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Thursday, December 20,2007

Prices closer to summer low

by WLJ
An active fed cattle trade developed in the northern region at midweek with prices trending $2-$3 lower for live cattle and $4 lower dressed. Nebraska feedlots sold 45,000 head at $86-$87 live and $1.37-$1.38 dressed. Colorado sold fed cattle at $86.50 live and $1.37 dressed, and Iowa feedlots sold 6,000 head at $1.36-$1.38 dressed. Trade in the southern Plains was still at a standstill with feedlots rejecting bids of $87 at midday last Thursday. Analysts were expecting trade in the $89 range when it finally occurred. The rapid decline has some market analysts scratching their heads at the fall. “The recent fed cattle price drop from the mid $90s to the low $90s occurred sooner than expected and raises questions about whether markets are merely weakening seasonally or as a result of something more fundamental,” said Oklahoma State University Agricultural Economist Derrell Peel. “Feeder cattle markets remain generally strong and, while no clear threats can be identified at this time, there is a lengthy list of factors that could inject volatility into cattle markets in the coming weeks and months.” Peel said some of the weakness is tied to the slumping boxed beef market. “The recent weakness in fed cattle prices is tied to a corresponding slump in boxed beef prices, the latest in a series of roller coaster of increases and decreases in wholesale beef prices this year. The current drop in boxed beef price raises questions about beef demand going into the summer. Memorial Day holiday beef sales appear to have been rather lackluster,” Peel said. “Sluggish macroeconomic indicators, high gas prices, and weaker pork exports are likely contributing to beef demand pressure. Anticipated increases in broiler production in the second half of the year will add additional pressure to meat supplies.” The Choice cutout dropped to $141.63 last Thursday. Select fell nearly a dollar to $136.01 in Thursday trade last week. However, volume remained lackluster and clearance levels indicate that the cutout will need to slide farther to increase sales and promote contracting. One bright spot for the beef trade is the continued strength in the boneless 50 and 90 percent trim as producers fill demand for grind product in advance of the Fourth of July holiday. With packer margins in the red, and heavy harvest volumes, the summer low might not be too far off. Retail demand should pick up going into July and wholesale buyers are likely to find value in the upper $130 range. Likewise, the fed cattle market has already slid the typical 14 percent from the winter/spring high of $100 to near the $86 mark, meaning fed cattle trends could reverse quickly, particularly as supplies tighten. According to University of Missouri Economists Glenn Grimes and Ron Plain, total cow slaughter for the year through the week ending May 26 was up 15.2 percent. “Daily cow slaughter was up 14.2 percent for the period, and beef-cow slaughter was up 16 percent. For the four-week period ending May 26, total cow slaughter was up 15.1 percent, dairy- cow slaughter was up 7.1 percent, and beef-cow slaughter was up 21.1 percent. The large beef- cow slaughter is probably due to the drought in the southeastern U.S. Calf slaughter through April for the year is up 25 percent from 2006,” Plain said. “This larger calf-slaughter and large cow- slaughter suggests the cattle herd is probably shrinking at a slow rate.” Adding to what could be a very tight supply of feeder cattle this fall, imports of feeder cattle have been running behind year-ago levels. “Feeder cattle imports from Mexico for January-April were down 21.4 percent. However, April feeder cattle imports from Mexico were up 3.8 percent from last year. Live-cattle imports from Canada in April were up 11.3 percent and total cattle imports for April were up 7.3 percent from 2006. However, total live-cattle imports were still down 7.1 percent for January-April compared to a year earlier,” Grimes and Plain said. The tight supply of cattle in the U.S. comes at a time when imports of beef coming from Australia, New Zealand, Canada and Uruguay are declining. “Overall shipments from these four countries, which account for 95 percent of fresh/frozen beef imports to the U.S., are down 5 percent through the middle of June,” according to Steve Meyer and Len Steiner, Chicago Mercantile Exchange (CME) analysts. The declining value of the U.S. dollar on the world market is reducing the profitability of bringing beef into the U.S. for sale. “Assuming everything else remains the same as in the latest USDA supply and use table, if beef imports are flat, it would remove about five points from per capita consumption, to about 64.8 lbs., and 1.4 percent lower than a year ago,” they said. The current USDA estimate places per capita consumption 0.6 percent below last year. Feeder cattle Feeder cattle prices remained strong last week in much of the country as feedlots jump into the process of contracting calves for the fall and winter months. Tight supplies of feeder cattle are expected to be supportive and herd expansion will add further upward price pressure. Peel said the cyclically low inventories, which were forced lower again last year by drought, are expected to begin building again in the second half of the year. “The question of the extent to which herd expansion resumes this year will have implications beyond this year but also immediately as renewed heifer retention will further limit feeder cattle supplies in 2007,” he said. “Forage conditions are significantly improved in the southern and northern Plains this year but the drought has emerged as a major factor in the Southeast. While cow herd expansion has clearly resumed in the center part of the country, offsetting liquidation in the Southeast may temper herd expansion once again.” Prices paid for feeder cattle in cash markets, which were mostly reporting light runs, closely mirrored contract trade on the CME. The CME cash index last Thursday stood at $107.39, while August contracts settled last Thursday at $108.10. September traded 7 points lower during the day, ending at $108.32, October feeders dropped 10 points, closing at $108.40, and November slid 50 points, ending the day at $108.20. Meanwhile, in auction market trade, feeder cattle receipts remain seasonally low. In Amarillo, TX, steers weren’t present in enough quantity to determine a market trend, however, feeder heifers under 600 lbs. were called steady on a limited test, while those over 600 lbs. were called steady to $2 higher. At Oklahoma City, OK, where producers continue to experience good precipitation, feeder steers and steer calves sold firm to $2 higher last week, with the exception of a few six weight steer calves which were $2 lower. Feeder heifer and heifer calves sold steady with the prior week, with moderate to good demand on all classes with the heaviest action of steers over 800 lbs. In Springfield, MO, last week, sliding fed cattle prices and high corn took their toll with steer calves moving $3-6 lower. Yearling steers were called steady to $3 lower and heifers were steady to $3 lower, with only the front end kind trading at steady money on moderate to light demand and moderate to heavy supply, including a number of program cattle included in the offering. To the west in Hub City, SD, last week, feeder steers and heifers sold $2-3 lower on several long strings of steers and heifers and farther south in La Junta, CO, steer and heifer calves were reportedly selling for mostly steady money.

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Thursday, December 20,2007

Cattle-on-Feed May marketings down; to pressure summer f

by WLJ
USDA= s June 1 Cattle-on-Feed report was called mostly bearish to the summer and early fall fed markets, while being friendly to cattle marketed at the end of the year, beginning of 2006. Analysts said that May marketings and volume of A heavy-weight@ placements were not friendly at all, while a significant decline in all other weights of cattle placed was very good news. According to USDA= s National Agriculture Statistics Service (NASS), cattle feeders sold 2.0 million head of cattle, one percent below last year and 11 percent below 2003. The large majority of analysts had predicted marketings to be mostly steady with last year, particularly with one extra business day during this past May, compared to last year. AThe fact that we are down, even a little bit, is very disappointing and not good news, especially when there was one more day to sell cattle, compared to (May) 2004,@ said Jeff Ackerman, analyst with A&A Commodities, Des Moines, IA. A On a daily marketing rate basis, cattle feeders sold six percent fewer cattle last month, than May of last year. Even if marketings for the month were steady, on a daily basis that is five percent smaller. That= s not the way to keep show lists current, particularly when beef demand is > sketchy, at best= .@ The number of cattle on feed four months or longer, as of June 1, was 111 percent of last year and 110 percent of the previous five-year average, according to analysts. AFront-end supplies are definitely weighing heavy on the market, and could do so an extra long time this summer,@ Ackerman said. ACome mid- to late-September we could still be trying to get through cattle that have been held an extra two to four weeks by feedlots.@ Andy Gottschalk, analyst with HedgersEdge, indicated that, from a percentage standpoint, the worst is still yet to come. Gottschalk= s projections show that the number of 120-day-plus cattle will drop to 107 and 106 percent of a year ago on July 1 and Aug. 1, respectively. However, he also said that figure would jump up to 118 percent Sept. 1, 115 percent Oct. 1 and 117 percent Nov. 1. In addition to the slower marketings, analysts said the fact that heavy weight placements were much larger last month would add even more price pressure to late summer, early fall fed prices. According to NASS, cattle feeders placed 735,000 head of 800-pound-and-heavier cattle into feedlots last month, 20 percent more than May of last year. Market sources said that a lot of wheat graze-out cattle were sold during May, three to five weeks later than normal, and that led to an overabundance of heavy cattle finding new homes in feedlot pens last month. In addition, Ackerman said that above-normal grazing conditions led to cattle coming off of pasture and range much heavier than normal, and with more condition than is usual for this time of year. AI think producers just let cattle get a lot bigger than normal, before deciding to pull them off of grass and take them to market,@ he said. AIn turn, the number of heavier cattle entering feedlots last month was skewed to the extreme. It will hurt in the long run, because some of those cattle could conceivably be ready to enter the market in September, when front-end supplies are still a concern.@ Gottschalk added, A Placements weights have been front-end loaded, which will only compound the problem with heavy fed cattle carcass weights this fall. The combination of a record total in the extreme front-end fed cattle supply and record carcass weights this fall will limit rebounds (early) this fall.@ Better news late fall, winter While the number of heavy placements last month was overly large, the total number of placement cattle entering feedlots during May was well below last year. NASS indicated that a total of 2.22 million head were placed, six percent below a year ago, and four percent below two years ago. Placements weighing 600 pounds or less totaled 435,000 head, down 12 percent from May 200; cattle weighing 600-699 pounds totaled 390,000 head, down 21 percent; and those weighing 700-799 pounds were figured at 663,000 head, down 14 percent. Analysts were saying that an uptick in fed cattle prices is to be expected during the last quarter of 2005, because of fewer-than-normal cattle expected to be ready for market over that period of time. Jim Robb, chief analyst at the Livestock Marketing Information Center (LMIC), said that fewer feedlot placements last month was the result of more interest from stocker operators, particularly those in the central Plains and Midwest. AThe drop in lightweight placements is indicative of Iowa, Nebraska and Kansas stocker operators coming into the southern Plains and Intermountain West and buying cattle to put back on their pasture and rangeland,@ Robb said. AThat is almost strictly a result of much better-than-normal grazing conditions across the country.@ He also said, however, that last months placement trend appeared to be more normal than abnormal. ARemember, cattle feeders placed a record number of cattle in May of last year, and now we are starting to see things go back to a more seasonal trend, where cattle are going back to grass in the spring to be sold to feedlots in the fall,@ Robb concluded. Cattle and calves on feed for slaughter market in the U.S. totaled 10.77 million head on June 1, one percent above last year and two percent more than two years ago. C 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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Thursday, December 20,2007

COMMENTS

by WLJ
June 27, 2005 The boxed beef cutout fell out of bed last week, getting down to the $133 level on Choice product. The Choice/Select spread got under $2; it was under $2 last July, but is normally between $6-8 this time of year, and carcass weights are going north fast. Father= s day beef sales were good, on ground beef, but not so good on the steak sales. Slaughter levels are staying at high levels for these timesC665,000 head last week. But, the fact of the matter is, cattle are starting to stack up in feed lots. We found an $83 market a lot faster than expected. Now, if you ask a cattle feeder if they= re current he will say yesCthey always say yes. But if you look at the fundamental data, cattle are getting bigger and fatter, and front-end supplies are bigger. We could see the fed market in the $70s later this summer, unless a few things happen. Ironically, the fat off these fed cattle is pretty valuable as 50 percent trim is trading for $75 per cwt. All you can make with that is hamburger, which is in great demand. We= ve seen a $30 slide in the boxed beef cutout in less than 60 days, which I= d have to say exceeds any normal seasonal shift. Packers were losing $21 per head last week. Their normal tactic of slowing down beef production to raise the cutout value and raise their margins hasn= t been working for the past several months. Just over a year ago retailers were caught upside down on the beef market and haven= t been eager to buy much more beef than they need or can effectively feature. By my estimations beef demand is falling out of bed and we need some help. It isn= t that people don= t want to eat beef. Instead, its that the price has risen beyond many house hold budgets. Yes, the steak houses are full, and it looks like there is all kinds of demand for the stuff. However, you have to keep in mind that the steak house isn= t a good indicator of beef demand. Anyway, retailers stepped up to the plate last week and are booking product for late summer featuring. Lower beef prices aren= t what anyone wants to hear about, but the retailers haven= t been eager to sell the stuff at the $150 level; $132 boxed beef is more appealing and allows them to feature. USDA= s last survey showed that average retail beef prices were at $4.25 when a little over a year ago it was just over $3. You could say that beef may have priced itself out of the protein market, or certainly reduced the customer base. With the prospects of rising beef production in the next few years we= re going to need to see some changes in the demand side of this market. I would venture to say we need the export markets to pick up some of the slack. Beef exports are starting to show some real promise in recent months and believe it or not Canada is importing beefCnot very much but they are buying. Exports to Canada are up a whopping 698 percent over the first four months of the year, compared to 2004. But, it= s pretty easy to show percentage gains like that when you were close to zero. Canada imported just over 12,000 metric tons for the first quarter; U.S. imports from Canada are about 10 times that much. Mexican beef imports are almost back to normal and are up 334 percent, from a year ago, at 76,635 metric tons. Overall, beef exports are up 150 percent from the same point a year ago. So I guess you could say that there are a few bright spots in the beef export market. Just think if Japan and Korea started taking product, this could change the prospects for this late summer fed market in a big way. Last week, USDA announced they have budgeted $144 million for the Market Access Program and Quality Samples Programs to promote Ag exports. These programs have been around for a while. Roughly 70 ag organizations will receive funds and you= ll be happy to know that the Meat Export Federation (MEF) gets the single largest share of the pot at $12 million. Ag Secretary Mike Johanns said that agriculture exports account for 25 percent of farm cash receipts, which illustrates just how valuable these export markets are. If you don= t think that creating trade agreements help agriculture, think again. U.S. farm exports are big business and it is vital to put some of these issues like BSE behind us. C PETE CROW

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Thursday, December 20,2007

BEEF talk

by Kris Ringwall, North Dakota State University
Grass is not free Summer in the beef business is turn out time. If we are not careful, some would conclude that it is the time of year when we don’t need to feed the cows. Summer would seem to be the time when cash costs are less and the pocketbook is not being called upon as frequently to pay the bills. The summer focus is the processing, hauling and storage of next winter’s feed. However, summer can be expensive. The costs of raising crops and forage are working their way into the system. The cow still is eating and those bites of grass in the pasture are not free. The 2006 report of the North Dakota Farm and Ranch Business Management program (www.ndfarmmanagement.com) detailed cow feed costs. The typical producer spent $257.83 feeding the cow. A little more than 31 percent of that total was related to pasture costs. Sorted on net return per cow/calf pair, the low 20 percent spent more on total feed ($292.59), with 29 percent ($85.08) of the bill attributed to pasture costs. The middle 40 percent to 60 percent spent $256.95, with 35 percent ($89.96) of the total feed bill attributed to pasture costs. The 20 percent of herds that had the greatest net return spent a total of $227.31 on total feed, with a little less than 30 percent ($67.60) of the total feed costs attributed to summer grazing for the cow/calf pair. The assignment of a value to pasture is important and relevant to the analysis of the total operation. The costs do influence the bottom line of cattle operations. In terms of cost per animal unit month (AUM) as reported to the North Dakota Farm and Ranch Business Management program, the average cost, based on net return per cow, is $13.23 per AUM. The bottom 20 percent paid $14.06, the middle 40 percent to 60 percent paid $15.30 and the top 20 percent paid $11.17. These numbers are not all based on market demand because not all producers are actively bidding for pasture. Some are assigning a value to their own pasture. An exact cost conclusion is difficult, but cow/calf producers are focused on pasture and range production. This was the second priority for producers, as documented in the publication “Priorities First: Identifying Management Priorities in the Commercial Cow-Calf Business,” summarized and authored by Tom Field, Ph.D., Fort Collins, CO. What is interesting, when it comes to pasture and range, is that the stocking rate was the highest ranking subcategory, followed closely by timing and duration of grazing. Monitoring cattle performance and plant species ranked considerably lower than the first two subcategories. In commercial cow/calf production, the stocking rate is compared with calf weight to feeders. The bottom line is that pounds and stocking rate, at least to the naked eye, are equivalent to the pounds of beef on a given amount of land. The duration of grazing determines how long the pounds will be (not can be) on a given amount of land. This creates a dilemma. While pasture and range are a very high priority, there is no indication of long-term grazing practices being beneficial to the health of the plant community. In the same breath, the associated appropriate stocking rate and grazing duration that produce a realistic quantity of beef need to be in the same equation. In a perfect world, all four subcategories should rank the same. In reality, calf performance and plant species composition are essential for monitoring stocking rate, and timing and duration of grazing. But that is the perfect world. We all know that pasture and range are very complicated fundamental aspects of beef production. It is reassuring that they rank high.

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Thursday, December 20,2007

Export demand supports market

by WLJ
The early fed cattle trade last week occurred at prices which analysts expected to be the seasonal low. Nebraska feedlots reported selling 10,000 head of fed cattle last Wednesday at $83.25-$84 live and $133 dressed. Colorado feedlots reported selling 1,000 head of fed cattle at $84 live and Iowa feedlots reported selling 200 head of fed cattle at $135 dressed. There was very little live trade in the southern Plains as of last Thursday, however, analysts were calling for live trade in the $85 to $86 range as a result of packers being short bought the previous week. Packers, for their part, were expected to begin slowing chain speeds from the prior week’s levels in an effort to stay out of the market as long as possible as well as providing some support for the beef cutout values which, last Thursday, were also nearing the expected seasonal bottom. However, the slowdown had yet to begin by midweek. Week to date harvest through last Thursday was 507,000 head, up 2,000 from the prior week and 3,000 head more than the same week in 2006. The Choice cutout last Thursday was hovering at $139.40, up 11 cents from the prior day. Select cuts gained 37 cents to trade at $132.24. Movement at the wholesale level was still relatively slow however, and it appeared that additional discounting could be in the works before buyers jumped back into the market to contract their product now that most have fulfilled their July 4th holiday needs. Export buying remains one of the bright spots in the beef market right now and is helping to support prices in the face of lackluster domestic demand. Some of that evidence was visible in the sagging middle meat prices, which packers were discounting last week in an effort to keep product moving out of cold storage. Chuck and shoulder cuts, in the meantime, were strong as buyers in Asia continued to demand more beef from the U.S. The lifting of the export ban which Korea had placed on six U.S. plants should add support to the beef complex. Another high note for the market is continued strength in the ground beef and boneless beef segments which are seeing strong demand for product ahead of the holiday.  Shipments of trim and grind were strong throughout the week and the 90 percent lean was still going strong at $137.43, compared to $130.28 last year, while the 50 percent trim traded at $55.71 compared to $38.47 on the same day in 2006. Cow carcass cutout values were trading at $111.83, which was down from early June, but still more than $6 above year ago levels. On the Chicago Mercantile Exchange (CME) last Thursday, contract prices moved higher across the board, rebounding from an early week sell-off following USDA’s cattle on feed report. The bearish report weighed heavily on deferred contracts after placements were reported higher than industry expectations, at 13.5 percent above May 2006.   The spot month contract gained 162 points during the session to close at $86.92, while August rose 90 points, ending at $90.15 and October added 132 points to close the day at $94.45. Feeder cattle While there are tight supplies of fed cattle ahead in the short-term, fall and winter fed cattle contracts lost ground early last week as a result of in increase in the number of cattle moving into feedlots earlier than expected from herds in the southern states. That, in turn, could impact prices paid this fall for feeder calves which have been very strong despite $4 corn prices, particularly when compared to steer prices the last time corn prices spiked. In 1997, 650 lb. steer prices dipped below $60. Thus far, early contract prices for feeder cattle have been reportedly good and video sales are also proving to be strong in advance of some of the season’s largest sales coming in July. University of Iowa Agricultural Economist Shane Ellis said he expects prices for fall calves to be lower than 2006 levels, however, he said prices will remain well above the 10-year trend line. “Third quarter prices are expected to be 5-10 percent lower than a year ago, Fourth quarter feeder cattle prices, on the other hand, will be similar to those of last year after harvest corn prices dramatically increased,” Ellis said. “Finally, beef feeder cattle supplies may be slightly lower this year, with fewer beef cows calving than a year ago. This may also help offset some of the weaker feeder cattle demand created by higher feed costs. In conclusion, cow/calf producers should see yet another profitable year. However, it may be advisable to use some form of marketing strategy that will mitigate the risk of increased corn prices.” Futures contract prices indicate that prices will remain strong into the fall marketing season and moved higher, following live cattle contracts in last Thursday’s session. August feeders jumped 120 points, closing the session at $109.77, while September gained 132 points, ending at $110.42, and October rose 130 points to finish at $110.40. The sharpest rise of the day came on the November contract which ended the day at $110.70, 147 points higher than a day earlier. Meanwhile, cash auction market prices last week rebounded slightly in many areas. The CME index showed feeder cattle prices averaging $108.40 last Thursday. In El Reno, OK, last week, feeder steers and heifers sold for steady money on good demand after a bounce in the futures market. Steer and heifer calves sold $2-4 higher than prior week’s light test, with several reputation brand calves included in the day’s supply. Continued rainy weather has prolonged the grass season and created very good demand for stocker cattle. Meanwhile, at the market in Oklahoma City, OK, feeder steers and heifers were called steady to $2 lower, while steer and heifer calves sold steady. According to market reports, the bulk of feeder receipts at OKC continue to be number one and two crossbred cattle coming from out of state. Demand was called moderate, at best, for feeders and good for calves despite the absence of some northern buyers last week. Farther north, in West Plains, MO, last Tuesday, steers and heifers were unevenly steady, selling from $2 lower to $2 higher throughout the day, with a full advance noted on better quality calves when the market reached its full potential after a slow start. Yearling demand remained good most of the day with several load-lots being absorbed rather handily in spite of the week’s sharply lower fed cattle trade and continued pressure on the cattle board and stronger grain futures. In Loup City, NE, market reports indicated moderate demand for a very short list of yearlings and fall calves, as well as several load lots of Holstein steers. Cattle quality and condition were reportedly average, with fairly good buyer turnout. In addition to the regular list of feeder buyers, there were several people looking to fill out pastures with grass cattle. While in Hub City, NE, compared to the previous week, feeder steers and heifers sold $2-3 higher on offerings consisting of mostly load lots of high quality feeders from reputation consigners. In the western states, prices were also mostly steady to higher last week. In Prescott, AZ, steer and heifer calves and yearlings were reportedly selling for steady money. While prices in Madras, OR, moved lower in a light test of the market. Prices for 500-600 lb. steers were in a range of $104-111, while those in the 600-700 lb. class were mostly $99-105, down $7-8 from the previous week.

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Thursday, December 20,2007

Idaho Beef Council announces 2007-’08 officers and budget

by WLJ
Kim Burton Brackett, a cow/calf producer from Castleford, ID, was recently elected chairman of the Idaho Beef Council for the 2007-2008 fiscal year beginning July 1. Brackett, who also represents the Idaho CattleWomen on the council, will lead the eight-member board representing Idaho beef producers in overseeing Idaho beef checkoff programs. Laurie Lickley, a cow/calf producer from Jerome, was elected vice chairman, and Jay Theiler, a cattle feeder representative from Boise, was elected secretary-treasurer. Other 2007-’08 Idaho Beef Council board members include outgoing chairman Dan Hinman, a cattle feeder from Caldwell, ID; Brenda Richards, a cow/calf producer from Murphy, ID; Lynn Keetch, a dairyman from Montpelier, ID; and new directors Tom Dorsey, a dairyman from Caldwell, ID; and Dan Schiffler from Jerome, ID, representing livestock markets. Working to help coordinate state and national beef checkoff programs, Brackett and Hinman also represent the Idaho Beef Council as directors to the Federation of State Beef Councils. Theiler serves as a U.S. Meat Export Federation director, and Lickley is a member of the national Beef Promotion Operating Committee. At 33, Brackett is the youngest Idaho Beef Council Chairman in the organization’s 40-year history. She says she is looking forward to working with the people involved in the beef industry and organization. “We are fortunate to have a staff of tremendous talent and dedication and our board of directors is a strong, well-rounded and forward thinking group of individuals all committed to promoting beef throughout Idaho.” she said. “I believe the beef checkoff is more relevant now than ever,” Brackett added. “As a producer, I view checkoff programs as one of the strongest tools for increasing profits in our operation. Checkoff dollars are essential in presenting a positive beef message to consumers. We must continue to educate consumers about the nutrient value and safety of beef. Increasing consumer demand for beef increases the value of our product, which means a larger bottom line for producers.” Idaho beef checkoff collections are expected to be $1,650,000 for the coming year, with an approximate net instate income of $759,150 after Cattlemen’s Beef Board remittance and collection fee paid to state brand department.   Planned program expenses for 2007-’08 are $234,251 for promotion programs including consumer advertising, retail and foodservice promotions, promotional events and July Beef Month; $129,300 for consumer information programs including youth and adult education programs and events, as well as media and health professional outreach; $91,180 for beef safety and product enhancement research; $36,565 for industry information including producer education programs, the Idaho Beef Quality Assurance Program, beef industry information and public relations; $36,000 for producer communications including producer publications and media, annual report and producer meetings; $40,960 for support of international marketing efforts through the U.S. Meat Export Federation; and, $173,000 for support of national programs including outreach to higher population states through the Federation of State Beef Councils. The 2007-‘08 budget reflects increased funding and focus on nutrition programs and health professional outreach, and supporting programs for higher population states and developing international markets. There is also strong focus on retail and foodservice programs as well as research and new product development and promotion.

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Thursday, December 20,2007

USDA announces CRP re-enrollment opportunities

by WLJ
Agriculture Deputy Under Secretary for Farm and Foreign Agricultural Services Floyd Gaibler recently announced that more than 14,000 agricultural producers and landowners may be eligible to re-enroll their land in the Conservation Reserve Program (CRP) continuous sign-up if their contracts expire on Sept. 30, 2007. “More than 300,000 acres enrolled under these contracts are scheduled to leave the program at the end of September,” said Gaibler. “Re-enrolling these acres is an important conservation decision because continuous sign-up contracts involve some of the nation’s most environmentally sensitive land.” Of the 300,000 acres eligible to leave the program, about 71,800 acres are in major corn producing states (Illinois, Indiana, Iowa, Minnesota, Missouri, Nebraska and Ohio). Farmers and ranchers with general sign-up CRP contracts that expire Sept. 30, 2007, and that did not take advantage of the last year’s re-enrollment or extension offer, also may be eligible for the continuous sign-up. Farm Service Agency officials at USDA Service Centers began notifying general sign-up CRP contract holders last month of this possibility. In addition, producers with land eligible for the continuous sign-up may, in some cases, be eligible for the special incentives of CRP’s Farmable Wetlands Program. This year marks the 10-year anniversary of the beginning of the continuous sign-up for CRP. Environmentally desirable land devoted to certain conservation practices may be enrolled in CRP at any time under continuous sign-up. Offers are automatically accepted provided the land and producer meet certain eligibility requirements. Offers for continuous sign-up are not subject to competitive bidding. Continuous sign-up contracts are for 10 to 15 years. CRP is a voluntary program that helps farmers, ranchers and other land-owners plant long-term, resource-conserving covers in exchange for rental payments, cost-share and technical assistance. These practices reduce erosion and improve wildlife habitat, water and air quality. For more information about CRP, visit your local USDA Service Center or online at: www.fsa.usda.gov.

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Thursday, December 20,2007

Leopold Conservation Award presented to San Isabel Ranch

by WLJ
The Wisconsin-based conservation organization Sand County Foundation, in partnership with the Colorado Cattlemen’s Association (CCA) and the Colorado Agricultural Land Trust, presented its Leopold Conservation Award last Monday to the San Isabel Ranch. “We view the Leopold Conservation Award as an important investment in private lands’ conservation,” said Dr. Brent Haglund, Sand County Foundation president. “The $10,000 that accompanies the award wouldn’t go very far as a direct investment into a conservation project. But by using it to highlight the outstanding stewardship of the San Isabel Ranch, we indirectly support hundreds of thousands in everyday improvements by other private landowners who make measurable and lasting improvements in water quality and wildlife habitat.” The San Isabel Ranch, located in Westcliffe, CO, has a 135-year history of agriculture. The success of the ranch can largely be attributed to the late Dr. Ben Kettle and his wife, Bet. The operation is now run by the Kettle’s daughter, Sara Shields, and her husband, Mike but Bet is still very much involved. The Shields place high value in adding natural materials back into the soil. Natural materials are added during winter feeding, and feed ground is chosen based on nutrient need of the soil and plant population. The accumulation of organic material allows the Shields to plow the land in the spring to nourish new plant life. They also use a rest/rotation method of grazing which is timed to balance plant growth with livestock grazing. The Shields’ water management practices include two projects in collaboration with the Natural Resource and Conservation Service. The first is a water delivery system that allows water to reach areas in need of irrigation. The other involves the creation of a drainage system to relieve a meadow of stagnant water. The Shields uphold the idea that economic success can exist alongside environmental sustainability, which is something Ben and Bet Kettle understood long ago. “I find no controversy between good conservation practices and good ranch management,” Bet Kettle said. “No family ranch endures into the fourth generation without sustained conservation efforts. We take care of the land and the water. That care rewards us in business and in quality of life.” The Leopold Conservation Award is presented annually in Colorado by Sand County Foundation and CCA. This year’s award was presented by Sand County Foundation Director Ed Warner, June 18, 2007, at the CCA Annual Convention at the Sheraton Resort in Steamboat Springs. For more information, visit www.leopoldconservationaward.org, e-mail Traci Eatherton at traci@coloradocattle.org, or call 303/431-6422.

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Thursday, December 20,2007

COMMENTS

by WLJ
July 4, 2005 It’s official; the U.S. had its first domestic case of bovine spongiform encephalopathy (BSE). Now we’re on the inside of this BSE circle looking out. We can’t say that it was an imported cow and that we don’t have any BSE in the U.S. We’ve got one. It’s unfortunate; but now we have to deal with it and move on. There has been a tremendous amount of speculation in regards to USDA’s handling of the issue. I suppose that when this cow was initially tested last November, USDA felt pretty confident that it was just a routine follow up on a false positive and that the immunohistochemistry test (IHC) was the absolute end-all best test. One thing we can be confident about is that the USDA testing protocol, for the most part, did work. The cow never made it into any feed or food supplies; even the pet food company wouldn’t use her. She was incinerated, unlike the Washington cow that did go into the supply. I’ll say one thing about USDA and that is they do have a little explaining to do. They were accused of making several protocol mistakes on this one, and several others prior to Ag Secretary Johanns taking the reins. It is somewhat perplexing that USDA had some holes in its testing protocol. You’d think, under the circumstances, that they would have treated this situation almost the same as nuclear waste—no room for error. There is a lot of finger pointing at the Animal Plant Health Inspection Service (APHIS) on their handling of this. Perhaps there is a need for change regarding who is responsible for what, and how this BSE testing is handled overall. When it comes to the packing plant, you have APHIS on the back door and the Food Safety Inspection Service (FSIS) on the front door. Experience has shown us that government agencies don’t play well with each other; cooperation doesn’t seem to be in their vocabulary. It may be time to take this BSE testing issue private, which the industry has already discussed for beef grading. And the only reason I mention that is USDA is indeed having a real credibility problem. I do have to give Mike Johanns a pat on the back for taking USDA’s issues head on, and it’s clear he has a tiger by the tail. Last week, USDA finally came clean on the origin of the cow. It was a 12-year-old Brahman cross cow from a Texas herd. The cow was born and lived its entire life on one ranch. They are now starting to look for the herd mates and her offspring. Not much information has been available about the feeding history of this animal. It’s going to be difficult for USDA to find the herd mates on a 12-year-old beef cow, seven months after the fact. This entire episode is going to aid the proponents of a mandatory animal identification system by adding fuel to help justify their cause. Ironically, the same agency that botched up the BSE testing is going to administer the national ID program. I would have to imagine that those in the Canadian cattle industry are starting to gloat a bit. Their contention has always been it’s not if the U.S. gets a case of BSE, it’s when. It would seem appropriate to change the tune of this issue and support the idea that we have detected one cow in 388,000 tests. This month we will have several federal courts take a look at live cattle imports from Canada, which is only about BSE. I would think that any discussion about live cattle imports and BSE may have just hit a brick wall. Now the term North American beef has a little more meaning and winning back export markets may take a bit longer. Taiwan stopped imports the day of the BSE announcement. All of a sudden, the BSE standards recommended by the World Animal Health Organization (OIE) look pretty reasonable. And honestly, the market showed absolutely no reaction to the BSE announcement. There will be some politicking on this one in Congress, which is unfortunate. It’s very clear that we in the beef industry are the only ones that are having a problem with BSE. Consumers don’t seem to be concerned, and neither should you. — Pete Crow

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Thursday, December 20,2007

GUEST OPINION

by WLJ
July 4, 2005 Country-of-origin labeling (popularly known as COOL) for beef and other meat products remains a controversial and divisive issue in the beef industry. A mandatory COOL program is scheduled to take effect in September 2006, but funding for that program is now seriously in question. An alternative to mandatory COOL is House Resolution 2068, also known as the Meat Promotion Act, which was recently introduced in the U.S. House of Representatives. Cattlemen favor COOL in some form––on that point, most of us are in agreement. But some proponents of mandatory COOL seem to go way beyond the desire to distinguish the quality and characteristics of U.S.-raised beef from beef raised in other countries. They would have consumers believe that if beef does not carry a “Raised in the USA” label, it may or may not be safe. Nothing could be further from the truth. The top priority for all cattlemen should be to assure consumers that all beef offered for sale in the U.S. is absolutely safe, or it will be removed from the meat case. I am as proud as anyone of the quality of the beef we produce in the United States, but I don’t need to frighten consumers into choosing it over foreign-raised beef. Consumer confidence is essential to growing beef demand, and we cannot undermine that confidence by implying that only “some beef” is safe, while some may or may not be. Supporters of mandatory COOL also overlook the fact that the vast majority of imported beef sold in the U.S. won’t fall under the mandatory labeling requirements that they tout so proudly. In fact, the overwhelming majority of imported beef consumed in this country is purchased through food service outlets, and therefore will not be labeled under the program set to take effect in 2006. So in the average grocery store meat case, over 90 percent of the beef offered for sale will carry the USA-origin label. Do I really need an expensive, mandatory program to distinguish my product from less than 10 percent of the beef with which it competes? How is that serving the interests of U.S. cattlemen? In fact, product differentiation is where I part company most strongly with proponents of mandatory COOL. Because such a large percentage of the imported product will be exempt and the vast majority of the product in the retail meat case would carry the U.S. label, mandatory COOL will just homogenize our brand and make it meaningless. Worse yet, we’ve paid for it (because the cost of business will be pushed down to the cow/calf operator) instead of getting paid for it. For adding value to our product by producing higher-quality, source-verified cattle, we should receive a return on our investment instead of being stuck with added cost. The success of many voluntary branded beef initiatives, that tout not only quality but also source identification, should be a signal to our industry that a mandatory solution is not needed. Our country was founded on free enterprise, not socialism or isolationism. We need to let the free market system in this country decide the value of origin labeling. As a cattleman who takes great pride in the beef I raise, I want to appeal to consumer’s desire for a quality product, rather than pander to unfounded fears about food safety. I also want the ability to be innovative and to differentiate my beef from other products—both foreign and domestic. I therefore feel that the voluntary measures proposed in the Meat Promotion Act offer a superior alternative to the costly, mandatory COOL requirements scheduled to take effect in 2006. — Marshall Edleman Editor’s note: Marshall Edleman is a cattleman from Willow Lake, SD, and a member of the National Cattlemen’s Beef Association.

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