Cattle supplies in 2010 should decline another 1 to 1.5 percent, said Randy Blach, Chief Executive Officer for Cattle-Fax, Friday in San Antonio, Texas, at National Cattlemen Beef Association annual convention.

Blach also said  beef demand will continue to be impacted by a weak economy and high unemployment.

Nevertheless, Blach said 2010 overall “should be a better year for the beef industry.” 

The reason for his optimism is that Blach said beef exports expected to rise and fed cattle slaughter totals are expected to decrease.

“Demand remains the biggest challenge for the beef industry in 2010,” said Blach. “Though the supply situation is very bullish, demand must stabilize in order for prices to turn significantly higher.”

Blach said fed cattle slaughter totals are expected to be down 2 percent in 2010, and cow slaughter totals should decline by nearly 9 percent. Average carcass weights, he said, are forecast to increase slightly and beef production is projected to be down 2.8 percent. Per capita net beef supplies are expected to be down 4 percent due to an expected increase in beef exports and smaller beef production.

 On Friday, all cattle and calves on hand January 1, 2010, in Nebraska totaled 6.25 million head, down 2 percent from a year ago according toStatistics Service, Nebraska Field Office.

The USDA announced that all cows on hand January 1, at 1.84 million head, were 4 percent below last year in Nebraska. The 2009 calf crop totaled 1.68 million head, down 3 percent from 2008. Cattle and calves on feed for slaughter in all Nebraska feedlots on January 1 totaled 2.5 million head, the same as last year.

Nationwide, all cattle and calves in the United States as of January 1, 2010, totaled 93.7 million head, 1 percent below the 94.5 million on January 1, 2009.

All cows and heifers that have calved, at 40.5 million, were down 1 percent from the 41.0 million on January 1, 2009. The 2009 calf crop was estimated at 35.8 million head, down 1 percent from 2008.

Cattle and calves on feed for slaughter in all feedlots on January 1 were 13.6 million, down 2 percent.

 In 2010, Blach said U.S. beef exports are forecast to increase to South Korea, and to a lesser extent Japan and Vietnam.  U.S. beef exports in 2010 are expected to rise by about 8 percent over 2009.

 In terms of feedgrains, he said total U.S. corn production could decrease, as U.S. corn supplies are record large at an estimated 14.83 billion bushels for the 2009/10 marketing year. U.S. soybean supplies are up over 10 percent compared to last year – the second highest level on record – while soybean acreage is expected to be near 79 million acres, according to Blach. 

Spot corn futures prices, he said, are forecast to average near $3.75/bu in 2010, near steady with 2009, and the combination of bumper corn and soybean crops, as well as the sharp decline in winter wheat acreage, has lessened the need for an acreage battle this spring.

 CattleFax is a Denver-based market analysis and information organization. For more information on the outlook for the cattle industry or for information about CattleFax services call 303-694-0323.

The Renewable Fuels Association reported this week that U.S. ethanol production reached an all time high in November 2009 at 761,000 barrels per day (b/d), according to data from the U.S. Energy Information Administration (EIA). That is an increase of 93,000 b/d from November 2008.

Ethanol demand, as calculated by the Renewable Fuels Association, also reached an all time high at 781,000 b/d in November, up from 683,000 b/d a year ago. Ethanol demand is averaging 702,000 b/d through November.

EIA also reports fuel ethanol imports of 12 million gallons in September.

Sen. Ben Nelson, D-Neb., called on his  Republican colleagues in the Senate Thursday to work with him to “avert efforts to pass health reform legislation using the truncated reconciliation process.” 

 “If Republican colleagues are serious about fixing our health care system and want to avoid using the reconciliation process, then I will go to the negotiating table with them,”  Nelson said. “If Republican senators join me at the table, we can use bipartisanship for health reform rather than use reconciliation, which needs only 50 votes to approve legislation.”

 Nelson said all it takes is one Republican to come forward, put partisanship aside, and work on behalf of those that do not have or cannot afford health insurance.

“Working together, we can fight to ensure health reform relies on our private market system, rather than the government to reduce the cost of health care and deliver better care for millions of Americans,” Nelson said.

Nelson said reconciliation has never been his preference for moving legislation.

“Instead, I always prefer the regular order process that allows full and open debate, many amendments and an opportunity for broad bipartisanship,” he said. ”That can be achieved, if Republican colleagues come to the negotiating table with their ideas and proposals.”

Obama, in his State of the Union address Wednesday, urged Republicans and Democrats to take another look at the health reform plan he’s proposed, which he called an improvement over the status quo, according to Nelson.

In his State of the Union address, Obama said “…if anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know.”

Obama asked of Congress not walk away from reform, but “… help us find a way to come together and finish the job for the American people.”

Johanns, who opposes reconciliation to pass health care reform, said earlier this week that the Senate must have an open debate and not rush this legislation.

“Several Senators from both sides of the aisle have spoken out against using reconciliation, and I urge the Administration and Democrats in the Senate to take leadership and do the same thing,” Johanns said.

American Farm Bureau Federation President Bob Stallman Thursday praised President Obama’s call in his State of the Union address for Congress to pass energy legislation that includes more production of renewable fuels and nuclear power.

“We also strongly back his commitment to opening new offshore areas for oil and gas development,” Stallman said. “ And we believe he was right on target with his stated commitment to continued investment in advanced biofuels and clean coal technologies.”

 Stallman said expanded trade opportunities are vital to America’s farmers and ranchers, and welcomed and support Obama’s call to export more of our agricultural goods.

“We appreciated his support for strengthening trade relations with Asia and with key partners like South Korea, Panama and Colombia,” Stallman said. ”We join President Obama in his stated goal of doubling our exports over the next five years and we look forward to working with the administration on a National Export Initiative that will help farmers and small businesses increase their exports. We also were encouraged by his reference to the need for immigration reform.”

 Stallman said while Farm Bureau supports Obama’s position on energy legislation and the direction of his trade initiative, they oppose the administration’s climate change legislation in its current form. 

“As we have continually stressed, climate change legislation currently before Congress will sharply cut the numbers of acres devoted to U.S. food production and will increase energy costs for America’s farmers and ranchers,” Stallman said.