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As I was writing this, oil had not yet clanged against the magical
$100/barrel figure, but it was getting darned close.
The recent run-up in oil prices has been part market fundamentals and
part market psychology. Demand continues to be strong with the higher
prices seemingly not being able to ration demand.
Supplies are relatively tight post refinery as inadequate refining
capacity continues to be an issue. While currently there's no shortage
of oil, there remains a lot of concern about possible disruptions in the
flow of oil due to terrorism, as well as the unstable political
conditions in the Middle East. Everyone is also looking to the winter,
with a tough winter having the potential to increase demand.
The Organization of Petroleum Exporting Countries (OPEC) wanted higher
oil prices but they seemingly don't want $100/barrel prices, either.
There talk is that OPEC would prefer prices in the $60-$80/barrel range,
but that might change if these higher prices don't curtail demand.
Besides the obvious production increases that come with higher energy
costs, the cattle industry remains nervous about what these higher
energy prices will do to beef demand. While the overall economic
indicators have been strong in face of these higher energy costs, any
reduction in disposable income is not good for beef demand. The greatest
threat is probably from a decrease in the overall economy driven by
higher energy prices.
Until the Iranian nuclear crisis is resolved, oil prices are expected to
remain volatile and the risk premium that has been priced into the
market is likely to stay. Most models would gauge that premium at
$30/barrel or more. The declining value of the dollar has certainly
helped.
-- Troy Marshall
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The biggest development this week regarding the farm bill was the
fight over attachments of an array of pork and amendments ranging from
immigration reform to the war in Iraq.
While activist groups hoping for a more substantive reform of farm
policy were extremely slow in getting mobilized politically, their
effort seems to be gaining momentum as they sense this may be their best
opportunity in a long time to attain their goal. That is thanks to the
farming segment's record commodity prices and income levels.
The second big piece of news was the Bush Administration's threat to
veto the bill due to its cost and differences in accounting. The
administration's biggest complaint with the measure as it relates to the
beef industry is, of course, the packer ban provision in the Senate
bill, which it opposes.
Not withstanding some of the marketing provisions and the amendments
some are trying to attach to the 2007 version of the farm bill, the
measure is essentially a continuation of 2002, just with a whole lot
bigger interest on renewable fuels. I suppose the only thing surprising
would be if there weren't a whole lot of political battling over a
$286-billion bill.
-- Troy Marshall
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The 2007 National Meat Case Study looked at more than 123,000
packages in 121 stores in 48 different markets, comparing its findings
with those of a similar study in 2004. The aim of the study was to
examine the U.S. fresh meat case to identify trends and changes as well
as identify areas of opportunity. The two most important questions of
the study were:
-- Click on headline to read the rest of this
story by
Troy Marshall
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The recent confrontation between those opposed to the value-based
changes that have occurred in the marketplace and those supporting them
have deep philosophical and psychological underpinnings that have been
written about for ages. In fact, our grandchildren will likely still be
debating the questions of: change vs. status quo, competition vs.
protectionism, capitalism vs. socialism, government involvement vs. the
free market, etc.
-- Click on headline to read the rest of this
story by
Troy Marshall
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As a service to all cattle producers, BEEF magazine and the
North American Limousin Foundation (NALF) will co-host two free
CyberCampfire webcasts on DVAuction.com in December. The first
will address crossbreeding strategies on Dec. 11. The second, which Five
Star Cattle Systems will sponsor on Dec. 18, will deal with bull-buying
strategies. Both webcasts begin at 7 p.m. MT.
Participation in an interactive CyberCampfire producer-outreach webcast
requires registration with DVAuction.com beforehand. When it is
time for a webcast, registered site users simply return to the DVAuction
home page and click the "View" button next to "North American Limousin
Foundation" under "Today's Events." There also will be a link on the
NALF home page (www.nalf.org).
The "Programs" section of the NALF Web site includes an archive of the
visuals, audio and supplemental materials from past Webcasts.
-- NALF and BEEF magazine release
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Scours weather happens. Are you ready?
A recent survey
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- A greater incidence of scours last season, mostly due to severe
weather in this hard-hit area
- 97 percent of vets who used Scour Bos reported that it met or
exceeded their expectations despite the weather challenge
- 99 percent of producers said they would use a scours vaccine for
pregnant cows prior to the upcoming calving season
- 47 percent of vets said they would use Scour Bos in 2008 season vs.
37 percent using ScourGuard and 8 percent using Guardian
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BEEF Cow-Calf Weekly chatted this week with with Bruce
Knight, USDA undersecretary for marketing, on National Animal
Identification System (NAIS) issues. Here's a bit of the give and take.
-- Click on headline to read the rest of this
story by
Joe Roybal
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The Bush administration this week stated its strong opposition to
the packer ban provision in the Senate farm bill. The statement of
administration policy said, "The Administration also strongly opposes
the prohibition on packer ownership and the provision regulating
production contracts because they would unduly interfere with the
freedom to contract, require the divestiture of assets by entities that
have operated lawfully, limit opportunities for farms and ranchers to
participate in marketing alliances, and increase prices for American
consumers." The administration also opposes the creation of a Special
Counsel for Ag Competition.
-- P. Scott Shearer, Washington, D.C.
correspondent
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A number of ag and business organizations stated their objections
this week to a proposed amendment by Sen. Chuck Grassley (R-IA) that
would create an office of Special Counsel at USDA. In addition, the
amendment would create a "task force" to investigate ag transactions and
mergers.
In a letter to the Senate, the groups said, "this amendment would
subject the entire industry to an expansive new regime of big government
regulation and unfettered legal prosecution." The administration has
stated its objections to this proposal.
Among the groups signing the letter were: the U.S. Chamber of Commerce,
National Association of Manufacturers, Biotechnology Industry
Organization, American Seed Trade Association, CropLife America,
National Grain and Feed Association, National Cattlemen's Beef
Association, National Oilseed Processors Association, National Pork
Producers Council, and Pet Food Institute.
-- P. Scott Shearer, Washington, D.C.
correspondent
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Caitlin Williams, Tucson, AZ, took home $2,500 cash and a $1,000
college scholarship as winner of the 2008 Beef Ambassador title.
Second place went to Jennifer Rassler, Kempton, PA, who received $1,200
and a $750 scholarship. Third-place winner Leticia Varelas, Hope, NM,
received $800 and a $500 scholarship. California's Michelle Wiggley and
Wyoming's Beth Wood received $250 each as honorable mention awards.
The National Beef Ambassador Program (NBAP) is a national, competitive
youth public speaking program for the beef industry. NBAP promotes the
beef industry and development of leadership skills in youth. The program
spotlights the positive impact of the cattle industry on the U.S.
economy and families. To learn more, visit: www.nationalbeefambassador.org.
-- NBAP news release
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Both gasoline and diesel registered an average price nationally over
$3 for the week ending Nov. 5, according to the Energy Information
Administration (EIA). The U.S. average retail price for regular gasoline
soared to $3.013/gal., 14.1¢ over last week and 81.3¢ higher
than last year. Meanwhile, diesel prices skyrocketed 14.6¢ to
$3.303/gal. surpassing the previous record high price by 14.6¢.
All U.S. regions recorded a gasoline-price gain, with the Midwest
leading the way at 17.3¢ to $3.037 -- 85¢ above a year ago.
The East Coast climbed 14.1¢ to $2.974, while the Gulf Coast rose
15.8¢ to $2.893, which was the lowest regional price. The Rocky
Mountain region added 9.9¢ to $2.972, and the West Coast sported
the high at $3.165, a jump of 7.4¢. The average price for regular
in California was $3.231, up 7.2¢ from last week and 83.5¢
over the previous year.
Meanwhile, all regional prices for diesel peaked to unprecedented highs.
The East Coast climbed 14.2¢ to $3.29/gal., the Midwest added
15.6¢ to $3.278, the Gulf Coast gained 15.7¢ to $3.219, and
the Rocky Mountain price settled at $3.411, a gain of 13¢. The West
Coast price $3.508, a jump of 11.4¢, while California was up
11.8¢ to $3.524, another record for that state.
-- EIA news release
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The U.S. Senate began consideration of the farm bill this week but
immediately ran into major problems that caused the bill to be delayed.
The major issue is how the Senate plans to consider amendments.
Majority Leader Harry Reid (D-NV) wants to move the bill quickly so it
can move to conference and be sent to the President by the end of the
year. However, Minority Leader Mitch McConnell (R-KY) wants to ensure
members are given an opportunity to offer various amendments.
Reid's concern is that some senators will want to offer amendments to
slow down or kill the farm bill. Negotiations continue between the
leaders on how to move the bill forward. In 2002, the farm bill faced
similar challenges.
Meanwhile, the Bush administration, in a very strongly worded statement
of administration policy, threatened to veto the Senate farm bill unless
major changes are made concerning payment limitations and reform of farm
programs. The administration also wants to ensure that the spending
levels as proposed in the President's fiscal year 2008 budget are not
exceeded.
The administration stated, "the bill shifts the balance of support in a
more potentially trade-distorting direction, continues a defective
safety net, lacks real farm program reform, and uses $37 billion in
increased tax revenue and gimmicks, including timing shifts and
artificially ending programs, to finance significant increases in
spending."
-- P. Scott Shearer, Washington, D.C.
correspondent
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In a very strong bipartisan vote of 361-53, the House of
Representatives overrode President Bush's veto of the Water Resources
Development Act. This legislation has been a priority of the ag
community because the bill provides for the modernization of the locks
and dams on the Mississippi and Illinois Rivers.
The National Corn Growers Association said, "For continued success, U.S.
farmers need efficient transportation networks, which is why corn
growers have been long-time advocates for improvements to our inland
waterway system. As with our highways and interchanges, the purpose of
modernization on the Upper Mississippi and Illinois Rivers is to make
the entire system more efficient."
The Senate is expected to override the veto, as well. This is the first
override of a veto by President Bush.
-- P. Scott Shearer, Washington, D.C.
correspondent
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The Interagency Working Group on Import Safety presented President
Bush with its "Action Plan" concerning imported products. The panel
made a number of recommendations concerning imported food and product
safety. They include:- Create a strong certification process by
giving the Food and Drug Administration (FDA) authority to require
producers of certain high-risk foods in a particular country to certify
that their products meet FDA standards.
- Encourage good importer practices by providing incentives to
importers to maintain the highest safety practices for products that
carry greater risks.
- Increase transparency by making the names of certified producers and
importers public.
- Increase U.S. presence overseas and increase training of foreign
inspection agencies.
- Strengthen penalties for sale of unsafe products.
The issue of imported food, toys and products has become a hot issue on
Capitol Hill. A number of hearings have been held and legislation
introduced.
-- P. Scott Shearer, Washington, D.C.
correspondent
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The National Livestock Emergency Response Conference is set for Dec.
5-7 in Tucson, AZ. Last year's one-day conference has been expanded to
three days to enable two days of field exercises.
The conference is being organized by the Arizona Livestock Incident
Response Team (ALIRT). The ALIRT model is being adopted, in whole or in
part, by numerous other states.
The conference is designed to provide info and training to a diverse
audience, including veterinarians, livestock producers, Extension,
emergency planners, and state and federal agencies. Featuring
international and national authorities, the agenda includes
presentations on: impact of animal emergencies on the U.S. and Mexican
beef industries, information on specific emergency responses,
agro-terrorism, crisis communication, integration of law enforcement,
and other topics. For more info, visit: ag.arizona.edu/ans/alirt/NLERCSchedule.html.
-- ALIRT news release
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Michigan Department of Ag (MDA) Director Don Koivisto says Michigan
cattle producers have purchased more than 1 million electronic ID (ID)
tags. Michigan has about 12,000 cattle farms and 1.2 million
cattle.
As of March 1, 2007, all cattle leaving their Michigan premises must be
tagged with a radio-frequency ID (RFID) tag. Although USDA has made the
National Animal Identification System voluntary, Michigan premises
registration and the Michigan Animal Identification System was
established to aid efforts in eradication of bovine tuberculosis (TB)
and the program is mandatory in Michigan, MDA says.
"Over 11,000 Michigan farms supported this milestone by purchasing ear
tags as part of our effort to eradicate TB from Michigan," Koivisto
says. "These RFID tags are helping protect the food supply by providing
source verification and 48-hour traceability."
Through the collaborative efforts of Michigan State University
Extension, the Michigan Cattlemen's Association, the Michigan Milk
Producers Association, Michigan Farm Bureau, USDA and MDA, compliance
with the cattle tagging requirements at livestock markets is 95-98%, MDA
says.
-- MDA news release
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"The stocker and backgrounding segments have always been critical to
the overall success of the beef industry. The structural changes brought
about by higher grain prices and input costs make these segments even
more critical, though," says Dale Blasi, Kansas State University (KSU)
beef stocker specialist. "Consequently the information provided by this
survey, at this point in history, is essential to characterize
management practices and identify opportunity on a national basis. The
time backgrounders and stockers invest in completing this survey is
truly an investment in their future."
He's talking about the National Beef Stocker Survey being conducted by
BEEF magazine, with cooperative input from 12 land-grant universities.
These include: Auburn University, Iowa State University, Kansas State
University, Mississippi State University, North Carolina State
University, Oklahoma State University, South Dakota State University,
Texas A&M University, University of Florida, University of Missouri,
University of Nevada, and Western Kentucky University.
The surveys were mailed last week to a list of stocker operators and
backgrounders representative of the industry in terms of size and
geography. What's more, every stocker operator and backgrounder has an
opportunity to participate in this historic survey by completing it
online (see instructions at end of this article).
"Information provided by this survey will help all of us charged with
serving the stocker and backgrounding industries serve them more
effectively," Blasi says. "Results from this survey will be used by
universities, industry leaders and allied industry to guide their
activities and investments in programs, products and research focused on
the needs and concerns of stockers and backgrounders."
Despite the fact that a majority of fed cattle spend some portion of
their post-weaning, pre-feedlot lives in a growing or straightening-out
program, there's never been a national effort to benchmark and
characterize the management practices and challenges of stockers and
backgrounders. The best resource that producers and those serving them
have had are estimates and guesses based on cow-calf and feedlot survey
information assembled by the National Animal Health Monitoring Service.
The most recent of those occurred in 1997-1999.
So, please complete a survey if you receive one in the mail. If you
don't receive one, please go online and do so. Keep in mind, all
information provided by producers is held in confidence and only used to
tabulate collective responses.
To participate in the National Beef Stocker Survey online, go to: www.snap-surveys.com/prismb2b/grau/NSSAlt/ntlstkrs07alt.htm.
-- Wes Ishmael, BEEF Stocker Trends
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New Mexico State University research says weaning calves for at
least 41 days before placing them on feed can increase their net return.
-- Click on headline to read the rest of this
Steve Suther, Certified Angus BEEF LLC news release
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R-CALF has filed a complaint in the U.S. District Court for the
District of South Dakota, Northern Division, to prevent USDA from
implementing the minimal risk rule that would allow live cattle born
after March 1, 1999 and beef products from animals over 30 months of age
to enter the U.S.
In a statement R-CALF said, "The OTM (over thirty months) rule creates
an unjustified and unnecessary increased risk of infection of the U.S.
cattle herd with BSE, and of importing beef contaminated with BSE into
the U.S., which will expose U.S. consumers to increased risk of a fatal
disease."
Meanwhile, the American Meat Institute said, "Claims by R-CALF and other
protectionist groups that such trade presents food safety issues are
simply unfounded and ignore the overwhelming scientific evidence that
demonstrates that food safety is not dependent on the age of the animal,
but whether specified risk materials (SRMs) that may contain the
infectious agent are eliminated from the food supply."
-- P. Scott Shearer, Washington, D.C.
correspondent
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The U.S. Senate Ag Committee stuck its flag in solid socialistic
rock recently by including an amendment to the Livestock Title of the
2007 farm bill that would allow government to tell cattlemen and other
livestock producers how to market their product. The measure will now be
debated in the full Senate.
-- Click on headline to read the rest of this
story by
Wes Ishmael, BEEF Stocker Trends
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A course on 12-month livestock-pasture-forage management will be
offered Wednesday through Friday, Jan. 2-4, at North Dakota's Dickinson
State University. It's designed for producers and students who want to
learn more about developing pasture-forage management plans.
Each participant in the course will develop a grassland management
strategy that provides a full 12-month forage sequence for his or her
ranch. Participants will learn about range ecology, livestock nutrition
and forage production so they can understand and operate their 12-month
pasture-forage management plans.
The cost of the course is $100 to producers. Call 701-483-2185 to
register.
-- NDSU news release
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