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Monday, January 24,2005

Environmental changes lead to more low-quality forage

by WLJ
Producers are well aware of the environmental changes that have evolved over the past decade or two. But, are producers prepared for future changes to the environment? Agriculture Research Service (ARS) scientists want producers to be aware that the ongoing drought may not be the only difficultly they need to account for in their production operation. These scientists are saying that elevated concentrations of carbon dioxide in the atmosphere may reduce forage quality, leading to reduced weight gain or more costly gain for livestock. Plant physiologist Jack Morgan at Colorado State University lead the study with ARS colleagues and cooperators. Morgan explained that researchers have noticed a steady rise in the concentration of carbon dioxide (CO2) during the last 150 years. Scientists expect the level of CO2 to keep rising mainly because of fossil-fuel burning, forest clearing and industrial manufacturing. If the theory of the intergovernmental panel on climate change holds true, atmospheric CO2 concentrations will double from today’s levels by the end of the 21st Century. In short, this will mean that the increased level of CO2 in the air will cause forage quality to drastically decline and leave producers with lesser quality feedstuffs. To test the possible effects, Morgan said researchers constructed six large chambers and installed them over native shortgrass prairie vegetation at the USDA ARS Central Plains Experimental Range in northeastern Colorado. Each chamber contained more than 25 different plant species, but was dominated by three perennial native grass species. This plant community was characteristic of vegetation grown in semi-arid grassland for thousands of years. The study was conducted over five years. During this time, half of the chambers were maintained at present atmospheric conditions of carbon dioxide. The other half of the chambers were enriched in CO2 to double the present carbon dioxide concentration from today’s concentration of about 360 parts per millions of CO2 to 720 parts per million-the expected level at the end of this century. Morgan said researchers found that increasing CO2 also increased plant growth. On average, more than a 40 percent increase in plant production occurred under doubled CO2 conditions. However, while there were more plants, forage quality declined in all three of the dominant grasses. The researchers primarily contributed the drop in quality to a decline in nitrogen concentration, or crude protein, in the plant shoots. “One might think that even with a decline in forage quality, this may not sound so bad since production increases so much,” said Morgan. “However, livestock performance can be limited by forage quality, and a decline in quality on native grasslands, where soil nutrients are not nearly as abundant as they can be in improved pastures, can have a significant negative impact on animal performance.” Many of the ARS colleagues share the opinion with Morgan that the decline in forage quality due to rising atmospheric CO2 may be one of the more important issues of global change facing ranchers. Of course, these researchers don’t want producers to be alarmed and think this will happen over night. Instead, scientists agreed that this will be a gradual change that will unfold over decades. “This study suggests that over the long haul, rising CO2 may significantly decrease forage quality across our native rangelands,” said Morgan. “The significance of this to cow/calf producers is that rising atmospheric CO2 may slowly be degrading the quality of native grasses their animals rely on.” Because this is such a critical matter for producers, the Rangeland Resources Research Unit has decided to continue its research. The next step Morgan says is trying to understand how rising levels of atmospheric CO2 affect the nitrogen cycle in nature. In conjunction with that study, one of the objectives is to determine whether there might be economical means to solve the problem of declining forage quality in native rangelands. The Fort Collins research station is also conducting research on grazing practices that may result in trapping more CO2 in rangeland soils. One theory is that producers could be able to inter-seed legumes into rangelands, which may improve the forage quality and also lead to more soil carbon storage. When asked what producers can do about the problem now, Morgan said there isn’t really a whole lot they can do, other than watch for research data which will suggest a solution. “At this point, I think this is an issue that producers and researchers ought to know about, just like we need to understand the long-term consequences of air pollution on human health,” said Morgan. “We are likely many years from solving this problem, but we wouldn’t be able to do much unless we know there is a problem in the first place.”

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Monday, January 24,2005

Letter

by WLJ
Shoot, shovel and shut-up Letter to the Editor, On Jan. 11, Canada announced another case of BSE in a beef cow that was born after the 1997 feed ban. I was not surprised by this finding, as our USDA has said that there could be up to 11 animals found before Canada would surpass the “minimum risk” category. However, I was greatly surprised when my uncle from Alberta gave me a call this morning. He stated that the Premier has instigated the “Shoot, shovel and shut-up” policy. Basically he has told the farmers and ranchers that if they have any animal that may be a high risk that they should shoot the animal, bury it and shut up about what they have done. Not only was I surprised but was awestruck. My uncle also advised me that the people in his area have not been eating beef due to these past circumstances and that I should notify my Congressmen and Senators of this whole ordeal. I have notified both. I truly believe that trade with Canada is very important, but not at the price of the people of the U.S. First, let’s protect ourselves by closing the border to Canadian beef and cattle. Second, let Canada get their cows in a row in the next year or two, then see about opening our borders to their beef and cattle. I know now that when I visit my uncle next fall that we will not be eating beef at his house. Sincerely, Corey Gall Tripp, SD

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Monday, January 24,2005

Obits

by WLJ
Charlie Bell Former president and CEO of McDonald’s Corp. Charlie Bell died Monday, Jan. 17, after battling colo-rectal cancer. Bell died in his hometown of Sydney, Australia, at the age of 44. Bell was elected McDonald's president and CEO by the board of directors in April 2004, following the death of Jim Cantalupo. Bell previously served as president and COO, and was responsible for the company's more than 30,000 restaurants in 119 countries, during which time he also became a director of the company. Before his promotion to president and COO in December 2002, Bell served as president of McDonald’s Europe, and was responsible for the company’s 6,000 restaurants in this geographic sector. Prior to that, he was president of Asia/Pacific, Middle East and Africa Group. He began his McDonald’s career at age 15 as a part-time crew member at the Kingsford restaurant in Sydney. Bell progressed quickly through the ranks, becoming Australia’s youngest store manager at age 19. He became a vice president at 27 and a member of the Australian board of directors by 29. Between 1983 and 1985, Bell spent two years working for the McDonald's Europe development company in Frankfurt, Germany, and worked with joint venture partners and developmental licensees in Sweden, Norway, Holland and Belgium in operations. He held the position of operations director and regional manager before being made vice president of marketing in 1990. In 1993, Bell was appointed managing director of McDonald’s Australia. Dorothy McArthur Dement Dorothy McArthur Dement, Myrtle Point, OR, died Sept. 25, 2004, in Woodburn, OR. She was 83 years old. Born Sept. 9, 1921 in San Jose, CA, to Robert and Leora McArthur. Dement attended Oregon State University where she was a member of the Alpha Z Delta Sorority, graduating with a degree in Home Economics. While attending Oregon State she met Sam Dement. They were married February 20, 1943, at Camp Roberts, CA, where he was serving in the United States Army. After the war she and Sam returned to Myrtle Point to operate the family ranch. She served as secretary for Sam when he was elected to the Oregon State Senate between 1968 and 1972. Survivors include her husband, Sam Dement, Myrtle Point; daughter Diane Simon and son-in-law Gary, Woodburn; daughter Joan Harpole and son-in-law Ron, Powers; sister Jean McKee, Mission Viejo, CA; sister-in-law Aileen Dement, Lakeport, CA; and numerous grandchildren, great grandchildren and nieces and nephews. Frank W. Orr Frank W. Orr, age 78, passed away January 4 at his home in Reno, Nevada. He was born September 12, 1926, in Vinson, Oklahoma, to Varner and Alice Orr. He is survived by his wife Mary of 55 years, son Stephan, Reno, brother Vesta and his wife Nelda, Sweetwater, TX, sister-in-law Louise Craft, Earth, TX, and numerous aunts, cousins, nephews and nieces. Raised on the family ranch, Orr attended high school and college in Texas before serving in the U. S. Army during WWII. Orr worked for Mill Iron Ranches, Texas; Lucky Hereford Ranches, Gilroy, CA; Ace Hereford Ranch, Gardnerville, NV; and with Green Gulch Ranch, Sausalito, CA, Bordertown NV and Vinton, CA, since 1966 until he retired in 1999. In lieu of flowers, donations may be made to the Church of Christ building fund or St. Mary's Hospice.

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Monday, January 24,2005

Packers’ supplies stall fed trade

by WLJ
— Feeders gain on spring prospects, corn decline. — Calves stronger on grazing outlook. Optimism that last week’s fed cattle prices would be stronger than the previous week’s level of $92-93 live, $145 dressed still hadn’t come to fruition as of Thursday. Fed trade was almost nonexistent last week with packer bids and cattle feeders asking prices being spread up to $6 apart. Analysts said they were expecting fairly active Friday afternoon trade, and that it would probably be at mostly steady money, if not a little softer than two weeks ago. Through mid-afternoon Thursday, only light trade had been reported in Nebraska at mostly $89-89.50 live, $144-145 dressed. Southern markets were inactive. Packers were not very active in the market last week despite seeing profits going over $22 per head. Analysts said packers purchased more than enough cattle during the first two full weeks of January to meet depressed slaughter chain speeds for a majority of the month. Between last Monday and Thursday packers had slaughtered 457,000 head of cattle, 7,000 fewer than the previous week, and a daily average of just over 114,000 head. Under normal circumstances, daily slaughter usually ranges between 125-130,000 head. For the week ending Jan. 15, 587,000 head of cattle were processed, a weekday daily average of 117,500 head. Several analysts were skeptical whether last week’s final slaughter figure would hit 575,000 head, compared to a “normal” weekly kill volume of 650-675,000 head. Year-to-date slaughter, through Jan. 15, totaled 1.161 million head, 137,000 head below a year ago. “Packers just don’t need many cattle for nearby production runs,” said Reed Zuhrmann, M&Z Livestock Analytics. “For the year packers have processed more than one day’s worth of cattle less than last year. It shows in their lackluster demand for cattle and their desire to still be bidding under $90 live, $145 dressed.” In addition, finishing weights of cattle are 20 pounds heavier than they were a year ago at this time and average carcass weights are 17 pounds heavier. “Fewer cattle are needed to produce even a similar amount of beef, compared to last year, and right now we are at least 10 percent off of total ‘normal’ demand, including pre-BSE export demand levels,” Zuhrmann said. Boxed beef markets were starting to soften last week, after a significant spike in both Choice and Select beef prices the week prior. At the close of business last Thursday, Choice beef was at $154.20, compared to $157.32 on Tuesday. Select dropped about $2 from Tuesday’s close, getting down to $149.84 at the end of business Thursday. If boxed beef prices dropped much further, packers would be close to going back to reporting red ink, and that was also influencing their decision to wait on buying fed cattle, analysts said. Live cattle futures were less than supporting to the cash market, particularly on Wednesday when losses ranged between $1.25-2 on most contracts, including February, which dropped $1.77 Wednesday, to $89.35. Yearlings spike $2 While cattle feeders were looking at yet another week of negative margins—mostly $40-60 per head—they were more than inclined to get into the heavy feeder market last week and buy them at stronger prices than the week prior. In most cases, 750-pound or heavier steers were bringing mostly $2 more than the week ending Jan. 16. There is still some optimism that the spring and early summer fed markets could be stronger, and that bullishness got even stronger after USDA indicated that beef trade with Japan could restart as soon as June. In addition, corn prices cheapened further early in the week and several sources said that it could be forward contracted at prices well below $3.50 per cwt. The March corn futures contract fell below $1.95 last week. The CME feeder steer index last Wednesday was at $106.36, compared to $104.61 the previous Wednesday. Calves follow Stocker operator demand for calves and lighter stocker cattle was called astronomical by several auction barn operators last week, and that resulted in prices for calves ranging anywhere between $2-7 higher than two weeks ago. Grazing prospects across most major cattle producing areas are still being called excellent, and several auction barn sources said most stocker operators are buying calves now and not waiting to the last minute when prices could be even higher. The second week of January saw Southwest grazing areas get another 2-4 inches of measurable moisture, while more northern areas of the southern and central Plains and the Midwest got another 1-3 inches. Northwest markets were also strong as winter weather was hitting a lot of that region as well. According to Zuhrmann, cheap corn has helped stocker operators, particularly in the central Plains and Midwest, get into the market earlier than normal because feeding them corn and stalks the next two months would be cheaper than paying another $8-10 more for grazing cattle come late March, early April. “This (price) run isn’t done,” he said. “I can sure envision $1.50 five-weights in some areas of the country. Canada’s influence on the calf market won’t happen until the fall.” Chad Kimball, an independent order buyer from Altus, OK, told WLJ that he and several colleagues have had as many requests for heifer calves and steer calves, and that they are being told to buy them at a discount to steers of under $5. “Stocker operators are not only bullish about the feeder steer market come this spring, but they are also confident that a lot more heifers will be demanded as cheaper alternatives to feeding out steers and there is also that residual replacement female market that some of them could be sold to,” Kimball said. — WLJ

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Monday, January 17,2005

Corn rally unlikely through winter, spring

by WLJ
— Significant downturn unlikely also. Cheaper-than-normal feed corn prices are expected to remain in place through at least the first half of the year, as 2004 production and end-of-year stocks were both higher than previously forecasted. Several market analysts, however, didn’t think prices would drop much more either as corn exports and domestic ethanol demand this year are expected to eclipse 2004 levels. According to USDA’s latest crop production forecast, the 2004 corn harvest is expected to total 11.81 billion bushels, 50 million bushels more than was projected in November and 1.7 billion bushels more than the previous record harvest of 2003. Pre-report analysts’ projections ranged between 11.6-11.8 billion bushels, with an average guess of 11.735 noted. In addition, the agency announced that Dec. 1 corn stocks totaled 9.45 billion bushels, 16 percent larger than Dec. 1, 2003, and the largest carry-over figure since 1987. Of the total stocks, 6.14 billion bushels were said to be stored on farms, up 16 percent from a year earlier. Off-farm stocks were pegged at 3.30 billion bushels, up 24 percent from the prior year. September through November disappearances were called 3.32 billion bushels, compared with 3.22 billion bushels during the same period in 2003. Most analysts’ had projected that stock number to be between 8.8-9.15 billion bushels. A majority of market analysts said the reports carried some “major surprises,” but that most surprises weren’t very good for grain farmers through the first half of the year. On the other hand, livestock producers were said to be looking to benefit from lower feed expenses through at least June. Sources projected feed corn prices would range anywhere between $1.85-2.15 per bushel for the first half of 2005, with a tighter range of $1.90-2.00 more likely. On a per cwt basis, corn is projected to range mostly between $3.30-3.80. “This was definitely a case of the big crop getting bigger as time went by, and it will keep prices fairly well depressed for the first half of the year,” said Jerry Gidel, grain market analyst with North American Risk Management Services, LaGrange, IL. However, Gidel also said there are enough questions surrounding the 2005 crop potential and a projected increase in corn demand, that further price decreases are unlikely. “It’s highly unlikely the U.S. will hit yields of 160 (bushels per acre) again. It’s more likely we drop back to 2003 levels of 146—14 bushels below last year’s record,” said Gidel. “We are also looking at a pick up in overseas export demand and domestic ethanol production is expected to increase significantly, which could drain supplies some. Livestock use could be steady to down some this year, however, other markets will make up for that slowdown.” Dave Monroe, broker with Wichita-based, HP Commodities Inc., said spring corn supplies could be a little smaller than other analysts anticipate. He didn’t see that resulting in any significant price changes right now, however. “Livestock use could be steady to slightly higher, particularly with corn being a cheap feed option this year and (cow/calf) producers looking at supplementing it in place of some of the hay that’s normally fed,” Monroe said. “It’s possible half of the increase in carryover stocks could be consumed in that manner.” USDA said Jan. 1 corn carryover totaled 1.96 billion bushels, compared to 1.84 million on Jan. 1, 2003. Exports were lowered by 50 million bushels last year after increased competition was noted from Argentina. Gidel said any upward jump in corn prices is unlikely until the middle part of the year when the 2005-06 corn crop will start to take shape. “A wet spring, and hot summer could mean another very large crop and that would keep corn prices depressed through the entire year. However, if drought conditions resurface in major corn producing areas, we could see some late-year jumps because of supply pressure,” he said.

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Monday, January 17,2005

Hunter contracts bovine TB

by WLJ
A hunter in Michigan was diagnosed with a rare human case of bovine tuberculosis after he cut his hand while gutting an infected deer, state health officials said. He is the first living person diagnosed with the strain of bovine tuberculosis that has been found in some northern Michigan deer and cattle in recent years, said T. J. Bucholz, spokesman for the Michigan Department of Community Health. The disease, which is difficult for humans to get but highly contagious in animals, has saddled farmers with costly testing requirements and limits to how they market their cattle in neighboring states. Officials would not release the hunter’s name or home town, but said the deer was killed in Alcona County. The man is in good condition and is being treated with antibiotics, Bucholz said. The same strain of bovine TB was found during an autopsy of an elderly person who died in 2002, but it was not the cause of death, he said. Eradication programs and milk pasteurization have reduced the number of human cases over the years. Different stains of the of the disease have been found in eight people from foreign countries in Michigan since 1995. The hunter in the new case sought medical attention after cutting his hand while removing the innards of the deer and noticing lesions in the animal’s chest cavity. The rare human cases usually are caused by breathing barn air infected by a sick cow or drinking unpasteurized milk from an infected cow. “This appearance of bovine TB in a human underscores the human health risk of the disease in free-ranging deer,” said Janet Olszewski, state community health director. “People should not consume wild animals that appear or are confirmed to be sick, regardless of the circumstance.” Michigan lost its federal bovine TB-free status in 2000, six years after discovery of an infected deer. State officials have ordered testing of the state’s nearly one million cattle, and some herds have undergone multiple testing, said Bridget Patrick, coordinator of the state’s eradication task force. Because the bacteria grow extremely slow and tend to remain dormant there is no reliable way to ensure the disease has been eliminated from an infected herd. The U.S. Department of Agriculture recommends killing herds known to have it.

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Friday, January 14,2005

Ag survey finds 86% favor online marketplace

by WLJ
Findings from an Internet survey indicate future farm success will involve farmers and ranchers and their cooperatives knowing how to effectively manage the Internet for marketing. That was the sentiment registered by 86 percent of individuals responding to an on-line survey conducted by National Farmers Union, a general farm organization representing more than a quarter of a million farm families nationwide and headquartered in metro Denver. “The purpose of this survey was to find out from farmers, ranchers and rural citizens ways they may be using the Internet and its relevance to their farm business and local cooperatives,” said Jeff Moser, project manager and NFU director of economic and co-op development. Perhaps the most significant finding in the survey was 58 percent of the responding farmers said they used the Internet for doing farm business for buying and selling. “From that key result Farmers Union is encouraged by helping farmers and ranchers and their co-ops to use the Internet for marketing and selling niche services and goods like specialty cheeses, par-baked breads, premium pasta, organic soybeans and natural meats,” Moser said. The survey also found that: • 94 percent of all respondents use a computer • 88 percent were connected to the Internet • 80 percent use the Internet daily • 51 percent made a purchase over the Internet within the past six months • 47 percent are interested in marketing the products of their own farm or co-op over the Internet • 44 percent declared they were presently members of a co-op and/or credit union • 43 percent said their farm or the cooperative that they are associated with had a web site. According to other recent statistics, online retailing in the United States accounts for 2.3 percent of all retail sales or approximately $100 billion annually. In the NFU survey, security was the number one Internet concern of 50 percent of all respondents, followed in order by privacy, reliability of service, affordability of service and ease to learn. The NFU survey is part of a larger project to enhance rural business from an existing online learning center created two years ago by NFU. The Web site, www.e-cooperatives.com, was created to tie Internet education with online retailing so the specialty products of farms and farm cooperatives become more readily available to consumers, said Moser. “We seek to increase value to consumers, raise farm profits and add to the quality of rural life.” “E-cooperatives.com educates and helps family farmers and ranchers carve out a niche, add value to their products and enhance their bottom line,” said Missouri Farmers Union President Russ Kremer. “It also helps create authentic relationships between producers and consumers.” “I feel that consumers want convenience, and like the producers who supply the food, also focus on value, taste and health,” said Sue Beitlich, a dairy farmer from Wisconsin and that state’s Farmers Union president. Beitlich is a member of the NFU e-commerce team of farmers, cooperative specialists and Internet developers guiding the project. Forester Research, an independent technology research company, projects that by the year 2009, half of U.S. households will have broadband at home. During this year’s holiday season, Beitlich and her client team at the NFU hope to launch the retail component to www.e-cooperatives.com. Then family farmers and co-ops will have a new venue on the Internet for reaching online shoppers seeking better produce from local farms. National Farmers Union fielded the online survey between Aug. 10 and Sept. 6 and motivated 827 respondents by entering them in a random drawing for a laptop computer, held Oct. 13. The survey was also provided offline to attendees at various state and local fairs around the country including in California, Colorado and Missouri. Specifically, 408 farmers, ages 17-87 and from 24 states took part in the survey, representing 49 percent or near half of all individuals participating. Of the farmers, 78 percent indicated they had been farming for at least 10 years or more. The NFU survey was similar to one conducted in March 2004 by the NFU when 268 persons responded from 23 states. Seventeen percent of the survey participants identified themselves as current Farmers Union members.

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Friday, January 14,2005

Beef Bits

by WLJ
Lone Star reports earnings Lone Star Steakhouse & Saloon, Inc. reported fourth quarter earnings were up for all its restaurants except for Lone Star Steakhouse and Saloon which ended the fourth quarter down 1.7 percent. Positive fourth quarter earnings include Sullivan’s Steakhouse, 3.1 percent, Del Frisco’s Double Eagle Steak House, 17 percent, and Texas Land & Cattle Steak House, 7.9 percent. Year ending results were up for all its restaurants—Lone Star Steakhouse and Saloon, 0.6 percent, Sullivan’s Steakhouse, 5.6 percent, Del Frisco’s Double Eagle Steak House, 23.2 percent and Texas Land & Cattle Steak House, 9.9 percent. Company earnings were up 1.3 percent for the fourth quarter, with an overall 3.6 percent increase for the year. Aussie beef to Korea hits record Australia recorded its highest ever monthly beef exports to Korea in December 2004, according to Meat and Livestock Australia. Exports reached 13,500 metric tons as importers built up stocks for the Korean New Year Feb. 8-10. That figure represented a 133 percent increase compared to the same month last year. Total Australian beef exports for the year reached 93,300 metric tons, up 50 percent compared to 2003 and the highest level since 1992. Demand for chilled beef showed strong growth in 2004, with exports reaching 12,200 tons for the year, 89 percent above 2003 levels. The share of chilled beef also increased from 10 percent of total exports in 2003 to 13 percent in 2004. Exports of frozen beef increased significantly—up by 45 percent on 2003 levels to reach 81,100 metric tons. Wendy's sales struggle, again Wendy's International reported a slide in same-store sales in December, projected wider losses for the fourth quarter and vowed to fight a $5 million verdict in a dispute with a Florida firm over the purchase of 27 restaurants more than a decade ago. The company is writing down the value of its Baja Fresh Mexican restaurant chain for $175 to $195 million. Legal costs over the $5 million verdict will raise Wendy's loss for the fourth quarter from $1.06 to $1.26 per share, up from its earlier estimate of $1.02 to $1.23. U.S. same-store sales slid 2.1 percent in December, compared to a 9 percent increase a year ago. Same-store sales increased 2.9 percent at company-owned Wendy's stores and 1.7 percent to 1.8 percent at franchised stores. Beef sub earns permanent spot The success and popularity of the Steakhouse Beef Dip Sub—the sandwich that moved more than one million pounds of beef in a six-week partnership between the beef checkoff program and Quiznos Subs—have earned it a permanent place on the chain’s menu. “The Steakhouse Beef Dip Sub was the most successful menu item introduction in our history,” said Trey Hall, chief marketing officer for Quiznos Sub. “We are extremely pleased with our partnership with the beef checkoff program.” Uganda steps up export efforts The Ugandan Beef Processors Association (UBPA) has formed a joint venture with a Kenyan company to increase beef production for export, according to published reports. UBPA has acquired a 49 percent stake in the Senko Livestock Farm in Mukono district, which was formerly owned by the government. The Kenyan company, Critical Mass Group, has taken the remaining 51 percent. The new venture will enable the UBPA to source cattle, breed and distribute them to farmers as well as slaughter and pack the meat for export. The project is expected to cost $65 million over five years including investment in machinery, a slaughter plant, and processing and packing equipment. The program plans to export 50,000 metric tons of beef within five years and also increase local consumption. CA packer changes financiers Brawley Beef, a U.S. beef processing and distribution company, has announced it has entered into a new three-year, $30 million asset-based credit facility with Wells Fargo Business Credit as its main operating lender. The new facility replaces the company's previous $10 million revolving credit agreement with Bank of the West. World’s top 10 U.S. beef cuts The U.S. Meat Export Federation and the beef checkoff program have identified 10 U.S. beef items that enjoy the greatest global demand. Top selling muscle meats are, in this order, short plate, short rib, chuck roll, outside skirt steak, hanging tender and rib finger. The top selling variety meats are liver, intestine, tongue and tripe. This information guides USMEF’s offshore marketing efforts in order to maintain sales of these products while building new markets for complementary U.S. beef products.

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Friday, January 14,2005

Tagging cattle challenges time management concept

by Kris Ringwall, North Dakota State University
The discussion remains heated on animal identification. As the winter picks up and the meeting season clicks along, a very common request is for more information on what is new in the world of cattle electronic identification. The Dickinson Research Extension Center is deep in the throws of the animal identification issue. The DREC actively was placing electronic IDs (EIDs) in calves this past fall. Currently, the tracing process is getting started and the total results are still in the future. Numerically, the center physically tagged 3,323 calves and 944 cows at 28 different work sites for an average of 152 cattle at each site. These sites were spread across North Dakota. The team logged 3,762 miles and spent 56 hours and 28 minutes on the road, or an average of a little more than two hours to travel to and from each site. Time management is an important part of any business equation involving agriculture. The time it takes to work cattle is no different. At the 28 sites, the team worked, on average, seven hours per site. The time was divided up into setup, working the cattle, tear down and cleanup. The average total time spent working cattle was four hours and seven minutes per site, with an average of 1.1 minutes per animal worked (including both cows and calves). The efficiency of the team improved as the season went along. Regardless of the time spent working cattle, setup, cleanup and teardown time also must be noted. The team utilized the For-Most portable hydraulic double alley with a 750 chute. The system, as described by For-Most, has a 14-foot adjustable double alley, adjustable overhead grill and a 4- foot funnel section to a 9-foot single alley behind the model 750 squeeze chute and scale. Cattle were fed into the For-Most system through a portable Wilson Wheel Corral, a series of hinged panels that unfold from the travel position to a complete corral for 140 head of calves (600 pound) and can be set up by one person in seven minutes (as described by Wilson). The team found setup time was quick and easy, utilizing available hydraulics and skill and experience with fifth-wheel driving. Two pulling units were required for delivering the needed equipment. An extra pickup was utilized to haul the required computer and electronic equipment. Although equipment placement time was actually minimal, the total setup time (allowing for conversation, location decisions and electronic setup) averaged 56 minutes per site. The tear down time was 34 minutes per site, a reverse of the setup time minus the need to decide where to put everything. In addition, cleanup time was necessary. Cleanup time is the time required to wash and disinfect all the equipment and have the equipment ready and serviceable for the next site. Cleanup averaged an hour and 27 minutes per site. In the typical cattle operation, time is critical. In the sense of the mobile facility, the facility works, but, as always, look at the whole picture before making a conclusion. The final discussion over individual cattle EIDs is far from over. The center could work 200 cattle in a civil 10 hour day. The day breaks down to an hour for travel to the work site, an hour for setup, an hour for lunch, a half-hour for two break periods, a half-hour for tear down, an hour and half for cleanup, an hour to travel home and three and a half hours to work the cows. I'm just not sure there is enough time in the day to get every cow and calf tagged, at least at the ranch level. The saga continues; you also must count all the overhead time and costs. May you find all your USAIP ear tags.

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Friday, January 14,2005

Budgets show higher production costs for 2005

by WLJ
Total direct costs of production in 2005 will increase more than 10 percent for most crops because of higher fertilizer and fuel expenses, according to Andrew Swenson, North Dakota State University Extension Service farm management specialist. Fertilizer is typically the largest and most volatile direct cost of crop production. Fertilizer prices are higher because of energy costs and global demand. Unfortunately, this coincides with low levels of soil nitrogen throughout the state, except for the southwest region. This means more of the expensive fertilizer is necessary for the same yield goal of a year ago. Fuel costs are also sharply higher for 2005, and interest rates will edge up for the first time in several years. Higher costs and poor prices will make it difficult for producers to find a crop rotation that is agronomically sound and provides a profit. Spring wheat, durum and canola project a return to labor and management of minus $10 to minus $30 in most of the nine crop budget regions. Malting barley is close to breaking even only in the west regions and the south-central region. Swenson cautions that the budgets are based on the average yield from 1997 to 2003, with the low and high yield years omitted. Although it may be considered more risky, winter wheat shows either a profit or small loss in all regions outside of the Red River Valley. Oats and rye once again are on the bottom of the profit picture, with losses ranging from $30 to $70 per acre. Soybean acreage has increased for 11 consecutive years, but Swenson believes that streak will end in 2005. Soybeans still will be strong in the east-central, southeast and Red River Valley regions, although the price of genetically modified seed took a substantial jump. However, soybeans are not expected to be profitable in other regions. Corn acreage also will decline because of significantly higher costs and lower prices. Dry edible beans and confectionery sunflowers have the best profit potential. These crops are considered to have more production risk than many, but with average yields, both will provide excellent returns. Because of strong prices, oil sunflower profit is projected at $15 to $40 per acre, depending on the region. Swenson says if a price is attractive, producers should contract and consider an 'act-of-God' clause for protection from a production shortfall. Lentils, safflower and large garbanzo beans are projecting a profit of about $30 in the west regions. However, garbanzo beans are costly to grow and have a high disease risk. A modest profit is projected in most regions for the minor crops of buckwheat and millet. More profit is projected for mustard. Flax and field peas do not project a profit, but Swenson expects acreage to increase because small grains project a lesser return. In addition, the marketing loan rate for flax and field peas provides better price risk protection. Swenson notes that the budgets do not include federal aid that is de-coupled from production (direct and counter-cyclical payments). These payments are based on historic crop bases and yields, not on current crop selection or production, but can be important to the whole farm profit. Direct payments generally increase from west to east. For example, when averaged over all crop acres, the direct payments will be about $6.25 per acre in the southwest region and about $13 in the south Red River Valley. Counter-cyclical payments occur if the national average prices of program crops are below a certain level. Payments are expected with the price levels used in the budgets. Historic yields and base acreage, which vary by farm, are used to calculate the amount. Expected payments, averaged over all crop acres, would be about $3 in the west regions and about $9 in the south Valley region. Unlike direct payments, which are fixed, counter-cyclical payments will dissipate if prices rise. Swenson emphasizes that the budget projections are just that. "Commodity prices and yields are extremely difficult to predict from one year to the next. It is critical to evaluate crop insurance and consider the financial downside risk, as well as the upside potential, of the crop rotation," he says. The budgets are available on the Web at www.ext.nodak.edu/extpubs/ecguides.htm. — WLJ

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