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Friday, August 8,2008

Beef Bits

by WLJ
Experts doubt meat/cancer link A panel of government, university and industry experts speaking at a leading food safety conference last week cast serious doubt on widely reported claims of a meat and cancer connection. David Klurfeld, Ph.D., national program leader in human nutrition at USDA, provided an extensive critique of the 2007 World Cancer Research Fund (WCRF) report which made dramatic claims about a "convincing link" between red and processed meat and colorectal cancer. According to Klurfeld, the systematic literature review said that, "Overall, mechanisms explaining the data linking meat intake and colorectal cancer are far from plausible biological mechanisms." He also said the literature review found a statistically significant 26 percent protective effect against rectal cancer for the highest meat consumption level—a finding not referenced in the final WCRF report. North Dakota to close beef plant Bismarck, ND-based North Dakota Branded Beef Inc. will close its processing plant in Harvey, ND, for financial reasons and because it now has alternatives to sourcing beef products raised and processed within the state, according to KFYR TV in Bismarck. "Now we have another option that is opening up, that will be to be working with the New Rockford Dakota Farms North Dakota Natural Beef slaughter facility in New Rockford, ND, and then the processing facility that they’re going to be opening up in Fargo, ND," company owner Juanita Braun told KFYR TV. According to the company’s Web site, the two-year-old plant processed fewer than 100 animals per day. Buyers hit spot market for meat With input costs increasingly unpredictable, meat suppliers are balking at locking in prices with long-term contracts with foodservice companies, according to a report in The Wall Street Journal. Where six months to a year was a typical contract length just a year or so ago, suppliers such as Tyson Foods Inc. and Pilgrim’s Pride have brought that down to a mere 90 days and have added clauses for additional fuel and feed costs. Restaurant companies are responding by rolling the dice with the spot market for meat and other commodities rather than locking in prices, the Journal reported. Even chains such as Sonic and Buffalo Wild Wings are buying their key ingredients, beef and chicken, on month-to-month contracts or paying floating rates. U.S. beef helps JBS margins JBS S.A., parent of Greeley, CO-based JBS-Swift & Co., said earlier this month that results for its U.S. unit helped offset the fourth straight quarterly loss overall for the Brazilian beef producer. The Sao Paulo, Brazil-based company reported a net loss of $233.4 million for its second fiscal quarter, ended June 30, on expenses related to U.S. acquisitions and currency losses. The loss compares with net income of $24.8 million for the same quarter a year ago. Sales for the quarter, meanwhile, increased more than six-fold, to $4.57 billion, mostly due to the acquisition of Swift & Co. in July 2007. Beef operations earned $132.9 million on sales of $2.63 billion in the second quarter, a turnaround from a loss of $900,000 on sales of $1.98 billion for the business in the first quarter of 2008. Whole Foods reports earnings slide Whole Foods Market Inc., which sells organic and naturally raised meats as part of its broad natural foods offering, reported last week that its third-quarter net income dropped more than 30 percent due, in part, to the cost of acquiring Wild Oats and a tough economy that is hurting consumer spending. Whole Foods earned $33.9 million, or 24 cents a share, for the three months ending July 6, down from $49.1 million, or 35 cents a share, in the same quarter last year. Whole Foods also sharply cut its outlook for 2009, saying it now expects sales growth of 6 percent to 10 percent for the year and it said its comparable-store sales are expected to grow 1 percent to 5 percent, down from the previously anticipated growth of 7.5 percent to 9.5 percent. The company cut all capital expenditure budgets related to new stores by 50 percent. Producers buy Canadian plant Natural Prairie Beef Inc. announced last week that it has purchased a former Winnipeg, Manitoba, meat processing plant and begun to upgrade and redevelop it to produce premium-branded Manitoba beef. Following a new business model for the Canadian beef industry, the producer-owned company will target niche markets and own more parts of the value chain from gate-to-plate. The first phase, which is expected to begin operations by the end of 2008, will employ 15-20 people and focus on processing value-added beef products for local markets. The company plans to renovate and upgrade the plant completely over the next two years to create a federally-inspected beef slaughtering and processing facility that will market premium beef products across North America and into Asia and the European Union. The plant is expected to employ about 80 people when complete.

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Friday, August 1,2008

Carbon credit program generates $8 million for farmers and ranchers

by WLJ
More than 2,300 farmers and ranchers will receive checks in the mail soon for capturing and storing carbon dioxide in their soil through the National Farmers Union Carbon Credit Program. National Farmers Union (NFU) President Tom Buis said total earnings from no-till and seeded grassland offsets generated $5,876,825 in income for 2006 and 2007 practices. To date, $8 million has been earned by producers since the voluntary program began in late 2006. "As conservation leaders, we know agriculture can play an important part in offsetting greenhouse gases in our environment today," Buis said. "Now, through innovative soil stewardship activities and the carbon offsets market through the Chicago Climate Exchange (CCX), producers are being rewarded for their environmental stewardship." This pool of enrollments sequestered carbon dioxide from 2.8 million acres using no-till cropping practices and by converting cropland to long term grass stands, as in Conservation Reserve Program acres. After third-party verification of the enrolled acres, the tons were registered and sold on CCX over the last several months. That amount of stored carbon dioxide offsets the estimated annual emissions of 320,000 automobiles. "We believe the role agriculture and forestry can play in combating global warming is enormous. The National Farmers Union and CCX share a common vision in creating market-based incentives that promote long term sustainability of America’s farmland. We are honored and proud to work with them through efforts of NFU to build this environmental market," said Dr. Richard L. Sandor, chairman and CEO of CCX. NFU was approved as an aggregator for CCX to pool and market carbon offsets in 2006 and has since become one of the largest providers of agricultural soil carbon offsets to CCX. CCX is the world’s first greenhouse gas emissions registry, reduction and trading system, trading more than 86 million tons of carbon offsets to date. Over the next three to five years, these farmers and ranchers will receive annual payments based on the acres they have enrolled and the price of the offsets traded. In addition to no-till and seeded grass offsets, credits can also be earned with prescribed grazing on native rangeland, tree planting projects, and methane capture projects. Additional pools of these offsets will be marketed in the coming months, he said. While enrollment is ongoing, the next pool deadlines will be Aug. 1 for the prescribed rotational grazing offsets and Aug. 15 for no-till/seeded grass offsets. The program is entirely voluntary, but contracts are considered legally binding once signed. The NFU Carbon Credit Program is available in all states where various offset projects are determined to be eligible by CCX. More information on the program can be found at www.nfu.org. — WLJ

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Friday, August 1,2008

No penalty-free early-out for CRP acres

by DTN
USDA will not allow landowners to take acres out of the Conservation Reserve Program (CRP) early unless the landowner agrees to pay the normal early-out penalties for breaking a contract, Agriculture Secretary Ed Schafer said last Tuesday. Schafer said the decision not to allow early out "strikes the best possible balance between supporting programs that protect our natural resources and meeting the nation’s need for grain production." The decision effectively means farmers wanting to void a CRP contract for 2009 crops would have to pay the USDA penalties to do so. In choosing to stand pat on CRP, Schafer said USDA completed "a very thorough review" of recent crop reports, weather conditions, commodity prices, and the likelihood of more land going into production. All of those factors allowed USDA to stand pat when it came to the penalties. "We realize we are in a situation that can change rapidly and quickly, but at this point in time, we are comfortable with the numbers we are seeing coming out," Schafer said. The impact of Midwest floods earlier this summer does not appear as severe as earlier thought. USDA reports show the country should potentially produce the second-largest corn crop on record, with an anticipated harvest of almost 79 million acres, he said. "We don’t feel the corn and soybean crops are going to be as bad as we originally feared," Schafer said. The decision not to allow early out of CRP comes less than a week after a federal judge limited a special USDA program allowing summer and fall haying and grazing on CRP acres. The federal judge determined USDA could not make such significant changes to the CRP program without first doing an environmental impact statement as required by federal law. Still, some agricultural groups and commodity end-users have been clamoring for USDA to tap the CRP program for more production acres. Conservation groups, wildlife groups and some farm organizations have argued the other way, maintaining the CRP is a conservation program and using that land for production could impact the environment and may not provide enough quality acres to alter commodity production. "There are a lot of groups that feel strongly about this issue either way," Schafer said. "So if you want to count that as pressure, certainly we have heard the message on both sides of the equation here. But, you know, the reality is we have acres that are coming out of the program because of expiring contracts." USDA reports there are now 34.7 million acres in the CRP, down from about 36.7 million acres last year. Schafer said another consideration was that the new farm bill maxes out the program authorization in future years at 32 million acres. Schafer pointed out that as many as 9.3 million acres could potentially come out of the program between now and fall 2010. In late September, contracts for 1.1 million acres are expected to expire. The potential expired acres jump to 3.8 million in fall 2009, and 4.4 million acres in 2010. "So, large blocks of land will be available for other purposes if landowners choose to pursue them," Schafer said. The penalty for canceling a contract before it expires requires a landowner to pay back every single dollar received under that contract, including cost-share money and rental payments, plus interest. There’s also an additional penalty of 25 percent of one year’s rental payment. High commodity prices and land values have prompted more landowners to take acres out of CRP early and put the land into production, despite the penalties. Over the past 19 months, landowners have paid penalties to pull out 288,726 acres from CRP, which included a high mark of 36,890 acres last May. Senate Agriculture Committee Chairman Tom Harkin, D-IA, one of the architects of the CRP program in the mid-‘80s, stated last week he thought Schafer made a sound decision not to approve early outs. Harkin had complained that allowing early outs now would be unfair to producers who chose earlier to pay the penalties necessary to get out of the program. He said a more gradual transition would be a more sound decision "for conservation and everyone with an interest in CRP." "Today’s decision also protects the public’s investment in conservation paid for through years’ worth of CRP payments," Harkin stated. "We already expect that millions of acres will exit CRP over the next few years as contracts expire and landowners choose to return the land to cropping." — Chris Clayton, DTN

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Friday, August 1,2008

Nebraska and Iowa producers promote U.S. beef in Tokyo

by WLJ
Two beef producers from Nebraska and Iowa took part in a U.S. Meat Export Federation (USMEF) U.S. Beef Checkoff-sponsored promotion, made possible through the financial support of the Nebraska Beef Council and the Iowa Beef Industry Council, that helped boost weekend sales of U.S. beef tenfold at a key store in Japan’s largest retail grocery chain. U.S. beef producers Bill Rhea of Arlington, NE, the Nebraska Beef Council’s treasurer, and Scott Niess of Osage, IA, and a member of the Iowa Beef Industry Council’s board of directors, witnessed and participated in a large-scale USMEF U.S. beef promotion for Japanese consumers at an Ito Yokado supermarket in Tokyo on July 12. Funded by the Nebraska and Iowa state beef councils, the U.S. beef retail promotion at four of Japan’s major supermarkets—Aeon’s Max Valu outlets, Ito Yokado, Daiei and York Benimaru—were part of USMEF’s continuing campaign to rebuild Japanese consumer confidence in U.S. beef by reestablishing its presence in supermarkets and reacquainting target consumers with its positive attributes—taste, consistency and value. "It is a great opportunity to see this U.S. beef promotion," said Rhea, "and to talk with consumers and buyers in Japan." USMEF is conducting a series of U.S. beef storefront events in its July-August "Beef de GENKI" (energy from beef) campaign at the four supermarket chains. This campaign is tied to USMEF’s strategic "We Care" theme and is targeted toward families with children to show that "We Care" about their health and vitality so they can enjoy life to the fullest. The campaign aims to increase sales, enhance consumer perception of U.S. beef, and rebuild trust by handing out samples, educating customers through information panels, and entertaining families with games. Since Japan reopened its market, the main supermarket chains have started offering U.S. beef one by one. Aeon, Japan’s largest supermarket chain, was the last to do so in December 2007. Its supermarkets have a reputation for high quality products at fair prices. One of the more innovative retailers, Aeon allows its customers to trace the origin of its domestic beef through in-store computers and cell phones. The U.S. producers also joined in the fun by participating in USMEF games with Japanese families. Their particular outlet increased its weekend U.S. beef sales tenfold, selling more than 500 U.S. steaks. The presence of U.S. ranchers showed consumers the real "face of the industry" and allowed them to gain a much deeper understanding of the Japanese market through a market debriefing, meetings with U.S. beef importers/buyers, and a visit to a Japanese Wagyu processing facility. "The customers’ reaction to U.S. beef is very positive," said Ito Yokado’s senior buyer. "This event proved very effective and I’d like to hold it again and expand it." "One of the things that is pretty remarkable about this whole trip," said Niess, "was that it was the first time that the Iowa Beef Industry Council and the Nebraska Beef Council came together in a joint effort to promote beef in Japan. And anyone that we talked to that had tasted or had sold American beef is wanting more—wanting more availability, wanting more volume, to be able to sell more American beef." Besides enthusiastic responses from consumers and supermarket buyers, USMEF garnered even more publicity for U.S. beef by securing articles in three major Japanese publications: Meat Journal, Chikisan Nippo and Nikkei. Chikusan Nippo The Meat Journal jointly quoted Rhea and Niess: "Japan is an important partner for the U.S. beef industry. We visited several retailers and distributors in Japan this time, and they want American beef. We wish the current problems, including age limitation, will be cleared and beef exports to Japan will increase." — WLJ quoted both Bill Rhea—"We’ve received very good reactions from consumers, and felt that U.S. beef was trusted by them,"—and Scott Niess—"Japanese consumers willingly tasted American beef with smiles. The safety, healthiness and reasonable price are the best attributes of American beef products."

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Friday, August 1,2008

Evocative, emotive "marbling"

by WLJ
To start a lively discussion amongst a group of cattlemen, just utter the word "marbling." It’s been called one of the most emotive words in the beef industry. From those who dismiss it as unimportant to the staunch defenders, opinions will vary. A presentation at the American Society of Animal Science annual meeting earlier this month focused on the science behind the word. Larry Corah, vice president of Certified Angus Beef LLC, shared research related to the value of marbling. "Nearly all beef scientists and connoisseurs indicate that there are three key attributes to beef palatability: tenderness, juiciness and flavor," he said. If it’s not met, tenderness is the most important. "It is clearly a threshold trait," Corah said. "The good news it that most researchers agree the beef industry has made great progress in both understanding and improving tenderness issues." Studies show marbling accounts for between 8 percent to 18 percent of the variation in tenderness, but Corah said it’s more significantly tied to juiciness and flavor. Two separate multi-city studies proved that when tenderness was held constant, consumers buy meat based on flavor. "Data out of Texas Tech University tells us that flavor is 2.5 times as important as tenderness when it comes to consumer acceptability," he said. "The taste they look for is a direct result of at least 80 to 90 days on a high-concentrate diet." The consumer preference for marbling isn’t isolated from the market price of beef, said Corah. "In the last 10 years, market differentiation has developed as a result of the demand for enhanced beef quality," he noted. "Colorado State University studies show that if beef tastes great, people are not only more likely to buy it, but more likely to pay more for it." That’s why over 40 percent of all fed cattle are marketed on quality-based grids, and those that make Premium Choice add more than $500 million per year to the industry. "The research not only says that marbling is important, but it’s also complicated," he said, noting factors like genetics, nutrition, breed and environment. "I would argue that there have been three major technologies in the past 50 years in our business: implants, ionophores and beta-agonists," Corah said. None have a positive effect on marbling, and a few—aggressive implants and Beta-II agonists—can be detrimental. "We really need more research to understand the mechanism in which these management practices affect marbling," he suggested. "The National Beef Quality Audit says we’re leaving $26.81 per head on the table in lost quality. That’s a lot. "As we continue to make great strides in tenderness, the ultimate driver for beef demand will be flavor," Corah predicted. — WLJ

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Friday, July 25,2008

42 Letter to the editor

by D. "Bing" Bingham - contributing columnist
Dear WLJ Editor, This letter is in response to the ‘Guest Opinion’ appearing in the July 7, 2008, issue of the Western Livestock Journal stating "Split-state status still wrong for Montana cattle industry" by Steve Roth, president, Montana Stockgrowers Association. As a cattle producer in a state that was granted split-state status in its fight to eradicate bovine tuberculosis (TB) in its deer herd, I wholeheartedly agree with the position of the Montana Stockgrowers Association. Michigan has endured a tremendous economic cost and an endless managerial hardship associated with this disease for over 10 years and it is my opinion that having split-state status is one of the reasons that we are no closer to the end of this problem than when the disease was first discovered. Split-state status lessened the urgency of eliminating the disease by the Michigan Department of Agriculture, the Michigan Department of Natural Resources, the United States Department of Agriculture, some in the livestock community, and, of course, the politicians. It effectively shifted the urgency and strong desire to eradicate TB in the deer to only the beef and dairy producers in the affected counties. Although I live in a region of the state that was granted TB free status, I am still shut out of our traditional markets because the state veterinarians in the states where our feeder cattle were marketed are not confident that Michigan’s policy of managing the disease by containment will safeguard their state’s livestock industry, a position with which I agree. The officials responsible for disease control refuse to take the necessary step of eliminating all of the deer in the affected counties. The importance of this step was expressed well when even Baxter Black weighed in on Michigan’s problem and in a rare serious column, stated that only by eliminating the deer in the affected counties could TB be eradicated. Such a measure is said to be impossible, but hunters nearly exterminated the bison on the Great Plains in a few short years. Had the deer been eliminated early after TB’s discovery, the region would now be repopulated with healthy deer. Let us hope that the state and national officials in charge of human and animal health show the leadership required to eradicate brucellosis in the Greater Yellowstone Area and bovine tuberculosis in the states that have infected deer. Let us also pray that they do it before the host wildlife of these diseases spread it to other states and countries. For those who don’t feel this is a possibility, I suggest you ‘Google’: New Zealand bovine tuberculosis. Sincerely, Clarence Wilbur

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Friday, July 25,2008

Cow size—Effects of cow size on pasture management

by Kris Ringwall, North Dakota State University
Cow size—Effects of cow size on pasture management The effect of cow size and expected production from pasture management directly impacts expected outcomes that translate into income. This relationship was discussed in recent BeefTalk articles. A drought, at least in western North Dakota, initiated the discussion. The Dickinson Research Extension Center (DREC) established two different groups of cattle based on body weight, calculating inputs and potential outcomes. The two groups (herds) of cattle were weighed. The first herd had 52 cows that averaged 1,216 pounds (856 to 1,395 pounds) and the second herd was 50 cows that averaged 1,571 pounds (1,350 to 1,935 pounds). Since not all of these cows had mature records in the center’s data system, data from all the cows was added. Mature cow records were allotted to 100-pound increments. The production potential based on "percentage of cow weight weaned" was calculated for the mature cows. Lee Manske, DREC range scientist, calculated the expected nutritional pasture needs and expected outcomes from these cows based on production estimates by 100-pound increments of cow weight. For cows that were less than 1,300 pounds, the monthly forage dry-matter intake was calculated at 933 pounds. This required 10.75 acres per cow per grazing season in western North Dakota, with a predicted calf weaning weight of 617 pounds. For cows that weighed from 1,301 to 1,400 pounds, the monthly forage dry-matter intake was calculated at 997 pounds. This required 11.49 acres per cow in western North Dakota, with a predicted calf weaning weight of 611 pounds. For cows that weighed from 1,401 to 1,500 pounds, the monthly forage dry-matter intake was calculated at 1,051 pounds. This required 12.11 acres per cow in western North Dakota, with a predicted calf weaning weight of 589 pounds. For cows that weighed 1,501 to 1,600 pounds, the monthly forage dry-matter intake was calculated at 1,101 pounds, requiring 12.68 acres per cow in western North Dakota, with a predicted calf weaning weight of 598 pounds. For cows that were greater than 1,600 pounds, the monthly forage dry-matter intake was calculated at 1,188 pounds, requiring 13.68 acres in western North Dakota with a predicted calf weaning weight of 572 pounds. With that data, I already can hear the e-mails coming. The data does not appear logical. The data means calf gain on pasture weaning weight minus birth weight and then divided by age and then multiplied by grazing days is decreasing as the cow size increases. The larger cows are weaning less percentage of their body weight and producing a smaller calf. Cows less than 1,300 pounds had a pasture gain estimated at 336 pounds. The 1,301- to 1,400-pound cows’ gain was estimated at 332 pounds. The 1,401- to 1,500-pound cows’ gain was estimated at 318 pounds. The 1,501- to 1,600-pound cows’ gain was estimated at 323 pounds, and for cows weighing more than 1,600 pounds, the gain was estimated at 307 pounds. Translated even further, seasonal calf weight gain (pounds) per acre for each cow group would be 31.21, 28.88, 26.23, 25.49 and 22.41 pounds, respectively. Associated individual costs could be calculated as well as the value of calf gain on a per-acre and/or per-cow basis to fine-tune the added value of the smaller cow. As was noted in previous discussions, what is offered here is food for thought. Previous and future managerial decisions can and will determine production potential. There is little we can do to change nutritional requirements, stocking rates and plant biology. How cattle perform given individual production scenarios will vary, but one thing is for sure, do not assume what you see fits. The actual collection of data is essential to guide local changes in management. The application of assumed principles may or may not apply locally. It never hurts to have "more food for thought" for supper. May you find all your ear tags. — Kris Ringwall (Kris Ringwall is a North Dakota State University Extension Beef Specialist, director of the NDSU Dickinson Research Center and executive director of the North Dakota Beef Cattle Improvement Association. He can be contacted at 701/483-2045.)

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Friday, July 18,2008

GIPSA cites JBS/Swift

by WLJ
GIPSA cites JBS/Swift USDA’s Grain Inspection Packers and Stockyards Administration (GIPSA) announced two weeks ago that it had cited Greeley, CO-based JBS/Swift and Company with violations of the Packers and Stockyards Act (PSA). According to a release from GIPSA, the company "inaccurately weighed hot carcasses for the purposes of payment to livestock sellers; used a dynamic monorail weighing system which was not accurate; reported inaccurate hot carcass weights to livestock sellers and paid livestock sellers on those inaccurate hot carcass weights; failed to pay the full purchase price for the livestock purchased within the time period required by the Packers and Stockyards (P&S) Act; and failed to pay the full amount due to livestock sellers for hot carcasses weights." According to one industry source, the allegations regarding inaccurate weights benefitted producers. The weights recorded by company scales were reporting weights in excess of actual hot carcass weights, which were used in turn as pay weights by the company. On June 18, 2008, GIPSA filed a complaint against Swift. If the allegations are admitted, or proven in an oral hearing, Swift may be ordered to cease and desist from violating the PSA and assessed a civil penalty. — WLJ

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Friday, July 18,2008

Truck weight laws leave farmers in the lurch

by WLJ
Truck weight laws leave farmers in the lurch Farmers and ranchers hauling their own goods to market across relatively short distances should not be held to regulations intended for commercial long-haul drivers, according to Mike Spradling, president of the Oklahoma Farm Bureau. During a recent hearing before the House Committee on Transportation and Infrastructure’s Subcommittee on Highways and Transit, the Sand Springs, OK, cattle and pecan producer testified on behalf of the American Farm Bureau Federation (AFBF) regarding the negative impact existing truck weight laws and regulations have on farmers and ranchers. "Current weight limits imposed by the Safe, Accountable, Flexible and Efficient Transportation Equity Act and the Federal Motor Carrier Safety Regulations (FMCSRs) burden farmers and ranchers hauling their products to market," said Spradling. "The American Farm Bureau Federation recommends changes to FMCSA’s rules regarding Commercial Motor Vehicles (CMVs) that will make them more workable for some farmers and ranchers while still maintaining the safety of rural roads." The current federal definition of a CMV is a vehicle with a gross vehicle weight rating or gross combination weight rating of 10,001 pounds or more. It takes very little to reach that threshold. For instance, a heavy-duty pickup truck can often exceed the 10,001-pound weight limit. This makes interstate travel unreasonable by triggering requirements such as a commercial driver’s license and compliance with hours of service rules. "Establishing a national threshold of 26,001 pounds would begin to eliminate the inconsistent and confusing system currently in place and free small farmers and ranchers from being regulated the same as commercial truck drivers," Spradling said. "Concentration within the agriculture industry has reduced the number of grain elevators, cotton gins and livestock markets, forcing farmers and ranchers to drive longer distances, often across state lines, to sell their commodities," Spradling said. Additionally, the lack of uniformity between states causes confusion and frustration, according to AFBF, which has proposed solutions to ease the burden of trucking regulations on some farmers and ranchers. "Farm Bureau believes there are several changes that need to be made to the agency’s current regulations," Spradling testified. "They include exempting border crossings between states with similar weight restrictions, raising the weight limit for CMVs to at least 26,001 pounds, or exempting state border crossings within the 150-air-mile radius currently recognized by FMCSA [Federal Motor Carrier Safety Administration]." — WLJ

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