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Friday, July 20,2007

BEEF BITS

by WLJ
4, 2005 Austria discovers second BSE case A second confirmed case of bovine spongiform encephalopathy in Austria appears to be an isolated case as all other cattle at the affected farm tested negative for the deadly brain-wasting disorder. Austria’s health and agriculture ministers said an 11-year-old cow from a small farm of seven cattle near the German border in the province of Vorarlberg had tested positive for the disease. All seven animals were slaughtered. Kosher plant opens in Nebraska Meat company, Local Pride, opened a kosher beef, lamb and bison packing plant in an existing but shuttered facility in Gordon, NE, in late January. The plant has stood idle since 1996. Local Pride is owned by the Rubashkin family, which also owns Agriprocessors, a kosher meatpacking plant in Postville, IA, that has drawn fire from animal-rights activists for its slaughter practices. Boston Market adds sirloin items Boston Market recently added sirloin meals to its dining menu. The new items are a five-ounce and eight-ounce lean steak entree, a barbecue-sirloin-and-cheddar-cheese sandwich, and a sirloin-dip sandwich. Average prices for the steak meals meals are $7.99 and $10.99. A la carte, the sirloin retails for $10.49 for a one-pound entree. The barbecue-sirloin sandwich sells for approximately $4.29, and the sirloin dip for $5.99. As part of the product introductions, Boston Market is partnering with the Cattlemen’s Beef Board and the National Cattlemen’s Beef Association to distribute coupons for the new items at blood drives throughout the U.S. Packers’ employment falling According to the U.S. Bureau of Labor Statistics, employment in the meat packing industry has declined by almost 10,000 jobs since May 2003, with the majority of those layoffs being from cattle and beef processing facilities. Packing industry sources cited the U.S.’ cessation of Canadian cattle imports as the primary reason for the fall. In May 2003, meat packing employment was 153,100 people. But by April 2005, employment declined to 143,300. Russia reports HMD outbreak All the livestock in the village of Busse in Russia’s Amur region were slaughtered following an outbreak of hoof-and-mouth disease(HMD). A total of 236 cattle have been destroyed. A total of six hundred kilos of napalm has been brought to Busse to incinerate the corpses. The outbreak has been caused by the Asia 1 virus. Recently, 20,000 doses of a polyvalent vaccine were sent to the Amur region. “Russia has not seen this type of virus so far. It has penetrated from China. This is an entirely new virus and the local cattle have not adapted to it yet,” Aleksandr Nesterenko, head of the agro-industrial department of the Amur administration said. Security measures in the southern part of Russia’s Far East have been stepped up due to the HMD outbreak. Czech Republic may have 20th BSE case Preliminary tests indicate another case of bovine spongiform encephalopathy (BSE) in the Czech Republic, the country’s second such case this month and its 20th thus far, according to the state veterinary authority. The last Czech case was confirmed 11 days ago, reports Meatingplace.com. Final test results from the second animal will be available next week. In all previous cases, initial positive results were confirmed in final testing. The Czech Republic’s first case of BSE was reported in June 2001. Pincher Creek to house plant Designs are underway to build a beef processing plant in Pincher Creek, Alberta. The plant is said to be worth $3.1 million U.S. New Generation Processors, a co-op planning the facility, is in the process of getting local municipal approvals before it moves to scheduling construction. The plant will be located on a 22-acre site in Pincher Creek and will slaughter between 200 and 325 cattle per day. At present, all investors are Albertan, but the facility is convenient to British Columbia, and New Generation plans to market shares to B.C. cattlemen. The co-op hopes to open its doors within 12 months. New Generation can be contacted at 403/627-3301.   China opens its first Burger King Burger King opened its first Chinese outlet in Shanghai on Monday, hoping to take a bite out of the rival McDonald’s profits in the booming Chinese fast-food market, according to the Associated Press. Along with famous menu offerings such as the Whopper, the outlet will also sell items customized to Chinese tastes, including a hamburger seasoned with the spicy mala sauce of southwestern China, the company said. Burger King has a lot of catching up to do in an already crowded Chinese fast-food market dominated by U.S. chains McDonald’s Corp. and KFC Corp. McDonald’s plans to open about 100 more restaurants in China this year, adding to the 600 plus it already operates there. © 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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Friday, July 20,2007

BSE case spurs testing changes

by WLJ
4, 2005 In addition to confirming the presence of bovine spongiform encephalopathy (BSE) in a cow first tested for the disease last November, USDA on June 24 also announced plans to change its testing protocol for the disease. U.S. Agriculture Secretary Mike Johanns said two different confirmatory tests were performed by the Veterinary Laboratories Agency (VLA) testing facility in Weybridge, England, and that additional tests were also conducted by U.S. Animal and Plant Health Inspection Service scientists. All those tests came back positive for the disease. “Last November we had an inconclusive report from a rapid screening test. USDA then conducted two IHC (immunohistochemistry) confirmatory tests, and both came out negative. A few weeks ago, an additional confirmatory test was conducted, and that test is referred to as the Western blot test,” Johanns said during his June 24 announcement. “On June 10 I learned that test was reactive and shared those results at that time.” “We now have the test results from the lab in Weybridge, England, as well as the results from additional testing in our own lab....The results confirm the presence of BSE in this animal....” Johanns and APHIS chief veterinarian John Clifford both reiterated that the suspect animal was a downer cow that was condemned from entering both the human food or livestock feed chains and that there was no opportunity for the disease to spread to the U.S. human or livestock population. “It is critically important to note that this animal was identified as a high risk animal,” said Johanns. “A sample was taken, and the carcass was incinerated.” Despite that fact, Johanns still announced that the testing protocol for the disease would be changed to include utilizing both the IHC and Western blot processes as confirmatory tests on “preliminary inconclusive” rapid test results. If results from either confirmatory test are positive, the sample will be considered positive for BSE. “I want to make sure we continue to give consumers every reason to be confident in the health of our cattle herd,” Johanns said. “By adding the second confirmatory test, we boost that confidence and bring our testing in line with the evolving worldwide trend to use both IHC and Western blot together as confirmatory tests for BSE.” He added that he was made aware of some variations in the IHC test between England and the U.S. However, Dr. Danny Matthews, transmissible spongiform encephalopathy program manager for VLA, said the variations do not result in either one of the countries’ BSE testing protocol being less effective or accurate than the other. “There are no two laboratories around the world that are using identical IHC methods and not a single test that you can take off the shelf,” said Matthews. “And, in fact, there's been quite a lot of resistance in Europe when there was an attempt to see if there was any scope for having a common protocol. In some cases, just variations in water content can actually mean that your test does not perform equally. So it really is appropriate for each laboratory to develop the test that works best for them.” Johanns said USDA will work with other international scientists to see if any additional changes to BSE testing protocol are necessary. Johanns and Clifford both remained confident that the U.S.’ BSE testing program is effective in ensuring both producers’ and consumers’ confidence in the health and safety of U.S. beef. According to USDA statistics, as of June 26 a total of 394,613 “most at risk” cattle have been tested for BSE under the stepped up testing protocol which was implemented June 1 of last year. There have been three preliminary inconclusive results and only one cow has been confirmed to have the disease under that program. On a weekly basis, the volume of testing has dropped off the past couple of months with only 5-6,000 tests being conducted per week. The peak season for testing was this past March and April when 10,000-11,000 tests were done weekly. Officials close to the testing program said the drop off in numbers is simply a matter of seasonal trends in the amount of “most suspect” cattle available for testing and that the “most at risk” population has almost been exhausted. When the program was first announced, APHIS Administrator Ron DeHaven said that there were around 450,000 head of cattle that were considered to be at higher risk for being infected with the disease. There are still several months before the maximum 18-month testing program time frame is reached. — 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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Friday, July 20,2007

New logo signifies push for mCOOL

by WLJ
4, 2005 The Cattlemen’s Competitive Market Project (CCMP) last week officially launched a “public awareness” campaign concerning mandatory country-of-origin labeling (mCOOL), including the unveiling of a new USDA RAISED BEEF logo. CCMP is a consortium of various state, regional and national livestock organizations who have been in favor of mCOOL ever since it was first passed by Congress in 2002. Among the CCMP member organizations are South Dakota Stockgrowers Association, Independent Cattlemen of Nebraska, Montana Cattlemen’s Association, Oregon Livestock Producers, Cattle Producers of Washington, R-CALF USA and the Organization for Competitive Markets. “The USA RAISED BEEF ‘Ask For It’ initiative is designed to increase consumer awareness and to encourage consumers to ask for USA Raised Beef at the point of sale,” CCMP said in a statement last Tuesday during a press conference in Washington, DC. “By educating consumers, and soliciting their involvement, mCOOL will be given the importance it deserves. When consumers are made aware that they cannot determine where their meat comes from, they immediately question grocers and political representatives urging that the information be included on product labels in their local stores.” The group added that the “Not Just Any Beef” portion of the logo is a key component of the educational process informing consumers that the USDA inspection stamp deceives consumers and misleads beef purchasers who believe it means beef raised and processed in the U.S. “In reality, the federal stamp is applied to cheap imported and unidentified beef. Currently, the U.S. accepts imports of beef into the food chain from more than 30 nations, all of which is sold to consumers under the guise of the USDA grade stamp of approval,” the group said. CCMP officials cited results of a recent survey that shows 85 percent of consumers surveyed want COOL; 74 percent support the idea of Congress making the program mandatory; and 55 percent have “little or not much trust” in the meat, seafood, produce and grocery industries to voluntarily provide country of origin labeling. The 1,000-person poll was conducted June 9 - 13 by Lake Snell Perry Mermin and Associates. A proposal recently approved by the full House delays funding for mCOOL until at least the beginning of fiscal year 2007, which means Sept. 1, 2006. No similar language has yet been introduced in the Senate, and senator staffers indicated that such language would be included in their version of the Ag Appropriations Bill for FY 2006. The Senate is expected to discuss and vote on an ag appropriations package sometime during mid-July, according to lobbyists. Once that is done, the House and Senate will send both proposals to a conference committee, where a compromise ag appropriations bill will be hammered out. Sources from both houses were uncertain as to whether the funding delay for mCOOL would be included in the conference version of the bill. — 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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Friday, July 20,2007

Infected cow native to U.S.

by WLJ
4, 2005 — Animal born and raised on Texas ranch. Officials with USDA’s Animal and Plant Health Inspection Service (APHIS) last Wednesday confirmed that a cow infected with bovine spongiform encephalopathy (BSE) was U.S. born and raised. It is the first domestic case of the disease confirmed in the U.S. According to John Clifford, chief veterinary officer for APHIS, the Brahma-cross cow was 12 years old when she was shipped to a pet food plant in Texas last November. She was born and raised on the same ranch in Texas all her life. When she arrived at the plant, the cow was not able to stand or walk and was condemned from entering the animal feed chain. Instead, brain samples were collected and the animal was incinerated. APHIS is currently working on tracking down any cohorts or herd mates that would be considered most at risk for BSE. “The source herd is under a hold order as we identify ‘animals of interest’ within the herd,” Clifford said. “Animals of interest include animals that were born the same year as the infected animal, as well as those born the year before and the year after. We may expand our inquiry to include all animals in this herd that were born before the feed ban went into place in 1997.” In 1997, a federal regulation was put in place that eliminated the use of ruminant meat-and-bone meal (MBM) in ruminant feed. MBM could include bits and pieces of central nervous system tissue, which is thought to carry the malformed proteins responsible for the disease. Clifford also said his department is interested in any of the animal's offspring that were born within the last two years, which means the last two calves. Last week’s announcement was several days after USDA announced the confirmation of the disease in the animal, but officials said they had to do DNA analysis to trace back the animal to its herd of origin. When the sample was first collected last November it was mislabeled with the wrong breed of the animal and was also commingled with at least four other animals that were being tested for the disease, Clifford said. In addition, Dr. Bob Hillman, state veterinarian for Texas, said that the laboratory from College Station that did the original testing on the infected cow’s sample conducts tests on cattle from states other than Texas, and that extra time was needed to gather the information concerning the cow’s origin and path of movement, if any. The name and specific location of the quarantined ranch has not been released. Clifford added that information would probably not be released through their office. He said releasing that information could violate the producer’s individual right to privacy. — 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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Friday, July 20,2007

Private property ruling criticized

by WLJ
4, 2005 — Supreme Court: economic development is public use. — Farms, ranches could be impacted. Private property groups, including farming and ranching organizations, were dismayed and upset with a recent Supreme Court decision allowing local governments to “take” private businesses, homes and/or land in order to promote economic development. The vote was 5-4 in favor of the town of New London, CT. Petitioners from the town alleged their Fifth Amendment rights were violated and challenged the city government’s use of eminent domain to take and pay for residential property which would be used to build a retail and entertainment area. In 1998, pharmaceutical manufacturer Pfizer, Inc. agreed to build a $270 million research facility next to the area involved in the lawsuit. The New London City Council then adopted a plan to redevelop 90 acres of that neighborhood, and transferred power of eminent domain to the private, nonprofit New London Development Corp., which was in charge of that redevelopment plan. According to the plaintiffs in the case, the city had no right to take their property except to build projects for “explicit public use,” like roads or schools. However, the court’s majority opinion indicated that economic development was considered within the realm of public use. “There is no basis for exempting economic development from our traditionally broad understanding of public purpose,” said Justice John Paul Stevens, who wrote the majority opinion. “Petitioners contend that using eminent domain for economic development impermissibly blurs the boundary between public and private takings....our cases foreclose this objection. Quite simply, the government ’s pursuit of a public purpose will often benefit individual private parties.” Other justices in the majority were Anthony Kennedy, David Souter, Ruth Bader Ginsburg, and Stephen Breyer. In addition, the majority opinion appeared to give local governments the authority to purchase and redevelop privately-owned areas if they are deemed run down or dilapidated. The four dissenting votes were by Chief Justice William Rehnquist, Sandra Day O’Connor, Antonin Scalia and Clarence Thomas. In her dissenting opinion O’Connor said, “Today, the court abandons the long-held, basic limitation on government power. Under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner, so long as it might be upgraded—i.e., given to an owner who will use it in a way that the legislature deems more beneficial to the public—in the process. To reason, as the Court does, that the incidental public benefits resulting from the subsequent ordinary use of private property render economic development takings ‘for public use’ is to wash out any distinction between private and public use of property—and thereby effectively to delete the words ‘for public use’ from the Takings Clause of the Fifth Amendment.” Private property groups were upset with the ruling saying that it now opens up all house and property owners as potential targets by city governments looking to expand their boundaries or improve their economic viability. “We are outraged that the Supreme Court ruled government bodies can use eminent domain authority to take private property for economic development by private businesses. The ruling in favor of the city in Kelo v. City of New London could have serious negative consequences to farmers and ranchers,” said Bob Stallman, president of the American Farm Bureau Federation (AFBF). “Apparently no one’s home, farm and/or ranch land, is safe from government seizure because of this ruling.” AFBF was one of many farm and ranch-based organizations that filed amicus curiae—also known as “friend of the court”—briefs. “Farmers and ranchers are having problems maintaining their fields and pastures for food and fiber production. They are contending with urban sprawl and need protection against government bodies having free reign to take land.” The other point of contention from plaintiffs and “friend” petitioners was that the land can be “taken for less than fair market value.” Property Rights Attorney David McIlheny, Joplin, MO, told WLJ last week that the Supreme Court’s decision could even result in some municipalities taking private property or land without paying for it, if land or property owners don’t agree to an original offer. “It appears landowners’ hands could be tied, with this decision,” McIlheny said. “There isn’t anything explicit in the ruling about ‘fair’ and/or ‘market’ value being paid for targeted property.” There were concerns that farms and ranches located on the “near outskirts” of municipalities could be the most impacted by this decision. “Those are probably the operations that need to be the most concerned with this decision, particularly if they are in ‘prime development’ areas,” McIlheny said. — 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, July 16,2007

BEEF talk

by Kris Ringwall, North Dakota State University
Back to the fungus Reviewing the cow/calf priority list (“Priorities First: Identifying Management Priorities in the Commercial Cow-calf Business”) that was summarized and authored by Tom Field, Ph.D., Fort Collins, CO, it is very obvious that the highest priorities for cow/calf producers are directly related to the purpose of the cow. That purpose, to annually produce a calf that will convert roughage from ruminant forage to nonruminant feed, is a very important part of the food chain. Whether food for other animals or food for humans, the conversion of forage by ruminants to protein for use in nonruminant diets certainly is important. The production of beef for the human diet is the driving force in the commercial beef industry, which is an industry that is more and more dependent on grass. Some would argue with that statement by noting that the cow/calf business always has been a grass-based industry. However, in the world of cheap, harvested feed, the industry has shifted at times. More manually harvested feeds have been a significant part of the cow/calf enterprise. However, the pasture and range category is No. 2 in the rankings of commercial cattle producers and the top two subcategories involve usage. That usage, as one might guess, involves stocking rate and the timing and duration of grazing. The priority settings do provide a glimpse into how cow/calf producers view the resources around them and open the door to a discussion of missed opportunities. In the area of pasture and range, it is the plants that form the foundation of the ranch. One could even go further and note that soil health is fundamental to the plant community. It is through monitoring and evaluation of the plants that one really learns the guts of a grass operation. The coming and going of various plants throughout a grassland community tells a lot about what is happening, not only on grazing impact, but also what one doesn’t see, which is the living world beneath our feet. This spring definitely was a mushroom spring. What is great about the world of mushrooms is that they simply are giving you a view of a world we cannot routinely see, at least not with the naked eye. Earlier, Lee Manske, Dickinson Research Extension Center range specialist, and I reported on a quick review of a few types of mushrooms evident on our walk in search of fairy rings. The mushrooms are the fruiting bodies of a fungus and the fairy rings are of the genus Chlorophyllum. Along the walk, we found a large number of hygrophorus, amanita, russula, armillarius, mycena, panacolus and cortinarius mushrooms. All these mushrooms must live on organic matter. Many of the fungi break down or decompose dead plants and animals. Furthermore, mycelium is the network of filamentous hyphae that form the typical vegetative structure of fungi and are always present in the soil. One does not need to look across the landscape to see life. All we need to do is look under our feet to find abundant life. The principle of good stewardship of the land literally starts under our feet and is the basis of the principles that establish the accepted grazing systems that producers use. In fact, according to Manske, fungi literally hold our grassland communities together. For example, the activity levels of rhizosphere fungi have the ability to aggregate and stabilize soil particles and thereby improve the quality of the soil in grassland ecosystems. The priority ranking is right because the overall management of the pasture and range has considerable significance for the development of today’s biologically effective grazing management system. However, don’t just look at usage because monitoring the health of grasslands is very complicated, and don’t forget to look at the plants and the soil they are growing from.

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Monday, July 16,2007

Educational beef tour schedule set

by WLJ
Lunch begins at 11:30 at the River Bend Ranch Headquarters, located east of Limon, CO, off I-70 at Exit 354 then .75 miles west. The program will conclude around 3:30 p.m. Joe and Cindy Frasier, Frasier Farms—River Bend Ranch are inviting beef producers, educators, industry representatives and others to their ranch near Limon, CO, for a tour on Thursday, Aug. 16, 2007, beginning with a lunch at 11:30. Lunch is sponsored by Red Angus Association of America (RAAA). During the tour, participants will get a first-hand look at how River Bend Ranch uses a Synchronized Artificial Insemination Breeding Program in their summer calving program. The day of the tour is the mass-insemination day for cows on an estrous synchronization protocol coordinated by Frank Carlson from ABS Global, Inc. This protocol also employs short-term calf removal to enhance pregnancy rates. The Frasiers are using Red Angus sires as part of progeny test evaluations for RAAA. Participants will also see first-hand how the use of radio frequency identification tags for record- keeping has been integrated with mating choices, breeding and calving records and marketing opportunities for Source and Age Verification through U.S Premium Beef. River Bend Ranch moved from a traditional season of calving to summer calving nine years ago. Joe will describe why they made this decision and the benefits he has seen by incorporating this management practice in his herd. The tour will also include a stop and discussion of how the River Bend Ranch is effectively using Management Intensive Grazing to improve range condition and productivity. Participants in the tour will observe the pasture cell structures and their use in rotational management. The Frasier families have been ranching in eastern Colorado since 1947 and are no strangers to the Colorado beef industry. They received the National Cattlemen’s Beef Association Regional Environmental Stewardship Award in 2003. The Colorado State University (CSU) Beef Team is serving as coordinators for this tour and encourages cattlemen to plan to attend this very educational event. For more information, contact Mick Livingston, Kit Carson Cooperative Extension Office in Burlington, CO, at 719/346-5571, or email mick.livingston@colostate.edu; Jack Whittier, CSU Beef Extension Specialist, Fort Collins, CO, at 970/491-6233, or by email jack.whittier@colostate.edu; Roger Ellis, CSU Extension Veterinarian, Fort Collins, CO, phone 970/297-4516, email roger.ellis@colostate.edu; or Michael Fisher, Yuma County Extension Office in Wray, CO, phone 970/332-4151, emai MJ.Fisher@ColoState. edu.

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Monday, July 16,2007

Distillers grains vital to future success

by WLJ
There’s no reason the cattle-feeding industry in Texas cannot remain strong and viable if it incorporates distillers grains into rations, said a Texas Agricultural Experiment Station researcher. “Our concern has been, ‘Will there be enough feed?’” said Dr. Jim MacDonald, Experiment Station beef cattle nutritionist. “Assuming all the distillers grains are available for livestock feed, clearly there will be.” But, MacDonald said, the ratio of corn being fed vs. distillers grains could go from 11-to-1 today, to 3-to-1 nationally in the next 10 years. “So we’d better figure out how to feed distillers grains,” he said. Relatively few distillers grains are fed in the southern Plains states now, MacDonald said. Some beef producers are reluctant because there’s no incentive and no ready supply.  However, with the opening of two ethanol plants scheduled later this year in the Texas Panhandle, a steady supply of distillers grains should be available, making the alternative feedstock more attractive, he said. “In the future, as long as it is priced relative to corn, I think there will be a necessity to use this new large pool of feed,” MacDonald said. The proportion of corn used from 2002 to 2006 hasn’t changed much in the areas of human consumption, high fructose production or exports, he said. The biggest change has been corn moving from the livestock-feed sector to the fuel-ethanol sector, MacDonald said. Livestock feed has decreased from 60 percent to 55 percent in that time period, while the ethanol fuel sector increased from 8 percent to 14 percent. However, National Corn Growers Association forecasts show that while the percentage has decreased, the actual bushels of corn produced will continue to increase due to higher yields and acres planted, he said. The acres of corn harvest is expected to rise from the current 71 million to 80-85 million over the next five years, MacDonald said. Yields are projected to rise to almost 180 bushels per acre in the next 10 years. “We’re not sure how big the ethanol industry is going to get, but if every plant being proposed as of now gets built, the Renewable Fuels Association says we’ll be producing 12.5 billion gallons of ethanol a year from starch,” he said. In estimating feed availability for livestock, MacDonald assumed as much as 15 billion gallons of ethanol being produced annually. At that rate, 35.5 percent of all corn would be needed for ethanol. This would bring the amount of corn available for feed down from the current 60 percent to 33.5 percent, assuming the other categories remain steady. Because yields are expected to increase, he said the decrease of actual corn fed will not be as dramatic, going from 6.1 billion bushels in 2006 to 5 billion bushels by 2017. The beef and dairy industries are in the best position of any of the livestock industry to use distillers grains, MacDonald said. Based on the number of plants proposed in the Texas High Plains, he estimated feed yards will need to include 15 percent to 20 percent of distillers grains in the diet (moisture-free basis) to use all the available supply. The two Hereford, TX, plants, with a combined 200 million gallons of ethanol production per year, will produce 665,000 tons of distillers grains, he said. This quantity alone would be enough to include 6 percent to 7 percent distillers grains in the diets of the 5.75 million head of cattle fed in the Texas, New Mexico and Oklahoma region. If a proportion higher than 20 percent were included into area feed yard and dairy rations, distillers grains will need to be railed in from the Midwest, he said. Growth of the ethanol industry in the Corn Belt has created a greater demand for corn in that area, MacDonald said. However, they now have a large surplus of distillers grains. That could make them cheaper to rail into Texas than whole corn. In the tri-state area, distillers grains would be mixed with steam-flaked corn. This is different from in the Midwest, where dry-rolled corn is fed, he said. Several studies are under way to see how to maximize the use of distillers grains in the feed yard situation, MacDonald said. Those results should be available later this summer.

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Monday, July 16,2007

Ag land tax breaks threatened in California

by WLJ
—Funding for Williamson Act dollars faces veto threat. Williamson Act payments to California counties, which offset tax decreases on agricultural land, could disappear if Gov. Arnold Schwarzenegger carries out his plan to axe the estimated $40 million in funding during this year’s budget negotiation. His initial budget contained no money for the program, however, after an uproar, the California Legislature added funding for the program to its budget package. However, the program remains in jeopardy; the governor could still use his line-item veto power to remove the funds. The Williamson Act is a program, similar to a conservation easement, which allows California producers to guarantee that their land will remain in agricultural production for a period of 10 or more years in exchange for a tax break on property enrolled in the program. Funding of just $40 million for the Williamson program represents a small fraction of the state’s enormous $103.7 billion budget. For the state’s producers however, it represents a substantial savings in terms of property tax assessments. In all, according to the California Department of Conservation, 16 million of the state’s 29 million acres of agricultural land in 54 counties are enrolled in the conservation program. But John Gamper, director of taxation and land use at the California Farm Bureau Federation (CFBF), said administration officials are indicating that the governor might go ahead with the cut, even if it means overriding the Legislature with a veto. Proponents of the Williamson Act argue that it is important to maintain land protected under the act for conservation and land use reasons. CFBF said funding the program encourages more responsible planning to protect “our members right to farm,” according to Gamper. He said in the most recent poll of landowners who participate in the Williamson Act program, 85 percent of participating landowners are “satisfied” or “extremely satisfied” with the benefits brought to them by enrolling in the Williamson Act. It is estimated the Williamson Act can save agricultural landowners from 20 to 75 percent in property tax liability each year, or approximately $150 million statewide, according to Gamper. “A survey of landowners in Williamson Act contracts concluded that one in three would not be farming or ranching without the act’s benefits,” said Gamper. As an example of how the cuts would impact counties, in 2005, Amador County received roughly $110,000 in subvention funds from the Williamson Act, according to county auditor Joe Lowe, who said the county puts the money into the general fund to cover property tax losses created by Williamson Act enrollments. Currently, Amador county has 94,000 acres, a third of the total acreage in the county, covered by the Williamson Act. The total appraised value of that property, if assessed at the Proposition 13 value and not with the tax break from the Williamson Act, is $133 million. This means the county would receive $1.3 million in property tax revenue from those areas, according to the county assessor. But, while those lands remain under the Williamson Act, they are assessed at $42.5 million and the county collects about $426,000 in property taxes plus the $110,000 in reimbursement funds from the state, the assessor’s office said. — John Robinson, WLJ Editor  

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Monday, July 16,2007

Heavy feeder cattle lead the way higher

by WLJ
—Fed market rebound and lower corn provide added boost to strong video auction prices paid for yearlings. Fed cattle trade this week got an early start as short-bought packers slowed production speed and started off with bids steady with the prior week. Feedlots, on the other hand, held firm, looking for higher prices for available fed cattle, which are reported to be in very current condition. It appeared last week like cattle are also being pulled forward to fill packer demand. Nebraska live trade started Tuesday at $142 with live trade in a range of $89-90 although volume was reportedly light to a single regional packer. Elsewhere, bids were still being rejected last Thursday as feedlots used their market advantage to push for higher prices. In Kansas and Texas, packer bids were at $88-89 live, while dressed bids in Colorado ranged from $142-143 and in Iowa from $140-142. Analysts last week expected live prices to reach the $91 live and $141 dressed level before any major trade would occur. The short-bought status of packers had them slowing their production speed slightly last week as they attempted to stay out of the market as long as possible and add value to cutout prices. Slaughter volume through last Thursday was estimated at 497,000 head, well above the previous holiday shortened week tally of 378,000 head, but lower than the same period in 2006 when the total reached 501,000 head. The bounce in the fed cattle market over the past six weeks shows that feedlots probably could have avoided the sharp drop to the low $80 level had they stood firm on asking prices. Occasional early week trade for lower money in the north didn’t help the cause of southern Plains feedlots which tended to market cattle later in the week. The past three weeks have seen a continuation of the trend with southern feeders generally trading higher than their northern counterparts. With tight supplies of fed cattle in the immediate future, the summer low is likely in place and prices should continue higher. The upcoming cattle on feed report is expected to show placement levels about 12 percent below June 2006. Adding to the picture are the prices being paid by feedlots for heavy weight placements for immediate delivery. Those cattle are being purchased to fit into the late fourth quarter marketings, which are trading on the Chicago Mercantile Exchange (CME) in excess of $99. With the recent corn market slide and the shortage of market-ready fed cattle ahead, the market picture for cattle feeders is looking better than many expected it to this year. However, retail demand will need to perk up if the cash market is going to fulfill market expectations in the fourth quarter.  HedgersEdge.com estimated last Thursday that packer losses are at $3.80 per head, which is largely the result of poor movement of beef at the wholesale level. Last Thursday, Choice product was trading at $143.33, up 24 cents, while Select gained 30 cents by midday to trade at $137.25. Good fill-in trade following the 4th of July holiday two weeks ago helped move the cutout higher. Since then however, movement has fallen off and last Thursday’s morning volume was lackluster with only 234 loads trading hands. One bright spot continues to be the cow markets, which are strong as a result of good movement of trim and grind loads. Last Wednesday, 44 loads of trim and 82 loads of grind product sold.  That movement is reflective of strong retail demand for ground beef products as consumers hunt for value-priced protein at the supermarket. The high demand has maintained cow beef cutouts well above year-ago levels. Last Thursday, cow cutout values were up 66 cents to $116.82, and the 90 percent lean traded at $144.70, while the 50 percent product moved at $55.62. The upward surge in the Canadian dollar to near par with the U.S. dollar means that there is less incentive for producers north of the border to ship their culls to the south for processing. That has left a few northern packers with a short supply and added to the willingness to pay more for cull cows. Prices remain in the mid-$50s and could remain there well into the fall if expected U.S. herd inventory numbers are reported near analyst’s expectations. The inventory report, due out June 20, is expected to show the smallest calf crop in years and perhaps a shift toward herd building, one that has been stalled for the past year and-a-half as a result of widespread drought last year and surging corn prices this year. If retention numbers increase, it will lead to an even shorter supply of available heifers this fall and reduce the number of cows being sent to market later this year, adding further support to the cow market. Feeder cattle Western Video Market Auction and Superior Livestock Auction both held massive video auctions last week, setting the fall market in most places. From July 9-11, Western Video Market held their auction in Reno, NV, at the Silver Legacy Hotel and most lots in that auction sold well considering weather conditions throughout the western U.S. Approximately 155,000 head were offered, with very good demand for heavy cattle over 700 lbs., most ready for immediate or near delivery. Demand for cattle to put on feed is heaviest in the north central states but feeders in California were ready for cattle as well, with the futures looking good, keeping the heavier cattle moving at good prices, mostly in the $108-$115 range. Lighter cattle were a tough sell in the western states where drought persists, but the lots offered for later delivery, mostly from October-December, sold fairly well. Six weight steer and heifer calves did better after the first day of the sale, but concerns over high feed prices kept many buyers away from all but reputable cattle. Prices for 600-700 lb. steers stayed in the $110-$125 range, mostly $115-120. Jerry York, WLJ fieldman, was at the auction headquarters in Reno during the sale. “We definitely saw the heavy cattle sell very well. The lighter cattle for immediate delivery got pretty tough. There were a lot of no sales on the lighter calves, just because the drought has a lot of guys worried about where they’ll go with these cattle,” he said. “The lightweights that did sell very well were all from good reputation outfits. It is pretty typical to see those cattle coming out of higher performance sires sell better, but this year, in some cases, they were the only ones selling.” York said that some lightweight black-hided cattle went for as high as $138. “Again, the ones bringing top dollar and selling well were the calves from top-reputation ranches. Value-added cattle also helped some of the lighter cattle sell. The natural feeders were generally worth three to five cents more. Quite a few Certified Angus Beef and a number of age/source verified cattle were run through the auction and they all, for the most part, sold very well.” York also added that drought was not the only concern at this year’s auction. “Normally people will talk about the weather at sales and it will be the biggest concern for ranchers, but this year I heard a lot of people talk about high input costs and uncertainty over domestic security issues,” he said. “ I think, overall, people were waiting to see how some of these things panned out before they bought higher-priced cattle for immediate delivery. It wasn’t just fears about lingering drought keeping buyers from taking all the offerings.” Superior Livestock held their annual “Week in the Rockies” video auction July 9-14, and this year it was their largest auction to date with 330,000 head on offer. Prices at the Superior Auction followed those of Western Video’s closely, although more cattle were offered from the Plains states and eastern U.S. In the southern plains of TX, OK and NM, prices seen during the Superior Auction were better than at local weekly auctions, largely because of weather issues. While good moisture blesses some areas of those states, flooding in large areas of eastern Oklahoma and Texas has kept some muddy cattle going through the rings, and severe drought in the Deep South has forced many cattle from the east into auctions in the Plains. Demand at auctions for feeder cattle in all Western and Midwestern states was good to very good, with prices being up from previous sales in all cases. In country auction markets, volume at most locations is seasonally low, keeping even the lighter weight cattle going back on grass in strong demand. Most demand is spurred by cattle feeder confidence in the corn market staying down after the recent announcement of a larger corn harvest estimate. Both corn and cattle futures for the remainder of 2007 are giving the feed yards some attractive margins and demand has increased accordingly. In Joplin, MO, last week 5,100 head of feeder cattle were sold, with steers going for $3-6 higher at $106-122 for six to seven weights and heifers were mostly steady to $3 higher in the same weight range at $99-109. Receipts in Oklahoma City were up sharply from two weeks earlier with 9,111 head sold, although down by nearly half from a year ago. Demand was very good for all classes of cattle with a number of aggressive out-of-state buyers attending. There are still some quality issues as in the past few weeks at this sale, with a number of cattle coming from the east and being quite thin, although last week the quality picked up some. Both steers and heifers were $3-5 higher, with 600-700 lb. steers selling at $117-$127.75, heifers about $10 lower. Heavier cattle also sold very well, with all weights, include those over 1,000 lbs., selling above $100. Trade and demand were good in Abilene, TX, where 974 head sold. Prices compared to the last sale were better on all cattle and feeders were $2-6 higher. Feeder steers in the 600-700 lb. range sold at $105-116, heifers roughly $10 lower. The 800-900 lb. feeder cattle were only a couple dollars lower across the board compared to the lighter calves. Prices were sharply higher since the last sale for all classes of cattle in Clovis, NM, where 2,823 head were sold last week. Steers were selling $7-11 higher and, in some cases, $13 higher. Heifers were mostly $6-8 higher and, in instances, up $10. Steers sold at $109-$113 for mostly 600 lb. calves, and the same for 700- 800 lb. cattle. Feeder heifers in the 600-700 lb. range were $95-$98.50, with the same or slightly better prices on 700-800 lb. cattle. In Madras, OR, 668 head traded last week, with a number beginning to come in because of short grass reserves. Feeder steers there sold at $102-111 for 600-700 lb. cattle, nearly the same as 400-500 lb. calves which were trading at $105-115. Steers in Madera, CA, were selling for $89-99.50 for 600-700 lb. cattle, with heifers at $82-91. Steers of 800-plus lbs. were trading at $81-92.25. CME feeder cattle contracts finished on July 12 with August feeder cattle futures down 32 cents to finish at $1.14. November contracts settled at $1.14, down 52 cents on the day. — WLJ  

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