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BEEF'S COW CALF WEEKLY    August 1, 2008  |  A PENTON MEDIA PUBLICATION
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    Table Of Contents
> Cattle On Feed Report Shows Sliding Numbers
> Commodity Markets Bite Back On Speculators
> Exports Are Looking Good – Really Good
> Mandatory COOL Interim Rule Published
> NCBA Adopts Interim Policy
> BQA Sessions Offered In Oklahoma, Texas
> Cattle-Feeding Losses Continue To Mount
> Consumer Preferences Shifting At The Meat Counter
> Feds Streamline Border Crossing
> Final Online Course Released
> House Passes ADUFA
> NJ Supreme Court Upholds Production Practices
> No “Early Out” For CRP Acres
> Record Federal Deficit
> Timely Cull-Cow Marketing Is Everyone’s Responsibility
> U.S. Average Gasoline Price Falls Below $4/Gal.
> UT, DuPont Launch Cellulosic Ethanol Pilot Plant
> What Is A Premium?
> “2008 Alliance Yellow Pages” Now Available Online
> Feedback On Argentina Trade Conundrum

    Our Perspective
      Cattle On Feed Report Shows Sliding Numbers

USDA’s latest Cattle On Feed (COF) report was called neutral to bearish as the marketing number came in significantly lower than estimates. Nationwide, the COF number was at 96% of a year ago, placements were 91% and marketings at 92%. The seven-state COF number mimicked the national trends, as the numbers for on-feed, placements and marketings came in at 96%, 90% and 88%, respectively. Placements were down 47% in Colorado, 18% in Texas, 22% in Nebraska, and 20% in Kansas.

The demise of the Canadian feeding industry continues, as Canada registerd its lowest COF number since 2004.

Cattle inventory numbers down again. As expected, the semi-annual inventory report released last week showed a continued but small reduction of the U.S. beef cattle herd. USDA estimates the number of beef cows and heifers that have calves at 33.15 million head on July 1 – down from 33.35 million head in 2007; a drop of about 0.6%, but a smaller decline than most pre-report estimates suggested.

Similarly, USDA estimates a 2.2% decline in beef replacement heifers, which is on the high side of pre-report figures, as well. All cattle and calves in the U.S. (as of July 1) totaled 104.3 million head, slightly below the 104.8 million on July 1, 2007 and down 1% from the 105.2 million two years ago.

All cows and heifers that have calved, at 42.4 million, was down slightly from both July 1, 2007 and July 1, 2006. Beef cows, at 33.2 million, were down 1% from July 1, 2007, and 1% below two years ago. Milk cows, at 9.25 million, were up 1% from July 1, 2007 and 1% above two years ago.

Other significant numbers were:
  • All heifers 500 lbs. and over, 16.5 million, down 1%.
  • Beef replacement heifers, 4.6 million, down 2%.
  • Milk replacement heifers, 3.9 million, unchanged.
  • Calves under 500 lbs., 28.6 million, down slightly.
  • The calf crop was down slightly. The 2008 calf crop is expected to be 37.3 million, down slightly from 2007 and 1% below 2006.
  • Calves born during the first half of the year are estimated at 27.1 million, down slightly from 2007 and 1% below 2006.
-- Troy Marshall



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      Commodity Markets Bite Back On Speculators

There’s been a lot of talk about speculators’ role in the commodity markets and their contribution to unneccessarily high commodity prices. Corn and oil have been the main concern for politicians, but all commodities have been supported by an influx of speculator dollars flowing away from the stock market into the commodity pits.

As is always the case, the market has a way of punishing unbridled enthusiasm or pessimism. This week brought massive liquidation in the corn and oil pits, as those commodities continue the downward trend of several weeks’ running. Not surprisingly, liquidation of positions has occurred, and some of those speculator dollars are returning to safer environments.
-- Troy Marshall

      Exports Are Looking Good – Really Good

At NCBA’s summer conference, Jim Wiesemeyer, vice president for policy and trade issues for Informa Economics Inc., told producers that exports are “going to be your margins in the future.” He made the case that growth from an industry standpoint is dependent upon exports and, conversely, our competitiveness in a global beef market.

Beef exports were up 32% in May, and were at their highest levels since 2003. This momentum was kicked off by Korea’s reopening, and with hopes that the Japanese market will soon follow suit.

In the week ending July 17, exports were 21,900 tons or a 188% increase over the previous week. This the second-largest export total since June 5, 2003.

The week of January 24, 2008 saw exports of 30,129 mt (one of the largest week’s ever, and the largest post BSE). For perspective, in 2003, we exported 540,748 mt; in 2007, 256,636; and we are at 346,874 for 2008.

Korea purchased 6,100 mt last week, but still has a way to go before regaining its stature as a top three export market. U.S. beef has became a rallying point for the political opposition in South Korea, but consumers are increasinlgy purchasing the product.

Overall, the global market for protein is exploding, but the beef industry has largely sat out the last five years because of BSE. The loss of our global market position becomes even more acute when considering that this was a time of a falling dollar that should have seen exports rise dramatically.
-- Troy Marshall



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    Mandatory COOL Interim Rule Published

USDA’s 233-page rule regarding mandatory country of origin labeling (mCOOL) sets the framework for mCOOL that is scheduled to be in place by the end of September. See the rule in its entirety at federalregister.gov/OFRUpload/OFRData/2008-17562_PI.pdf.
-- Click on headline to read the rest of this story by Troy Marshall

      NCBA Adopts Interim Policy

At the summer midyear meeting, the National Cattlemen’s Beef Association’s policy division adopted several policies that will remain interim until voted on by the membership in January. Two of the biggest issues were renewable fuels and environmental regulations.

The policy board called for a significant reduction of the Renewable Fuels Standard (RFS) and declared opposition to mandated production and/or mandated usage of any renewable fuels. The board also voted to support transitioning to a market-based approach for fuels produced from livestock feedstuffs.

To promote U.S. energy independence, the board also voted to support environmentally responsible exploration and extraction of domestic fossil fuel-based energy sources and regulatory relief to speed up construction and renovation of refineries.

The board also voted to support development of accurate greenhouse gas emissions data for domestic cattle production systems based on sound science, and to develop a communications strategy to address inaccuracies about emissions related to the cattle industry. They declared opposition to government action that would regulate or require reporting of ag greenhouse gas emissions. Opposition to listing species or habitat under the Endangered Species Act based on climate change was also approved.
-- Troy Marshall



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      BQA Sessions Offered In Oklahoma, Texas

Cattlemen in Oklahoma and Texas can sharpen their Beef Quality Assurance (BQA) skills at a series of upcoming seminars.

  • Oklahoma cattlemen can choose from six meetings scattered throughout the state, with the first set for Aug. 5 at Enid. Other meeting locations include Goodwell, Woodward, Stillwater, Waggoner and Ardmore.

  • Meanwhile the Texas AgriLife Extension Service, Texas Beef Council and Texas and Southwestern Cattle Raisers Association (TSCRA) will host two BQA meetings in August; Abilene on Aug. 15 and Amarillo on Aug. 25.

    “By becoming a certified Beef Quality Assurance producer, growers not only help keep consumer confidence strong, but also position themselves to capture some of the premium dollars which the program will undoubtedly generate along the way,” says Bruce Carpenter, Texas AgriLife Extension livestock specialist at Fort Stockton.

    For more info on the Oklahoma meetings, go to www.oklahomabeefquality.com. For more info on the Texas meetings and to pre-register, contact TSCRA’s Stacy Fox at sfox@texascattleraisers.org or 817-332-7155. Or visit www.texasbeefquality.com.
    -- Burt Rutherford

  •       Cattle-Feeding Losses Continue To Mount

    Cattle feeding continues to gush red, and this point is clearly illustrated by numbers put out by the LMIC (Livestock Marketing Information Center) and looking at monthly estimated cattle feeding losses for the first six months of the year.
    USDA slaughter level by month (million head) Estimated $ losses/head (LMIC) Equity Loss (million)
    January-1,858 -168.23 $312.6
    February-1,776 -150.44 $267.82
    March-1,842 -169.78 (largest in history) $312.70
    April-2,010 -137.68 $276.7
    May-2,140 -50.07 $107.1
    June-2,268 -88.78 $201.35
    Year to Date $1.478 billion
    -- Troy Marshall

          Consumer Preferences Shifting At The Meat Counter

    Wallets are slimmer these days as prices for food and fuel climb. For consumers, tighter grocery budgets often mean high-end beef cuts are left out of the shopping cart.

    When it comes to purchasing meat, consumers are shifting their preferences to roast beef. According to Oregon Business News, roast beef sales are up over last year as consumers search out cheaper cuts that can provide enough meat for several meals.

    Though roast sales nationwide have eased in recent months, a 1.1% sales increase from 2007 over 2006 may have signaled the start of a trend, says Randy Irion, director of retail marketing for the National Cattlemen’s Beef Association.

    What’s more, the article notes that increased retail prices are directly related to the high price of corn and fuel. In fact, the average per-pound price was up 4.2% for beef in 2007 from 2006, USDA says.

    And as consumers struggle with the rising costs of food, the emerging trend is to trade down from more expensive to affordable meats, with roast beef and hamburger being utilized for multiple meals throughout the week. For the complete article click here.
    -- Amanda Nolz



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          Feds Streamline Border Crossing

    The U.S. Departments of State and Homeland Security say a new Passport Card is available to people who travel by land or sea to Canada, Mexico, the Caribbean and Bermuda.

    The Passport Card is a convenient, wallet-sized document that will facilitate the frequent travel of Americans living in border communities. It utilizes a vicinity-read radio frequency ID chip that will allow U.S. Customs and Border Protection officers to access photos and other biographical info stored in secure government databases before the traveler reaches the inspection booth so that inspection can be facilitated.

    The Passport Card is available for $45 for first-time applicants and $35 for children under 16. Adults who currently have a valid passport can apply for the Passport Card by mail for $20. For more info, go to www.travel.state.gov.
    -- Department of Homeland Security release

          Final Online Course Released

    The National Cattlemen’s Beef Association (NCBA), the Angus Foundation and Pfizer Animal Health have teamed up to create the final online course in the beef reproduction series titled “Prevention Programs and Technologies to Improve Reproductive Performance.”

    The hands-on, interactive course features exercises, tools and resources that cover benchmarking herd performance measures; performance improvement strategies; uses and descriptions of available technologies; and goal-setting and activities planning.

    Cost is $25 for NCBA members and $35 for non-members. For more info, contact Grace Webb, producer education coordinator, at gwebb@beef.org or 303-850-3338.
    -- NCBA

          House Passes ADUFA

    The House of Representatives passed by voice vote H.R. 6432, the Animal Drug User Fee Act (ADUFA). This legislation reauthorizes the Food and Drug Administration (FDA) to collect fees from the animal health industry to be used for the review and approval of animal health products.

    The fees supplement FDA’s Congressional appropriations to provide for more timely review of new animal drugs. Since ADUFA was originally passed in 2003, FDA has been able to reduce its review time for new animal drugs. This has allowed these new drugs to enter the marketplace quicker while at the same time maintaining high standards for safety and effectiveness.

    The bill now goes to the Senate for consideration. This legislation – ADUFA expires on Sept. 30 – is a priority of the livestock and animal health industries.
    -- P. Scott Shearer, Washington, D.C. correspondent

          NJ Supreme Court Upholds Production Practices

    The New Jersey Supreme Court this week upheld several animal-welfare regulations established by that state’s department of agriculture. The measures include gestation crates for sows, debeaking chickens, castration and feeding practices to enhance egg production.

    The court did find one practice objectionable – docking of dairy cattle to remove the lower portion of the tail. The court also instructed the ag department to do more work to evaluate and define what routine husbandry practices are if they want to continue relying on them.

    New Jersey adopted animal welfare regulations in 2004 to meet a legislative mandate issued eight years prior to develop “standards for humane raising, keeping, care, treatment, marketing and sale of domestic livestock.” A coalition of animal rights groups sued, contending the regulations were inhumane and provided no benefit to the animals. Last year, a three-judge state appeals court upheld the practices.

    To read the court’s opinion, go to www.judiciary.state.nj.us/opinions/supreme/A-27%20SPCA.pdf.
    -- New Jersey Star Ledger

          No “Early Out” For CRP Acres

    USDA Secretary Ed Schafer says USDA won’t allow “early out” for Conservation Reserve Program (CRP) contracts without penalty. Schafer says market conditions have improved and that acreage was exiting CRP through normal maturities.

    According to USDA, 1.15 million acres of CRP will mature as of Sept. 30, 2008, and 3.855 million acres will mature on Sept. 30, 2009.

    Sen. Tom Harkin (D-IA), chairman of the Senate Ag Committee, supports USDA’s decision and said, “After the spring and early summer disasters throughout the Midwest, USDA rightly allowed emergency use of CRP land for grazing. I believe Secretary Schafer has drawn a sound distinction between that emergency access vs. offering an option for CRP contract holders unilaterally to cancel their contracts and put land back into crop production without any penalties or interest.”
    -- P. Scott Shearer, Washington, D.C. correspondent

          Record Federal Deficit

    The Bush administration said this week that this fiscal year would set a record for national debt – $482 billion. The previous record was $413 billion for fiscal year 2004.
    -- P. Scott Shearer, Washington, D.C. correspondent

        Timely Cull-Cow Marketing Is Everyone’s Responsibility

    “Short-term,” “gummer” and “smooth mouth” are all terms cattlemen use to describe older cows. These animals have produced well for the past decade or so and are the experienced veterans of the herd. However, due to age, lack of teeth, and an anticipated decline in production, they’re forced to retire.
    -- Click on headline to read the rest of this story by Ron Torell, University of Nevada Extension livestock specialist (torellr@unce.unr.edu)

          U.S. Average Gasoline Price Falls Below $4/Gal.

    The U.S. average retail price for regular gasoline fell 10.9¢ (week ending July 28) to hit $3.955/gal., the third consecutive week in which the U.S. average decreased and the first time in eight weeks that the average price fell below $4. Meanwhile, retail diesel prices tumbled for a second week, losing 11.5¢. to $4.603/gal., but still $1.717 higher than a year ago.

    Gasoline was down in all regions, registering $3.96/gal. on the East Coast, the Midwest shaved 15.4¢ to $3.827, the Gulf Coast losing 8.5¢ to $3.857, the Rocky Mountains dropping by 4.5¢ to $4.06, and the West Coast moving 11.8¢ lower to $4.245. California lost 14.3¢ for the week ($4.317/gal.).

    Diesel also was down across the country. The East Coast fell 10.9¢ to $4.664, the Midwest plunged 13.1¢ to $4.518, the Gulf Coast dropped 13.1¢, to $4.57, the Rocky Mountains shaved 5.7¢ to $4.657, and the West Coast fell by 7.9¢ to $4.766. California shaved 9.5¢ to hit $4.869/gal.
    -- Energy Information Administration

          UT, DuPont Launch Cellulosic Ethanol Pilot Plant

    DuPont and the University of Tennessee (UT) plan to build a new cellulosic ethanol pilot plant and research facility. Expected to be operational by the fall 2009, the facility could be one of the first steps in shifting ethanol production from corn to less demand-intensive feedstocks such as corn cobs and switchgrass.

    “We believe this project will make Tennessee the focal point for the development of the cellulosic ethanol process,” says UT president John Peterson.

    “With food and gas prices surging at double-digit rates, there is an imperative for sustainable biofuels technologies,” adds DuPont CEO Charles O. Holliday Jr. “This joint venture addresses this issue head on.”

    The plant, to be located in Vonore, TN, about 35 miles from Knoxville, will produce up to 250,000 gals. of ethanol annually. Vonore was selected as the site because it is 30 minutes from the UT campus and the Oak Ridge National Laboratory, which has also been working on development of a cellulosic ethanol process.

    Peterson says UT officials expect the pilot plant to be the first of at least 10 cellulosic production facilities to be built across Tennessee, providing new cropping opportunities for the state’s farmers.

    To read more on this story, go to: southeastfarmpress.com/biofuels/biofuels-switchgrass-0728/.
    -- Forrest Laws, Farm Press

        What Is A Premium?

    As a veterinarian, clients frequently ask me: “Can I get a premium for my preconditioned calves?” I always respond with: “What is a premium?”
    --Click on headline to read the rest of this story by Dave Sjeklocha, DVM, Haskell County Animal Hospital, Sublette, KS (620-675-8180).

          “2008 Alliance Yellow Pages” Now Available Online

    BEEF magazine’s “2008 Alliance Yellow Pages” are now online at www.beefmagazine.com. The listings, which will also appear in the August issue of BEEF, are the industry’s most comprehensive. Detailed are 34 programs – categorized by consumer-based programs, where the focus is on finding, feeding and marketing cattle according to predefined consumer product specifications; or calf-based programs, where calves are procured to fit specific value requirements. The listings include contact info, history and specs for each of these top, value-based marketing programs.
    -- Joe Roybal

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        Cow-Calf Weekly Mailbag
          Feedback On Argentina Trade Conundrum

    I'd like to comment on the July 25 article, “No Livestock From Argentina.”

    First, one clarification: The last incidence of foot-and-mouth disease (FMD) in the Patagonia South region of Argentina occurred in October 1976 and was traced to its origin north of the 42°S. line that divides the region from the north.

    But, this trade issue presents an interesting and difficult quandary for the U.S. livestock industry. Nearly all U.S. livestock organizations rightfully maintain a zero-tolerance position with regard to FMD and FMD-related trade issues. Therefore, organizations like the National Cattlemen’s Beef Association, R-CALF and the U.S. Cattlemen’s Association adamantly oppose USDA's proposal. And, of course opposing USDA in this case is low-hanging fruit for politicians. However, a couple of points must be made:
    • Both South Patagonia and North Patagonia are FMD-free "without vaccination," according to the World Animal Health Organization (OIE), which also declared all of Argentina FMD-free "with vaccination" in March 2007.

    • The U.S. led the fight for getting the application of sanitary and phytosanitary (SPS) science-based standards into the Uruguay Round Agreement of the General Agreement on Tariffs and Trade. The U.S. also fought hard to get other countries to adhere to the sanitary regulations that affect trade.
    Therefore, as the U.S. government and the U.S. livestock industry ask other countries to honor science-based SPS standards with regard to issues like BSE in Asia and hormones in Europe, it's difficult to be credible trading partners as we categorically shrug off the science and arbitrarily exert pressure on USDA to abandon the proposal to open meat trade with Patagonia South. The fallback, though, is that this would be the first time USDA recognizes the disease-free status of a sub-region of a country.

    There is no practical reason today to open animal or meat trade with this region – with or without FMD. But let's all remember that we're now in a global fishbowl. We should be careful what we ask for – we might just get a level playing field.
    -- Clint Peck
    Montana director of Beef Quality Assurance



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