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This week, Burger King announced its plans to eliminate the use of
crates among its pork and poultry suppliers. Cynics will say the chain
is talking the talk more than walking the walk, as its initial plans are
to procure only 2% of its eggs and 10% of its pork from such sources,
but Burger King is a very big customer for eggs and pork.
It's true that Burger King can't procure enough of such product at the
current time, but the chain is among a growing number of food providers
responding to consumer demands. It may be activist groups that are
driving the animal welfare bus, and their goals may be drastically
different from those of cattlemen, but it would be a mistake to not
appreciate that the American consumer is the engine of growth for this
movement.
History tells us there will be small premiums paid initially, until the
industry adopts enough of the techniques and technologies to meet the
demand. And eventually, what were premiums will become discounts as such
practices become the de facto industry standard.
Irrespective of the premium and discount arguments, a large percentage
of the consuming public seemingly is concerned about animal-welfare
issues and wants accountability. Such assurances on animal welfare
likely will be packaged right along with other health assurances,
including preconditioning, and source-, age- and genetic-verification
programs.
-- Troy Marshall
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The ethanol debate is creating some unlikely bed partners. Having
already formed alliances with the pork and poultry industries in calling
for an end to the ethanol subsidies and tariffs that have created such
an enormous market-distorting set of economic signals, the cattle
industry is also finding support for its position among environmental
groups, and even other renewable energy advocates. The rallying point is
why ethanol has been bestowed preferred status by the government.
While the environmental benefits of ethanol are debatable, the economics
are well known and decidedly against ethanol production. But the
political momentum is too strong to expect any decision to be made on a
realistic cost vs. benefit basis, at least in the near future. Instead,
it will be a long-term educational process that will require many allies
to convince the American consumer that while the goal is great and
noble, ethanol is an extremely poor avenue with which to reduce U.S.
dependence on Mideast petroleum.
Most important is convincing consumers that ethanol should be forced to
compete on a level and real-world playing field with other renewable
energy sources. It's always been, and continues to be, a very bad policy
for government to set aside economic realities in favor of a political
aim.
We must move beyond the emotional response of believing anything is
better than nothing, to focus on viable long-term solutions. Make no
mistake about it, the problem is real, and ultimately we will have to
find a realistic option to address it.
-- Troy Marshall
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Final moves and posturing to make the March 30 deadline for forging
a free-trade agreement (FTA) between the U.S. and South Korea were
frenetic on Thursday, with even the heads of state wading into the fray.
South Korean President Roh Moo-hyun and President George W. Bush talked
via telephone for 20 minutes on Thursday and exchanged their views on
the remaining obstacles, including automobiles, agriculture and
textiles, reports the Korea Herald.
Click here to read more of this story by Joe
Roybal
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Japanese retailer -- Seiyu Ltd. -- of which Wal-Mart Stores Inc.
owns 51%, will begin marketing U.S. beef in 20 stores in Japan's Kanto
region tomorrow. The Seiyu Group operates about 400 stores in Japan.
A Seiyu release says the beef will be certified as originating from U.S.
cattle 20 months of age or younger. The release says "Seiyu's beef buyer
went to the U.S. and inspected the control system in the meat-processing
facility, the traceability procedures from the farm thorough export, and
confirmed its accuracy and consistency. Therefore, we believe our
customers will again welcome safe U.S. beef."
On Thursday, U.S. Ambassador to Japan Tom Schieffer participated in a
kick-off celebration at Seiyu's LIVIN Kinshicho location. Wal-Mart says
it and Seiyu will closely monitor consumer interest in the new beef
offerings and increase the availability of U.S. beef accordingly.
Offered are U.S. beef chuck for steak, thin-sliced U.S. beef chuck, and
sliced U.S. beef chuck for barbecue.
-- Joe Roybal
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Popeye is probably still trying to recover from all the media
reports last September about an E. coli outbreak in California
spinach. The California Department of Health Services and FDA released a
final report last Friday on the investigation into the outbreak, but
it's not likely Popeye and other spinach lovers will find much comfort.
The 50-page report describes the investigation in detail, as well as the
environmental factors most likely involved in the outbreak. Those risk
factors included the presence of wild pigs in and around the spinach
fields that produced the contaminated spinach, and the proximity of
irrigation wells to surface waters exposed to cattle and wildlife.
However, the investigation was unable to definitely determine how the
contamination occurred.
To read the report, log on to www.DHS.ca.gov.
-- Burt Rutherford
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This year's bull sale season validated the same long-term trends
we've been seeing for some time. The good bulls (genetics) are worth
more than ever.
In fact, trying to apply economic differences to the genetic
differences, it's easy to make the case that good bulls aren't a cost
but a very solid investment. Meanwhile, a poor bull (genetics) can spell
economic ruin.
In a similar fashion to our calf and fed markets, the price spreads
between good and bad bulls is growing wider, but is still probably much
narrower than what it should be. With that said, the right genetics are
simply the foundation of creating value.
Increasingly, the industry is coming to understand that properly
managing those genetics and putting them in appropriate systems to
capture that value is critical. As one cattle feeder put it: "You can't
make one that doesn't have the genetics to do it, grade, convert
efficiently, gain, and grade. But there are a thousand ways to make an
animal with the right genetics perform no better than average."
That will be the challenge.
-- Troy Marshall
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Consumer desires are changing and that shift is being felt at the
ranch gate. The natural and organic food segments are among the fastest
growing market segments both worldwide and in the U.S., says Erica
Kuhlmann, managing director and head of BMO Capital Markets' Food Group.
The natural and organic food segments have experienced double-digit
growth over the last two years. Based on the investments being made in
the industry, BMO Capital Markets projects that growth rate to exceed
15% in 2007 and 2008. In 2005, U.S. consumers spent $44.5 billion on
natural and organic foods, which accounted for about 8.6% of the total
U.S. food supply. By 2010, the group says spending on such food will be
nearly $70.9 billion, of which meat, fish and poultry will account for
about $6 billion.
"Consumer perception is that organic and natural foods are more
nutritious and safer because the use of pesticides, hormones,
antibiotics or biotechnology are limited or non-existent in their
production," Kuhlmann says. "What once was a small niche market has
become a significant market segment that both large and small retailers
are trying to capture."
-- Burt Rutherford
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Sen. Byron Dorgan (D-ND) proposed an amendment to the Iraq war
supplemental appropriations bill that would have moved the
implementation date for mandatory country-of-origin labeling (COOL) to
Sept. 30, 2007, a year earlier than current law. The amendment was ruled
out of order but we may see it resurface during the farm-bill debate.
The National Cattlemen's Beef Association (NCBA) urged the Senate to
oppose this effort. In a letter to all senators, NCBA said, "NCBA has
long understood the significance of labeling as a marketing tool for
cattle producers to showcase the high quality of U.S. beef. The current
law, however, does not accomplish this task, and as such, NCBA remains
dedicated to working with Congress, producers, retailers, and consumers
to develop a beneficial labeling program that adds true value and avoids
excessive costs to our producers and consumers -- a program that truly
gives consumers a choice and allows cattlemen to see a return on their
investments."
The American Meat Institute (AMI) reminded Senate members that the
potential costs of COOL "will outweigh benefits to producers and
processors."
-- P. Scott Shearer, Washington, D.C.,
correspondent
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This year Camp Cooley Ranch celebrates 20 years of
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A Japan Ministry of Agriculture, Forestry and Fisheries survey found
Japanese consumers regard beef traceability as important and necessary,
Meat & Livestock Australia (MLA) reports.
Japan's domestic traceability program, "Indication and Relay of
Individual ID Numbers on Designated Beef," has been the law since
December 2004. It allows consumers to trace individual cattle
information by accessing a designated Web site and entering a 10-digit
ID code included on retail packaging labels. Information provided on
domestically produced beef includes: date and place of birth, sex, type
of cattle, and when/where it was slaughtered.
The survey found 35% of respondents to be "familiar with the
traceability system," while a majority (81%) believes the current
required system should be continued, with 41% citing the program as
useful in preventing BSE from spreading. Few people (only 6% of the
total respondents) actually utilized the ID program's Internet service
to check on the ID numbers, however.
-- Meat & Livestock Australia
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Quarantine officials from South and North Korea met today to discuss
ways of stemming the spread of foot-and-mouth disease (FMD) in North
Korea, Yonhap News reports. Earlier this week, South Korea sent
$280 million (US) in emergency medicine and medical equipment to its
Communist neighbor, and plans additional shipments after today's
assessment of the situation by quarantine officials. North Korea has
culled hundreds of cows and thousands of pigs infected by the disease
since July, after which it called on the South for help in preventing
the spread.
-- Joe Roybal
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The Iranian snatching of British marines surged the national average
price of diesel by 3¢ to $2.73/gal. from Tuesday to Wednesday this
week, ProMiles reports. But for the week ending March 26, retail diesel
prices had fallen for the second consecutive week, according to the
Energy Information Administration. Meanwhile, gasoline prices had
continued their upward trend for an eighth consecutive week.
The average retail price for a gallon of regular gasoline rose 3.3¢
to $2.61, 11.2¢ higher than at this time last year. All regions
reported upticks, with the East Coast up 2.7¢ to $2.575/gal., the
Midwest 3.3¢ to $2.518, and the Gulf Coast 3.4¢ to $2.442. The
largest regional increase was in the Rocky Mountains with a 5¢ jump
to $2.538/gal., while the West Coast registered a 3.9¢ increase to
$3.016/gal. California rose 3.1¢ to $3.152 -- 48.3¢/gal. over
last year's price.
Retail diesel fell 0.5¢ nationally to a $2.676/gal. average, but
remains 11.1¢/gal. higher than this time last year. East Coast
prices fell 0.4¢ to $2.657, Midwest prices fell 1.1¢ to
$2.655, the Gulf Coast saw an increase of 0.3¢ to $2.643/gal.,
while the Rocky Mountains were up 1.5¢ to $2.78, and the West Coast
recorded a 1¢ drop to $2.803. California fell 0.6¢ but at
$2.869/gal. remains 14.2¢/gal. over last year.
-- Joe Roybal
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A story making headlines this week claims a link between infertility
in adult males with the amount of beef consumed by their mothers during
pregnancy. The study published in the British journal, Human
Reproduction, speculates that the culprit is growth implants and
"other zenobiotics" in beef.
Click here to read more of this story by Joe
Roybal
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Burger King and Wolfgang Puck made major announcements in their
animal welfare standards preferences recently. The announcements come on
the heels of a January announcement by Smithfield Foods, the world's
largest pork processor, to phase out crate confinement of pigs over the
next decade.
The Associated Press (AP) reports that earlier this month Burger
King sent People for the Ethical Treatment of Animals (PETA), which
earlier led a "Murder King" campaign against the word's second-largest
hamburger chain, two letters outlining the chain's new supply
guidelines.
The letters, forwarded by PETA to the AP, said Burger King had started
purchasing 10% of its pork from suppliers that don't use sow gestation
crates, and intended to double that amount by the end of 2007. In
addition, Burger King also said it plans to procure 2% of its eggs from
cage-free hens, with the intention to double it by the end of 2007.
Burger King also will favor processors -- when available -- that use gas
rather than electricity to stun birds.
Last week, celebrity chef Wolfgang Puck announced his companies and
dining venues will only use eggs from cage-free hens, and all-natural or
organic crate-free pork and veal. It also will serve only certified
sustainable seafood, eliminate foi gras from its menus, serve
all-natural or organic chicken and turkey meat from farms compliant with
progressive animal welfare standards, and write to suppliers regarding
more humane harvest methods for poultry.
-- Joe Roybal
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U.S. corn producers are expected to plant 90.5 million acres of corn
this spring -- the highest acreage planted in 63 years. According to
USDA's March 30 Prospective Plantings report, released this morning, the
increases come at the expense of cotton and soybean acres, down 20% and
11%, respectively.
The report says corn acres would be the highest since 1944, when 95.5
million acres were planted. Expected acreage is up in nearly all states
due to high corn prices.
Illinois farmers intend to plant a record high 12.9 million acres of
corn this spring, up 1.6 million acres from last year. North Dakota and
Minnesota growers also expect to plant record high corn acres, up
910,000 and 600,000 acres, respectively.
Soybean producers intend to plant 67.1 million acres in 2007, down 11%
from last year. If realized, this will be the lowest planted area since
1996. Acreage decreases are expected in all growing areas, except in New
York and the Southeast.
Large decreases in soybean acreage are expected across the Corn Belt,
with the largest decline expected in Illinois, down 1.4 million acres
from 2006. However, area planted to soybeans is expected to increase in
the Southeast, with Georgia expecting the largest increase from last
year at 95,000 acres. Planted acreage in New York is expected to be the
largest on record at 210,000 acres.
All wheat planted area is estimated at 60.3 million acres, up 5% from
2006. The 2007 winter wheat planted area, at 44.5 million acres, is 10%
above last year and up 1% from the previous estimate.
-- Elton Robinson, Farm Press
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What they don't teach you in AniSci 101.
The Charolais-influence in your crossbreeding program adds an
exceptional boost of heterosis, economic value and cowherd
predictability. Charolais-influence adds value in virtually every
segment in the U.S. beef industry.
You choose your end-use target. Use Charolais genetics to get
there!
Click here for more
information.
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Sens. Jeff Bingaman (D-NM) and Pete Domenici (R-NM) introduced
legislation to expand the use of renewable fuels over the next 20 years.
The "Biofuels for Energy Security and Transportation Act" would require
America's fuel supply to contain higher amounts of renewable fuels, from
8.5 billion gals. in 2008, to 36 billion gals. in 2022. From 2016 to
2022, the legislation requires an increasing portion of the renewable
fuels consumed to be advanced biofuels, such as cellulosic ethanol,
biobutanol and other fuels derived from unconventional biomass
feedstocks. The legislation increases the Department of Energy's funding
for bioenergy research and development by 50%.
-- P. Scott Shearer, Washington, D.C.,
correspondent
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The Senate provided $4.2 billion in agricultural disaster assistance
in the FY 2007 supplemental appropriations bill. This legislation also
includes a March 31, 2008 target for ending U.S. combat operations in
Iraq. The White House says it will veto the legislation because of the
Iraq war language and millions in non-defense items.
-- P. Scott Shearer, Washington, D.C.,
correspondent
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U.S. District Judge James Robertson, whose court is in the District
of Columbia, ruled yesterday afternoon that USDA can't block Creekstone
Farms Premium Beef from BSE-testing the cattle it processes.
Creekstone Farms wanted to privately test for BSE in an attempt to
regain its ability to export beef to Japan. USDA refused to allow
Creekstone to do so, after which Creekstone took the agency to court.
While the judge ruled that USDA can't prevent Creekstone Farms from
testing for BSE, he gave the agency time to appeal his decision, putting
his order on hold until June 1. If USDA doesn't appeal before then, the
order becomes effective and Creekstone Farms can begin testing.
In the trial, USDA argued, among other things, that because the BSE test
must be done on brain tissue after animals are dead, it has the
authority to regulate the tests because it is used in disease treatment.
Robertson rejected that argument, saying that regulating the test might
be appropriate through the Federal Trade Commission or the Commerce
Department, but that the authority does not exist as the law is written
now.
-- Burt Rutherford
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The 2006 drought brought higher fuel, fertilizer and hay prices to
cow-calf producers, and hiked the cost of running a breeding cow in the
Texas Rolling Plains to more than $400. That calculates to an $84/cwt.
breakeven price for weaned calves, says Stan Bevers, Texas A&M
University (TAMU) Extension economist in Vernon.
Identifying and managing such costs is the aim of a Beef Cow-Calf
Standardized Performance Analysis (SPA) Workshop set for May 2 at the
TAMU Research and Extension Center in Vernon. Bevers says the course,
which begins at 8:30 a.m., will be a hands-on workshop where each
attending ranch will be supplied with a computer and assistant, and
aided in completing its own SPA analysis for the 2006 calf crop.
SPA provides ranchers the opportunity to analyze their ranch operation
from both a production and financial side. Intended as an annual tool to
be used by the cow-calf producer, SPA facilitates the comparison of an
operation's performance between years, producers, production regions and
production systems.
Registration is $50/ranch and includes the software, educational
materials, lunch and refreshments. Early registration is encouraged in
order to sufficiently organize an operation's data for the SPA analysis.
Learn more by calling Stan Bevers at 940-552-9941, Ext. 231.
-- Joe Roybal
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