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The corn market trended higher this week with December corn flirting
with the $7/bu. level this week. In addition, USDA lowered its expected
yield by 5 bu./acre to 148.9, a significant reduction this early in the
year.
Rain makes grain, they say, but too much moisture in the Corn Belt has
delayed both planting and emergence, even flooding some fields. We’re
approaching the trigger time when some some ground will be shifted out
of corn.
While there’s been a lot of talk about a global food crisis, and
increasing concerns about the subsidization of ethanol, it’s hard to
fathom any substantive change in the ethanol policy. That means we’ll
come out of this year with even lower ending stocks than a year ago,
which would be the lowest level in more than a decade. However, there
was good news this week with reports of production increases in China
and Russia, and good prospects for the second corn crop in Brazil.
In looking back at market reports from a year ago, I noticed everyone
was talking about the implications of $3.50/bu. corn. Who would have
thought that we’d be talking double that price today?
My frequent rants about ethanol’s impacts on the cattle industry has
gotten me added to the list for mailings from ethanol-industry
apologists. It’s interesting that as the opposition to the ethanol
giveaways becomes louder, the claims of the ethanol apologists become
more shrill. In fact, I had to smile at the one this week asserting that
corn prices would barely fall if the ethanol subsidies were ended today.
If nothing else that should put a smile on your face during a difficult
time.
-- Troy Marshall
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One of my grandmother’s favorite admonishments to me and my
brother was that “criticizing another’s garden doesn’t keep weeds
out of your own.” My favorite singer George Strait put it another way
– “Every time you throw dirt on her, you lose a little ground.”
-- Click on headline to read the rest of this
story by Troy Marshall
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Few would describe the U.S. beef industry as overly optimistic these
days. After all, the prodigious and deep change wracking the beef
economy has most folks concerned and anxious, and the uncertainty is
especially acute in the seedstock segment. There are a number of reasons
for this:
-- Click on headline to read the rest of this
story by Troy Marshall
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We were all sitting around last week talking about our dads and how,
growing up, we all loved and respected our dads but never wanted to
cross the line with them. None of us feared our dads; rather we all
shared the feeling that if someone was going to be disappointed in us,
we wanted it to be our moms, who were likely quicker to forgive and less
intimidating.
-- Click on headline to read the rest of this
story by Troy Marshall
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Glasgow, MT rancher and 2001 National Cattlemen’s Beef Association
president Lynn Cornwell died June 5 of an aortic aneurysm. He was 56. He
is survived by his wife Debby, and their four children – sons Cody
and Kirk, and daughters Michelle and Jamie. Cornwell also had eight
grandsons. Read his obituary in the Great Falls Tribune at: purduephil.wordpress.com/2008/06/06/former-ncba-president-lynn-cornwell-passes/.
-- Joe Roybal
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The Beef Improvement Federation’s (BIF) Commission on DNA Markers
has established a blog to gather input on DNA technology and beef cattle
improvement. Info gathered via the blog will influence BIF policy
deliberations and help guide strategy for production educational
programming.
Bloggers can share their current perspective on DNA technology, the
future of the technology and current challenges. Learn more and add your
comments at beefdnatest.wordpress.com/about.
The blog will operate for at least one month leading up to the BIF
Convention in Calgary, Alberta, Canada, June 30-July 3, 2008.
-- Alaina Burt
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Alberta livestock producers are being offered $150 million in
bailout money by the province, with another $150 million promised if
cattlemen will comply with the age and country-of-origin verification
needed to certify Alberta livestock production as disease-free.
The National Meat Association (NMA) reports that Alberta livestock
producers have been hard hit by high feed and fuel costs, lower prices
and the soaring Canadian dollar. Alberta has the largest beef herd in
the country.
The pork industry has been hit so hard that the federal government plans
to indemnify pork producers to destroy 150,000 sows. Alberta also
announced June 6th that it is spending $56 million this year to create a
livestock and meat agency that will implement a new long-term plan,
according to the Canadian Press.
-- NMA “Lean Trimmings” newsletter
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The long and winding saga of the fight between Nevada ranchers Wayne
and Jean Hage and the U.S. Forest Service appears to be over. This
week, the U.S. Court of Federal Claims released a decision in the case
that, while it didn’t award the estates of the two ranchers everything
they asked for, did grant them compensation for part of the
“takings” they accused the Forest Service of doing.
In 1991, the Hages sued the Forest Service over actions surrounding the
cancellation of their grazing permits. In this week’s decision, the
fifth court action in the case, the court found that the Forest
Service’s impoundment and sale of cattle was not a taking and denied
their claim for compensation. However, the court found the Forest
Service did engage in takings regarding certain water rights and
improvements, and awarded the estates of Wayne and Jean Hage a total of
$4.2 million, plus interest and attorney’s fees and costs.
-- Burt Rutherford
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Regular-grade gasoline is expected to average $3.78/gal. in 2008, or
97¢ above the 2007 average price, reports the Energy Information
Administration (EIA) in its “Short-Term Energy Outlook.” The U.S.
average regular gasoline price, currently over $4/gal., is projected to
peak at $4.15 in August. Meanwhile, retail diesel-fuel prices are
projected to average $4.32/gal. in both 2008 and 2009, an increase of
$1.44 over the 2007 average.
In addition, world oil consumption is projected to grow by 1 million
barrels per day (bbl/d) in 2008. U.S. consumption of liquid fuels and
other petroleum is expected to decline by about 290,000 bbl/d in 2008
because of higher petroleum product prices and slower economic growth.
Adjusting for increased ethanol use, U.S. petroleum consumption is
projected to fall by 440,000 bbl/d in 2008.
Meanwhile, for the week ending June 9, the U.S. average retail price for
regular gasoline increased to another record high for the 11th straight
week and surpassed $4/gal. for the first time. The price rose 6.3¢ to
$4.039, or 96.3¢ higher than last year at this time. The national
average price of diesel dropped 1.5¢ for the second week in a row to
settle at $4.692/gal., $1.90 more than a year ago.
For gasoline, the West Coast recorded the highest average price, soaring
15.9¢ to $4.325/gal., while California was up 19.1¢ to $4.433. The
Gulf Coast remained the lowest at $3.909, despite a 6.3¢ jump for the
week.
For diesel, the week’s lowest regional price occurred in the Midwest,
at $4.615, while the West Coast was the highest at $4.874. At
$4.992/gal., California slipped below $5 price for the first time since
May 19.
-- Energy Information Administration
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USDA announced farmer and rancher candidate nominations for local
Farm Service Agency (FSA) county committees begins June 15 and continues
through Aug. 1. To be eligible to serve, a person must participate or
cooperate in an FSA-administered program, be eligible to vote in a
county committee election, and reside in the local administrative area
in which the person is a candidate. Nomination forms for the 2008
election must be postmarked or received in the local USDA Service Center
by close of business on Aug. 1. Ballots will be mailed to producers
beginning Nov. 3 and must be returned by Dec. 1.
-- P. Scott Shearer, Washington, D.C.
correspondent
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The Food Before Fuel Campaign was announced this week with the goal
of urging Congress to revisit the nation’s renewable fuels policy. The
campaign’s principles are to encourage policymakers to “revisit and
restructure policies that have increased our reliance on food as an
energy source, and to carefully address how to develop alternative fuels
that do not pit our energy needs against affordable food and
environmental sustainability.”
A major leader in this effort is the Grocery Manufacturers Association,
which says, “It is past time to acknowledge the reality of this
problem and begin a serious, bipartisan effort to fix it. Our current
policy is driving higher food prices around the globe and here at home,
and while it’s not the only factor at play, it is one we can do
something about.”
The membership includes American Bakers Association, American Beverage
Association, American Frozen Food Institute, American Meat Institute,
Earth Policy Institute, Environmental Working Group, Grocery
Manufacturers Association, National Cattlemen’s Beef Association,
National Chicken Council, National Retail Federation, and Snack Food
Association.
-- P. Scott Shearer, Washington, D.C.
correspondent
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Over 30 Congressional Members led by Rep. Stephanie Herseth Sandlin
(D-SD) and Rep. John Shimkus (R-IL) sent a letter to EPA Administrator
Johnson urging him to preserve the Renewable Fuels Standard (RFS) in
last year’s energy bill and to refuse granting any waiver to the RFS
requirement.
The letter stated, “A careful look at the facts reveals that American
ag producers can and will meet our domestic and international
commitments for food and feed and still make a significant and growing
contribution to lessening our dependence on imported oil with homegrown,
American-made renewable fuels. The harsh criticism biofuels have
received recently in connection with the rise in food prices is
unwarranted.
“If we look at the facts, several other factors are central to higher
food prices: record oil prices, soaring global demand for commodities
from oil to grains, poor weather conditions, a weak U.S. dollar, and
restrictive ag policies around the world. In fact, a recent study by
Texas A&M University noted, ‘The underlying force driving changes in
the ag industry, along with the economy as a whole, is overall higher
energy costs, evidenced by $100/barrel oil.’ ”
-- P. Scott Shearer, Washington, D.C.
correspondent
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A line of tornadoes late Wednesday night caused widespread damage
across northeast Kansas, including a direct hit on the town of Chapman
and considerable damage in Manhattan.
In fact, areas of Kansas State University (KSU) were significantly
damaged, including Weber Hall. According to Ken Odde, KSU Animal
Sciences Department head, the southeast entrance to Weber Hall was
completely destroyed, as was the majority of the roof over Weber Arena.
“It will be a long time before Weber Hall will be fully functional
again,” Odde says. “The most important thing is there were no
injuries.”
Thursday was spent assessing damage and trying to secure the building.
Odde is hopeful the portions of Weber that had minimal damage will be
partially functional in the next few weeks. Call Hall and the KSU
livestock units were not affected, while Waters Hall, which houses the
College of Ag offices and classrooms, sustained some damage.
There were several other structures on campus that where hit by the
tornado, including the engineering building and the wind erosion lab.
Currently, storm damage at KSU is estimated at $20 million.
– Kansas Livestock Association
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With the skyrocketing cost of fuel, fuel thefts are growing across
the country, particularly from farm fuel tanks, which are usually in
remote locations. The Texas and Southwestern Cattle Raisers Association
(TSCRA) offers these five steps to help decrease the likelihood that
fuel thieves will raid your tanks:- Lock both fuel nozzles and
filler caps on overhead fuel tanks in rural areas.
- Don't leave fuel-burning equipment unattended near roadways or
construction sites.
- Don't leave portable fuel tanks unattended in fields or at job
sites. Even if the tank is empty, thieves may take it and use it to
steal fuel at another location! Any type of tank that can be used to
transport fuel is susceptible to theft; numerous thefts of chemical
tanks at gas well sites have been reported.
- Invest in locking fuel caps for your vehicles. A good-quality cap
may be purchased for approximately the price of what 3 gals. of fuel now
cost!
- When purchasing bulk fuel, make sure you get the amount you paid
for. It's easy for a dishonest delivery driver to short you 10-20 gals.,
and then sell it at the end of the day and pocket the money. If at all
possible, be present or have a representative present when fuel is
delivered to assure you got the number of gallons you paid for.
-- Texas and Southwestern Cattle Raises
Association release
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Effective June 15, regulations go into effect in Minnesota for
livestock herds in the proposed “Split State Zone,” an area within
Roseau, Lake of the Woods, Beltrami and Marshall counties.
Herds in the zone will be required to have an annual whole-herd TB test
and maintain up-to-date contact info with the Minnesota Board of Animal
Health (MBAH). Animals moving off the farm will need a whole-herd test,
individual animal ID, an individual TB test within 60 days prior to
movement, and a movement certificate. Cattle going directly to slaughter
or to slaughter through a state or federally inspected market are exempt
from the 60-day individual animal test.
In addition, all livestock producers in the proposed “Modified
Accredited Zone” (also known as the Split State Zone) must provide
MBAH with up-to-date contact and premises info by June 15 to comply with
these regulations.
Once the regulations take effect, law enforcement can stop trucks and
check that animal movement is in compliance with these regulations. Any
person in violation is subject to criminal or civil penalties.
MBAH is applying to USDA for a Split State Status that, if approved,
would enable much of the state to upgrade its TB status while the
affected area of northwest Minnesota will remain at Modified Accredited.
As part of the application, MBAH must develop a zone and demonstrate to
USDA that there’s a plan in place to prevent the disease from
spreading out of that zone.
Get more info at www.mntbfree.com or calling the
Bovine TB Hotline at 1-877-MN TB FREE (668-2373).
– MBAH news release
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The Montana Department of Livestock says a heifer from the Paradise
Valley has tested positive for brucellosis. Testing performed at the
National Animal Disease Center in Ames, IA, confirmed the presence of
the brucella abortus bacterium, the causative agent of
brucellosis. Within four to eight weeks, or as soon as soon as the
downgrade can be listed in the Federal Register, Montana will be
downgraded from Brucellosis Class Free status to Class A.
State veterinarian Marty Zaluski says the brucellosis-confirmed heifer
had been vaccinated twice and was part of a herd-management plan. All
other animals in the herd have tested negative.
With the loss of Class Free status, Montana’s livestock producers
must test bulls and non-spayed females, 18 months of age or older, 30
days before interstate movement.
In May 2007, the disease was discovered in a Bridger cattle herd,
resulting in 301 cows and 284 calves being depopulated. Per USDA-Animal
& Plant Health Inspection Service regulations, the state had to remain
brucellosis-free until July 2009 to maintain its Class Free status.
Montana had been brucellosis free since 1985.
The soonest Montana can apply to regain Class Free status is one year
from the date the last reactor was killed, or May 27, 2009. In February
of this year, USDA declared all 50 states to be free of brucellosis in
livestock, the first time in 74 years.
-- Alaina Burt
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With persistently wet conditions in parts of the Midwest worsening
and some areas suffering catastrophic flooding, cattlemen are “now
looking straight down the barrel of $7 corn, and that may just be the
beginning,” says Gregg Doud, National Cattlemen’s Beef Association
(NCBA) chief economist.
-- Click on headline to read the rest of this
NCBA news release
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The White House expects to receive the second farm bill early next
week when President George W. Bush returns from Europe. Bush will veto
the bill and return it to Congress, which is expected to override the
veto by the end of next week. This will mean that all 15 titles,
including trade, will become law.
-- P. Scott Shearer, Washington, D.C.
correspondent
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The National Ag Statistics Service reported record-high U.S. red
meat production in April, totaling 4.30 billion lbs., an increase of 14%
over the 3.75 billion lbs. produced in April 2007.
Pork was the big gainer, rising 18% from April of last year, while April
beef production was up 12%, based on a 10% increase in cattle slaughter.
Veal production increased by 1%, while lamb and mutton production were
up by 2%.
In 2008, year-to-date totals (through April), commercial red meat
production has increased 8% over 2007 totals. Beef production is up by
5%, while pork production is up by 13%. Veal production is down 12%
from last year, and lamb and mutton production has declined by 5%.
-- National Cattlemen’s Beef Association
eUpdate
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The Midwestern Governors Association (MGA) is asking the
Environmental Protection Agency (EPA) to uphold the Renewable Fuels
Standard (RFS) passed by Congress last December.
In a letter to EPA Administrator Stephen Johnson, MGA says the “blame
placed on ethanol for higher food prices is misguided. Higher food
prices are the result of many factors, including rising transportation
and production costs due to record oil prices, increased demand for
grains and meat from developing countries, increased speculator
investment and influence in all commodities markets, and extended global
drought. As a result, all food commodity prices are high, not just the
price of corn. In short, granting any waiver to the RFS will not reduce
current food commodity prices.”
The letter also says the RFS will help move the ethanol industry toward
use of cellulosic materials by “encouraging investment and
technological innovations.” The letter was signed by Governors Mike
Rounds (R-SD) and Jennifer Granholm (D-MI).
-- P. Scott Shearer, Washington, D.C.
correspondent
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Senator Chuck Grassley (R-IA) is urging USDA to increase funding for
the promotion of pork and beef export markets. He’s asking USDA to
look at various programs that will help livestock producers “through
this rough patch.”
In a letter to USDA Secretary Ed Schafer, Grassley wrote, “I would ask
that USDA give serious consideration to increasing funding for pork and
beef promotion in the Market Access Program (MAP) and the Foreign Market
Development Program (FMD). These programs can encourage the development,
maintenance, and expansion of commercial export markets for our meat
products.”
-- P. Scott Shearer, Washington, D.C.
correspondent
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That was the question on most minds during the Colorado
Cattlemen’s Association (CCA) meeting this week in Colorado Springs.
However, Douglas Ross, special counsel for ag with the Department of
Justice Antitrust Division, says he doesn’t know when a decision would
be released on the proposed purchase by JBS Swift of National Beef and
Smithfield’s beef plants.
Each case is fact-specific, he says, promising a thorough analysis of
the facts in the case. However, in three previous cases with similar
implications – Cargill-Continental Grain; Smithfield-Farmland; and
Smithfield-Premium Standard Farms – the time frame varied from eight
to 16 months before the Department of Justice announced its
findings.
“We take the concerns we’ve heard about concentration very
seriously,” he says. “But it’s not enough to say we think
there’s too much concentration. We have to do further analysis to see
if it will be anti-competitive.”
Others on the CCA program ventured the following guesses on a
forthcoming decision: Cattle-Fax CEO Randy Blach anticipates a decision
no sooner than August. Gregg Doud, National Cattlemen’s Beef
Association chief economist, thinks it could come as early as next
month.
-- Burt Rutherford
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Country Natural Beef producers will continue to have access to Whole
Foods customers, the grocery chain announced this week.
Last week, Whole Foods announced it would stop buying beef from Beef
Northwest feedyard, located at Boardman, OR, because of an effort by
United Farm Workers to unionize the operation (“Union Targets Oregon
Feedlot; Whole Foods Caves,” June 6 BEEF Cow-Calf Weekly).
Because Country Natural Beef cattle are finished at the feedyard, the
announcement effectively blocked the flow of product to retail
customers.
However, Whole Foods reversed its stance this week and said it will
continue to buy Country Natural Beef from the feedyard despite the
efforts by union activists. Whole Foods is Country Natural Beef’s
biggest customer, making up 70% of the co-op’s business.
Whole Foods spokeswoman Libba Letton said many Whole Foods customers
felt the chain’s actions were a sign of support for UFW. “We heard
a lot from our customers that they believed that it was a sign that we
weren’t supporting Country Natural Beef, which our customers are a
very big fan of.”
-- The Oregonian and Associated Press
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It hasn’t yet, but it’s not out of the question, says Gregg
Doud, National Cattlemen’s Beef Association chief economist. And if it
happens, it’s likely that cattlemen will bear the brunt.
Cattlemen operate in an inelastic market, he says, meaning that in the
short term, the producer pays the price when there’s no replacement
for a commodity such as corn. Feedyards are currently losing $100
million/week in equity on fed cattle, he says. “When the banker tells
that feedlot that it’s over, what’s going to happen? We contract.”
And at some point in time, he adds, the red ink running in the feedyard
sector will flow into the laps of the cow-calf producer.
In the long term, however, it’s the consumer who ultimately pays
because economic forces cause the industry to shrink and prices to go
up. “If you think we have food inflation now, we’re just getting
warmed up,” he says.
-- Burt Rutherford
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Ranchers, landowners, range managers and others are invited to
participate in a June 23 range-monitoring workshop near Lander, WY.
Attendees will learn range-monitoring techniques; how to identify
grasses, forbs and shrubs; and tour riparian and upland sites in the
Bureau of Land Management’s Atlantic City Common Allotment.
"We’ll be teaching range-monitoring methods that are simple and easy
to learn yet are still scientifically valid and approved by federal land
management agencies,” says Barton Stam, University of Wyoming
Cooperative Extension Service (UW CES) educator.
Participants should meet at the Atlantic City Mercantile in Atlantic
City south of Lander at 10 a.m., bringing their own lunch and drinking
water. The workshop is free. For more info, contact Stam at
307-864-3421.
-- UW CES news release
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As one of the few public health professionals who has taken a
strong, public stance in favor of food irradiation, I agree with Iowa
State University’s Dennis Olson that the public health community needs
to exercise stronger leadership in support of irradiation (“Whatever
Happened To Irradiation?” May 2 BEEF Cow-Calf Weekly).
However, the introduction of public health standards that we take for
granted today – iodinization of salt, fluoridation of water, mandatory
vaccinations for school attendance and, yes, pasteurization of milk –
were not accomplished overnight. Despite advocacy beginning early in the
20th century, Minnesota did not require pasteurization until 1948.
The time for mandatory irradiation of ground beef and other high-risk
foods, like lettuce and tomatoes, is coming. The case gets stronger with
each new outbreak. In fact, a new E.coli O157:H7 outbreak in
romaine lettuce was reported in Washington state last week, and the Food
and Drug Administration had just advised restaurant chains to stop
serving tomatoes because of an outbreak in 16 states traced to raw
tomatoes.
Mandatory irradiation will come sooner if beef producers accept that
irradiation is in their best interests. Are the costs of outbreaks –
lost sales, lawsuits and recalls – really a necessary part of doing
business? Are you at risk of losing your business if an outbreak is
traced back to your establishment?
The bottom line for me though, is whether it would be acceptable for
your child to end up on kidney dialysis in the hospital with
hemolytic-uremic syndrome. Let's all get moving together on using
irradiation to make ground beef even safer!
-- Harry F. Hull, M.D.
St. Paul, MN
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