Feed Lot

FEB 2018

Feedlots and cow/calf operations in the beef industry who feed 500 or more has annually on grains and concentrates; maintain 500 or more beef cows; backgrounder, stocker/grower, preconditioner; veterinarian, nutritionist, consultant

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Increased demand for Choice, Prime and Premium Choice brand- ed beef traditionally sets the tone for fourth-quarter pricing, but late 2017 included an additional factor. A technical adjustment to USDA grading cameras may have played a role in beef buyers paying more. "Some analysts have pointed to the camera grading changes as a causative factor in packers paying more for cattle, especially of higher quality, but actual impact may be less dramatic than the news," says Paul Dykstra, Beef Cattle Special- ist for Certified Angus Beef LLC, in his bi-weekly CAB ® Insider report. The CAB cutout the second week i n N o v e m b e r w a s u p $ 5 / c w t . Choice was up $5.50 and Select nearly $2. 16 FEED•LOT  February 2018 FEEDLOT FOCUS By TERRI QUECK-MATZIE CAMERA GRADING AND THE MARKET The problem Fifteen beef packing plants, pro- cessing about half the nation's fed steer and heifer slaughter, use cam- eras for quality grading. This sum- mer nine of those plants upgraded to a newer version of one of the cameras. The change, like all up- grades and adjustments, was eval- uated through in-plant trails con- ducted by the USDA Agricultural Marketing Service (AMS) and the Agricultural Research Service's U.S. Meat Animal Research Center (US-MARC). AMS approved the newer version camera based upon acceptable performance during the in-plant trials. But, according to a November 3 letter from USDA Under Secre- tary for Marketing and Regulatory Programs Greg Ibach to beef chain stakeholders, over time the profes- sional USDA graders began to no- tice the camera didn't always work as expected. The inspectors have the ability, and ultimate responsi- bility, to override questionable camera grades, and they were do- ing so at a higher than normal rate. AMS began working with the camera manufacturer and industry players to collect in-plant perform- ance data. The data indicated an adjustment was needed to ensure the camera provided accurate and consistent assessments to the USDA graders, and the necessary software adjustments were made October 26. More data was collected and an- alyzed by US-MARC, and addition- al camera adjustments were made November 9. Market impact The timing has led many to be- lieve the camera changes affected pricing and the quality spread. Dykstra describes the picture as "a combined seasonal impact with a likely added effect due to a slightly smaller percentage of car- casses reaching the Choice grade than expected." In 2016 year, with the normal seasonal spread widening, the Choice/Select spread was in the $15/cwt. range. According to 2017 numbers the weekly average Choice/Select spread for the week of October 30 was $10.40/cwt. jumping to $17.58 for the week of

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