grabs my hand when I try to pet him, chases cats

Question
I have a one year old neutered pure bred German Shepherd. I got him when he was 8 weeks old. I also have an 8 year old who is pretty much the perfect German Shepherd in looks temperament and he is absolutley loyal and highly protective of my place. Live on a 7 acre ranch with horses cattle and cats.
My young dog has been a challenge since I got him. He is high strung and busy, while my other shepherd was born serious. He is really mouthy, i guess is what you would call it. When I do obedience with him and try to pet him he always grabs my hand in his mouth. Sometimes when I am just walkng out to the barn he will jump at my hand and grab it. I want to be loving to him and reward him when he does something right, which is rare, but how do I get him to stop grabbing my hand? He does this even if I try to pet him on his sides, not just his head. When I took him to obedience classes he was the best dog in the class, I was so proud of him, but at home and off the leash, he is like a wild man. Now for his most serious problem, as long as I have had him, he has chased the barn cats, I have always got after him. I even put a shock collar on him for a while because he would chase them clear into the hills and not listen to me. This slowed him down and he did listen. I train horses also and this is the busy time, I could not try to give a lesson and also carry a remote and train the dog. He started chasing them worse but they are a year old and get away from him, however, someone dumped off some small kittens that I did not even know were here, about 6 weeks old. He chased them up trees, I got them and put them in the barn and for about a week all was well. But he did still try to harass them, the other day, my grand daughter was with the kittens, and right in front of her he went after one of them and would not stop and ended up shaking it and killing it. I am furious about this, I am not fond of this dog anyway, because he is nothing like my other dog and is such a problem. If the humane society would have been open he would be gone. But after thinking it over, he does love me to death and is loyal, I thought I would give him another chance. Then last night he chased another one of the cats all the way to the hills and this time his hair was all raised up. He did not listen to me when I called him to come back. I will not tolerate a dog killing cats, I have 13, adopted from the cat rescue who are doing their job in keeping the rats and mice away from my barn. Is there anything I can do? I have always been told once they are cat killers you cannot change them. Either they are born that way or they are not. My other dog was not born a chaser, he is more oriented to being a guard dog and watching people, this one so far shows not that much protection ability but is very interested in chasing leaves, butterflies and anything small, altho I did teach him to leave my Chihuahua alone.
He also has a lot of allergies. He was scratching and losing all his hair and his skin was bright red. had blood work done and found out he is allergic to chicken, corn, barley, wheat and soybeans, along with elm trees and a few other things. He was stealing cat food every chance he got and the first 5 ingredients of cat food he is allergic to. He was on lammb and rice dog food but it has barley and chicken fat in it, so he is on a totally natural lamb and rice with none of those ingredients.
am sorry this is so long, I just wanted to give you as much information about Justin as I can. Is there anything I can do about the cat chasing? I cannot own a dog who kills cats. He has enough to do on this large ranch and I leave him loose with me all day out in the barn area, so he is not a bored dog, he has a pretty darn good life.  

Answer
Hi, first off yes once they kill they will always kill.  Second, using a shock collar can actually make matters worse as they associate the animal they are going after as doing it to them, not you.  Basically in their mind, they are chasing the cat (to attack it, so they are in prey mode), and then they get zapped (attacked in their mind and since they are in a prey mode, it is associated to that prey) so they associate it to the cat and will go after the cat even more.  Especially a very strong prey driven dog, which he is.  He also has a very strong herding drive, that is why he grabs your hand so much, he is trying to herd you everywhere.  This dog would be ideal as a working dog in competition like schtuzhund as he could put his strong instincts to work.  Like you said, he was great in class, so he obviously enjoys working.  As far as protection, you shouldn't see too much of that at this age anyway.  He isn't mentally mature enough for it.  You probably will see more of that in the next year.  Unfortunately you will not be able to correct the cat problem.  Hope this helps,

Dawn