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Friday, June 27,2008

Business advisor: 16 ethanol plants filing bankruptcy, many more to come

by DTN
Business advisor: 16 ethanol plants filing bankruptcy, many more to come The U.S. ethanol industry is in trouble and can expect to see a rash of bankruptcies and dismantling of at least some production, according to a specialist who helps companies in distress. Alex Moglia, president of Moglia Advisors based in the Chicago area, said he knows of at least 16 ethanol companies that are filing for bankruptcy, and there will be at least two to three times that number filing within the next year. Though he declined to give the names of companies involved, Moglia said, "There’s a whole host of them we’ve either looked at or handled." If Moglia is right, a U.S. ethanol industry shakeout that started last year is about to shift into high gear, potentially threatening the ability of the industry to meet mandates laid out in the Renewable Fuel Standard. Companies come to Moglia Advisors and similar firms to help save their businesses, which often can result in filing for bankruptcy protection. "Investors are just pulling their hair out in trying to restructure debt with lending institutions," said Moglia, who was hired early on to help the Central Illinois Energy ethanol plant in Canton, IL, prior to the company’s decision to file bankruptcy. "Everybody is stuck in this industry," he said. "Equity investors are stuck, the lenders are stuck, the producers are stuck, and even worse, with farmers who had supply contracts and marketing contracts, they’re stuck. The reality is that most of the players that are going to be active here are going to be funded by foreign investors." Moglia has led numerous corporate restructurings, acquisitions, workouts and bankruptcies in the past 25 years. Before founding Moglia Advisors, he held senior management positions with Continental Illinois National Bank and CNW Corp. Moglia currently serves on the board of directors of the Corporate Finance Association Foundation. The weakness of the U.S. dollar makes it possible for foreign investors to acquire ethanol plants "at a deep discount," he said. "They can buy as low as 20 or 30 cents on the dollar," Moglia said. "That should scare the hell out of anyone in the biofuels industry. I’ve worked with plants that are incomplete, others that can’t operate profitably so they’ve all shut down. This will shake out most of small- and mid-sized players. Larger players will survive because they have buying power." More ethanol producers will continue to file bankruptcy, he said, because of high feedstock costs and a "limited upside flexibility in terms of how much you can sell ethanol for." "The demand for ethanol is not there," Moglia said. "The same thing happening to ethanol is happening in the biodiesel business. It will be the Wal-Mart-ization of the ethanol industry. It’s just a mess." For the record, since 2007 there have been just four ethanol bankruptcies documented in the media and/or in court records, together accounting for 60 to 80 million gallons of production capacity. They include the following: Ethanex Energy Inc. based in Basehor, KS, an ethanol-development company that never did operate an ethanol plant, filed for Chapter 7 liquidation bankruptcy at the end of March; E3 BioFuels LLC in Mead, NE, filed for Chapter 11 bankruptcy protection in November 2007; Central Illinois Energy in Canton, IL, filed for Chapter 11 in December 2007 and was bought at auction; and California-based Convergence Ethanol Inc. filed for Chapter 7, also in December 2007. Christopher Grooby, an ethanol financing attorney with Washington, D.C.-based law firm Baker and McKenzie, said bankruptcy is becoming a possible solution for struggling ethanol plants. "My guess is bankruptcy is a very strong word," he said. "There are many plants now that are either under construction or in the early stages of their operation that still have debt and so are in restructuring talks with their lenders so that formal bankruptcy proceedings can be avoided." Joseph Peiffer, a bankruptcy attorney with Day Rettig Peiffer in Cedar Rapids, IA, said the number of ethanol plant bankruptcies Moglia cites is "about right." Peiffer said many ethanol plants are and will be folding because "the business model they were built on doesn't work." Farmers and their cooperatives have either borrowed money or pledged their land as collateral in building ethanol plants, he said. "Now they’re getting bought out on cents per dollar," he said. "Equity investors and people who made secured loans are not able to recover their investments either. Investors are losing and creditors are losing. Banks are looking at their losses and trying to minimize their loss." Julia Pettit, a biofuels attorney with Stoel Rives LLP in Salt Lake City, Utah, said while the number 16 seems "a little high," it is difficult to track ethanol companies going bankrupt. "I would say that’s probably a little high based on what I’ve been watching the last six to nine months," she said. "What’s also difficult is that sometimes a company doesn’t use the word ‘ethanol’ in their name, they use ‘energy’ or something else. It’s always difficult to track these companies. As to whether you're going to see numbers double, that’s somewhat difficult to predict. I think that there are certainly some projects that got financed way back during the heyday when ethanol was hot. It may just be that those projects don’t really have all the components to make them successful or viable." Pettit said Moglia "certainly has his ear to the ground and is very sensitive to the economics of these projects." "If you sit back and take a look at the whole industry, there’s no doubt there's a shakeout occurring," she said. "For what it means to the industry as a whole, it is not as bad as it seems. That's my perspective." Pettit said companies are either shutting down operations altogether or are still in the process of being constructed and deciding whether to finish. "We’re going to see targeted mergers and acquisitions," she said. "My guess is it’s going to be a company that put in a lot of equity up front and has a lender who just doesn’t understand an industry to work with them to get over the hump, or know how to venture into hedging arrangements. In those situations you have the lender really putting the screws to that company. These might be the kind of companies that need to seek bankruptcy protection to give them some breathing room." There are going to be times when ethanol producers "just don’t produce" to get "supply/demand in the place where it needs to be to operate," Pettit said. For every 10 ethanol and/or biodiesel plants "you read about in the media, there are probably 50 to 100 others that are in financial difficulty and are contemplating shutdown," Moglia said. "Lenders are restructuring the debt so the plant has a chance of servicing the debt on a monthly basis through the financial institutions," he said. "The investors, lenders and operators are holding hands and trying to ride out this economic cycle. They are suffering quietly because there are public policy implications also." Since ethanol production is mandated by the federal government, he said they are already "operating outside free-market fundamentals." "And when you are having activities operating outside free market, there are public policy implications," Moglia said. "There is an enormous reticence to allow the market to adjust. There are a variety of economic, labor or similar strategic reasons, which is why people pushed biodiesel and ethanol so hard. You have a homeland security issue affecting business enterprise." When it comes to the work Moglia Advisors does, he said, bankruptcy is usually a last resort. Moglia said that’s because it is expensive and full of time delays, and the "stigma of bankruptcy" could hurt a company for years to come. "Most businesses—biofuels or not—they get into trouble and they never see the inside of a bankruptcy court," he said. "Most of these settle outside of court. We tell people they just slash expenses to a minimum. In most cases, we suggest plants be mothballed for the next two to five years to see what happens. I spoke at an ethanol producers’ conference. Somebody raised a hand and asked, ‘What is the biggest problem facing ethanol plants today?’ I looked him straight in the eye and said, ‘Management.’ Unless you’re talking about a bomb hitting your building, or a meteorite hits your building or an act of God hits your building, management should have prepared and anticipated for such an eventuality." Moglia said many ethanol plants were started or funded by people "who did not have a background in process industries." "Just because you’re a good farmer doesn’t make you a good judge of a manufacturing enterprise," he said. "Too many people forget that making ethanol is different from growing a crop. Most ethanol operators could benefit from contacting a turnaround firm, for technical and refinance side. The minority will contact us; the majority will try to make things happen on their own. Most of those home-spun remedies will fail. Then they contact us when it is impossible to restart the plant or complete the plant." — DTN

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Friday, June 20,2008

BLM seeks bids for new wild horse pasture facilities

by WLJ
BLM seeks bids for new wild horse pasture facilities As part of its responsibility to manage, protect, and control wild horses and burros, the Bureau of Land Management (BLM) is soliciting bids for one or more new pasture facilities located anywhere in the continental U.S. Each pasture facility must be able to provide humane care for and maintain at least 500 wild horses—up to as many as 2,500—over a one-year period with an option under BLM contract for four additional one-year extensions. BLM needs additional space for wild horses placed in long-term holding facilities, all of which are currently located in Kansas, Oklahoma, and South Dakota. "The BLM is facing tough challenges as it manages and cares for wild horses and burros both on and off public rangelands," said BLM Deputy Director Henri Bisson, who noted that herds of wild horses and burros, which have virtually no natural predators, can double in size about every four years. "As a result," Bisson said, "our agency must remove thousands of animals from the range each year to ensure that herd sizes are consistent with the land’s capacity to support them. The horses and burros that must be removed, but for which no adoption demand exists, need to be cared for, and that’s why the BLM is soliciting bids from contractors who can provide a pasture for these animals on their private ranches." Bisson pointed out that the current wild horse and burro population roaming freely on BLM- managed lands in 10 western states—approximately 33,000 as of February 2008—significantly exceeds what BLM considers to be the appropriate management level. This sought-for level of about 27,300 is the number of free-roaming horses and burros BLM has determined can thrive on BLM-managed rangelands in balance with other rangeland resources and uses. "The BLM is working hard to achieve the appropriate management level so that healthy herds of horses and burros can thrive on healthy rangelands," Bisson said. "But with the herds’ reproduction rate of about 20 percent a year, at least 6,000 horses and burros must be gathered from the range annually just to keep the free-roaming population from increasing." Those wild horses and burros removed from the range that are not placed into private care through adoption (a one-year process) or direct sale (an immediate process) are fed and cared for at holding facilities. In the current fiscal year, holding costs are expected to exceed $26 million, which accounts for about three-fourths of BLM’s appropriated budget for the entire wild horse and burro program. Currently, there are more than 30,000 wild horses and burros maintained at holding facilities. In the case of long-term holding (pasture) facilities, unadopted and unsold horses live out the rest of their lives there. Animals are held between 10 and 25 years depending on their age when they enter lifetime holding. In contrast, only a small percentage of wild horses roaming public rangelands live past the age of 15 because of the harsher conditions. "The BLM is committed to fulfilling its mission under the landmark Wild Free-Roaming Horses and Burros Act of 1971," Bisson said. "That means not only providing humane care to wild horses and burros, but also managing them in an ecologically and fiscally sound manner. That includes bringing the number placed through adoption or sold each year into balance with the number removed annually from the range. By achieving this balance, fewer animals will need to be maintained in holding facilities." Details of BLM’s long-term holding facility requirements are described in solicitation NAR080108 which has been posted at http://www.fbo.gov. Applicants must be registered at http://www.ccr.gov to be considered for a contract award. The solicitation ends July 30, 2008. For further information about BLM’s wild horse and burro program, see the agency’s Web site at www.blm.gov. — WLJ

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Friday, June 20,2008

$228 million paid as compensation for lost taxes on federal lands

by WLJ
$228 million paid as compensation for lost taxes on federal lands Secretary of the Interior Dirk Kempthorne announced that local governments with tax-exempt federal land in their jurisdictions will receive $228.5 million this year in compensation for forgone tax revenue. Under the federal Payments in Lieu of Taxes (PILT) Program, the money is distributed to about 1,850 county and other local governments around the nation to help pay for essential services such as firefighting and emergency response, and to help improve school, road and water systems. "These communities play a key role in supporting federal lands throughout the year," Kempthorne said. "We recognize and appreciate that vital assistance and are distributing these payments to local governments by June 12 so the funds can help the counties plan their annual budgets." The Department of the Interior annually collects about $4 billion in revenue from commercial activities on federal lands such as livestock grazing, timber harvesting, and oil and natural gas leasing. Some of these revenues are shared with states and counties in the form of revenue-sharing payments. The balance is deposited in the U.S. Treasury which, in turn, pays for a broad array of federal activities, including annually appropriated PILT funding to counties. Eligibility for PILT payments is reserved for local governments (usually counties) that contain nontaxable federal lands and provide government services related to public safety, housing, social services, transportation and the environment. By law, the payments are calculated using a mandated formula based on the number of acres of federal entitlement land and the population within each county or jurisdiction. These lands include the National Forest and National Park Systems and National Wildlife Refuge System, as well as lands managed by the Bureau of Land Management and those affected by U.S. Army Corps of Engineers and Bureau of Reclamation water resource development projects, and others. Payments to individual counties may vary from the prior year because of changes in acreage data, which is updated yearly by the federal agency administering the land, and population data, which is updated based on U.S. Census Bureau data. The per acre and population variables used to compute payments are also adjusted for inflation, using the Consumer Price Index, as required by 1994 amendments to the Payments in Lieu of Taxes Act. Payments are also adjusted for the level of prior-year revenue payments and the amount that a county receives under Sections 6904 and 6905 of the PILT Act. Revenue payments are federal payments made to local governments under programs other than PILT during the previous year. These include those made under the Refuge Revenue Sharing Fund, the National Forest Fund, the Taylor Grazing Act, the Mineral Leasing Act, the Federal Power Act, and the Secure Rural Schools and Community Self-Determination Act of 2000. Sections 6904 and 6905 provide additional payments for additions to the National Park System and National Forest Wilderness areas. For the 2008 payments, the per acre amounts are adjusted from the 2007 payment of $2.23 per acre (maximum) and 31 cents per acre (minimum) to $2.29 per acre and 32 cents per acre. The population variables are adjusted from $59.85 (minimum)-$149.61 (maximum) to $61.41-$153.50 per capita. The 2008 payments fund about 62.2 percent of the authorized level of $367.2 million. As a result of increases in Forest Service timber payments, reductions in PILT entitlement land, a decrease in the prorating percentage and expiration of section 6904/5 payments, the total 2008 PILT payments to the following twenty-three states will be slightly lower than the 2007 payments by more than 1.5 percent: Alabama, Alaska, Arkansas, California, Connecticut, District of Columbia, Georgia, Idaho, Kentucky, Maine, Maryland, Massachusetts, Missouri, New Jersey, North Dakota, Ohio, Oregon, Pennsylvania, South Carolina, South Dakota, Virgin Islands, Wisconsin and Wyoming. Of the $228.9 million appropriated for PILT in FY 2008, $228.5 million goes for payments to counties and other local governments; the balance funds the administration of the program. — WLJ

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Friday, June 6,2008

Two weevil varieties can give growers double headaches

by Jason Campbell - WLJ Correspondent
Two weevil varieties can give growers double headaches Alfalfa growers in the central part of Nebraska should keep in mind that they may see two different varieties of weevils in their crop, said University of Nebraska–Lincoln (UNL) Butler County Extension Educator Mike Rethwisch. The eastern strain usually invades the crop in time for the first cutting, Rethwisch said. The western strain, prevalent in the western two-thirds of Nebraska, peaks one to three weeks later. So growers may treat for one strain, then may have to treat again for the other. To check for weevils, Rethwisch advised producers to use a sweep net. They will catch the caterpillar stage of the weevils in the net. Some growers look at the alfalfa plants, where small holes eaten in the leaves at the growing tip indicate weevil damage. "If you see lacy leaves, there’s a good chance the crop is already damaged," Rethwisch said. "The importance of that damage depends on the proximity of harvest. With alfalfa pushing $100 a ton or more, it doesn’t take much to add up to a substantial loss." "I have collected some clover leaf weevil larvae already this past week. Alfalfa weevil larvae should also be found if people begin to look," he said. "If the crop is less than 10 inches tall and the producer can find one weevil per stem, it’s probably time to treat." UNL has some publications with charts that will help determine the economic threshold for applying insecticides at http://entomology.unl.edu/fldcrops/pestipm.shtml. Click on one of the choices under Alfalfa Weevil. Larvae generally damage the first crop, Rethwisch said, while the adults damage regrowth by feeding on the developing crown buds. Rethwisch also mentioned potato leafhoppers as an intermittent pest for Nebraska alfalfa. Although eastern alfalfa sustained huge populations of potato leafhoppers last year, weather patterns and the way the wind blows will determine whether it will return in 2008, he said. Since the insect doesn’t overwinter in Nebraska, it depends on winds to bring it back. Every year is different. Grasshoppers may damage alfalfa sometimes and cutworms will attack it as well. Cutworms feed at night, so they’re not visible during the day. The alfalfa doesn’t green up after cutting. "We’ll see some variegated cutworms somewhere in Nebraska this year; they’re just not as widespread as the weevils," Rethwisch said. — University of Nebraska-Lincoln Extension

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Friday, June 6,2008

Wildfires affect forage production

by WLJ
Wildfires affect forage production The lack of rainfall across much of North Dakota has created ample fuel for wildfires this year. Dry, brittle vegetation has gone up in smoke on hundreds of acres of range and pastureland in the western half of the state this spring. Land managers must plan their grazing or haying year differently as a result of these fires, according to Kevin Sedivec, North Dakota State University (NDSU) Extension Service rangeland management specialist. Historically, land managers have taken different approaches to managing fire-impacted range and pastureland. Public lands once were rested for two years following a wildfire, whereas insurance agents and many ranchers believe once the rains come, the grass will regrow and forage production will be normal. "The truth lies within these two philosophies," Sedivec says. Research trials The NDSU Animal and Range Sciences Department and USDA Forest Service conducted a trial in western North Dakota from 2002 to 2005 to test the impacts of a dormant-season fire on forage production and plant species composition. The researchers also were interested in the grazing management practice (rotational grazing, season-long grazing, and no grazing) the year before a fire and if the burning impact differed by type of grazing. The researchers found that fire negatively impacted forage production, regardless of grazing history. On average, dormant-season fire reduced forage production by 40 percent during the first growing season after a fire. Forage production was affected negatively even during the second growing season following a fire. Production reductions ranged from 10 percent on the rotational grazing system and nongrazed areas to 30 percent on the season-long grazing pastures. "One interesting note: These negative impacts on forage production occurred in a year when spring rainfall was normal to above normal," Sedivec says. The NDSU Animal and Range Sciences Department and North Dakota Army National Guard conducted a trial from 1999 to 2001 in east-central North Dakota to test the impacts of spring fires on forage production of grasses and leafy spurge. As in western North Dakota, spring fires negatively impacted grass production. It was reduced by 17 percent, compared with unburned sites; however, leafy spurge production increased by 27 percent. Researchers also learned that grass production in eastern North Dakota was impacted only the first growing season following a fire, while leafy spurge production remained greater on the burned sites for two growing seasons. In both studies, plant species composition was not affected by a one-time fire event. Annual weeds usually don’t need to be controlled because range and pasturelands will recover to preburn conditions. However, if weather conditions continue to remain dry, annual and noxious weeds may become a problem. If they do, state law requires land managers to control them with the appropriate weed management strategies, Sedivec says. Tips for grazing and haying after a wildfire Ranchers and land managers can continue to graze or hay their range and pasture following a wildfire, but they need to take precautions and reduce stocking rates, sometimes substantially, depending on moisture conditions and location in the state, Sedivec says. Here are some of his suggestions: Delay the livestock turn-out date two to four weeks. Grazing should begin no earlier than late May for crested wheatgrass or smooth bromegrass and mid-June for native rangeland following an early spring burn. Reduce stocking rates by 30 percent to 50 percent in the western Dakotas, 20 percent to 30 percent in the central part of the states, and 10 percent to 20 percent in eastern areas. These stocking rate reductions will be greater if dry conditions persist into May and June. Range and pastureland in the Dakotas, Minnesota and eastern Montana grow the majority of forage in May, June and July. If rain doesn’t fall during this period, plan for substantially less forage. Use plant phenology, or stage of plant development, in determining forage-quality goals for hay production. Forage production increases with maturation, peaking at the seed set stage; however, forage quality declines. If fire impacted your hay land, maturation will be delayed slightly, forage production will be reduced, and forage quality will be improved. "Determine your forage-quality goal and harvest accordingly to optimize production and quality," Sedivec says. To learn more about forage production on land affected by wildfires, visit the NDSU drought information Web site at http://www.ag.ndsu.edu/disaster/drought.html or contact Sedivec at 701/231-7647 or kevin.sedivec@ndsu.edu. — WLJ

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Friday, June 6,2008

Research focuses on predicting steaks' tenderness

by WLJ
Research focuses on predicting steaks’ tenderness University of Nebraska-Lincoln (UNL) scientists have developed a way to predict steak tenderness before the consumer takes that first bite. The technology could be a boon to the beef industry as it would allow retailers to charge a premium for a "guaranteed tender" label. "Beef tenderness is a primary factor in consumer satisfaction," said Jeyamkondan Subbiah, the UNL food engineer who heads the research. "However, a sufficiently accurate, nondestructive method of on-line evaluation of tenderness continues to elude the beef industry." Current USDA grading standards classify beef carcasses into quality and yield grades but do not assess tenderness. Since carcasses are not priced on the basis of tenderness, producers don’t have a financial incentive to supply a tender product. The beef industry long has sought technology that could scan fresh meat at two to three days postmortem and predict its tenderness when cooked by the consumer about two weeks later. "There is a growing recognition that beef tenderness must be incorporated into the USDA quality grading process if true, value-based marketing is to be developed," Subbiah and other authors wrote for a recent presentation on the issue. UNL is developing that technology. Its approach uses a hyperspectral imaging, a novel technology that combines video image analysis and spectroscopy. The system consists of a digital video camera and spectrograph to capture the two key qualities that affect beef tenderness—muscle structure and biochemical properties. In the research, two-day aged, one-inch thick ribeyes were placed on a plate and scanned by the system, which captures multiple images at hundreds of wavelengths with regular intervals. The combination of the video images and spectroscopy is key, Subbiah said. The video technology captures the muscle profile. Tender beef has fine muscle fibers, while tough beef has visibly coarser muscle fibers. The spectroscopy measures biochemical properties that indicate how much the steak will become tender during aging. After scanning, the steaks were cooked and tested. Results so far are promising. The system predicted three tenderness categories—tender, intermediate and tough—with about 77 percent accuracy and two tenderness categories—acceptable and tough—with 93.7 percent accuracy. "Beef is expensive. Consumers expect it to be tender. One bad experience can make them not buy beef for awhile," Subbiah said. "We think consumers are willing to pay a premium for a guaranteed-tender product." Subbiah said that premium could be $1 to $2 per pound. Hyperspectral imaging is not new. Previously, it’s been used to determine nutrient deficiency in plants, fecal contamination in chicken, and fungal/bacterial contamination in fruit. Researchers will continue to hone this process. In the meantime, UNL is patenting the technology and hopes to identify a business interested in partnering on commercialization. Critical to commercializing the technology will be finding a way "to take it from the lab to the plant," Subbiah said. The industry must be able to use it to evaluate a carcass, not individual steaks, and do it in about 10 seconds per carcass. "It has to be done in the current mode of operation," without any additional, time-consuming steps, Subbiah added. Such commercialization is likely two to three years away, he added. — WLJ

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Friday, June 6,2008

Tyson chickens test positive for avian influenza

by WLJ
Tyson chickens test positive for avian influenza Tyson Foods announced on June 3 that a flock of chickens at a farm in northwest Arkansas have tested positive for a mild strain of avian influenza. The company said that they are working cooperatively with USDA and the Arkansas Livestock and Poultry Commission to manage the exposed flock of breeder hens. Preliminary tests on the flock indicate the presence of antibodies for H7N3 avian influenza, however, there is no indication the birds currently have the virus. The 15,000 chickens involved show no signs of illness and the situation poses no risk to human health. News of the virus caused Tyson’s shares to fall 7.9 percent lower, to $17, during afternoon trading. Market analysts fear that while the outbreak may be harmless, the economic effect to the U.S. poultry industry could be large if other countries ban U.S. poultry. Russia has taken similar measures in the past, and if countries such as Japan join in banning poultry from Arkansas, there could be significant effects. The discovery came as part of routine, pre-slaughter surveillance conducted by the company. The strain involved is low pathogenic H7N3. It is not the highly pathogenic H5N1 virus that has previously affected birds in Asia, Europe and Africa. Even though the affected birds do not currently have the virus, the flock is being depopulated as a precautionary measure and will not enter the human food chain. While the birds’ exposure to this strain of avian influenza poses no risk to human health, USDA’s policy is to eradicate all H5 and H7 subtypes. As a preventative measure, Tyson is also stepping up its surveillance of avian influenza in the area. The company plans to test all breeder farms that serve the local Tyson poultry complex, as well as any farms within a 10-mile radius of the affected farm. The increased surveillance is in addition to Tyson’s existing testing program which involves the company checking all flocks for avian influenza before they leave the farm. The test results are known before the birds are shipped to a Tyson plant for processing. — WLJ

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Friday, June 6,2008

How can retained placenta problems be prevented?

by Miranda Reiman, Certified Angus Beef
How can retained placenta problems be prevented? Since there are many causes of retained placenta, there is no simple answer. Some of the obvious answers include: (1) don’t allow cows to get too thin or too fat before calving, (2) reduce stress near calving as much as possible, (3) prevent exposure to pine needles, juniper trees, and pine trees (particularly ponderosa pines) before calving, (4) make sure your trace mineral and vitamin supplementation program is adequate, (5) prevent foothill abortion problems, and (6) maintain a sound vaccination program to minimize the chance of viral or bacterial abortions. Because calving problems often result in retained placenta, it is important to consider the appropriate selection of genetics for your herd as a part of prevention. One of the useful tools is birth weight Expected Progency Differences (EPDs). Lower birth weights will decrease calving problems if all other factors are equal. However, it is also important to remember that big cows with big pelvic canals can have big calves easily. So select bulls with birth weight EPDs in keeping with your herd. Also, remember to look at the bull’s actual birth weight data and remember that the birth weight EPD numbers are not the same between breeds. One breed can have a bull calf with a birth weight of 100 pounds and a birth weight EPD of 1.0 while another breed can have a bull calf with a birth weight of 80 pounds and a birth weight EPD of 5.0. Obviously, the second bull will tend to have calves with lower birth weights if all other factors are equal. Another tool available is pelvic measurements in yearling heifers. The value of this tool is to cull replacement heifers with small pelvic canals before breeding for the first time. Regarding birth weights, it is important to remember that the cow or heifer has 60 percent of the "input" into how large the calf is going to be. Therefore, genetic selection of the cowherd has more impact than the one time selection of the bulls. If you don’t have problems with retained placenta, that is excellent. If you do, there are a number of important items you will need to consider and discuss with your veterinarian. — John Maas, Extension veterinarian, University of California-Davis

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Friday, June 6,2008

Beef Bits

by WLJ
Tyson removes antibiotic-free label Under pressure from regulators and competitors, Tyson Foods Inc. recently withdrew its antibiotic-free chicken label awarded by the Agriculture Department barely a year ago. The company said in a recent news release that it was "voluntarily" withdrawing the label "due to uncertainty and controversy over product labeling regulations and advertising claims." Soon after USDA approved the label in May 2007, Tyson’s competitors cried foul. In September, Tyson was notified by the agency that it had made a mistake in awarding the label because Tyson was using ionophores, an antibiotic widely used in the industry. Australia eyes entry into Chinese beef market A recent delegation led by Meat and Livestock Australia (MLA) to China has visited with more than 140 importers and retailers over the course of the 10-day visit. The trip is designed to create connections in the country, where Australia is pushing strongly to expand its exports of red meat. Glen Thompson, MLA’s regional manager for Southeast Asia and China, said the market is almost 100 percent supplied by domestic product, but that the sheer size alone offers marketing opportunities for Australia’s red meat industry. More burgers appearing on menus Whatever they’re calling it, however they’re dressing it up, restaurants are putting burgers on the menu with increasing frequency, according to market research company NPD Group and Datassential, a foodservice research firm. The two firms found that 7 percent more restaurants, from quick service to fine dining establishments, offered burgers on their menus in 2007 than two years earlier. In fact, burgers comprised 14 percent of all restaurant orders last year, or the equivalent of 8.5 billion burgers. In many cases, the ingredients have become more exotic. For example, cheddar cheese has been replaced in some cases by pepperjack, Parmesan and Tillamook. Restaurants with pepperjack burgers on the menu grew by 25 percent last year over the number in 2006. USDA on inspection trip to Brazil USDA officials will depart for the Brazilian state of Santa Catarina this month to assess fresh beef and pork production conditions there. The trip is a result of discussions which were recently completed by the U.S. and Brazilian delegates at the Consultative Committee on Agriculture held in Brasilia. The U.S. hopes to export cattle and beef to Brazil, and Brazil hopes to send fresh beef and pork to the U.S. USDA will determine the risk of foot-and-mouth disease (FMD) in the state of Santa Catarina. It has been one year since the state received official recognition from the World Organization for Animal Health as being FMD-free, though many in the U.S. fear that the country’s regionalization efforts are not effective. Global beef trade may expand 40 percent World trade in beef and pork is expected to grow by more than 40 percent by 2017 while poultry trade expands by just below 40 percent, according to the latest Agricultural Outlook from the Organization for Economic Cooperation and Development (OECD) and the U.N. Food and Agriculture Organization. Increased import demand for beef and pork will be dominated by OECD countries while Asian developing countries will drive poultry import gains, the study predicts. Between now and 2017, average global prices for both beef and pork are expected to rise by about 20 percent, while wheat and corn prices rise 40 percent to 60 percent, and oilseed prices increase by more than 60 percent, as compared to average prices from 1998 to 2007. AMI to host two webinars on COOL The American Meat Institute (AMI) will host two webinars in June about implementation of mandatory country-of-origin labeling (COOL), which is scheduled to go into effect on Sept. 30, 2008. AMI Senior Vice President of Regulatory Affairs and General Counsel Mark Dopp will discuss what meat products must bear origin information, how labeling should be written, as well as record-keeping and other requirements. The first webinar will be held June 10, 2008, at 2 p.m. EST, and will be an informational presentation, with Q&A as time allows. Participants may submit questions to AMI and these questions will be addressed in a second, follow-up webinar June 12, 2008, at 2 p.m. EST. To register, visit: http://www.meatami.com/ht/d/MeetingDetailsMO/mid/00000016. Australia’s beef exports to Russia more than doubled in May, from April, making it the second-biggest buyer, overtaking the U.S. and South Korea. Exports to the Commonwealth of Independent States (CIS), chiefly Russia, in May rose to 17,557 boneless metric tons from 8,426 metric tons in April, both up from 87 metric tons in May last year, according to figures supplied by the Department of Agriculture, Fisheries and Forestry. Exports to CIS in the first five months of this year rose to 30,749 tons, compared with 532 tons in the year-earlier period, figures show. Total Australian beef exports in May totaled 93,933 tons, up 6.4 percent on the month and up 5.4 percent on the year.   Australia doubles beef exports to Russia

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Friday, June 6,2008

Record $108.5 billion agricultural exports forecasted for 2008

by WLJ
Record $108.5 billion agricultural exports forecasted for 2008 U.S. Agriculture Secretary Ed Schafer recently announced an updated quarterly forecast for U.S. agricultural exports—expected to reach a record $108.5 billion for fiscal year 2008. The upward revision is a $7.5 billion increase from February’s previous record forecast and $26.5 billion above the final 2007 exports. Grains and animal products account for two-thirds of the export gains. "America’s increased export volume in bulk commodities like corn, other animal feeds and soybeans make agriculture the bright spot in the overall balance of trade," said Schafer. "U.S. producers are on track to export a record 63 million tons of corn and set new export volume and value records for pork. Export volumes and values are also up for many horticultural products, with sales growth to Canada and the European Union being exceptionally strong." Asia continues to be an important growth market for U.S. agricultural commodities. U.S. exports to China are forecast to reach a record $10.5 billion, up almost $3.4 billion from 2007 levels. Canada and Mexico remain the U.S.’ top two markets worldwide with exports forecast to reach $30.5 billion in 2008—some $5 billion above 2007. "Trade agreements have a significant impact on our ability to sell America’s agricultural products in world markets," said Schafer. "Canada and Mexico, our two North American Free Trade Agreement (NAFTA) partners, currently buy 28 percent of the value of America’s agricultural exports—up from 20 percent purchased 15 years ago when trade began under NAFTA. Unfortunately, Congress has not been acting in the best interest of the American farmer and rancher by stalling approval of the signed trade agreement with Colombia, yet along with approving trade with Korea and Panama, Congress could provide three extremely important markets for expanding the trend of increased American export sales for years to come." While agricultural imports in two-way trade with the U.S. will also increase—to a record $78.5 billion forecast by USDA—the $108.5 billion in export sales by American farmers and ranchers will net a positive agricultural trade surplus of $30 billion for the U.S. — WLJ

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