been remarkable. We are
experiencing price levels in the top 10% of all
time prices for cattle, hogs, and sheep, and
the excitement and enthusiasm for raising and
marketing livestock is gradually returning to
rural America. In the American economy, the
survivors usually get paid well for surviving.
I believe the more exciting fact is that all three
livestock segments have their herd /flock
numbers in line with, or even below, logically
expected end product demand levels. The U.S.
beef cow herd, as well as the North American
sow herd, are at historic lows. Export demand
is often the biggest wildcard for many
agricultural commodities, however news on
the meat export front is quite encouraging.
Although the last two years have been painful
for many in livestock production, a period of
sustained livestock profitability looks very likely.
Time to get the bills paid, make up with your
lender, and put a few dollars away for the future.
Central Livestock is your full service marketing
organization, here to serve your marketing
needs, during the good times as well as in
tough times. Please call on our staff, for all
of your marketing needs. Thank you for the
opportunity to serve. n
Central Livestock • www.centrallivestock.com • Rock Creek (320) 629-1122 • South St. Paul (800) 733-1844
Albany (800) 733-6828 • Zumbrota (877) 732-7305 • West Fargo (800) 733-4620
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©2010 CRI N0474-050
Central Livestock Expert Outlook Minnesota TB Update
By Bethany Hahn, Communications Specialist, Minnesota Board of Animal Health
By Jena Swanson, TEAM Marketing and Administration Manager
A
comprehensive look at industry
trends of sheep and goats with
Tom Ostlie, Sheep Department
Manager, and hogs and feeder pigs with
Bob Young, Zumbrota Market Manager and
Hedging Specialist, Gary Millard, Head of
Swine Marketing, and Tony Fink, Head of
Swine Sales.
$1.30. “That is the
highest price I have
ever seen for a
finished lamb,” states
Tom Ostlie, Sheep
Department Manager.
For many sheep
Tom Ostlie
producers, a trip to
Central Livestock is more exciting than ever
before with record sheep market prices
on all classes of sheep. It’s hard to believe
less than 10 years ago, lambs averaged
$66.90 (NASS).
Market prices on sheep are indeed high
right now and that is a trend that Tom
Ostlie believes will continue. Tom explains
that the trend is due to the simple law
of supply and demand. There is a high
consumer demand for lamb meat, and
a lessening supply. In the U.S., sheep
numbers have shown a decline since the
population peak in 1942 of 56.2 million
head. Volume continued to slip, and by
1994, the sheep inventory was just below
10 million head (NASS). According to the
NASS, “From the start of the 20th century
to the end of the century sheep numbers
were down 85%.” Currently the 2010 U.S.
sheep inventory is at 5.63 million head,
which is down 2% from 2009.
Although sheep inventory is down 2%
nationally, along with Minnesota sheep
inventory down 7% from 2009, Wisconsin
sheep inventory is up 6%. All goat
inventory is down 1% nationally from 2009,
meat goat inventory is down slightly, and
milk goat inventory is up 6%. Wisconsin
meat goat inventory is up 17%, and
Minnesota meat goat inventory is up 10%.
Wisconsin milk goat inventory is up 15%,
and Minnesota milk goat inventory is up
13% (NASS). Although national goat, and
national and Minnesota sheep inventories
may be down, it is clear that raising sheep
and goats in Wisconsin and Minnesota is
an ever-increasing trend.
Ostlie attributes the growth in this region
to several factors: terrain, prices, and
producers transitioning to different species.
The terrain in this region lends nicely to
raising sheep and goats with lush pastures.
Market prices are very high right now,
and could entice people to start raising, or
expand volumes of sheep and goats. This
is especially true of goats, with industry
interest and market prices increasing
significantly in the last fiveseven years. The final factor is
probably the most noteworthy
in this region, producers
transitioning from raising
different species to raising
sheep and goats. Many people
who have switched to raising
sheep and goats, formerly
raised beef or dairy cattle. Age
can play a factor in this, as
farmers retire from raising cattle,
and switch to sheep. Many that
switch find sheep and goats
to be easier to handle, less
risk of injury, and are ideal for
producers with small acreage.
is the increasing demand from ethnic
buyers. In the last 10 years, there has
been considerably more demand for
sheep and goats from ethnic buyers. Small
ethnic markets have also been starting in
different regions, and have aided demand
for all ages and classes of sheep and
goats. It also seems that market prices
are traditionally stronger around ethnic
Holidays. Many animals purchased for
religious slaughter must meet certain
criteria. Ostlie encourages sheep and goats
producers to learn more about ethnic
Holidays, and the characteristics buyers
are looking for around those particular
marketing windows.
Tom shares his observations on the
qualities and traits that are in the highest
demand for finished and feeder lambs, and
goats through traditional buying channels
and ethnic buyers.
•Finished lambs through traditional packer: Packers are looking for
A
Federal Order has been issued
by the U.S. Department of
Agriculture (USDA) to suspend
enforcement of a portion of the bovine
tuberculosis (TB) regulations in the U.S. As
a result many states have reduced their
TB testing requirements for cattle moving
out of Minnesota’s Modified Accredited
Advanced (MAA) Zone.
Under the Federal Order, the USDA will
have the authority to determine whether
or not to downgrade a state’s TB status
based on a scientific analysis of risk.
Previously, if two or more infected cattle
herds that were not epidemiologically
connected were found in a TB-Free
state, that state would automatically lose
their free status and be downgraded to
Modified Accredited Advanced. Under
the new Federal Order, the USDA would
have the option to downgrade the state’s
status depending on the risk of disease
transmission as well as the efforts put
forward by the state to eradicate the
disease and conduct surveillance testing.
The Federal Order will also suspend the
federal rule requiring breeding cattle to
be TB tested before leaving a MAA Zone.
However, certain states may chose to
maintain the TB test requirement for cattle
being imported from Minnesota. South
Dakota and Nebraska, both significant
trading partners, have said that they will
allow cattle coming from Minnesota’s MAA
Zone to be imported without first being
TB-tested. It is the hope of the Board that
other surrounding states including North
Dakota, Iowa, Illinois, and Wisconsin will
eventually recognize the federal order
and drop their testing requirements. In
the meantime, producers should contact
the receiving state to verify shipping
requirements prior to exporting cattle.
Last year, the USDA announced that it
would be revising the national TB program
to take a new approach to managing the
disease. The agency is currently working
on writing new rules, which will then be
submitted for review and a public comment
period. The Federal Order is considered
by the USDA to be an “interim measure”
which will be in place until the new rules
are issued.
Bovine TB Status Upgrade Application
In March 2010 Minnesota submitted an
application to the USDA for an upgrade
in status for each of the state’s TB zones.
The application requested that the portion
of the state that is currently MAA be
upgraded to TB Free and the portion of
northwest Minnesota that is currently MA
become MAA. The state anticipates the
status upgrades will become effective in
October 2010. n
This coupon good for
one ice cream sandwich
at the Zumbrota Market Customer Appreciation Event in July
Look for details on the event in the near future
Central Livestock
Association
A subsidiary of Cooperative Resources International
Zumbrota Market
P.O. Box 185, Zumbrota, MN 55992
Phone 877/732-7305 • Fax 507/732-7791
www.centrallivestock.com
Ostlie says another important
factor affecting market prices
Central
Central
Livestock
Livestock
• www.centrallivestock.com
Association • •www.centrallivestock.com
Rock Creek (320) 629-1122
• South
• South
St. Paul
St. (800)
Paul (800)
733-1844
733-1844
Albany (800) 733-6828 • Zumbrota (877) 732-7305 • West Fargo (800) 733-4620
2x
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Central Livestock Virtual Market Tour
C
entral Livestock released the
first Virtual Market Tour of the
Zumbrota market. As a member
-owned cooperative, Central Livestock
holds fall delegate meetings each year to
gain input, and this project was inspired
from these meetings, and approved by the
Central Livestock Board of Directors.
The Virtual Market Tour details the entire
process of marketing livestock at the
auction market, gives a closer look at the
new improvements, and displays safe and
careful animal handling as a means to
show positive images of animal agriculture.
completed this year, with all to be displayed
on the website. Visit www.centrallivestock.com
and click on Virtual Market Tour or go to
www.youtube.com to view the first Central
Livestock Virtual Market Tour of the
Zumbrota market. n
The Zumbrota Virtual Market Tour is the
first of the Central Livestock markets to be
completed, with the other markets to be
Enter the 6th Annual Central Livestock Photo
Contest
The contest is open to all Central Livestock customers and their immediate family members who wish to enter. Entries must be received by
September 15, 2010. The photos will be judged on focus, content, color tone, composition and overall appeal. The winner in each category will receive
a prize and could be featured in the 2011 Central Livestock calendar and a future issue of Marketings.
Entry Rules
•Entries become the property of Central Livestock and will not be returned.
•All photos must be in color.
•Entries may be digital or printed on photo quality paper. Prints must be 5” x 7” or 8” X 10”. Digital entries should be taken at the highest
resolution possible. The camera should be a least 2.5 mega pixels or higher. Images should be saved as EPS, TIF, or JPG formats and
e-mailed to [email protected] by September 15, 2010.
Each photo entry must select one of the following categories:
Livestock Scenes
Country Scenery
Kids & Livestock
Entries are limited to three photos per Central Livestock customer. Photos may be entered into different categories.
Entries should not be mounted or framed. Include the following information with each entry:
•Title of Photo, Photographer’s Name and Address, Category, Phone Number, E-mail Address, Location “
and Date of Photo.
Please mail photos and entry info by September 15, 2010 to:
meaty, clean lambs, weighing 120-
150#. Packers prefer shorn with the
pelt grown back, because these
lambs will yield more. Wooly lambs
will also sell fine, but they won’t
yield as much.
•Feeder lambs through traditional
farmer buyers: Farmers are looking
for good-doing, growthy, stretchy
lambs that will develop into a good
finished lamb. Farmers want
castrated and properly docked tails,
(not too short) from multiple breeds
of sheep.
•Finished lambs through ethnic
buyers (traditional feeder lambs):
Buyers are looking for lighter weight
lambs, 60-100#, that is not
completely finished by a traditional
packer’s standards. Only a limited
number will go this direction, and
can be spotty to hit niche avenues.
A larger percentage of lambs are
going towards traditional channels,
but both buyer avenues are very
competitive.
•Goats through ethnic buyers: Buyers
are mostly looking for kid goats,
40-70#; this type has the highest
demand and brings the highest
market prices. The meat goats,
traditionally males, bring top dollar.
Goats are typically slaughtered
at local ethnic slaughter facilities,
with very few going towards large,
traditional packers.
Sheep producers also need to consider
the price difference between shorn and
unshorn when marketing lambs. Ostlie
explains there is a significant price
difference, and seasonal pattern between
the two. New crop spring lambs, fourfive months old, with short wool, will sell
as good as shorn lambs. If you take the
same lamb and put it on pasture until it
reaches 8-10 months of age, it will have
substantially more wool. As wool gets
longer, and the lamb gets older, the lamb
has less value than a shorn lamb. Market
topping lambs that packers prefer are
shorn lambs with a pelt grown back to a
#1 pelt, which takes approximately six
weeks.
Central Livestock sees sheep and goat
production as a growing livestock segment
in this region. In order to better serve our
customer needs, and increasing ethnic
buyer demand, Central Livestock is going
to begin holding special sales for sheep
and goats. Beginning on August 3, 2010,
Central Livestock- Zumbrota Market, will
hold a special goat, and breeding sheep
and goat sale. These special sales will
be held in conjunction with the Tuesday
auctions, and will be the first Tuesday of
the month. Look for future details on
these special sales through our website
www.centrallivestock.com and radio
market reports.
Central Livestock is committed to personal
customer service, and staff work hard
to ensure that customers receive the
best price possible. All sheep are graded
individually, and sold for the highest
price for their particular weight and
class, rather than selling sheep in a pool.
Central Livestock has strong demand for
all classes of sheep and goats, including
slaughter ewes, and aged slaughter goats.
Sheep and goats are sold at all of our
markets, and sold five days a week at the
Zumbrota market. Central Livestock is an
89-year-old farmer-owned cooperative,
marketing livestock for you. For sheep and
goat marketing questions, contact your
local Central Livestock market, or call Tom
Ostlie at 612-532-0966.
H
og producers have waited a long
time for May 2010. This month
marks the highest market hog
prices ever (Missouri). “John Lawrence at
Iowa State University estimates the average
market hog was sold at
a profit of $29.39 per
head in April. That makes
April the most profitable
month since August
2006 and only the fourth
profitable one in the last
Gary Millard
31 months” (Missouri).
Bob Young, Zumbrota Market Manager and
Hedging Specialist, Gary Millard, Head of
Swine Marketing, and Tony Fink, Head of
West Fargo Market 75th Anniversary
Special Yearling Sale
Wed., August 25th, 2010, 10:00 AM
Look for more details closer to sale time
Central Livestock Photo Contest, Central Livestock Association
953 Concord St. S., PO Box 419, South St. Paul, MN 55075
For more information call Mike Hilde- 701-371-8144, Kelly Waslaski- 701-360-2326, Kent Oland- 701-238-1546
Central Livestock • www.centrallivestock.com • Rock Creek (320) 629-1122 • South St. Paul (800) 733-1844
Albany (800) 733-6828 • Zumbrota (877) 732-7305 • West Fargo (800) 733-4620
6
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Works Cited.
Grimes, Glenn, and Ron Plain. “Hog Outlook.”
University of Missouri AgEBB. 7 May 2010.
Online. 12 May 2010.
Central Livestock was recognized at the 81st Minnesota State
FFA Convention, held April 25-27, 2010 at the University of
Minnesota. Central Livestock was given recognition at the
Honors Reception as a bronze level donor, and awarded the
50-year donor plaque from the Minnesota FFA Foundation.
Central Livestock also presented the Career Development
Event in Livestock Evaluation at the fourth General Session.
Phone: _____________________________________________________________
Millard goes into detail on steps hog
producers and Central Livestock staff takes
to ensure all swine receive top market prices
at Central Livestock. One step producers can
take is to use our hedging and price protection
service, offered by Bob Young, Zumbrota
The Central Livestock hog department is
dedicated to strong customer service, and
sorts all hogs and sows by size, color, and
breed, to meet the packer’s needs to bring
the most value for the hog producer. Central
Livestock is an 89-year-old farmer-owned
cooperative, marketing livestock for you. For
hog and feeder pig marketing questions,
contact your local Central Livestock market,
or call Gary Millard, Head of Swine Marketing,
612-819-1372, or Bob Young, Zumbrota Market
Manager and Hedging Specialist, 651-343-3703.
Meyer, Steve, and Len Steiner. “Daily Livestock
Report.” CME Group. 29 April 2010. Online. 12
May 2010.
“Overview of the U.S. Sheep and Goat
Industry.” Agricultural Statistics Board. NASS,
USDA. September 2007. Online. 12 May 2010.
“Pork Exports Register Slight Gains.” National
Hog Farmer. 15 April 2010. Penton Media, Inc.
Online. 12 May 2010.
“Quarterly Hogs and Pigs.” Agricultural
Statistics Board. NASS, USDA. March 2010.
Online. 12 May 2010.
“Sheep and Goats.” Agricultural Statistics
Board. NASS, USDA. January 2010. Online.
12 May 2010. n
Central Livestock
receives
FFA Recognition
___________________________________________________________________________
Millard only knows of a
few U.S. packers that are
When asked to describe a typical Central
Livestock hog customer, Millard states the
typical herd size is 5-15,000 head, with most
operations located in Minnesota and Iowa.
There aren’t as many small herds anymore
(less than 5,000 sows), because it is difficult to
compete, and remain profitable. He says most
customers are farrow-finish operations, with
some buying feeder pigs and finishing them.
Most of these feeder pig finishing operations
average about 180-800 head annually. Most
Central Livestock customers are family farms.
The largest volume that Central Livestock sells is
sows, followed by butcher hogs, and feeder pigs.
Central Livestock staff works hard to get the
producer top value for their hogs. Central
Livestock works with several packers to get
the best bids for the producer, and makes sure
the highest bid offered on a given day is the
price paid to the producer that day. Packers
are looking for healthy, top grading, lean hogs.
They want lean hogs, but carrying some fat.
Another niche market producers can research
is selling natural hogs, with the possibility to
get a premium. Producers must sign an All
Natural Affidavit, and need to discuss the
program further with Gary Millard.
Address: __________________________________________________________
In the last two years, there has been much
discussion with COOL (Country of Origin
Labeling), and the impact Canadian hogs have
on the U.S. market. Millard states, “Canadian
hogs haven’t really affected the U.S. market
at all.” He goes into further detail, consumers
aren’t concerned with meat origin right now,
and they are only looking
at the price. Many families
would like to buy only U.S.
meat, but getting value for
the dollar is the main factor
when buying groceries right
now. Furthermore, many
consumers don’t even know
what COOL is.
Similar to the sheep market, hogs and feeder
pigs have been affected by the increasing
demand from ethnic buyers. Millard says
ethnic buyers have really helped drive feeder
pig prices up, because they are slaughtered
for religious slaughter, and special occasions
like weddings and funerals. In some
circumstances, feeder pigs prices are driven
so high, that hog farmers cannot afford to
buy the pigs to bring back to the country.
Millard explains that many ethnic buyers are
looking for black hogs. Most ethnic buyers
prefer feeder pigs weighing 60-150#, with
no preference for breed or color. Most hog
farmers are looking for healthy feeder pigs,
60-120#, and prefer Landrace and York
cross breeds. Often times, farmers will also
purchase feeder pigs weighing less than 60#
because of price competition.
Market Manager and Hedging Specialist.
Producers should also keep excellent records,
and go through PQA and TQA certification.
Millard recommends keeping farms inspected
and receiving a premise identification number.
Name: ______________________________________________________________
Fink and Young say the export markets have
significantly helped improve the market prices,
specifically Mexico and the re-opening of China
since the H1N1 outbreak last year. According to
an article in the National Hog Farmer, “Mexico
was the top destination for U.S. pork in 2009,
and remains the No. 1 buyer in 2010.” Strong
global demand will continue to contribute to
pushing hog prices higher. Young also explains
that corn markets directly correlate with hog
prices, and forecasts for a large corn supply
should help keep feed costs low.
Hog volume marketed through Central
Livestock has recently increased, and Millard,
Young, and Fink ascribe this to the high
market prices. Young explains, “When prices
get better, more people sell through a terminal
market system.” High prices make it difficult for
smaller producers to sell directly to a packer,
and fit into a given marketing window. If the
market continues to stay high, hog volume
may increase as well. The corn market will also
play a huge role in this topic. Neither Young
nor Fink have seen any new hog operations
emerge, they think most people are waiting to
see where the market trend will go.
slaughtering Canadian hogs. COOL has made it
tougher to slaughter Canadian hogs in the U.S.
On the other hand, Canadian sows are being
slaughtered by most sow packers. Packers
have found slaughtering Canadian sows to be
profitable because of their inexpensive price.
This trend will carry on as long as consumers
continue to want cheap grocery products.
WI Farm Technology Days - July 20-22
Sow reduction is also a huge factor in the
current high prices, and explains why hog
supplies are so tight, explained Young. “The
combined U.S. and Canadian sow inventories
are now estimated to be 7.064 million head,
4.2% smaller than a year ago, and 8% smaller
than in 2008” (CME). Canada is even more
so in a liquidation mode, with their breeding
herd contracting quicker than the U.S. (CME).
Fink explains that locally, they have not seen
the drastic sow reduction, or really many
producers exiting the business at all.
All three agree current high prices are needed
for hog producers right now, because they
haven’t made profits in at least 1.5 years. Fink
says he could only remember two other times,
both in the 1980s when hog prices reached
the $60s live. Another interesting point that
Young makes is the fact that big sows are
currently higher priced than market hogs.
He credits this to the school lunch program,
trends in the fast food industry, and the
upcoming grilling season. Fast food chains are
really pushing breakfast, especially sausage,
which comes from sows. This trend will most
likely continue with the current economy, and
eating habits.
Central Livestock Raffle Ticket
Swine Sales, attribute high market prices to
several different areas: hog inventory, sow
reduction, export markets and demand. Hog
inventory in the U.S. and Canada is declining,
simply put, said Fink, “there are less pigs in
the country.” The total U.S. hog inventory is
down 3% from 2009 (NASS). According to the
CME Daily Livestock Report, “The most recent
combined U.S. and Canada hog inventories are
now pegged at 75.623 million head, 2.7% lower
than a year ago.”
Jessica Johnson- DeGroot and Jena Swanson
Look for our Central Livestock
booth at the upcoming WI
Farm Technology Days.
The event will be held at the Roger & Beverly Peterson Farm in
River Falls, WI on July 20-22. Find us in the Agri Business Tent A-001.
Redeem this raffle ticket for a chance to win a Central Livestock jacket!
Central Livestock Raffle Ticket
WI Farm Technology Days
July 20-22
Central Livestock • www.centrallivestock.com • Rock Creek (320) 629-1122 • South St. Paul (800) 733-1844
Albany (800) 733-6828 • Zumbrota (877) 732-7305 • West Fargo (800) 733-4620
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