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There was a lot of buzz this week about a report from Texas A&M
Extension economist Steve Amosson on how the ethanol industry is
struggling with the rise in corn prices and natural gas. Uncertain
economic conditions and the economic crisis have forced the canceling or
postponement of projects with the capacity to produce an additional 11
billion extra gals. of ethanol annually.
The dilemma is that the ethanol-production mandates are still in place;
in addition to the 15 billion gals. mandated for production from corn,
an additional 21 million gals. generated from feedstocks other than corn
are supposed to be online by 2022.
One positive note is that a Georgia plant that plans to convert wood
chips into fuel received $90 million in financing from USDA last week.
But cellulosic-ethanol production is very much in its infancy. Who knows
if the science or the economics will be there in 4-5 years to the scope
needed to meet the mandate.
Meanwhile, another report released this week detailed the use of
ethanol-production byproducts by the livestock industry, and the
likelihood that the ethanol industry will soon be producing more
byproducts than what the livestock industry will be able to use. This is
an interesting dynamic when one looks at prices for the future.
Initially, demand outstripped supply, and byproducts were priced
essentially in relation to the price of corn or other potential
feedstuffs. This will likely continue to be the pricing norm for the
foreseeable future, but those relationships may adjust if production
begins to exceed practical demand.
It’s likely that the price of byproducts relative to the price of corn
will decrease over time, making it more attractive to livestock feeders.
In turn, this will likely increase the regional advantages or
disadvantages, as those with more access to byproducts – or the
ability to utilize more byproducts – increase in competitiveness.
-- Troy Marshall
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 Feeling good about beef
While you’re managing your operation, your checkoff dollars are
reminding millions of consumers that beef is a great value — for both
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More about all the new checkoff-funded market research, tools and
tips to help consumers stretch their dollars at the meat case.
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Every inauguration is characterized by hope and optimism, and every
new administration offers the potential of being historically
significant. Of course, President Barack Obama's carried more
significance in that he’s the first African-American president, and
the fact that the economy is in recession due to the financial crisis.
-- Click on headline to read the rest of this
story by Troy Marshall
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I was giving one of those industry-trends talks the other day, and a
lively discussion ensued about our industry’s changing structure, the
impact of higher input costs, changing consumers, branding/marketing,
and the impact of food safety, animal welfare, and the environment in a
competitive global beef market. It was all going just fine, when someone
asked the question: "What have you and your family done on your
operation to prepare for these changes, and what changes do you
anticipate implementing based on the changes occurring?"
-- Click on headline to read the rest of this
story by Troy Marshall
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 Fresh water on demand, 24 hours
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From a single horse Stall Fount to fountains that water up to 500 head
of cattle, Ritchie fountains are top quality. The Omni and CattleMaster
families feature a new, domed valve cover designed to reduce dirt and
grime accumulation in the water seal groove. All products feature
stainless steel, heavy-duty polyethylene or a combination of both and a
10-year limited warranty.
For more information or a distributor near you, contact Ritchie
Industries at 800-747-0222 or visit www.ritchiefount.com
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USDA’s Ag Marketing Service (AMS) published a notice in the Jan.
16 Federal Register establishing a voluntary standard for a
“naturally raised” marketing claim. Once the standard becomes
effective, livestock producers may utilize AMS’s voluntary,
third-party verification services to provide validity to naturally
raised claims, and in certain cases, may have access to markets that
require AMS certification.
-- Click on headline to read the rest of this
NMA Lean Trimmings newsletter release
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Video presentations from the 2008 BEEF Quality Summit are now
available at beefmagazine.com/beeftv/bqs08/.
Entitled “Quality – A Solution to Rising Costs,” the 1½-day
program featured some of the nation's top experts providing participants
with background and insight into the considerations, tools and practices
that can help producers optimize beef quality as a competitive tactic in
these challenging times.
And keep an eye out for more details on the 2009 BEEF Quality
Summit – our fourth – planned for November in St. Joe, MO.
-- Joe Roybal
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 It’s a New Day in the Sun! Join your fellow cattle
producers in Phoenix, AZ for the 2009 Cattle Industry Annual Convention
& NCBA Trade Show. January 28th -31st. If you’re in the cattle
business you don’t want to miss the largest, most important meeting of
the year. For more information or to register visit www.beefusa.org or call 303-694-0305.
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ARG Enterprises Inc., operator of 69 Black Angus Steakhouse
restaurants in seven states in the western U.S., is seeking bankruptcy
protection and a buyer, Bloomberg reports. In a statement filed
with the bankruptcy court on Thursday, the Los Altos, CA-headquartered
chain blamed its demise on the impact of the mortgage crisis on
consumers’ discretionary income.
Founded in Seattle, WA, in 1964, the chain specializes in black Angus
steaks, prime rib and seafood, and employs more than 3,600 people.
-- Bloomberg
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Last week, the outgoing Bush administration changed the list of the
$116.8 million in sanctions against European food products imposed as
part of the European Union’s (EU) ban on beef produced with growth
promotants. The move was designed to increase the pressure on the EU to
drop the ban.
“For over a decade, we have been trying to resolve this dispute with
the EU but our efforts have gone nowhere,” said outgoing U.S. Trade
Representative Susan Schwab. “In these circumstances, I’ve decided
it’s time to modify the duties to try to encourage a resolution of
this longstanding dispute so as finally to provide a fair outcome to the
U.S. beef industry, while addressing the economic impact of such
long-standing duties on U.S. interests.”
The EU reacted angrily to the move and vowed to challenge it at the
World Trade Organization (WTO).
However, as recently as Oct. 16, 2008, the WTO Appellate Body confirmed
that the U.S. has the right to continue imposing retaliatory sanctions
until the dispute over the EU ban on hormone-treated beef is resolved,
the National Cattlemen’s Beef Association (NCBA) says.
“The WTO ruled that this ban costs the U.S. more than $116 million in
trade each year, but that doesn’t take into account the many new
nations that have since joined the EU or the increase in demand we have
seen globally,” says Gregg Doud, NCBA chief economist. “A seismic
shift occurred in 2003 when the EU went from a net exporter of beef to a
net importer. Today, the EU imports almost as much beef as the U.S.
exports to the entire world. The potential market for U.S. beef in
Europe could be substantially higher without this trade barrier.”
To see the list of EU products subject to tariffs, go to www.ustr.gov/assets/.
-- Burt Rutherford
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Two defendants have been sentenced to die, and a top industry
executive drew life imprisonment, in connection with the 2008 melamine
scandal in China. The toxic chemical was added to Chinese food and
beverage products to cheaply boost their protein contents.
Tian Wenhua, the former head of Sanlu – one of China’s leading dairy
producers, was sentenced to life in prison for her role in allowing the
sale of such products, Reuters reports. The two other defendants drew
death sentences for their involvement in contaminating milk that
sickened thousands of children. Another three former Sanlu execs drew
prison sentences of five to 15 years.
-- Reuters
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Red-meat exports continued their strong pace through November, with
pork up 20% and beef up 9% (including variety meat) compared to November
2007, reports the U.S. Meat Export Federation (USMEF).
January-November beef exports were up 37% to 582,270 metric tons (mt),
or 1.28 billion lbs., with variety meat exports up 18% to 331,479 mt
(730.8 million lbs.). Total beef exports of 913,739 mt (2.01 billion
lbs.) were up 29% and valued at $3.37 billion, a 40% increase. 2008 beef
exports are on pace to reach 94% of the 2003 export value.
For the first 11 months of 2008, pork and pork variety meat exports were
61% larger than 2007, at 1,898,698 mt or 4.18 billion lbs. Meanwhile,
2008 pork exports through 11 months were valued at $4.5 billion, an
increase of 59%.
“Global protein supplies remain tight, with the exception of a few
situations in key countries where stocks of imported red meat are
weighing on the market, specifically in Korea and China,” says Erin
Daley, USMEF economist. “As currencies and prices stabilize,
inventories will decline and demand for U.S. red meat will likely
continue at a relatively strong level. Although pork exports are not
expected to maintain the stunning pace of 2008, they are forecast to
exceed 2007 volumes,” Daley said.
“The bottom line is that, regardless of the global economic situation,
people have to eat,” Daley says. “U.S. beef and pork prices are
lower than they were during the summer, which helps offset the increased
strength of the U.S. of the dollar.”
-- USMEF news release
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The Food and Drug Administration (FDA) has issued a final guidance
on the regulation of genetically engineered (GE) animals under the new
animal drug provisions of the Federal Food, Drug and Cosmetic Act. The
guidance clarifies FDA’s statutory and regulatory authority and
provides recommendations to producers of GE animals to help them meet
their obligations and responsibilities under the law
(www.fda.gov/cvm/GEanimals.htm).
According to FDA officials, the guidance will help them efficiently
review applications for products from GE animals to ensure their safety
and efficacy. And FDA says it won’t allow any products from GE animals
to be sold without first submitting them to scrutiny by independent
advisers at a public meeting.
Meanwhile, FoodProductionDaily reports that Jean Halloran,
Consumers Union (CU) director of food policy initiatives, says FDA’s
policy claiming that GE foods are not different from conventional foods
and thus don’t need to be labelled flies in the face of consumer
opinion and common sense. She says a recent CU poll found 95% of
consumers favor labelling of meat and milk from GE animals.
-- FDA release and FoodProductionDaily.com
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 More Deere. Less Dough
Learn more about the versatile new line of Utility Tractors from John
Deere.
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Feedlot managers, owners, employees and allied industry can learn
the latest on feedlot management at the 2009 Nebraska Beef Feedlot
Roundtable. Meetings are set for:
- Feb. 10 at the Lifelong Learning Center in Norfolk
- Feb. 11 at the Holiday Inn Express in Lexington or
- Feb. 12 at the Prairie Winds Community Center in Bridgeport.
Among the topics of discussion are: corn-byproduct research; effects of
feeding distillers grains on meat quality; E. coli O157:H7 and
distillers grains; fate of steroids released by implants used by the
feedlot industry; feedlot cattle health; 2009 feedlot economics; a
producer panel on dealing with volatile input costs; what’s new in
feed additives and implants; and Nebraska feedlots benchmark data.
Preregistration deadline is Feb. 5 and cost is $25 (which includes
lunch); $40 at the door. For more info or to register, contact Judson
Vasconcelos at 308-632-1397, or e-mail jvasconcelos2@unl.edu.
-- University of Nebraska-Lincoln
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The U.S. average retail price for regular gasoline increased for the
third straight week (week ending Jan. 19), adding 6.3¢ to $1.847/gal.
Meanwhile, the average retail diesel price dropped 1.8¢ to $2.296,
97.4¢ lower than at this time last year.
The average gasoline price is $1.17/gal. lower than this time last year,
but all regions reported increases for the week. The East Coast was up
6¢ to $1.81, the Midwest 5.1¢ to $1.874, the Gulf Coast 8.4¢ to
$1.729, the Rocky Mountains 4.4¢ to $1.607, and the West Coast 7.5¢ to
$2.029. California rose 7.6¢ to $2.064.
Diesel was down at retail in all regions but the Rocky Mountains, which
rose 1.4¢ to $2.249. Otherwise, the East Coast shaved 1.8¢ to $2.377,
the Midwest 2.5¢ to $2.264, the Gulf Coast 1.7¢ to $2.227, and the
West Coast was down 1.5¢ to $2.338/gal. California fell by 1.5¢ to
$2.319, $1.041 below last year.
-- Energy Information Administration
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When heading to the bank or farm-credit lender, have your ducks in a
row and expect to answer plenty of questions about how you’ll manage
the risk and tighter margins that are expected, says Jason Henderson,
executive vice president of the Federal Reserve Bank in Kansas City.
-- Click on headline to read the rest of this
story by Larry Stalcup
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U.S. Secretary of State-designate Hillary Clinton is pushing for
renegotiation of a free-trade agreement (FTA) between the U.S. and South
Korea, terms of which had long been held up by an impasse over Seoul's
restrictions on imports of U.S. beef, Meatingplace.com reports.
Clinton's main beef, and that of the Obama administration, is an
imbalance in auto trade. "If the South Koreans are willing to re-engage
negotiations on these vital provisions of the agreement, we will work
with them to get to resolution," she said in written responses to
questions from the Senate Foreign Relations Committee.
However, reopening belabored discussions on the bilateral trade deal may
not bode so well for U.S. beef. South Korea agreed to resume imports of
U.S. beef last year only under pressure from Washington, which had
threatened to scrap the FTA altogether if Seoul didn't lift its ban on
U.S. beef. The FTA itself promises reduced tariffs on U.S. beef and pork
imports.
But Seoul hasn't budged on the auto provisions, trying instead to get
the deal approved by its own legislature in order to put pressure on
U.S. Congress to approve the deal.
Democrats in control of Congress criticized the Bush administration for
failing to change auto provisions in the pact.
"If they fought as hard for cars as they did for beef, we wouldn't have
that problem," Charles Rangel, chairman of the House of Representatives
Ways and Means Committee, said during a meeting to discuss the panel's
priorities for the year.
-- Meatingplace.com
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New legislation aimed at stemming the export of horses for slaughter
in Mexico and Canada was introduced into the U.S. House of
Representatives Judiciary Committee on Jan. 14. Sponsored by Committee
Chairman John Conyers (D-MI) and Rep. Dan Burton (R-IN) HR 503, the
Conyers-Burton Prevention of Equine Cruelty Act, prohibits the
transport, sale, delivery or export of horses for slaughter for human
consumption. It also criminalizes the purchase, sale, delivery or export
of horsemeat intended for human consumption.
Violators would face fines and/or one-year imprisonment for a first
offense or those involving five or fewer horses, and fines and/or
three-year imprisonment for repeat offenses or those involving more than
five horses.
The new bill is essentially the same as HR 6598, the Prevention of
Equine Cruelty Act of 2008, also introduced by Conyers and Burton in
July 2008. The committee passed that bill in September, but it never
received a full House vote.
"It's a new Congress, so the bill has to go through the process from the
beginning with a new name," says Nancy Perry, vice president of
government affairs for the Humane Society of the U.S. "But HR 6598
underwent so much scrutiny, we feel this bill will reach the full House
quickly."
-- TheHorse.com
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Three area beef cattle seminars scheduled this month in Illinois
will emphasize the feeding of corn co-products and producing a quality
beef product. Dave Seibert, University of Illinois (UI) Extension, says
seminars are planned for Jan. 27 in Onarga at the Ford-Iroquois
Extension Office; Jan. 28 in Paris at the Edgar County 4-H Fairgrounds;
and Jan. 29 in Carrollton at the Greene County Extension Office.
Speakers for the 9:30 a.m.-2:30 p.m. programs include specialists from
UI Extension, Purdue University, Illinois State University, and industry
representatives. Registration is $20 at the door. For more info, call
Seibert at 309-694-7501, Ext. 224.
-- University of Illinois release
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The North American Limousin Foundation (NALF), American Hereford
Association (AHA) and the Red Angus Association of America (RAAA) have
released their spring listings for Expected Progeny Differences (EPDs).
-- Click on headline to read the rest of this
Association news release
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The National Pork Producers Council (NPPC) has filed a lawsuit in
federal court challenging the Environmental Protection Agency’s (EPA)
decision to require livestock farms to file reports under the
Environmental Protection and Community Right to Know Act (EPCRA). NPPC
alleges that EPA violated the due process rights of farmers by failing
to develop an adequate system to accept the reports, making compliance
with the law impossible.
NPPC said, “In sticking the agricultural community with this
unworkable rule, EPA not only failed to provide any guidance to farmers
on compliance with the new regulation or develop an adequate system to
handle the volume of reports that would be filed, but it actively
engaged in efforts that undermined the ability of farmers to comply with
this new, stringent rule.”
Last December, EPA ruled that large livestock farms would be required to
file mandatory reports on air emissions by first making phone calls to
their state and local emergency response authorities, then by filing a
written notification of emissions estimates. Farms that fail to comply
will face penalties of $25,000/day.
-- P. Scott Shearer, Washington, D.C.
correspondent
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The National Agricultural Library has released the 2009 editions of
its classic glossary and thesaurus of the specialized vocabularies of
agriculture. The four-part reference works – the “Glossary of
Agricultural Terms” and its Spanish-language counterpart, and the
“NAL Agricultural Thesaurus” and its Spanish version – are
available at agclass.nal.usda.gov/agt.shtml.
-- USDA release
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Since August, BEEF has been providing a Friday afternoon
roundup of each week’s cattle-market activity at beefmagazine.com. Produced by
Steve Kay, editor and publisher of Cattle Buyers Weekly
(CBW), the number-one marketing and business newsletter for the North
American meat and livestock industry, you can find it in the center
column of the opening page under: “Cattle Market Update.”
Now, there’s a new addition to that Friday feature – a projected
cattle feeding margin.
“Cattle feeders in 2008 suffered their heaviest losses in recent
history and 2009 will remain challenging. The projected feeding margin
is aimed to help cattle feeders make informed decisions about buying and
placing cattle,” Kay says. “The projected margin will cover one
class of cattle and can be used as a weekly barometer of likely
profitability.”
The margin will come from the North American Institute for Beef Economic
Research (NAIBER), using its proprietary Cattle Feeding Return Risk
Analyzer (developed by NAIBER co-founder Ted Schroeder of Kansas State
University).
The weekly margin will include: 750-lb. steer; its average price at the
previous Monday’s Oklahoma City Stockyards sale; a Kansas feedlot
location; interest rates that reflect general cattle financing
conditions; average daily gains, death loss and other feedlot inputs;
projected corn costs during the projected feeding period, using corn
futures closes each Thursday; a projected live cattle price at the end
of the feeding period, using live-cattle futures closes each Thursday; a
projected outweight of 1,250 lbs.
Some inputs, as noted, will be updated each week while others, such as
daily gain and death loss, will be adjusted on a seasonal basis. People
wishing to calculate their own projected cattle feeding returns, using
their own inputs, can do so by going to NAIBER’s Cattle Feeding Return
Risk Analyzer at: www.naiber.org/cattleriskanalyzer/.
-- Joe Roybal
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Barack Obama was sworn in as the 44th President of the U.S. Obama
referred to the nation’s energy needs in his inaugural address when he
said, “We will harness the sun and the winds and the soil to fuel our
cars and run our factories.”
It was the largest inaugural ceremony in history with more than 1.8
million people attending. I have had the privilege of attending numerous
events and ceremonies in Washington, D.C., but this one was amazing and
the excitement was electrifying. It truly was historic.
-- P. Scott Shearer, Washington, D.C.
correspondent
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White House Chief of Staff Rahm Emanuel issued a memorandum to all
federal agencies placing a hold on pending federal regulations until the
new administration can review them, a move that could affect major
climate change-related rules from the Bush administration. It halts work
on all draft rules until the new administration can complete a legal and
policy review, according to a White House press statement.
The question is what regulations the new team at USDA will want to place
on hold and review, especially country of origin labeling (COOL). It’s
expected that we will soon know USDA’s decision.
-- P. Scott Shearer, Washington, D.C.
correspondent
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While distillers grains have become a staple in some bovine diets, a
Kansas State University (KSU) researcher advises against their use for
horses.
Teresa Slough, KSU equine nutrition specialist, says there’s no
information available so far on the long-term effects of feeding dried
or wet distillers grains with solubles (DDGS) to working horses, mares
or foals, but warns the disadvantages outweigh the advantages.
"Horses are very susceptible to fumonisin poisoning from moldy corn.
Fermentation during ethanol production doesn´t destroy the mold, rather
it is concentrated. Feeding DDGS contaminated with fumonisin just once
could cause death," she says.
DDGS high phosphorus content is another concern.
"Unless the other feedstuffs in the horse´s diet are very high in
calcium, the potential exists to create a diet inversed in its Ca:P
ratio and negatively affect bone development," Slough adds. "This is of
particular concern with broodmares and foals."
DDGS’ high sulfur content also makes it problematic for horses.
"Sulfur toxicity in horses, although rare, can result in colic,
jaundiced mucous membranes, labored breathing, cyanosis and convulsions,
followed by death," she says.
"The bottom line is feeding DDGS to horses isn’t recommended unless
it´s been tested for fumonisin and contains less than 5 parts/million,
and then it should only comprise a small percentage of the total
diet.”
-- Mary Lou Peter, KSU Extension
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The Senate voted to confirm former Iowa Gov. Tom Vilsack as the 30th
USDA Secretary on Tuesday. Sen. Tom Harkin, chairman of the Senate Ag
Committee said, “Tom Vilsack's confirmation today signifies new
leadership for the USDA, but also a new focus on the issues important to
all Americans, including nutrition, conservation, energy and promoting
the rural economy."
Vilsack is beginning to put his team in place with John Norris, chief of
staff; Carole Jett, deputy chief of staff; and Dave Lazarus, special
assistant.
The Senate also confirmed seven other nominees: Steven Chu, Secretary of
Energy; Hillary Clinton, Secretary of State; Arne Duncan, Secretary of
Education; Janet Napolitano, Secretary of Homeland Security; Peter
Orzag, Director of Office of Management and Budget (OMB); Ken Salazar,
Secretary of Interior; and Eric Shinseki, Secretary of Veteran
Affairs.
-- P. Scott Shearer, Washington, D.C.
correspondent
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The Samuel Roberts Noble Foundation Ag Division will host an
educational workshop on prescribed burning Jan. 27 at the Noble Pavilion
and Lake Murray State Park in Ardmore. The workshop is open to the
public but attendees must pre-register.
The morning session will feature presentations on topics ranging from
legal considerations and techniques for managing fire to environmental
considerations and prescribed burning plans. Following lunch, a
demonstration burn will be held at the Lake Murray Field Trial Grounds
(weather permitting), which will include an explanation of equipment
used during a controlled burn.
Registration is $15, which includes lunch. For more info or to
pre-register, visit www.noble.org/agevents, or
call 580-224-6411.
-- Noble Foundation release
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