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Monday, August 29,2005

Worldwide meat consumption growing

by WLJ
World meat production and consumption are continuing to grow. Total meat production reached an estimated 258 million tons in 2004, two per cent higher than the previous year, according to the Worldwatch Institute’s report, Vital Signs 2005. Meat and Livestock Australia (MLA) said the report shows that meat production has more than doubled since the 1970s, due to increased demand and the introduction of large-scale production processes. The UN Food and Agriculture Organization (FAO) estimates in their Food Outlook that world production will increase to 265 million tons in 2005. World meat consumption, especially in the developing world, has also continued to rise. According to the FAO, the average person consumed 40.5kg of meat in 2004. This is projected to increase to 41.7kg in 2005. MLA said that by 2020, the International Food Policy Research Institute estimates that people in developing countries will eat more than 36kg/person of meat on average – twice as much as in the 1980s. In contrast, people in industrial countries will consume the most meat – nearly 90kg/person by 2020. According to the Worldwatch Institute, as production and consumption of meat continue to increase worldwide, the methods of production are also changing. Industrial animal agriculture is the most rapidly growing production system for pigs, chickens and cattle, with more than half of the world’s poultry and pork, and most beef, produced using these intensive methods. The Institute noted that environmental and public health concerns about meat production and consumption are also growing and, consequently, farmers, business owners, chefs, and consumers are thinking differently about their food choices. For example, MLA stated that after McDonalds asked suppliers to discontinue antibiotic growth promoters in animal feed in 2003, consumers are also demanding more grass-fed meat, milk, and eggs for health reasons. – WLJ © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.

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Monday, August 22,2005

Beef Bits

by WLJ
Alberta group has big beef plans A group of Alberta ranchers plans to purchase an existing beef plant in Alberta, and open a new 1,400-head-a-day slaughter facility in Manitoba. Canada Farm Direct has already raised $20 million of the $30 million through private investment it will need to obtain a large, unidentified beef processing plant in Saskatchewan. If that deal goes through, Canada Farm Direct would then move to construct a new Manitoba-based slaughterhouse capable of processing up to 1,400 fed cattle a day. Canada Farm Direct is hoping to open the new facility somewhere in western Manitoba along the Saskatchewan border in the next few years. The group maintains its processing plant will not operate in competition with the proposed Ranchers’ Choice Beef Co-op plant slated to be constructed in Dauphin, Alberta, later this year. For a minimum $10,000 investment, investors get a guaranteed dividend on net profits and can have 50 head of cattle processed at the facility each year. South Dakota beef backed by Gov. South Dakota Gov. Mike Rounds recently announced his support of the South Dakota Certified Beef program. He said the program is an opportunity for the state to market its beef as “the finest anywhere” and also generate higher earnings for producers who participate in the program. Rounds said consumers will be willing to pay more for the certified beef, the result of producers following certain steps, including detailed record-keeping that includes birth and immunization dates. Many producers already are taking many of those steps anyway, the governor said. “If we produce the best beef, let's get paid for it,” Rounds said. Jack in the Box profits jump San Diego-based hamburger chain Jack in the Box Inc. recently announced profits for the third quarter totaled $23.9 million, compared to $20.7 million a year ago and ahead of earlier projections for the quarter. The company raised its projection for year-end net profits to approximately $2.52 per share, up from the earlier forecasted $2.46. Last year, the company earned $2.02 per share. For the first three quarters, sales increased to $1.9 billion, compared to $1.7 billion a year ago. Jack in the Box now operates 2,033 restaurants, about three-quarters of them owned by the company. Red Robin CEO dismissed Michael J. Snyder has been dismissed as chairman, chief executive and president of Red Robin Gourmet Burgers after an internal probe revealed he misused charter airplanes and corporate expense accounts. A special committee investigation by the Greenwood Village, CO-based company identified various expenses by Snyder that were inconsistent with company policies or “lacked sufficient documentation.” Snyder took control of the company after merging his Snyder Group Co., which controlled 14 Red Robin franchises, with the parent company in 2000. The publicly-traded company, known for its wide array of specialty burgers, owns and franchises more than 260 restaurants in the U.S. and Canada. Sysco earnings up for Q4, year Restaurant food distributor Sysco Corp., recently announced net profits edged up 1.5 percent in the fourth quarter, to $284.7 million. Sales for the Houston-based firm were $7.98 billion in the fourth quarter. For the year, sales reached $30.3 billion, up 3.2 percent from a year ago, while net profits rose 6 percent to $961.5 million. Richard Schnieders, Sysco's chief executive, said that increased distribution efficiencies more than offset rising fuel costs, and that the company's investments in specialty food distributors is paying off. Bob Evans sees sales increase Processor and restaurant chain Bob Evans Farms has seen a rise in sales of 23 percent in the first quarter of the financial year. Sales rose to $395.6 million compared to $320.6 million in the same quarter last year. The company said the increase is primarily thanks to the acquisition of Mimi's Cafe in July 2004. Net income for the quarter was $7.2 million, compared with $14.2 million a year ago. The decline has been put down to lower same-store sales and operating margins at Bob Evans restaurants, partially offset by improved results in the food products segment. Same-store sales for the quarter fell by 1.9 percent at the company’s restaurant division, and average menu prices were down by 0.1 per cent from a year ago. At Mimi's Cafe, same-store sales went up by three percent, with average menu prices up by 2.3 percent. During the first quarter, the company opened six new Bob Evans restaurants, bringing the total to 593. However, the company is reducing the number of Bob Evans Restaurant openings to around 20 this year, from 37 in the 2005 financial year, as it focuses on improving results at existing outlets. FSIS proposes to raise fees Food Safety and Inspection Service (FSIS) announced through a USDA press release a proposed rule that would create four incremental annual fee increases for voluntary inspection, overtime and holiday inspection services, identification and certification services, and laboratory services. For example, the fee for providing meat and poultry voluntary inspection, identification and certification services is proposed to increase from $43.64 per hour per program employee in 2005 to $46.78 in 2006, $47.79 in 2007, $48.84 in 2007, and $49.93 in 2008. FSIS must pay for inspection during regular hours, but will charge when inspectors incur overtime or work during the holidays. To submit comments: Email to fsis.regulationscomments@fsis.usda.gov or www.regulations.gov; mail comments to Attention Docket Clerk, Docket No. 03-027P, USDA/FSIS, 300 12th St., SW, Room 102 Cotton Annex, Washington, D.C. 20250-3700 by Aug. 19. Montana slaughterhouse shuttered Ranchland Packing Co., a Butte, MT, meatpacker, was closed by USDA inspectors who discovered an infestation of rodents and insects in the building. The plant was ordered closed on Sunday, and the owners have until the end of the day Wednesday to prepare a plan to correct the situation. The company told the Associated Press that the infractions were minor and limited to the office areas and that the company has operated for over 30 years without a single food-safety complaint. © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.  

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Monday, August 22,2005

BSE rule violations cited

by WLJ
— USDA says processing safeguards working. Last week, in response to a Freedom of Information Act request made by a private citizen, the USDA released statistics regarding the incidence of Specified Risk Material (SRM) contamination in meat. Records show there have been 1,036 noncompliance reports filed by federal inspectors in the 17 months that have passed since the USDA ordered the removal of all SRMs from meat products for human consumption. Food Safety Inspection Service (FSIS) spokeswoman Amanda Eamich said the agency encourages inspectors to file reports when they find violations of the SRM ban. SRMs are tissues that typically contain the proteins or prions associated with bovine spongiform encephalopathy (BSE) in an affected animal. SRMs include the skull, brain, eyes, tonsils, trigeminal ganglia, spinal cord and dorsal root ganglia of all cattle more than 30 months of age, and the distal ileum (portion of small intestine) from cattle of all ages. Eamich said when an inspector witnesses a violation, FSIS guidelines require immediate action to remedy the situation. “Depending on the plant, the lot or the entire days’ product would be reinspected,” she said. “The program is working; no banned materials have made it into the human food chain,” said Eamich. Response from consumer groups has been less optimistic. “Frankly, we are not surprised,” said Michael Hansen, senior scientist for the Consumers Union, producer of Consumer Reports magazines. “The USDA doesn’t take the testing program seriously,” he said. Speaking on behalf of the Consumers Union, he said the group hopes this information will spur the agency to take this disease more seriously. See Violation on page “This shows the USDA is more concerned with the meat industry, than public safety,” Hansen said. The American Meat Institute had a decidedly different take on the information. In a press release, AMI Foundation (AMIF) president James H. Hodges said, “When considering the public health risk posed by BSE, it is essential to maintain perspective about this animal disease. BSE’s notable impact on humans is the ability to generate emotion and overreaction to an extremely low risk.” Hodges equated the likelihood of BSE posing a risk to the public with the odds of being hit by lightning and winning the lottery in the same day. The USDA records show that in the period since the SRM ban was put in place, there have only been 1,036 incidents of noncompliance. Over that same time period, a total 46 million cattle were slaughtered under federal inspection, resulting in a noncompliance rate of less than one-tenth of one percent. Hodges said, “With inspection records indicating a better than 99.9 percent compliance rate with rules designed to protect humans from BSE, this is a success story that should instill confidence in American beef consumers.” AMIF and other livestock industry groups are concerned that certain opponents of the USDA and livestock producers will use the information to paint a negative picture of USDA protocols. In his statement, Hodges urged the public to consider the positive side of the equation, “Some groups will no doubt attempt to use this information as evidence of possible operational problems and even a food safety concern, when nothing is further from the truth,” he said. Last week, Japanese officials announced they would seek information about the SRM violations. Reports from Japan indicate the recent revelations could harm negotiations as the U.S. struggles to resume beef exports to East Asia. — John Robinson, WLJ Associate Editor © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.  

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Monday, August 22,2005

Corn, hay harvest declines projected

by WLJ
— Spike in feed costs possible. USDA’s National Agricultural Statistics Service (NASS) released a much anticipated crop production report Aug. 12. The report, which projects yields for a variety of crops, held bearish news for livestock producers across the nation. Crop estimates for corn and hay, two of the most widely used feed inputs for producers, lag behind previous year harvest levels. Corn crop yields, which were initially hampered by wet weather during planting season, have also been hurt by record heat and dry conditions across the Corn Belt. The 2005 corn harvest is expected to fall 12 percent below the record harvest level of 2004. Based on conditions through Aug.1, NASS estimated crop yields to average 139.2 bushels per acre, down from an average of 160.4 bushels per acre last year. NASS estimated the total number of acres harvested in 2005 will rise to 74.4 million acres, one percent more than 2004. Despite the increase in acreage, actual yields are predicted to be lower in 29 of 33 corn producing states. The largest declines are expected in Missouri, Kansas and Illinois. Extended hot, dry weather across Illinois has lowered yield estimates from 180 bushels per acre in 2004, to 125 bushels per acre this year. That also resulted in a disaster declaration from USDA Secretary Mike Johanns, paving the way to relief payments to producers in the state. Similar yields are expected in Kansas. Missouri, although less publicized, is suffering much lower yield estimates. The Missouri corn yield in 2004 averaged 162 bushels per acre. This season, the average estimate has been reduced to 99 bushels per acre. Although the report is considered by many as only a guideline, it provides a glimpse into what corn buyers could be facing come fall and winter. Prior to the report being released, analysts estimated that a yield below 140 bushels per acre would spell an increase in the corn market prices, by some estimates pushing corn to more than $3 per bushel. However, since crop reports were released, corn futures have dropped to $2.14 per bushel by last Thursday, a decline of approximately 16 cents per bushel from pre-report prices. Some analysts speculate that the decline was due to over purchasing by buyers who expected a more pessimistic crop report. The same environmental conditions that hit the corn crop are also negatively impacting the 2005 harvest estimates for alfalfa and other types of hay. Despite a two percent increase in the number of acres harvested, alfalfa production is expected to decline two percent from last year for an estimated total harvest of 73.8 million tons. Production of other types of hay, where harvested acres have declined by two percent, is expected to decline to 76.1 million tons, down eight percent from 2004 levels. Across the Intermountain West and central Plains, hay yields have declined for the 2005 growing season due to poorer-than-average growing conditions. NASS noted that North Dakota was the single bright spot for hay yields, where a mild spring and above normal summer precipitation were delaying harvest efforts. However, the report also noted that, at present, harvested yields are running above national levels and exceeding the prior year harvest by more than a half-ton per acre. Statisticians for NASS surveyed more than 27,000 producers from all sectors of agriculture to compile the report, which will be updated each month through the end of harvest. Early crop reports are generally viewed as preliminary and until harvest, each report carries a varying degree of accuracy based on environmental circumstances. Cooler, moist weather is anticipated across the central and northern Plains for the next few weeks, and while it may help the last cuttings of hay, it is likely to be too late to affect the corn crop this year, sources said. — John Robinson, WLJ Associate Editor © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.  

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Monday, August 22,2005

Packer profits keep feds steady

by WLJ
— Dressed prices fall $2-3. — Seasonal low still possible. Despite packers reporting double-digit profits most of last week, cattle sellers weren’t able to reap much of the benefits. Cattle market analysts said that if it wasn’t for packer profits last week, the fed market would have seen across-the-board declines. The spot cash fed cattle market traded at mostly steady with the prior week on a live basis, and $2-3 softer in the dressed market. Trade in northern feeding areas started Wednesday afternoon and Thursday morning at mostly $79 live, $125 dressed. The percentage of cattle that traded on a live basis last week in Nebraska was 10-15 percent larger than normal, market analysts said. Through Thursday noon, a total of 65-70,000 head were sold by Nebraska feeders. Southern Plains trade was slower to develop. Through noon Thursday, Kansas feeders had sold 45-50,000 head at mostly $79-79.50. Texas trade was still trying to get started, with only 10,000 head trading at mostly $79. There were also a few pens of cattle in Oklahoma that moved at $80. Most Texas feedlots were holding out for at least $80, and some analysts said trade might happen at that level on Friday. The packer margin index ranged mostly between a positive $13-16 per head last week, and most sources said they would keep slaughter volumes at a moderate pace in order to maintain positive margins. The boxed beef market was starting to soften up after an 11-day rally. As of noon last Thursday, Choice boxed beef was at $134.39, while Select was at $126.49. Boxed beef sales volumes last week were considered moderate. Packer inventories were tighter, compared to previous weeks, in an effort to maintain higher boxed beef prices. Slaughter volumes last week were up slightly from the previous week, and a little larger than current beef demand levels. Through Thursday, last week slaughter volume was 493,000 head, 8,000 larger than the week prior. For the week ending Aug. 13, 629,000 head of cattle were processed. Analysts said that a slaughter level of only 615-620,000 head was required to meet weekly beef demand. There has been only one week since the Fourth of July, that cattle slaughter was under 625,000 head. That was the week ending Aug. 6, when 616,000 head were processed. Market analysts were eagerly anticipating USDA’s Aug. 1 Cattle-on-Feed Report to see whether cattle feeders had been aggressive in their marketing efforts throughout July. Pre-report estimates for July marketings ranged between 99-102 percent of last year. Most market analysts said that even a 102 percent marketing figure wouldn’t be good, because that happened with one extra marketing day, compared to last year. Most sources said that one marketing day accounts for 4.5-5.5 percent monthly slaughter. Comparing the same number of marketing days in July this year with last year, marketings were only 95-96 percent, sources said. Andy Gottschalk, analyst with HedgersEdge.com, told WLJ that last week’s steady market was solely the result of packers being in the black, financially. “Contrary to popular belief, when packers make a profit they spend it on fed cattle,” he said. “They weren’t willing to pay more for cattle, but they sure bought more cattle at the same money compared to the previous week.” Over the next few weeks, analysts aren’t very optimistic on the fed cattle market, unless packers are able to move product at a higher level. “Cattle weights are still abnormally heavy for this time of year, and still have yet to hit the normal peak in finishing weights,” said Gottschalk. “We also have yet to pull any cattle forward to get out of the front-end supply situation that is building up.” Reed Marquotte, analyst with M&Z Livestock Analytics, said the drop in dressed beef prices indicated the continued trend of heavier-than-normal cattle. “Steer carcass weights are averaging around 850 pounds, 20-30 pounds heavier than normal for this time of year. A lot of that extra weight is from cattle in southern feeding states, where near-record hot temperatures should have curtailed (weight) gains,” said Marquotte. “The only logical conclusion is that cattle are being held back a few weeks more than normal, which is certainly pressuring total cattle supplies.” Feeder markets Action in the feeder market last week depended mostly on the location of the market. Prices in most markets were somewhat mixed, but mostly trended higher on better quality with demand called steady to good. Across the northern tier, feeder calf marketings are starting to pick up as the number of loads increased enough for a market test in some states. Montana markets reported the first large volumes of the season which was met with good demand. In the Dakotas, auction yards noted good attendance. Prices in South Dakota were steady to $2 higher for most offerings. As receipts continue to increase, buyer attendance should go up, leading the way for buyer competition and hopefully, higher prices. In the southern tier, prices varied greatly between states. Reports of increased moisture and greener pastures have brightened the outlook considerably. Buyers in the southern tier were primarily interested in yearlings able to finish before the end of the year. Optimism is based on projected improvements in the late fourth quarter fed market and the prospect for feedlots to move back into the black at the end of the year. Prices for steers over 800 pounds were $2-3 higher in most markets, while lighter classes of steers and heifers were divided between steady to $2 lower for 700-800 pound steers and $2-5 lower for 450-700 pound offerings. The outlook for the feeder market seems to have improved considerably in the past two weeks. Increased moisture conditions along with below normal temperatures have served to brighten moods which some believe has been pushing prices higher. Supplies of yearling feeder cattle continue to be tight in most markets as heifers are retained for replacements. Friday’s cattle on feed report will provide some direction for the feeder market in coming weeks. The report is expected to show placements into feedlots at 2% more than a year ago. Analysts guesses ranged between 98% to 104% of a year ago August. If the heavy placements are larger than a year ago, it could put pressure on the fed market, but light cattle should maintain some strength. — WLJ © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.  

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Monday, August 22,2005

USDA food safety appointment

by WLJ
Agriculture Secretary Mike Johanns today announced he has appointed Dr. Curt J. Mann to serve as Deputy Under Secretary for Food Safety. “Curt Mann brings a wealth of experience, knowledge and dedication to food security, food safety and bio-defense that will assist our efforts to protect the public health from contamination of meat, poultry and egg products,” said Johanns. “We are glad to welcome him back to USDA to serve in this important role and continue our commitment to safeguarding the public health.” Dr. Mann will begin his new duties at USDA August 22nd. Previously he served with the Biological and Chemical Defense Policy Directorate of the White House Homeland Security Council as the Director of Food, Agriculture, and Water Security. In this role, he was responsible for planning, developing, formulating, evaluating, and advising Presidential led programs related to bio-defense of agriculture, food and water systems. Dr. Mann was instrumental in the development and drafting of Homeland Security Presidential Directive-9 “Defense of United States Agriculture and Food” signed by the President in January of 2004. Prior to his White House service, Mann was a special assistant to the Secretary of Agriculture where he focused on coordinating the Department’s role in Homeland Security following the events of September 11th. Dr. Mann has also practiced as a clinical veterinarian, served as a professional staff member to the U.S. House of Representatives Committee on Agriculture and as executive director of the Association of American Veterinary Medical Colleges. “Dr. Mann’s experience and expertise will nicely compliment our strong food safety leadership team,” said Dr. Richard Raymond, Under Secretary for Food Safety. Dr. Mann studied microbiology at Montana State University and the University of Wyoming. He received his veterinarian degree from Kansas State University and has practiced as a large and small animal clinical veterinarian. He has one daughter and lives in McLean, Virginia.—WLJ © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.  

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Monday, August 15,2005

Beef Bits

by WLJ
Idaho plant closes permanently Swift & Company permanently shuttered its Nampa, ID, cow processing facility Aug. 5, citing poor market conditions and an inability to procure enough older cattle to sustain operations. The plant was closed the two weeks prior for those same reasons, and the company informed workers from that facility of the decision Aug. 5. Supplies of older Northwest cattle have been hurt by the previous five years of drought which forced a lot of those cattle to either be culled earlier or moved into the Midwest, far away from the processing facility. The plant had 408 employees as of the shut down, compared to 560 back in May of 2003. Tyson to be added to S&P 500 Tyson Foods will be added to the S&P 500 upon completion of the Unocal acquisition by Chevron. The S&P 500 is an index of 500 stocks chosen by Standard & Poor’s for their market size, liquidity and industry group representation. It is considered a benchmark of performance of the overall market. The specific time line for the finalization of the Unocal/Chevron merger was not known last week. Philippines lifts U.S. beef ban Under an agreement announced Aug. 4, the U.S. will now be able to export boneless beef from cattle 30 months and younger to the Philippines. The estimated value of the Philippines market reopening to U.S. boneless beef is $2.5 million. In 2003, the U.S. exported $4.9 million worth of beef and beef products to the Philippines. The Philippines adopted measures to restrict imports of U.S. beef after bovine spongiform encephalopathy (BSE) was confirmed in Washington state back in December 2003. The country started allowing imports of U.S. boneless beef from cattle not older than 30 months in January 2004. But, In June 2005, the Philippines imposed a temporary ban following confirmation that a second U.S. cow had tested positive for BSE. New Virginia plant proposed Cattle producers in Virginia are trying to organize a partnership to build a beef processing operation in the central region of the state. Members of the Central Virginia Cattlemen’s Association say a new plant will provide them with more choices for selling their cattle. A site study funded by USDA has already been conducted, and creation of a business plan has commenced. It is estimated the plant would cost about $1.5 million. No land for the plant has been bought, but planners hope to locate it beside U.S. Highway 15 in either Buckingham, Madison, Orange, or Louisa counties. Presently, the nearest beef processing plant to the ranchers is in Harrisonburg, VA, and it only can take a few cattle at a time. The potential capacity of the proposed plant has not been announced. Facility donated to university A cattle research facility in southeast Colorado was recently donated by Five Rivers Ranch Cattle Feeding LLC, to Colorado State University’s College of Agriculture and the Department of Animal Sciences. The gift, valued at $2.5 million, includes five-year funding for a professorship within the department to be located at the center. The university took possession of the center on June 1. The Southeastern Colorado Research Center comprises nearly 15 acres and will hold about 1,500 head of cattle. Five Rivers Ranch Cattle Feeding will provide cattle for research purposes for a minimum of five years and will supply feed and supplements to meet their nutritional needs. Barbecue chain plans expansion Conway’s BBQ, founded nine years ago with a single outlet on Conway Road in south Orlando, is heading north. The company, with three outlets operating in Orlando and a fourth under construction, recently signed its first franchise deal to launch the brand in another state—Pennsylvania. The company’s goal is to see 100 restaurants in operation in various states by 2010. Unlike most barbecue restaurants, Conway’s serves all its meat sauceless, and diners can select from the various types pumped from dispensers shaped like cow udders. The distinctive dispenser will be featured in franchise outlets as well. Which states will house Conway’s restaurants were not yet known by the company. New beef at Aldi stores With development assistance from the checkoff-funded R&D Ranch, Quantum Foods has created a line of frozen, pre-portioned, marinated flat iron steaks. These steaks are now available in over 800 Aldi stores under their Granger brand. This is the first introduction of a frozen marinated Beef Value Cut in the retail channel. Beef Value Cuts are a result of the checkoff- funded Muscle Profiling Study, which highlighted individual muscles in the chuck and round to see how these muscles performed on their own rather than in traditional roast cuts. © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.  

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Monday, August 15,2005

Cattle imports still slow

by WLJ
— Transportation shortage could linger. Daily volumes of cattle entering the U.S. from Canada have increased slightly during the first half of August, compared to mid-July data. However, market analysts said the impact to the U.S. cattle markets has still been minimal, at most, and could remain that way through the rest of the year. According to USDA’s Animal and Plant Health Inspection Service (APHIS), 30,669 head of fed and feeder cattle entered the U.S. from Canada between July 18 and Aug. 10. However, that figure doesn’t include weekend movement of cattle, just weekday volumes. Over that period of time, 15,954 head of fed cattle, for immediate slaughter, were reported moving to U.S. packing plants, the other 14,715 head being feeder cattle going to certified U.S. feedlots. The largest single daily volume, through last Wednesday, occurred August 8, when 1,763 of slaughter cattle and 2,610 head of feeder cattle crossed the border. “We are talking about less than two percent of daily slaughter in the U.S. coming from Canadian cattle,” said Jim Robb, chief market analyst at the Livestock Market Information Center. “In most cases, the figure from Canada is less than one percent of daily (U.S.) slaughter.” Two primary reasons have been cited for the slow pace of cattle coming in from Canada—fewer-than-expected fed cattle in Canada and the lack of available trucking. Mark Gustafson, vice president for Swift International, told WLJ last week that the number of backlogged fed cattle in Canada isn’t nearly as large as many people thought. “We’ve had a lot of problem finding enough cattle to justify loading a truck and getting them down here,” Gustafson said. In addition, he said finding trucks to deliver cattle has been an even harder task than finding cattle ready for slaughter. “Not only is it expensive to get trucks to deliver cattle but they are very hard to find, because they have either gone out of business entirely or have shifted into hauling other commodities or products,” Gustafson said. “We are seeing this on the refrigerated side also.” Dennis Laycraft, executive vice president for the Canadian Cattlemen’s Association, said that two of the five largest livestock haulers in Canada have both gotten out of the business and shifted their emphasis to another industry. “After two years and two months of little or no cattle activity, they got out of livestock and started hauling from the oil patches,” said Laycraft. “That has turned out to be a very lucrative decision for them, and it appears unlikely they will get back into the cattle business.” In addition, the number of qualified livestock truck drivers is down and that is keeping any available trucks for that purpose parked, according to Laycraft. “When hauling cattle, there is more to it than just driving them to a destination,” he said. “Animal handling skills are required, and a lot of prospective drivers aren’t adequately trained or prepared for that part of the job.” U.S. truck companies are also a little apprehensive of doing too much hauling of cattle from Canada because of the extra licensing that is required. “U.S. haulers don’t have to have any more licensing than Canadian truckers, however, it does cost some to get that licensing done,” Laycraft said. From a cost standpoint, cattle hauling expenses are on the verge of eclipsing $2.50 per loaded mile. Additional jumps in fuel cost could force that charge even higher, according to transportation companies. — Steven D. Vetter, WLJ Editor © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.  

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Monday, August 15,2005

Congress debates immigration reform

by WLJ
Two competing immigration reform bills have been introduced in Congress in past weeks and the debate over the best approach toward overhauling a broken system is raging. One proposal sponsored by Sens. John Kyl, R-AZ, and John Cornyn, R-TX, would mandate extensive reforms in border security including increases in border patrol agents and technology. The Kyl-Cornyn bill also provides funding to increase the size and number of detention facilities for holding illegal immigrants. Perhaps the most contentious portion of the Kyl-Cornyn measure is the requirement that immigrants in the U.S. illegally report for health screening and background checks before being issued a temporary work permit. The permit would allow the individual to work and travel freely throughout the U.S. Following the issuance of a temporary permit, illegal immigrants would have five years before being required to return to their country of origin. Once back in their home country, individuals would be required to apply for a “guest-worker” permit before returning to the U.S. Critics of the Kyl-Cornyn proposal are quick to point out that many immigrants, even those in the country illegally, have an established and important presence in this country including families, homes and jobs which are not easily abandoned. An alternative to the reform offered in the Kyl-Cornyn bill has been offered in the form of bipartisan legislation introduced by Sens. John McCain, R-AZ, and Edward Kennedy, D-MA. The McCain-Kennedy bill also features an increase in border security and funding to prevent illegal immigration to tighten the porous border. However, rather than a voluntary deportation program, the legislation creates a large “guest-worker” program that requires immigrant registration and the payment of punitive penalties and back-taxes before an illegal immigrant could start toward the path of citizenship. Signers on both plans have been quick to step forward in favor of their chosen bill and are quick to criticize the opposition. Sen. McCain said in reference to the Kyl-Cornyn bill, “report-to-deport is not a reality, and it isn’t workable. Systematically rounding up every person living here illegally and sending them home isn’t a viable option either. It’s neither practically possible or economically feasible.” Kyl, arguing in support of his own legislation stated, “Those who seek permanent residence and eventual citizenship will have to return home and apply from their own countries, but that’s the time-honored and legal method of doing so today.” Under the Kyl-Cornyn proposal, illegal immigrants who do not comply with the proposal would be automatically deported to their home country and denied entry to the U.S. for a period of ten years. Many close to the issue believe that White House support will be critical to getting any meaningful reform bill passed. Although President George Bush made immigration reforms a top priority following the events of Sept. 11, 2001, White House reaction to the recent flurry of activity has been muted. At hearings scheduled for both bills currently before Congress, representatives for the White House have been conspicuously absent. Agriculture sector interest groups are closely monitoring the legislative activity. At present, immigrant workers compose a significant portion of the agriculture, manufacturing and service sector workforce. A year 2000 census estimate showed that nearly 30 percent of the immigrant workforce is employed in various agriculture industries and an additional 20 percent of immigrants are employed in manufacturing and processing pursuits. In total, it is believed that as many as 11 million workers in these industries may be in the country illegally. Analysts are quick to point out that any immigration reform must take into account the importance these workers play in the economy. Studies show that without immigrants from other countries, and particularly Mexico, the U.S. labor market would have experienced a shortfall of more than 500,000 employees, a contraction of more than 13 percent in some industries. The agriculture pursuits would have been especially hard-hit, due to the large number of recent immigrants employed in the industry. Estimates show an agriculture sector shortage of more than 132,000 workers annually without immigrant workers. Regardless of the reform enacted, the bill will likely have a substantial impact on agricultural producers who rely heavily on the immigrant labor pool to meet their labor needs. Already, interest groups for producers are lining up to provide input on both measures on behalf of farmers and ranchers across the county. — John Robinson, WLJ Associate Editor © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.  

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Monday, August 15,2005

Effort to expand livestock feed restrictions continues

by WLJ
—Draft plan under review The U.S. Food and Drug Administration (FDA) announced last week that it has made significant progress toward a change in policy for eliminating all bovine materials in livestock feed. FDA initially banned the feeding of bovine materials to cattle in 1997, but the rule did not cover certain feeding practices and left potential loopholes in the feed ban. The most serious concerns lie in the potential for cross contamination of feed during the milling process and the possibility of cattle being fed a ration containing banned materials accidentally. In January 2004, former FDA Commissioner, Mark McClellan announced the agency planned to take action to clarify uncertainties in the feed ban which did not address the feeding of cattle with materials such as plate scrapings and chicken litter. McClellan also addressed the possibility of eliminating the use of bovine specified risk material (SRM) from all livestock feed. By strengthening current feed ban measures, FDA hoped to prevent all potential transmission methods of bovine spongiform encephalopathy (BSE) from entering the bovine food supply. On July 14, 2004, the FDA unveiled the advanced notice of proposed rulemaking (ANPR) which announced the agency intended to ban from livestock feed all products it determined to be a risk for spreading BSE. The prohibited products included items such as the brain, skull and spinal cord from cattle 30 months and older; also included were the intestinal tract and tonsils from cattle of all ages. The agency also included the possibility of removing downer cattle from the animal food chain in the ANPR announcement. A ban of rendered SRMs and downer cattle from animal feed could have an enormous impact on the entire livestock industry. In an August 2004 letter to FDA, the American Meat Institute (AMI) estimated financial impact at more than $125 million annually. Both rendering plants and feed mills would experience the bulk of the impact. However, producers will also experience an increase in render fees when the value of a rendered animal is eliminated by the ban. In addition to the monetary damage, the ban would send an estimated 1.4 billion tons of bovine rendering waste to landfills each year. In the course of their comments to FDA, AMI urged the agency to weigh the industry impacts and base any future rules on scientifically valid observations. AMI’s comments concluded that current scientific studies do not necessarily validate the measures being weighed by the agency. FDA has considered public comments from interested parties and made changes to the original proposed rule. The revisions, which have not been released, are being circulated among FDA officials as the agency considers whether to publish the regulation. Once published, the rule will go through an additional public comment period prior to being implemented. — John Robinson, WLJ Associate Editor © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.  

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© Crow Publications - Any reprint of WLJ stories, except for personal use, without permission, written consent and appropriate attribution is prohibited. 2008 Crow Publications. All rights reserved.