OVER MY SHOULDER
Markets up, down & around as pages of 2008 calendar turn
J.D. SARTWELLE

It's hard to believe that three months of the new year are already gone. Even with the added day, February is still the short month and it doesn't take long for it to get over with unless you're sick with the flu and then it goes very slowly. In the north and east severe winter weather was the norm, while in other parts of the country weather was more seasonal.

In our end of the woods, we were wet in the south, the east and the deep valley while everywhere else was dry and looking for moisture. Not much got done on the political front or the export trade situation and about all that came from Washington was presidential posturing.

Markets were up, down and around, pleasing to some and not to others. During the month, oil futures hit the $100 mark and stayed over it for several days (and it's over it again) That was the main reason for a major spike in gasoline while at the same time gasoline stocks were a recent inventory high and we even exported ready made gasoline; as they say ... it's cra'zy.

The month started wet in the coastal bend and stayed that way as it hampered outside activities. Temperatures were up and down, but generally not unbearable. Mid-month, when the wind blew, cowboys worked a few cattle and the farm boys began to plant; and by end of month had lots of seed in the ground.

In the market place, oil was high, gasoline higher, diesel higher yet and rising, fed cattle down, feeder cattle and calves up, grains up, then lower, then up, protein up, plenty of hogs, plenty of fowl that makes for plenty of competition for beef in the grocery store.

On the political scene, the month of February was wasted as not much got done with the Farm Bill in the conference committee. There was lots of talk outside of the committee but not much formal talk on the inside. A good bit of "posturing" took place concerning the animal abuse and "rules breaking" by the cow plant in California and USDA's recall of meat product going back over two years to make it the largest recall ever. It definitely wasn't a good thing for the industry and should remind us all that there are those that take great delight in exposing what we hope is a very small amount of negative actions that we all may knowingly or unknowingly be a part of.

On the export front very little got done. The Koreans have a new president and new administration that will take a little time to get their feet on the ground to get negotiations restarted. The U.S. is still intent on not approving a Trade Agreement until we agree on beef trade. Meanwhile, the Japanese haven't changed much and then at end of the month, poor ole Canada finds another BSE cow that is not expected to change their status with the U.S. or the world.

In the feedyards, high priced feeders being fed higher priced rations are showing lots of red figures. The beef trade is facing a flagging demand that is being affected by lower priced competitive meats, a slowing economy, and having to deal with high priced energy and food that is cutting into the pocketbooks of most Americans.

Packers are also feeling the squeeze of buying them alive and selling them dead, and about the only bright spot in their deal is that drop credits (offal) have established value highs almost every week of the month and are approaching all time highs. The month started with $90 cattle and finished the month trading a good many at $93. The nay sayers are saying that it won't take long to get down into the 80s.

At the markets, seasonally light numbers of calves and slaughter cows and bulls were seen at weekly auctions. Calf quality was mixed as were the slaughter cows and bulls. From first of month 'till the end, even with talk of bad weather, dry conditions, no wheat grazing, etc, calf prices added another smooth 8-10 bucks to the calf trade and $5 or more to cow and bull prices.

The pork complex is reeling because of too much production. The big producers talk of liquidating the sow herd, but apparently up to now haven't seen fit to do much of it. The cold storage report at the end of the month showed significant amounts of pork in storage; probably enough to live on for six months without harvesting another. Lower priced pork and poultry doesn't make it easy for beef to compete in the meat case.

High priced fuel, feed, fertilizer and other inputs this spring will make us all look at what we're doing. We need a large, early, good, calf crop to make ends meet. What is given to us can surely be taken away. We got to have a good spring to get off to a good early start. The best springs that I know about are the wet ones, so keep the timely rains a'coming.