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The industry has taken some severe hits on the animal welfare front
recently because cattle that pass the initial veterinary inspection at a
packing plant, then go down for non-health related issues, could still
enter the food chain if they passed a subsequent inspection by USDA
inspectors. That’s about to change. USDA this week announced it will
propose a rule to prohibit this exception.
-- Click on headline to read the rest of this
story by Troy Marshall
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As expected, President Bush vetoed the farm bill this week, saying
it exceeded budget restrictions, failed to cap payments to wealthy
Americans, and would raise food prices for consumers. The Bush
administration labeled it a trade-distorting and earmark-laden bill that
was a budget buster. Also expected, both the House and Senate quickly
voted to override the veto.
With things like the quarter-billion dollar land purchases in Montana
included in the bill, one has to wonder about the industry’s
long-standing approach of not asking for government handouts. I’ve
always believed in self-reliance, an unfettered marketplace and less
government oversight. But many of the handouts included in this farm
bill are coming out of our pockets both directly and indirectly. If we
lack the ability or will to stop things like the ethanol subsidy, then
perhaps it is time for the industry to begin working for some offsets.
It is hard not to argue that each successive farm bill has left the
cattle industry in a less competitive and profitable position than it
was going into it. Fighting for principles is noble, but if we’re
going to continue to stand for them, ultimately we will have to remain
financially viable as well.
-- Troy Marshall
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Certainly, the answer is in the affirmative, but the real question
is timing. It doesn’t appear to be anytime soon.
This week, crude oil more than doubled the price from a year ago, which
at the time was near historical highs. Feed and energy costs are not the
only inputs on the rise, but certainly those getting the most attention,
and near-term projections are not calling for any major reductions.
My email has been flooded with questions asking how to remain profitable
when input costs are rising faster than prices. Unfortunately, that is a
difficult question to answer.
Being a low-cost producer is one key to remaining sustainable.
Ultimately, though, cattle prices will have to rise, which they will.
But in order for cattle prices to rise to levels equal or better than
the cost of production, we’re going to have to reduce supplies to the
point that demand will sustain higher prices. That means the market must
reduce capacity. The long-term prospects for this industry remain
exceedingly bright, but in the short term, margins will be moving in the
wrong direction.
-- Troy Marshall
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How quickly things change. Not that long ago, it looked like the
golden era of beef production had arrived – we had arrested the
decline in beef demand, it looked like global exports would continue to
fuel domestic industry growth, and profitability had been consistent.
-- Click on headline to read the rest of this
story by Troy Marshall
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The American Meat (AMI) Institute has updated www.countryoforiginlabel.org,
its country-of-origin labeling (COOL) website. Mandatory COOL is
scheduled to go into effect Sept. 30.
The website contains an info summary about COOL implementation as it
exists under the law enacted in 2002, as well as info relating to
possible changes that may occur through passage of the 2008 farm bill.
Sections on the site include info about who needs to label products, how
to determine what meat products need a label, labeling categories,
recordkeeping requirements, info on international trade, and a
“support desk” that links visitors to USDA and AMI experts who can
help explain the details of the law.
-- AMI news release
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In the first quarter of 2008, U.S. beef exports increased 37% over
the first quarter of 2007 to 117,730 metric tons (mt) (259.5 million
lbs.) and beef variety meat exports increased 19% to 79,913 mt (176.1
million lbs.) for a combined 29% increase to 197,643 mt (435.7 million
lbs.) – a 40% increase in value to $682.7 million, according to the
U.S. Meat Export Federation (USMEF).
-- Click on headline to read the rest of this
USMEF release
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President George W. Bush followed up his threat and vetoed the 2008
farm bill. The President in his veto message said, “For a year and a
half, I have consistently asked that the Congress pass a good farm bill
that I can sign. Regrettably, the Congress has failed to do so.”
He also said, “At a time when net farm income is projected to increase
by more than $28 billion in one year, the American taxpayer should not
be forced to subsidize that group of farmers who have adjusted gross
incomes of up to $1.5 million. When commodity prices are at record
highs, it is irresponsible to increase government subsidy rates for 15
crops, subsidize additional crops, and provide payments that further
distort markets. Instead of better targeting farm programs, this bill
eliminates the existing payment limit on marketing loan subsidies.”
This is the first time that a comprehensive farm bill has been vetoed
since President Dwight D. Eisenhower vetoed a farm bill in 1956.
-- P. Scott Shearer, Washington, D.C.
correspondent
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North Dakota State University's (NDSU) Central Grasslands Research
Extension Center near Streeter will hold its annual field tour June 26,
preceded the same day by a daylong symposium entitled "Natural Resources
of the Coteau: Past, Present and Future." The 9 a.m.-5 p.m. seminar will
examine the geology of North Dakota's Missouri Coteau region, as well as
its history, cultural and economic development.
The Missouri Coteau region runs diagonally across the state from the
northwestern corner through central North Dakota. It's a highland of
rock, gravel and other soil a receding glacier deposited about 10,000
years ago. Its rolling, grassy hills are dotted with potholes and lakes.
While many acres have been converted to cropland, much of the land is
highly erodible, making it best suited to producing perennial forages.
The field tour starts at 6 p.m., and includes a farm energy audit demo
and updates on livestock and biofuels research at the center. NDSU
researchers also will report on a study of creep grazing turnips,
foxtail millet and an annual species mix. A community meal in the
center's conference room wraps up the tour at 8:30 p.m.
For more on the field tour, visit www.ag.ndsu.nodak.edu/streeter/,
call 701-424-3606 or email p.nyren@ndsu.edu. To learn more
about the symposium, email kathleen.tweeten@ndsu.edu
or call 701-328-9718.
-- NDSU news release
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The Chicago City Council last week repealed its ban on restaurants
serving foi gras. The Council voted 37-6 to repeal the two-year-old ban.
“We applaud the Chicago City Council for allowing people the freedom
to choose their own food,” said Kay Johnson Smith, executive vice
president of the Animal Agriculture Alliance. “Today, all of animal
agriculture is breathing a sigh of relief. The potentially
precedent-setting ban on a safe and delicious product had many farmers,
ranchers and consumers wondering if steaks, pork chops or eggs would be
next.”
-- Animal Agriculture Alliance release
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The House of Representatives overrode the President’s farm bill
veto by a vote of 316-108 and the Senate overrode it by a vote of 82-13.
However, the bill was missing the trade title.
It was discovered that the farm bill the President vetoed was missing
the trade title because of a clerical error. Thus, the House and Senate
leadership have been working on getting the trade title enacted. The
House of Representatives on Thursday passed the farm bill again with all
titles included. The Senate will consider the legislation after the
Memorial Day recess.
-- P. Scott Shearer, Washington, D.C.
correspondent
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Ann Swinker, Pennsylvania State University Extension equine
specialist, pointed out an error in last week’s item, “The Horse Ban
& The Law Of Unintended Consequences,” which incorrectly stated that
the horse-slaughter ban had “rather handily passed into law.”
In actuality, however, no such legislation has been passed. A measure
outlawing the harvest of horses – H.R. 503, the American Horse
Slaughter Prevention Act – did pass a U.S. House vote, but the U.S.
Senate failed to take up the measure.
Rather, the three U.S. horse-slaughter facilities – Dallas Crown Inc.
in Kaufman, TX; Beltex Corp in Fort Worth, TX; and Cavel International,
Inc., in DeKalb, IL – closed under varying circumstances. The plants
produced horsemeat for export to the European Union and other countries.
The two Texas plants were shut down when a three-judge panel with the
Fifth Circuit Court of Appeals in New Orleans ruled that a 1949 Texas
law that bans horse slaughter for human consumption was valid. The
demise of Cavel International came at the hands of the 7th U.S. Court of
Appeals in Chicago last September when it upheld an Illinois state law
that bans the slaughter of horses for human consumption.
For an in-depth review of the situation by Utah State University, titled
“The State of the Horse Industry Since The Closing Of The Horse
Harvesting Facilities,” go to: extension.usu.edu/equine/files/uploads/horse%20harvesting%20paperno%20ext.doc.
-- Joe Roybal
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Storm season is upon us and the Department of Homeland Security is
encouraging all business owners to “define their day after” a
disaster by putting emergency preparedness at the top of the to-do list.
“Research conducted by the Ad Council found that more than 85% of
small businesses understand that emergency preparedness is important,
yet only four in 10 businesses have a plan to protect their business,”
said Homeland Security Secretary Michael Chertoff. “The ability of
these businesses to survive and recover quickly from both natural and
man-made disasters directly benefits employees, customers, the community
and the local and even national economy.”
For info, go to www.ready.gov
or www.sba.gov/services/disasterassistance/disasterpreparedness/index.html.
-- Homeland Security release
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Maybe so, according to a survey of bankers by the Federal Reserve
Bank of Kansas City. The Kansas City Fed’s Tenth Federal Reserve
District encompasses Colorado, Kansas, Nebraska, Oklahoma, Wyoming,
northern New Mexico and western Missouri.
Credit conditions remained healthy in the first quarter, but bankers
expected the improvements in credit conditions to slow going forward.
Loan repayment rates remained at historical highs and the number of loan
renewals and extensions held steady. However, fewer bankers expected
loan repayment rates to improve in the second quarter.
According to bankers in the Tenth Federal Reserve District, robust gains
in farm income, capital spending and farmland values are expected to
slow. In the first quarter, bankers reported strong farm incomes. Fewer
bankers, however, expected farmers to earn higher incomes in the coming
months. Rising input costs are limiting crop profit margins and
livestock producers are suffering huge losses due to higher feed costs.
Farm interest rates dropped to their lowest levels since 2004, but
collateral requirements rose sharply in the first quarter and are
expected to hold firm in coming months. The amount of funds available
for loans is expected to decline in the second quarter with rising loan
demand.
For more info, and links to data from other Federal Reserve districts,
log on to www.kansascityfed.org and
click on "Survey of Agricultual Credit Conditions."
-- Burt Rutherford
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It’s not too late to be counted in the 2007 Census of Agriculture,
according to Ag Secretary Ed Schafer. USDA’s National Agricultural
Statistics Service (NASS) has already sent a second reminder to
producers who haven’t responded. Representatives from NASS’ 46 field
offices are now beginning to call and visit producers who have not
responded.
Ag Census forms can be returned by mail or you can report online. For
more info or for assistance, call (888) 424-7828 or log on to www.agcensus.usda.gov.
-- USDA release
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Looking for info on Johne’s disease? Visit www.animalagriculture.org,
and click on the “National Johne’s Education Initiative” logo on
the right side of the page.
Johne’s is a slow, progressive intestinal tract disease that affects
ruminants and costs the beef and dairy industries millions of dollars
each year, says Michele Vise-Brown, CEO for the National Institute for
Animal Agriculture (NIAA), which USDA has charged with helping educate
and inform producers and veterinarians about Johne’s disease – its
prevention, control and testing. Research shows one out of 10 animals
moving through livestock auction markets is infected with Johne’s.
-- NIAA news release
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In spite of near-hysteria by some Korean consumers, South Korea is
expected to implement new import standards that will open its market to
U.S. beef early next week, a government source told Yonhap News
Thursday.
The source said the government plans to announce measures that will
boost the competitiveness of local cattle farmers at the same time that
new sanitary and phytosanitary standards are posted.
In spite of the consumer hysteria, which many believe has been a
politically-motivated effort to undermine Korea’s new president, the
U.S. Meat Export Federation (USMEF) expects U.S. beef to quickly sell
once it hits retail stores.
Even though they want to avoid flashpoints in consumer protests, Korean
retailers have great interest in featuring U.S. beef, says Joel Haggard,
USMEF senior vice president for the Asia Pacific region. U.S. beef will
come into the Korean market significantly less expensive than either
Australian or Korean beef and it’s going to be very profitable for
retailers to carry U.S. beef, he says. “We firmly believe, based on
experience, that once the product is in the stores, there will be
take-up very quickly.”
USMEF expects exports could hit 50,000 tons this year and the Korean
market could be at pre-2003 levels by 2010 or 2011.
-- Burt Rutherford
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Over 1,000 agriculture, conservation, nutrition, hunger, and
environmental groups sent a letter to every Senator and Congressmen
strongly urging them to override the President’s veto. The letter
said, “Communities across the nation, from urban to rural, have waited
too long for this legislation. The Conference Report makes significant
farm policy reforms, protects the safety net for all of America’s food
producers, addresses important infrastructure needs for specialty crops,
increases funding to feed our nation’s poor, and enhances support for
important conservation initiatives.”
-- P. Scott Shearer, Washington, D.C.
correspondent
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The U.S. Environmental Protection Agency (EPA) issued a notice for
public comment on the request by Texas Governor Rick Perry for a waiver
of 50% of the Renewable Fuel Standard (RFS) in 2008. EPA is asking for
comments to help determine “if the statutory basis for a waiver of the
national RFS requirements has been met and, if so, the extent to which
EPA should exercise its discretion to grant a waiver.”
Also, EPA is requesting comments on: - Whether compliance with the
RFS is causing severe harm to the economy of the State of Texas;
- Whether the relief requested will remedy the harm;
- Determinations to what extent, if any, a waiver approval would
change demand for ethanol and affect corn or feed prices; and
- EPA is asking that commentators include data or specific examples in
support of their comments.
Also, they are looking for data that shows a quantitative link between
the use of corn for ethanol and corn prices, and on the impact of the
RFS mandate on the amount of ethanol produced would be especially
helpful. There will be a 30-day comment period after the notice is
published in the Federal Register. For more info, visit: www.epa.gov/otaq/renewablefuels/rfs-texas-notice.pdf.
-- P. Scott Shearer, Washington, D.C.
correspondent
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The Beef Promotion Operating Committee has recommended a $45.8
million Cattlemen’s Beef Board budget for Fiscal 2009, reflecting a
6.6% decrease from the $49 million budget for Fiscal 2008.
-- Click on headline to read the rest of this
Beef Board release
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USDA’s Ag Marketing Service (AMS) last week issued the final
regulation to re-establish and revise the Livestock Mandatory Reporting
program.
The program was initially implemented in 2001, but statutory authority
lapsed on Sept. 30, 2005. Since then, AMS has been publishing reports
based on voluntary cooperation from packers.
Last October, Congress enacted legislation to reauthorize the original
act through Sept. 30, 2010. USDA’s final regulation is a result of
that legislation. The final rule will become effective July 15. For
info, click here
-- Southwest Meat Association
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Secretary of Ag Ed Schafer defended ethanol against claims that it
is playing a major role in increasing domestic and international food
prices. He indicated that other factors such as higher energy costs,
increased worldwide demand for food, and drought in Australia and other
parts of the world have had a greater effect on food prices.
According to the President’s Council of Economic Advisors “only 3%
of the more than 40% increase we have seen in world food prices this
year is due to the increased demand on corn for ethanol.”
Schafer said, “We are going to make the case for food and fuel.”
Concerning proposals to modify the Renewable Fuels Standard (RFS)
Secretary Schafer said it would be wrong to roll back the mandate and
“changing the RFS is not going to change the amount of corn that is
being used for ethanol.”
-- P. Scott
Shearer, Washington, D.C. correspondent
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Secretary of Agriculture Ed Schafer announced that USDA would
propose a regulation that would ban disabled or nonambulatory cattle
from entering the food supply. This closes a “loophole” that allows
downer cattle to be slaughtered for food if they go down after a
preliminary inspection and are approved by a USDA veterinarian.
Earlier this week, Senate Majority Whip Dick Durbin (D-IL) had written
USDA urging the Department to amend its rule to ensure that
non-ambulatory cattle do not enter the food supply. Durbin referenced
the petition by the American Meat Institute, National Meat Association,
and National Milk Producers Federation requesting the loophole be
closed. The recent abuses at the Westland/Hallmark meat plant in
California highlighted the need for a change in policy.
-- P. Scott Shearer, Washington, D.C.
correspondent
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"Managing Annual Cow Costs" is the theme for a Kansas State
University Extension conference set for Aug. 7-8 in Manhattan.
Keynote speaker is Barry Dunn of the King Ranch Institute for Ranch
Management, Texas A&M University-Kingsville. Other presentation topics
include: cow economics in the ethanol era, summer and winter grazing
systems, alternative forage options, byproduct feeding, supplementation
strategies and decisions, pasture evaluation, and cow-herd management
strategies.
Get more info by contacting Larry Hollis at lhollis@ksu.edu or 787-532-1246;
or Linda Siebold at lsiebold@ksu.edu or 785-532-1281.
-- Kansas State University release
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An Oklahoma auction-market employee is the first to receive a reward
through Texas and Southwestern Cattle Raisers Association’s (TSCRA)
“Operation Cow Thief,” a program introduced last year to reward
those who offer info leading to the arrest and/or grand jury indictment
of individuals for theft of livestock or related property.
The informant, who wishes to remain anonymous, provided valuable tips
that led to the recovery of 13 head of cattle, and account for 60 more
head, with a total value of about $32,000. Three men were charged with
felony theft and organized criminal activity – Dale Ritchie has
pleaded guilty, while Earl Colbert Jr. and Lethal Wiseman Jr. have been
indicted in Hardeman County, TX, and await trial.
To provide info or donate to “Operation Cow Thief,” call
888-830-2333. Informants may remain anonymous. To learn more, visit:
www.thecattlemanmagazine.com/theftProtectionCowThief.asp.
-- TSCRA release
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