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BEEF'S COW CALF WEEKLY    October 10, 2008  |  A PENTON MEDIA PUBLICATION
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    Table Of Contents
> Nothing To Fear But Fear Itself
> "Hand Out" Or "Hand Up" Is A Matter Of Perspective
> All In All, We've Been Pretty Lucky
> Is It Time To Take Advantage Of Corn Prices?
> Two New Suspected Cases Of BSE In Ireland
> A Sit-Down With The World’s Biggest Packer & Feeder
> Act Now To Reserve Seat To Brazil
> Antitrust Recommendations & the Next Administration
> Arkansas Father-Son Team Are Top U.S. Stockers
> Average Gas Price Is Below $3.50; Diesel Under $4
> BSE Costs U.S. $11 Billion in Lost Trade
> Climate Change Is Focus Of KSU Conference
> Currency Exchange Nets JBS-Swifts $400-Million Bonus
> E-Verify Program Extended Until March 6
> Japanese Claim Brain-Wave Test Detects BSE
> Mexico Horses Likely Source Of Piroplasmosis Outbreak
> Minnesota’s Split State TB Status Approved
> National Biofuels Action Plan Released
> New Technology Detects Foodborne Illnesses
> President Bush Signs FY ’09 Continuing Resolution
> Reconsideration Of Ethanol Tariffs Requested
> Renewable Fuels Items Included In Bailout Package
> It’s Not A Feud; It’s Just Good Business

   
    Nothing To Fear But Fear Itself

If you aren't at least a little afraid about the general state of our economy, and the global economy for that matter, you haven't been listening to the news. Ultimately, we rely on other people's spending habits and budgets to pay our own bills, and that understandably makes one nervous when input prices have been rising at an unprecedented rate as they have been.
-- Click on headline to read the rest of this story by Troy Marshall



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    "Hand Out" Or "Hand Up" Is A Matter Of Perspective

The biggest difference between “bailout” and “financial relief” is mostly semantics. But with the U.S. government coming to the rescue of insurance companies, the sub-prime market, financial markets and the auto industry, it may be time for a whole new discussion on the political front for this country.
-- Click on headline to read the rest of this story by Troy Marshall


    All In All, We've Been Pretty Lucky

The U.S. International Trade Commission (ITC) recently estimated that trade restrictions that were the direct result of BSE cost the U.S. cattle industry just over $11 billion from 2004 to 2007. The ITC also estimated that other tariff and tariff-rate quota restrictions cost the industry approximately $6.3 billion from 2004 to 2007. Without those losses, cattlemen’s income would have increased by roughly 8.5%!
-- Click on headline to read the rest of this story by Troy Marshall



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      Is It Time To Take Advantage Of Corn Prices?

The collapse of confidence across the entire spectrum of the global economy has cut out the underpinnings from the commodity market rally. Corn prices have been plummeting as rapidly as cattle prices.

Despite what appears to be one of the largest corn crops ever, initial yield estimates indicate the actual harvest is more likely to be below projections. Ending stocks may be slightly higher than a year ago, but with the increasing demand fueled by ethanol mandates, the key figure stocks-to-usage ratio will be historically low. That means we’ll be heading into a very similar position as we have the last several years, where commodities are in a fierce battle for acreage.

A strengthening dollar and a weak economy should help to temper demand, but supply and demand concerns aren’t expected to go away. We simply have no buffer in the system. $80-$90/barrel oil, and $4 something corn, are better than most would have anticipated a few months ago, but at today's levels would you be a buyer or seller?

The challenge in strategic planning as it relates to marketing and managing input costs is that the marketplace has become so intertwined. A cow-calf producer used to be able to largely ignore how his calves performed once they went beyond the ranch gate; today, that’s a prescription for disaster.

Ag used to focus on internal dynamics when making these assumptions, but now that approach can lead to some grievous mistakes. The lines between the global highway, Wall Street, Main Street, and the dusty roads of rural America are becoming fuzzier. -- Troy Marshall


      Two New Suspected Cases Of BSE In Ireland

RTE, Ireland’s national radio and television station, reported two suspected cases of BSE last Friday night. One of the cases in Ireland involves a five-year-old cow in County Meath, while the other is an 11-year-old dairy cow in County Cork. Both cases are in dairy cattle.

Ireland’s Department of Agriculture, Fisheries and Food (IDAFF) reports that, if confirmed, the two latest cases would bring to 17 the number of confirmed in Ireland in 2008. The total number of confirmed cases in 2007 was 25, with 41 cases in 2006, 69 cases in 2005, 126 cases in 2004, 182 cases in 2003 and 333 cases in 2002.

“The underlying trend remains positive and the increasing age profile of animals confirmed with the disease indicates that the enhanced controls introduced in 1996 and early 1997 are proving effective,” IDAFF says.

Since January 2001, Ireland has BSE-tested all cattle over 30 months of age destined for human consumption and all casualty animals, as well as all fallen cattle since July 2001.
-- Muriel Elizabeth Hayes


    A Sit-Down With The World’s Biggest Packer & Feeder

Wesley Batista says his family's JBS SA wants to work with producers to build the beef industry and create new markets.
-- Click on headline to read the rest of this story by Steve Kay


      Act Now To Reserve Seat To Brazil

Sign-up is progressing for the Beef Study Tour to Brazil set for Jan.15-26, 2009. The tour sponsored by Montana Beef Quality Assurance and BEEF magazine will focus on beef cattle production systems in west-central Brazil.

“In today’s global marketplace cattlemen need to know what the competition is up to and how they’re doing it,” says Clint Peck, Billings, MT, director of Montana’s Beef Quality Assurance program. “We’ve developed an itinerary that’ll give beef producers around the U.S. the best possible look at Brazil’s beef systems and assess their strengths and weaknesses as competitors in international markets.”

Peck and Joe Roybal, Editor of BEEF, will lead the tour along with travel coordinator Renata Stephens of Brazilian Liaison. Stephens is a Brazilian native who has extensive experience in ag tours and South American excursions. Peck has participated in several beef study tours to South America.

Tour participants will experience a variety of cattle ranching and feeding operations in Brazil’s west-central Brazil’s subtropical cattle farming regions. Highlights include a two-night stay at a working family ranching operation that caters to guests and tour groups. Among the other stops will be a federal beef cattle research center and a high-tech cattle seedstock operation.

“Beyond learning about the challenges and opportunities facing Brasilian ranchers, we’ll interact with local farming families, experiencing their day-to-day lifestyles,” Peck adds. “South Americans are very gracious hosts and fully enjoy their American guests.”

Mixed with the ag setting are world-class tourist sites like the Brazilian Pantanal and Bonito Springs – and two nights in Rio de Janiero.

The tour package price of $4,995/person (double occupancy and based on 25 participants) includes international airfare to and from Brazil, in-country air and motor coach transportation, eight nights of business-class lodging and most meals – along with local guides and translators. Deadline for registration is Nov. 3, 2008.

For more info, contact Peck at cpeck@montana.edu or 406-896-9068; Joe Roybal at joe.roybal@penton.com or 952-851-4669; or Renata Stephens, BrazilianLiasion, at renatas@BrazilianLiasion.com or 763-972-8080. A tour itinerary can be viewed on the Montana BQA website: www.mtbqa.org or www.beef-mag.com.
-- Clint Peck



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      Antitrust Recommendations & the Next Administration

The American Antitrust Institute (AAI) released a report recommending legislative and enforcement priorities for the next administration. The major ag recommendations are entitled “Fighting Food Inflation through Competition,” and include increased antitrust enforcement of merger and conduct rules including. Among them are:
  • Applying stricter standards to mergers in input markets.
  • Challenging anticompetitive, post-sale restraints in the sales of seed.
  • Developing ag market guidelines for assessing buyer mergers.
  • Challenging buyer mergers whenever they are likely to result in the exercise of buyer power.
  • Challenging collusive conduct by buyers that affects public market prices.
The report also asks the administration to employ and augment USDA authority to regulate market conduct to facilitate fair, efficient, and open competition by:
  • Adopting regulations under the Packers and Stockyards Act (PSA) to control abusive buying practices.
  • Adopting regulations under the Ag Marketing Agreement Act of 1937 to control abuse of market orders.
  • Seeking expansion of the PSA to cover all agricultural commodities and clarify its standards.
-- P. Scott Shearer, Washington, D.C. correspondent

      Arkansas Father-Son Team Are Top U.S. Stockers

Pendergrass Cattle Co., Charleston, AR, was named winner of the Backgrounding Division en route to claiming the 2008 National Stocker Award presented annually by BEEF magazine and sponsored by Elanco Animal Health. As winners, Pendergrass Cattle Co. receives $10,000 in cash from Elanco, as well as expense-paid trips to BEEF magazine’s BEEF Quality Summit (beefconference.com/) in November, and the annual National Cattlemen’s Beef Association meeting in January.

In addition, two other semi-finalists for the 2008 National Stocker Award will receive $2,500 each from Elanco. They are Howard Ranches of Waurika, OK; and S&M Cattle Co. of Ordway, CO.

You can read the complete Pendergrass story in the October issue of BEEF. Read more complete articles on Howard Ranches; and on S&M Cattle Co by clicking on the lines.
-- Joe Roybal


      Average Gas Price Is Below $3.50; Diesel Under $4

The U.S. average price for regular gasoline plunged 14.8¢ (for the week ending Oct. 6) to slip below $3.50/gal. for the first time since April 14. Meanwhile, the U.S. average diesel price dropped 8.4¢ to $3.875.

Gasoline prices have now fallen for three weeks in a row, bringing the average to $3.484, but 71.4¢ above a year ago. The East Coast was down 12¢ to $3.544, the Midwest 21.6¢ to $3.393, the Gulf Coast 16.4¢ to $3.436, the Rocky Mountains 10.4¢ to $3.496, and the West Coast 7.4¢ to $3.568. California dropped 6.9¢ to $3.601.

Meanwhile, diesel was below $4 in all major regions for the first time since March 10. The East Coast fell 9.2¢ to $3.928/gal. (89.7¢ higher than last year), the Midwest 7.8¢ to $3.858, the Gulf Coast 8.6¢ to $3.843, the Rocky Mountains 5.8¢ to $3.886, and the West Coast 9.4¢ to $3.847. California moved 9.4¢ lower to $3.869/gal.
-- U.S. Energy Information Administration




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      BSE Costs U.S. $11 Billion in Lost Trade

The International Trade Commission (ITC) estimates in a report that trade restrictions linked to BSE cost U.S. producers and industry nearly $11 billion in lost beef exports between 2004 and 2007. Japan and Korea account for nearly $9.5 billion in lost exports.

Sen. Max Baucus (D-MT), chairman of the Senate Finance Committee, who requested the report said, “It’s clear USDA and USTR must redouble their efforts to fully open markets in Japan, China and the rest of the world to safe, delicious U.S. beef. Removing these barriers must be a top priority.”
-- P. Scott Shearer, Washington, D.C. correspondent


      Climate Change Is Focus Of KSU Conference

National authorities on global climate change will be at Kansas State University (KSU) Oct. 21, leading the first open-to-the-public session ever offered as part of a KSU Research and Extension Annual Conference.

A special 1:30-5:30 p.m. program in the KSU Union´s main auditorium includes:
  • "Climate change impacts: Global, national and regional" - Johannes Feddema, Kansas professor of geography.
  • "Adaptation to climate change" - Jerry Hatfield, lead scientist and director of the National Soil Tilth Lab, Ames, IA.
  • "Mitigation of climate change: Agricultural sequestration" - Charles Rice, KSU professor of soil microbiology and specialist in carbon sequestration.
  • "Climate change policy and economics" - Susan Capalbo, Oregon State University Department of Agricultural and Resource Economics.
  • Steve Swaffer, Kansas Farm Bureau director of natural resources, will describe how farmers can earn soil carbon credits that can provide access to revenue-making opportunities on the U.S. carbon market.
For more on the half-day workshop, contact Chuck Rice at 785-521-6094 or cwrice@ksu.edu, or visit www.oznet.ksu.edu/annconf.
-- Kansas State University release


      Currency Exchange Nets JBS-Swifts $400-Million Bonus

JBS Swift managers are very good operators in all that they do, not just killing cattle and selling meat. For instance, the company made US$400 million in recent weeks on currency exchange, it picked up beef plants for tax debts, and on one occasion purchased a plant that was financed for it by the previous owner over the next 10 years.

This comes in stark contrast to Brazil’s second-largest meat company Sadia SA. It lost US$430 million during the same period on currency exchange, causing the chairman and CEO to step down and the accounts director to be sacked.

JBS has made US$175 million additional profit on the US$1.5 billion set aside for the purchase of Smithfield and National beef. This money was in U.S. dollars, which have gained in value in the last few weeks while the Brazilan Real has lost 17%.

The U.S. Department of Justice (DOJ) is expected to make its decision shortly on the JBS-SA acquisition of Smithfield Beef Group, National Beef Packing Co and Five Rivers Ranch cattle feedlots for $1.535 billion. The general feeling is that DOJ will force JBS divestiture of one of the Smithfield plants and one of the National plants in the Southwest for reasons of fair competition.
-- Muriel Elizabeth Hayes, Argentina


      E-Verify Program Extended Until March 6

The continuing resolution that funds most federal agencies until March 6 extends the E-Verify program until March 6. This voluntary program is used by the meat industry to verify the legality of employees.
-- P. Scott Shearer, Washington, D.C. correspondent


      Japanese Claim Brain-Wave Test Detects BSE

Japan’s National Institute of Animal Health (NIAH) claims to have developed a method of using cows' brain waves as a determinant of BSE infection. NIAH senior researcher Shozo Arai says the method could evolve into “devices small enough to be portable to help detect the disease at farms," according to Mainichi Daily News.

An NIAH team transplanted part of the brains of cows infected with BSE into the brains of 11 healthy cows and examined their brain waves and other conditions. Infected cows began to show typical symptoms of BSE, such as shaking legs and the inability to stand 22 to 24 months after the transplantation.

Moreover, about 22 months after the transplants, the cows' reactions to sounds in their brain waves began to slow down. Abnormalities were detected in the brain waves of all 11 cows involved in the experiment.

See the article at mainichi.jp/mdnnews/news.
-- U.S. Animal Health Association


      Mexico Horses Likely Source Of Piroplasmosis Outbreak

Officials believe two horses that entered Florida from Mexico are behind the state's piroplasmosis outbreak, reports Horsetalk. It’s the first time the blood-borne parastic disease has occurred in the U.S. in 20 years.

At its height, 25 properties were under quarantine and 200 horses were undergoing testing. At one stage, seven properties had horses testing positive for the disease. There are now 13 premises under state quarantine, with only one farm still having positive horses on the premises.

The disease can be spread by ticks but no evidence of the presence of the types of exotic tick that carry the disease has been found. Rather, evidence indicates that transmission of the disease has been by management practices, possibly the use of needles.

See the article at www.horsetalk.co.nz/.
-- Horsetalk


      Minnesota’s Split State TB Status Approved

Three years after detecting bovine tuberculosis (TB) in northwest Minnesota, USDA has approved Minnesota’s Split State Status effective today, Oct. 10.

With the approval of Split State Status, a large part of the state will upgrade its classification to Modified Accredited Advanced, and a smaller section of northwestern Minnesota will remain at Modified Accredited (MA). This status will help the state target its resources where they are most needed, while also saving producers outside the affected area from additional testing requirements that accompany MA status, says State Veterinarian Bill Hartmann.

To learn more, or to view a map or review the testing and shipping requirements, visit the state’s bovine TB website at www.mntbfree.com www.mntbfree.com.
-- Joe Roybal


      National Biofuels Action Plan Released

USDA Secretary Ed Schafer and Secretary of Energy Sam Bodman released the National Biofuels Action Plan (NBAP), an interagency plan detailing the efforts of federal agencies to accelerate the development of a sustainable biofuels industry.

Schafer said, “This National Biofuels Action Plan supports the drive for biofuels growth to supply energy that is clean and affordable, and always renewable.”

The NBAP outlines interagency actions and accelerated federally supported research efforts in seven areas including: sustainability, feedstock production, feedstock logistics, conversion science and technology, distribution infrastructure, blending, environment, and health and safety.
-- P. Scott Shearer, Washington, D.C. correspondent


      New Technology Detects Foodborne Illnesses

A new method to capture and detect foodborne illness-causing bacteria such as E. coli promises to be quicker and less expensive than current conventional technology. Inside Indiana Business reports the technology is based on discoveries by a research group led by Bruce M. Applegate, Purdue University food sciences associate professor.

Intelliphage, founded in 2008 by Applegate and Lynda Perry, a research associate in his group, has modified a virus that can infect a specific E. coli bacterium. It identifies the bacterium's presence in food by attaching itself to the bacteria, turning it red or making it luminescent, allowing easy detection by food companies. Applegate's virus is grown in a non-pathogenic lab strain of E. coli.

"Other companies say they can identify a bacterium within an hour, but it takes more than 24 hours to grow the bacterium before they can identify it. That’s because they need to grow 100 million cells of a bacterium before they are able to detect them,” Applegate says. "We can locate one bacterium cell in just 25 grams of food, and that means we can detect the bacterium earlier."

See the full text at
www.insideindianabusiness.com/.
-- U.S. Animal Health Association


      President Bush Signs FY ’09 Continuing Resolution

President George W. Bush signed into law a continuing resolution that will fund USDA and most federal agencies until March 6, 2009. Early next year, Congress will consider either funding the appropriation bills for each department for the remainder of the fiscal year or pass another continuing resolution.
-- P. Scott Shearer, Washington, D.C. correspondent


      Reconsideration Of Ethanol Tariffs Requested

The U.S. Chamber of Commerce released a new report, “Blueprint for Securing America’s Energy Future,” which calls for “free-flowing trade” for renewable fuels and says the import tariff on ethanol is an impediment. The report says, “Eventually, free trade of biofuels should be the goal, and we should be prepared to reconsider the tariff on imported ethanol as global demand and markets progress.” The report also criticizes the blender’s tax credit for ethanol.
-- P. Scott Shearer, Washington, D.C. correspondent


      Renewable Fuels Items Included In Bailout Package

The $700-billion bailout package, “Emergency Stabilization Act of 2008,” includes a number of renewable fuels provisions. These include extending the production tax credit for wind energy for one year, through Dec. 31, 2009. The biodiesel tax credit is extended through 2009 and the alternative fueling credit for ethanol blended gasoline (E-85) infrastructure is extended through 2010.

-- P. Scott Shearer, Washington, D.C. correspondent


    It’s Not A Feud; It’s Just Good Business

Regarding Troy Marshall’s Oct. 3 item, “Manadatory COOL & The Checkoff Marry Up” (beefmagazine.com/cowcalfweekly/1003-mandatory-cool-checkoff-marry/), I was hoping people would embrace Sen. Jon Tester’s interest in enhancing the beef checkoff instead of feeling threatened by the idea. Marshall is just plain wrong about some things.
-- Click on headline to read the rest of this story by Danni Beer, Beer Ranch, Keldron; SD


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