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The ethanol industry is struggling, despite the billions in
subsidies and a government-guaranteed market. Those conditions along
with record-high oil prices generated a flood of investment into the
industry that many likened to an old-fashioned gold rush.
-- Click on headline to read the rest of this
story by Troy Marshall
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 Good news for beef exports
The U.S. Meat Export Federation reported that for 2008, export volumes
increased 28% to nearly 2.2 billion pounds, while values jumped 38% to
$3.6 billion. Canada and Mexico were the top two destinations for U.S.
beef. Get to know your checkoff — learn
more about how your investment continues to build beef demand around
the world.
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USDA is strongly indicating changes to the mandatory country of
origin labeling (MCOOL) regulations, or at least changes in the
interpretation of the rule. USDA Secretary Tom Vilsack said this week he
intends to ask packers to label each meat package with the country in
which the animal was born, the country in which it was raised and the
country in which it was slaughtered. He’s also seeking to change the
window for ground-meat sourcing from 60 days to 10 days.
Due to the declining economy and concerns about American protectionist
policies, tensions have already increased around the globe; the
likelihood of increased trade wars and disruptions is very real.
While I’m not sure anyone understands the rulemaking process, it
appears Vilsack is seeking agreement from the packing industry to these
changes; it’s not going to be an easy sale. Failing to get agreement,
we may be faced with yet another rulemaking process.
But it appears the changes may be inevitable. The real question is
timing, and when we actually see full implementation.
On related notes: With the strength of the Canadian dollar, higher feed
costs, and concerns about MCOOL, the Canadian cattle inventory declined
for the fourth-straight year in 2008. Canadian beef-cow numbers were
down 6.6% to 4.655 million head.
Meanwhile, U.S. beef exports rose by 34.8% in 2008 in volume and by
40.3% in value. We are now within a half-billion lbs. of the 2003
pre-BSE levels. Mexico and Canada are our top two beef customers,
respectively, and represent more than half of U.S. export totals in
terms of dollars. However, those purchases could drop sharply in 2009
depending on the course of trade retaliation on which Canada and Mexico
embark.
-- Troy Marshall
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I recommend that everyone takes a look at the recent checkoff-funded
research study entitled “U.S. Beef Demand Drivers and Enhancement
Opportunities” (see “Consumers Seek Convenience, Nutrition,
Safety” elsewhere in this issue). It was conducted by Kansas State
University’s James Mintert and Ted Schroeder, and Michigan State
University’s Glynn Tonsor.
-- Click on headline to read the rest of this
story by Troy Marshall
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 “Our
Customers Speak”
Gardiner Angus Ranch Video Series .
This video series was developed after years of listening to customer
concerns and responding to questions regarding the use of data
management and science and technology in making genetic evaluation
decisions. Topics range from “best practice” breeding, managing
input cost and using data to improve carcass quality.
The video series is ongoing and new videos will be launched
periodically. In the future, beef industry leaders will also be featured
discussing timely industry issues or responding to relevant concerns
from Gardiner customers.
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The U.S. beef sector finished 2008 strong with excellent December
export performance, reports USDA’s Foreign Ag Service.
- Beef exports totaled 98.6 million lbs., 15.6% higher than in
December 2007, with Mexico and Canada the leading destinations for those
exports. Shipments to Korea amounted to 7 million lbs., down from its
monthly high of 36.7 million lbs. in July. The value of December beef
exports was 18.1% higher than in 2007.
- In all, 2008 beef exports finished 34.8% higher than one year ago
and back to within 450 million lbs. of the pre-BSE levels of 2003.
Mexico was the largest customer for U.S. beef at just under 500 million
lbs., 11% higher than last year; Canada was the second largest customer
for U.S. beef. The big growth markets in percentage terms were Japan and
Korea, primarily because of the very low level of exports there in 2007.
- 2008 beef export value was 40.3% higher than last year, indicating
an improvement in export pricing. Beef variety meat exports ended the
year 16.5% higher with Mexico remaining far and away our largest variety
meat customer.
The U.S. totaled $3.62 billion in beef, beef variety meat, and processed
beef-product exports in 2008. The top 10 destinations included: Mexico
($1.399 billion), Canada ($716 million), Japan ($383 million), Korea
($294 million), Vietnam ($131 million), Taiwan ($128 million), European
Union-27 ($111 million), Egypt ($93 million), Russia ($90 million), and
the Caribbean ($79 million).
Of the top 10, every country other than Japan and Korea imported a new
record-level of U.S. beef and beef products in 2008. The top 10
countries account for 95% of total U.S. beef export dollars, with Mexico
and Canada accounting for 58% of the total.
-- CME Group Daily Livestock Report and NCBA
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Farmers worldwide continue to enthusiastically embrace genetically
engineered (GE) crops, with 309 million acres planted in biotech
worldwide in 2008 compared to 282 million in 2007.
That’s according to a report released by the International Service for
the Acquisition of Agri-Biotech Applications (ISAAA) entitled “The
Global Status of Commercialized Biotech/GM Crops: 2008.” Find it at
www.isaaa.org.
The report says a record 13.3 million farmers in 25 countries are using
ag biotechnology today (compared to 12 million in 2007); 90% (12.3
million) of these are resource-poor farmers in 15 developing
countries.
Sharon Bomer Lauritsen, executive vice president, Food and Agriculture
for the Biotechnology Industry Organization (BIO), issued the following
statement in response to the report's findings: "The ISAAA report
further illustrates what we have known all along, that biotechnology is
a key component contributing to sustainable agriculture. Ag biotech
provides solutions for today's farmers in the form of plants that yield
more per acre, resist diseases and insect pests and reduce farmers'
production costs, and inputs.”
More than 154 million acres of biotech crops were planted in the U.S. in
2008, up from 143 million in 2007, with the primary crops being: corn,
cotton, canola and soybeans, but also squash, papaya, alfalfa and sugar
beets.
"At a time when the United States and the world are looking for
science-based solutions to help feed a growing population, agricultural
biotechnology is able to deliver heartier crops that produce more food,
often in areas with less-than-perfect growing conditions,” Lauritsen
says.
"Ag biotechnology also has environmental benefits because biotech crop
varieties require less cultivation and fewer pesticide applications,
thereby saving fuel and reducing carbon dioxide emissions into the air.
This also improves soil health and water retention.”
-- Farm Press
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“Yeah, the ‘perp’ might have a greasy chin.” Giving new
meaning to the phrase “eat and run,” a burglar broke into a home in
Peoria, IL and the only apparent results were a purloined steak and a
messy kitchen.
Police report a man returned to his home to find someone had broken in
via a window, but nothing was missing – except a $6 steak he’d left
out to thaw. He also found dirty dishes in the sink, a dirty skillet on
the stove, and used paper towels on the counter. Police believe the
intruder cooked and ate the steak.
-- Associated Press
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USDA Secretary Tom Vilsack says he’s prepared to allow the country
of origin labeling (COOL) final rule go into effect as scheduled on
March 16. However, he believes there needs to be changes in the rule and
would like industry to voluntarily adopt these changes.
The areas include labeling of:
- Meat from mixed-origin livestock – product should be labeled
with the country where each production step takes place.
- Process products – cooked, cured, smoked, fried, etc. products
should be labeled. These products are currently exempt from the final
rule.
- Ground product – currently a country may be listed on the label as
long as the product has not been out of inventory for more than 60 days.
Vilsack would like this changed to 10 days.
USDA says it will follow closely how the rule is implemented by industry
and then determine if changes need to be made to the final rule. Vilsack
plans to send letters to industry outlining his suggestions.
-- P. Scott Shearer, Washington, D.C.
correspondent
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The California State University, Chico College of Agriculture will
hold its 18th Beef Day Feb. 21 from 8 a.m. to 3 p.m. at the Ag Teaching
and Research Center (University Farm). Registration is at 8 a.m.,
followed by workshops, a tradeshow and a tri-tip lunch.
Co-sponsored by the College of Agriculture, UC Cooperative Extension
(UCCE), Young Cattlemen’s Association and the California Beef
Improvement Association, cost is $12/person and $8/student.
For more info, contact Dave Daley at ddaley@csuchico.edu
or at 530-898-4539.
-- California State University-Chico news release
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Total cattle inventories in Canada as of Jan. 1 were 13.180 million,
5.1% fewer than a year ago, according to Statistics Canada. Canadian
cattle inventories have declined for four consecutive years and current
inventory levels are down 12.5% from the peak of the last cycle in 2005.
Canadian beef-cow inventories were reported at 4.655 million, 6.6% lower
than a year ago.
The magnitude of the decline in Canadian beef-cow numbers was surprising
and reflects the extremely difficult conditions under which Canadian
producers had to operate in 2008, according to the CME Group Daily
Livestock Report. Those tough conditions included a strong currency,
very high feed costs and implementation of mandatory country of origin
labeling (COOL) in the U.S.
-- CME Group Daily Livestock Report
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for Certified Angus Beef® brand products and more than $200 million
in grid premiums have been returned to producers. Angus, the power of
people and progress. www.angus.org
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Colorado State University and the University of Nebraska-Lincoln
(UNL) are teaming up to host the “Emerging Opportunities in Cattle
Feeding” roundtable, March 26 at the UNL Panhandle Research and
Extension Center in Scottsbluff.
Discussion will center on phosphorus and how cattle feeders can
cost-effectively meet cattle requirements for the mineral, plus how
carbon credits may or may not apply to cattle feeding.
Cost is $40/person preregistered and $50 at the door. For more info,
contact Jack Whittier at 970-491-6233 or jack.whittier@colostate.edu;
or Nancy Weiss at 970-491-7604 or nancy.weiss@colostate.edu.
-- University of Nebraska release
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A comprehensive study by ag economists at Kansas State University
(KSU) and Michigan State University (MSU) found that nutrition, safety
and convenience are important factors in shoppers´ attitudes toward
buying beef. Price is also a factor but modest price fluctuations have
small discernable impacts on beef demand.
-- Click on headline to read the rest of this
story by Mary Lou Peter
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The Public Lands Council (PLC) and National Cattlemen's Beef
Association (NCBA) lauded the Environmental Protection Agency’s (EPA)
decision to deny a petition for suspension and cancellation of M-44
Sodium Cyanide Capsules & Sodium Fluroroacetate (Compound 1080)
Livestock Protection Collars (LPC).
The groups say that annual cattle and sheep losses to predation are
estimated to be $18.3 million and $51 million, respectively. These
numbers could easily double or triple in the absence of effective
predation management tools, the groups say.
“There are significant restrictions in place to prevent threatened or
endangered species from exposure to M-44s and LPCs. EPA stated that
M-44s and LPCs do not pose a significant risk to non-target wildlife and
there is no substantive reason to ban registration and use of these
predator control methods,” the groups say in a release.
“In addition to protecting livestock, these predator control methods
aid public safety, combat the spread of disease and reduce wildlife
conflict while creating a sustainable balance between people and
wildlife.”
-- Public Lands Council
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The House Ag Committee passed the “Derivatives Markets
Transparency and Accountability Act of 2009,” which increases the
transparency and strengthens oversight of futures, options and
over-the-counter (OTC) markets.
Rep. Collin Peterson (D-MN), chairman of the House Ag Committee said,
“The urgency to fix the problems in regulated and unregulated futures
markets is magnified by the credit crisis and the collapse of some of
America’s largest financial institutions: i.e. entities that were
heavily involved in the trading of off-exchange credit derivatives like
swaps contracts. Their failures have put the American taxpayer on the
hook, so just sitting back and doing nothing is not an option.”
Provisions included in the Derivatives Markets Transparency and
Accountability Act would:
- Require all prospective OTC transactions to be settled and
cleared through a Commodity Futures Trading Commission (CFTC)-regulated
designated clearing organization, unless exempted by CFTC in accordance
with specified criteria. In some cases, the clearing requirement can be
met through a Securities and Exchange Commission (SEC)-regulated
clearing agency or a properly regulated foreign clearinghouse.
- Give CFTC the authority, with the President’s consent, to suspend
naked credit default swap trading whenever a SEC short-selling
suspension order is in effect.
- Close the so-called “London Loophole” by requiring foreign
boards of trade to share trading data and adopt speculative position
limits on contracts that trade U.S. commodities similar to
U.S.-regulated exchanges.
- Require CFTC to set trading limits for physically deliverable
commodities, in order to prevent excessive speculation.
- Empower the CFTC to criminally prosecute people who violate
commodities legislation.
- Limit eligibility for hedge exemptions to bona-fide hedgers.
- Improve transparency by requiring CFTC disaggregate and separately
report the trading activity of index funds and swap dealers in
agriculture and energy markets.
- Call for new, full-time CFTC employees to enforce manipulation and
prevent fraud.
- Authorize CFTC to take corrective action if it finds disruption in
OTC markets for energy and gas.
-- P. Scott Shearer, Washington, D.C.
correspondent
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According to USDA, U.S. distillers grains exports nearly doubled
last year from 2.36 million metric tons in 2007 to 4.51 million metric
tons in 2008. The top markets for distillers grains were Mexico (26% of
total exports), Canada and Turkey.
-- P. Scott Shearer, Washington, D.C.
correspondent
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Farmland values declined in fourth-quarter 2008 amid weaker farm
income and softer non-farm demand, according to the Federal Reserve Bank
of Kansas City’s fourth-quarter survey of ag credit conditions.
Even though farmland values declined, they remained above 2007 levels,
the survey reported. What’s more, the majority of the 254 bankers
surveyed in the seven-state Fed district expect farmland values to hold
steady in the coming months.
Weaker farm incomes, reflecting lower crop and livestock prices, have
eroded ag-credit conditions and cut capital spending. Bankers expect
larger contractions for both farm income and capital spending in 2009.
In addition, softer demand for real estate and capital purchases was
reported, and an increase in operating loans for both the crop and
livestock sectors is expected.
Visit www.kansascityfed.org/agcrsurv/agcrmain.htm
for the complete report.
-- Kansas City Fed release
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McDonald’s Corp., the world's largest fast-food chain, has cut
some prices by a third in China where a once-booming economic growth has
slumped amid the global financial crisis. The firm says half of its
products are now selling at the same level or lower than 10 years
ago.
McDonald’s is among a growing number of Chinese retail firms slashing
prices to lure back customer dollars in an economy that has displaced
millions of workers. China has been one of the fastest growing markets
for McDonald's. But China's economic growth fell to 6.8% last quarter,
dragging down the pace of expansion for all of 2008 to a seven-year low
of 9%.
At the same time, however, the fast-food giant reaffirmed its plans to
open 175 restaurants and hire 10,000 staff in China this year. It
currently operates 1,050 restaurants and employs more than 60,000
workers in China.
-- Reuters
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The tornadoes that ripped through Oklahoma last week are yet another
stark reminder that everyone needs to be prepared for disasters, says
Glen Selk, Oklahoma State University Extension livestock specialist.
If you are a cattle producer, being prepared means record keeping and
animal ID. "Cleaning up after a severe storm is difficult enough. Losing
valuable cattle brings additional financial hardship to the
situation,” Selk says.
Cattle loss can occur in several scenarios. Livestock may be killed,
lost or stolen during a stormy situation. An accurate accounting of
livestock and property is essential to a cattle operation's storm
preparedness. “Keep a current inventory of all animals and the
pastures where they are located. Individual animal ID tags on all
animals have several other purposes, but can become extremely valuable
if cattle become scattered or even stolen,” he says.
“If the cattle inventory records are computer-based, consider having a
back-up copy stored at a neighbor's or a relative's house. Even
handwritten records stored in more than one location may become valuable
if the unthinkable (loss of home or outbuildings) occurs. These records
will be very important when insurance claims need to be made, or if
proof of ownership is required to reclaim livestock misplaced by the
storm."
For more on disaster preparedness, go to texashelp.tamu.edu.
-- Ron Hays, Radio Oklahoma Network
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All bulls are not created equal. That simple truth, says Roger
Ellis, Colorado State University Extension veterinarian, has created
management considerations for cattlemen ever since the first rancher
tried to manipulate the reproductive process in his cattle. In short,
some bulls are high performers and some are slackers. Unfortunately,
even today, with all the advanced management practices available to help
you gain efficiency in your breeding program, there still isn't a good
way to tell the difference.
-- To read the rest of this story by Burt
Rutherford, go to:
beefmagazine.com/genetics/0201-bullmanagement-success-key/
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A recent Iowa State University (ISU) study found that in times of
high feed costs, like those of 2007, the positive economic impact of
pharmaceutical technologies increased from $430/beef animal to
$524/head. The study by ISU researchers John Lawrence and Maro Ibarburu
is an update of a 2005 analysis that measured the economic impact of
pharmaceutical technologies commonly used in beef production –
parasite control products, implants, ionophores and beta-agonists –
using current feed and cattle prices.
In the initial study, performance data from university studies conducted
over the past 20-25 years were combined using meta-analysis, a widely
accepted technique for combining empirical data. The performance data
were converted to dollar impact using budget data from 10 universities
in various U.S. regions. The combined economics indicate the value of
these technologies increased by 22% when factoring in the higher feed
costs of 2007.
"Since most of these pharmaceutical technologies improve feed efficiency
and/or increase pounds of gain, it should not be surprising that they
have a greater impact during times of high feed costs,” Lawrence says.
“While the market price for calves and feeder cattle going into the
feedlot has decreased as feed costs have increased, the price decline
would have been larger if stocker operations and feedlots did not use
efficiency-improving technologies."
Lawrence also analyzed the results using the Food and Agricultural
Policy Research Institute (FAPRI) model of U.S. agriculture to estimate
the impact on beef production, price and trade if these pharmaceutical
technologies weren’t used in 2007. The model indicates the U.S beef
industry would have seen:
- 14% smaller calf crop
- 19% reduction in total beef produced
- 11% increase in retail beef prices
- 9% decrease in beef consumption
- 247% increase in beef imports
A segment-by-segment analysis showed that high feed costs and changes in
calf prices associated with the bioeconomy era increased total per-head
costs for the cow-calf producer by 21% and feedlot costs per head by 7%.
The 9% reduction in calf prices more than offset the 23% increase in
feed costs for stocker operations, resulting in a 5% net decrease in
total per-head costs.
The complete study can be found at: www.econ.iastate.edu/LawrencePaper.pdf.
-- Growth Enhancement Technology release
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Is it time you finally fed out your calves? Though there's no sure
thing, the numbers point to a better profit potential in retaining
ownership of your calves through the feeder-cattle stage or even the
feeding cycle. And if your genetics are good, high-quality carcasses may
give you an even better profit.
-- To read the rest of this story by Larry
Stalcup, go to: beefmagazine.com/markets/marketing/0201-consider-retained-ownership/
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The Economic Research Service (ERS) is forecasting that net farm
income in 2009 will be $71.2 billion, a 20% drop ($18.1 billion)
compared to 2008. However, 2009 will still be 9% above the previous
10-year average of $65 billion.
Net cash income is forecast at $77.3 billion, down 17% ($16.1 billion)
from 2008 but 7.6% above the 10-year average of $71.8 billion.
Total farm expenses are estimated to decrease for the first time since
2002. However they will still be 9% higher than 2007, which was $20.5
billion. Government payments are forecast to decline in 2009 to the
lowest level since 1997.
-- P. Scott Shearer, Washington, D.C.
correspondent
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