Workers at some Tyson beef plants will continue to be paid to stay home as the company reports that market conditions are not improving. Tyson Foods announced in January that it would temporarily suspend slaughtering operations at plants in Denison, IA; Norfolk and West Point, NE; and Boise, ID, for a period of three to five weeks. A second shift in Pasco, WA, was also suspended. Now, Tyson says that the suspension will last at least five weeks and perhaps longer. Workers were asked to take vacation during the first week of suspension, then were paid for 32 hours of work. During the downtime, many were assigned to maintenance and training sessions. “We know how difficult this suspension has been for our team members and our plant communities,” said John Tyson, chief executive. “However, market conditions have not improved enough to warrant resuming operations.” Approximately 2,100 workers have been affected, 900 of them at the Norfolk plant. Tyson will hold meetings with workers at all plants on Feb. 7 to update them. — WLJ

The federal grazing fee for Western states lands managed by the Bureau of Land Management (BLM) and the U.S. Forest Service (USFS) will be $1.79 per animal unit month (AUM) in 2005, up from $1.43 in 2004. The newly adjusted fee, which takes effect March 1, applies to more than 18,000 grazing permits and leases administered by the BLM and more than 8,000 permits administered by USFS. The formula used for calculating the grazing fee, established by Congress in the 1978 Public Rangelands Improvement Act, has continued under a presidential executive order issued in 1986. Under that order, the grazing fee cannot fall below $1.35 per AUM, and any increase or decrease cannot exceed 25 percent of the previous year’s level. Without the 25 percent cap, the 2005 fee would have risen to $1.99 per AUM. The annually adjusted grazing fee is computed by using a 1966 base value of $1.23 per AUM for livestock grazing on public lands in more western states. The figure is then adjusted according to three factors – current private grazing land lease rates, beef cattle prices, and the cost of livestock production. Based on the formula, the 2005 fee rose primarily because of an increase in beef cattle prices in 2004, which reflects the fact that beef cattle ranchers are getting a higher price for their products in the market. The $1.79 fee applies to 16 western states on public lands administered by the BLM and the Forest Service. Those states are Arizona, California, Colorado, Idaho, Kansas, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Utah, Washington, and Wyoming. USFS applies different grazing fees to national grasslands and to lands under its management in the eastern and midwestern states and parts of Texas. The national grassland fee will be $1.90 per AUM, up from $1.52 in 2004, and will also take effect March 1. The fee for eastern and midwestern states and parts of Texas will be out later this month. — WLJ

A growing population coupled with diminishing fresh water supplies should force major changes in the way the world's farmers tend crops in coming decades, a recent study recommends. Since agriculture uses about 70 percent of the world's fresh water every year, farming should be the focus of intense conservation efforts, Cornell University professor David Pimentel said. "We in the U.S. waste a lot of water in contrast to other people," said Pimentel, whose study appeared in the October issue of the journal BioScience. "Agriculture is going to have to give up water as the population grows," he said. "States like California, Colorado, Texas and Nebraska are going to have to make some major changes." The study said farmers should use water-conserving irrigation methods combined with water and soil conservation practices to minimize run-off. It also suggests governments eliminate water subsidies to farmers to encourage more efficient use, work to reduce water pollution and protect forests and wetlands. In parts of Arizona, water from major aquifers is being withdrawn more than 10 times faster than it can be recharged by rainfall. In California, agriculture accounts for about 3 percent of the state's economic production but consumes 85 percent of the fresh water. The United Nations estimates world population will rise to 9.4 billion by 2050 from about 6.3 billion now. The increasing demand for water is already causing problems. Pimentel cites the Ogallala aquifer, under parts of Nebraska, South Dakota, Colorado, Kansas, Oklahoma, New Mexico and Texas, that supplies water to a fifth of all irrigated land in the country. The underground water source has dropped 33 percent since 1950—half the volume of Lake Erie, said Sandra Postel, director of the Global Water Policy Project in Amherst, MA. Similar problems are happening worldwide, from the Chenaran plain in northeastern Iran to Guanajuato, Mexico. Of particular concern is Asia, home to 60 percent of the world's population, but only 30 percent of its fresh water. Postel says water efficiency will have to double to meet future needs. "The pace of the problem is proceeding faster than the pace of the solution," Postel said. By 2050, "water will to be the most critical resource issue we face in the entire world," said Bob Stallman, president of the American Farm Bureau Federation and a Texas-based rice farmer. "Frankly, I think wars will be fought over water. There are already border disputes in some parts of the world between countries over water."

Last week’s announcement of the Oregon ruling on wolf reclassification sent shock waves through the agriculture community and has producer organizations in the affected states planning their appeal. A federal judge in Oregon ruled last Tuesday that the Bush administration violated the Endangered Species Act when it relaxed protections on some of the gray wolf populations in April 2003. U.S. Fish and Wildlife Service (FWS) divided the wolves range into three areas and reclassified the Eastern and Western populations of wolves as threatened, instead of endangered. Experimental non-essential populations, like those found in Yellowstone National Park, Wyoming, Idaho and the rest of Montana, were not included in the reclassification or jurisdiction of the ruling. These wolves are considered to be separate and distinct populations with different rules for management. However, producers who operated in areas where the wolf status changed were allowed to kill wolves that were attacking their livestock. The Oregon decision rescinded that rule change and has again made it illegal for producers in areas outside of experimental populations to do anything about the wolves except call FWS. Tom McDonnell, director of Natural Resources for the American Sheep Industry Association, said, “As a result of the Oregon wolf lawsuit, USDA’s Fish Wildlife Service has pulled all of its traps and halted wolf management activity in Wisconsin, Michigan, Northwestern Montana and Northern Idaho. It is still uncertain if relocation can even be used as a management tool at this time. FWS is in the process of applying for special take permits, a process that could take weeks or months. At this time it is illegal for anyone within these regions to kill a wolf for any reason.” McDonnell added that because of wolf management in Minnesota the species was already down listed to threatened. Therefore, the lawsuit does not impact wolf management efforts in this area. He noted that the Minnesota wolf management plan and efforts to delist the eastern timber wolf are, however, on indefinite hold. “If the lawsuit is allowed to stand nationally, it will mean the wolf will have to be recovered throughout its historic habitat, at historic numbers,” said McDonnell. “Unfortunately, historic population estimates are just that, estimates, and much of the wolf’s habitat has been converted to agriculture, urban areas and other uses. If applied at the national level, this lawsuit makes wolf recovery for all intents and purposes very difficult.” Steve Pilcher, executive director of the Montana Stockgrowers Association, said, “The wolves are doing very well and people need to understand there are some impacts with livestock being present. Unfortunately, it is the livestock industry that bears the cost of having the wolves present. I am thankful the Oregon ruling does not have any impact on the 10j rule that is now in effect. For those of us dealing with the experimental non-essential populations, we’re very fortunate to have this increased flexibility in protecting our livestock. It’s just sad when we have those type of people making decisions when wolves can have such a significant impact on the lives of the ranching community.” The 10j regulations allow livestock and landowners in areas where nonessential experimental populations of wolves roam to shoot a wolf depradating their livestock without obtaining a permit first. Glen Stonebrink, executive director of the Oregon Cattlemen’s Association, said the association is waiting to see what FWS’ plan of action is before moving forward to combat this ruling. Stonebrink is anticipates that FWS will rewrite some of the rules of the Endangered Species Act, in particular the 4D rule, which was used to reclassify those wolves from endangered to threatened. “Instead of the judge having to define everything as he did, FWS could go back and redo their rule-making and make it more clear so it would have a better chance of standing up in court,” said Stonebrink. “In the meantime, I think it is important for producers and legislators to decide that the Endangered Species Act should be reformed and defined by lawmakers. We’re tired of the court defining what something means when it is pretty clear.” Incidentally, the gray wolf is extinct from Oregon and the Oregon Cattlemen’s Association is strongly fighting any plans to reintroduce the wolves to that area. Responding to the Oregon ruling, Jack Field, executive director for the Washington Cattlemen’s Association, said, “We oppose removing that management tool from our cattlemen and our producers realizing that if there is an issue we would like livestock producers to have the ability to protect their personal property and livelihood.” Lloyd Knight, executive vice president of the Idaho Cattlemen’s Association, said, “That decision causes some concern and puts up some roadblocks in delisting, but thankfully it does not derail us from state management. In our minds, state management is the next best thing until we get delisting.” According to FWS, it will take two to four weeks to review the Oregon decision and its implications. The agency did indicate that the lawsuit does not impact the experimental population in Montana, Idaho and Wyoming directly. Since the Colorado and Oregon wolf management plans allow private landowners to take depredating wolves, these plans may be illegal at this time and producers are encouraged to contact their local FWS for more information. Wyoming is moving forward with its lawsuit on wolf management.

Another strong year is expected for beef exports from Australia, a major global supplier, with exports forecast to rise 8.9 percent to 995,000 metric tons from 2004, according to a projection issued last week by marketing concern Meat & Livestock Australia Ltd. However, a major uncertainty in the market is the impact of a lifting of a ban on U.S. beef imports by Japan and South Korea, said Peter Weeks, MLAs chief analyst. If only small quantities of U.S. beef enter Japan and South Korea in 2005, then total Australian exports should comfortably exceed the record of 947,000 tons set in 2001 and the actual 913,799 tons in 2004, he said in a statement. Actual market conditions in Japan will be influenced by the terms for the re-entry of U.S. beef, with demand likely to rise if Japan drops its requirement for U.S. cattle birth records, Weeks said. MLA forecasts beef exports to Japan will rise 9.3 percent to 430,000 tons in 2005 from a record 393,471 tons last year. Beef exports to the U.S., Australiais second-biggest export market, are forecast to rise 2.9 percent to 360,000 tons from an actual 349,751 tons last year. Weeks said the impact of strong prices for manufacturing beef and firm consumer demand in the U.S. is expected to more than offset a stronger Australian dollar and fierce competition for the Japanese and South Korean markets. Beef exports to South Korea are forecast to surge 23 percent this year to a record 115,000 tons from an actual 93,310 tons in 2004. The other major outlet for Australia beef, the domestic market, is expected to maintain modest growth this year. Beef consumption in Australia grew 3 percent in 2004 to 774,000 tons and will rise in 2005 to 785,000 tons, MLA forecast. Export meat is weighed free of bones, while product for the domestic market is weighed bone-in. Weeks said the increased supply of beef will be underpinned by increased production and slaughtering. Total beef production will rise 5 percent to 2.25 million tons this year, MLA forecast. The company also predicted another fall in live cattle exports in 2005 to 580,000 beasts, after an 18 percent drop last year to 635,000 beasts. Strong competition from the meat trade, record cattle prices, the high Australian dollar and increasing freight costs will continue to have an impact on the live trade, it said. — WLJ

McDonald's triples Q4 profits Strong U.S. sales helped McDonald's Corp. more than triple its fourth-quarter profits to $398 million, capping the fast-food chain's best single-year sales improvement under the Golden Arches in 17 years. Intent on keeping the momentum going, the company raised the possibility Jan. 28 that it might spin off its Chipotle Mexican Grill business. The company extended its nearly two-year hot streak with higher-priced menu additions, later operating hours and the introduction of cashless pay options sent comparable sales up 9.6 percent last year in the United States and contributed to a 6.9 percent improvement worldwide. Tyson buys Oscar Mayer plant Tyson Foods will spend $100 million to renovate a former Oscar Mayer plant in Sherman, TX, and turn it into its largest case-ready operation. According to Tyson, the plant will employ 1,600. The 537,000-square-foot plant opened in 1974 and closed in 1998. It was sold to IBP Inc. in 2000, which Tyson purchased in 2001. Renovations will start immediately, including an upgrade of the refrigeration system and installation of all-new processing and packaging equipment. Tyson hopes to have one production shift operating by early 2006 and a second shift by early 2007. The plant will have a capacity of 6 million pounds of pork and beef cuts per week. ConAgra Foods pays $14M settlement CorxAgra Foods has agreed to settle a class action lawsuit, according to a news release from the Omaha-based company. The suit was brought in 2001 by shareholder plaintiffs, principally related to accounting matters at a former ConAgra Foods subsidiary, United Agri Products Inc. following the company’s June 2001 restatement of earnings in connection with UAP for fiscal years 1997-2001. ConAgra Foods sold UAP in November of 2003. The $14 million settlement, which is largely covered by insurance, is without any admission of liability or wrongdoing. The settlement has been preliminarily approved by the court. Beef hormone battle continues The United States and European Union have asked the World Trade Organization (WTO) for the creation of a panel to resolve their disagreement regarding beef treated with hormones. The resolution panel may be set up in the near future, but any final resolution will probably take years. The EU was ordered to end its ban on hormone-treated beef from the United States and Canada because the decision is without scientific grounding. The EU contends that it has since developed the scientific evidence and has instituted a new rule, which bans permanently one hormone, oestradiol 17b, and provisionally bans five others. Tyson earnings hurt by BSE Tyson Foods Inc., hurt by costs associated with bovine spongiform encephalopathy (BSE), reported lower profits for its first quarter. Tyson earned $48 million, or 14 cents per share, for the three months ending Jan. 1. Compared to the period a year ago when the worlds largest meat company earned $57 million, or 16 cents per share. No case of BSE has been attributed to Tyson, but the company has seen its beef business affected all the same. Tyson said it took charges of $61 million related to the disease, plus charges of $25 million for poultry plant closings and costs related to prepared foods. Low pork prices also pressured earnings, but Tyson said it had a good quarter in its poultry division. Taiwan to reopen to U.S. beef soon An Agriculture Department official said that Taiwanese agricultural officials have finished a review of the American beef industry, which included a fact-finding mission to the U.S., and will announce reopening of the border to American beef within a month. The border was closed in Dec. 2003 after the United States’ first case of BSE was found in a Canadian-born animal. That year the U.S. exported $325 million worth of beef to Taiwan. BSE scare in British clinics Some cosmetic surgery clinics in Great Britain are allegedly operating without licenses and using collagen from cattle on their patients without certifying that the product is BSE-free. Great Britain authorities are looking into these claims and are reporting that as many as one of six cosmetic surgery clinics operate without licenses. The country's chief medical officer, Sir Liam Donaldson, said that fillers like collagen are used to puff up lips and smooth out wrinkles. Although there has been no outbreak to date, the fillers used often come from cattle. With the high incidence of BSE that was present in that country, officials are leary of an outbreak. Donaldson said they have to look into the use of these aesthetic fillers to establish if there is any risk of variant CJD, the human form of BSE.

Saying its members have endured significant and prolonged financial damages because of the ongoing ban on Canadian cattle, the American Meat Institute on Jan. 27 filed a motion seeking a preliminary injunction against USDA in an attempt to end the remaining portions of the 18- month ban on Canadian cattle. The ban on cattle 30 months of age and older has been in place since May 2003 when Canada diagnosed its first domestic case of BSE. "There is no scientific, legal, or logical reason to continue the ban on Canadian cattle," said Mark Dopp, AMI's senior vice president for regulatory affairs and general counsel, in the association's announcement of the lawsuit. "This ban is causing drastic and permanent economic consequences on both sides of the border, hurting hardworking Americans and Canadians while serving no valid purpose." The motion seeks to enjoin the continued enforcement of part of an interim rule promulgated by USDA's Animal and Plant Health Inspection Service in May 2003. When originally issued, the interim rule closed the border between Canada and the U.S. to importation of cattle and beef products from Canada into the U.S. Upon filing its initial lawsuit on Dec. 30, 2004, AMI pointed out that the international trade guidelines established by the World Animal Health Organization, known by its French acronym, OIE, Canada's response to its cases of BSE and the system set in place prior to Canada finding its first case of BSE are more than adequate to justify full trade in cattle and beef products with Canada, regardless of an animal's age. AMI has argued that since the May 2003 border closing, many U.S. meatpackers have endured huge economic losses because of the short supply of cattle, while Canada has taken steps to expand its domestic slaughtering capacity. “The economic damage being done to U.S. meatpackers and their employees has been severe, prolonged, and in some cases, permanent," said Dopp in the announcement. "Every day this ban drags on, yet another U.S. plant draws closer to closing its doors. Unless USDA's new rule is modified, it will result in the movement of thousands of meat processing jobs out of the U.S. This will happen primarily because the ban will prohibit the importation of older Canadian cattle for processing in U.S. plants, while allowing importation of meat from those same cattle processed in Canadian plants," he said. There have been calls from some groups to block the planned reopening of the border on March 7 since two recent cases of BSE were diagnosed in Canada. AMI has contended that Canadian beef is as safe as U.S. beef, since both nations have nearly identical systems in place to combat BSE. As such, calling the safety of Canadian beef and cattle into question as a means for denying the reopening of the border would make the U.S. look like it doesn't believe its own rhetoric, the AMI said. "Trade is not a one way street, and we have to open our border to have borders opened to us," said Dopp. "And Canada is the first rung on the ladder in our quest to regain lost export markets worldwide."

The Canadian Food Inspection Agency announced proposed regulations to remove restrictions on beef imports. Restrictions were introduced following the detection of bovine spongiform encephalopathy in Washington state on Dec. 23, 2003. Based on the guidelines of the World Organization for Animal Health, the CFIA plans to permit the importation of live cattle born in 1996 or later, beef from animals of any age from which specified risk material has been removed and various other commodities, , according to a news release from the agency. Products that may pose a higher risk, such as certain animal feeds, will remain prohibited. The proposed regulations will further align Canada’s BSE-specific policy for imports from the United States with science-based international guidelines for safe trade, which are designed to protect public and animal health. With respect to bluetongue and anaplasmosis, the proposed regulations will allow for year-round access for U.S. feeder cattle destined for slaughter into Canadian feedlots, while maintaining the highest level of animal health protection. Additionally, work to expand the scope for further change relative to breeding cattle will follow the publication this year of a recently completed study conducted in Alberta. “Our response to BSE continues to be based on science, and science clearly demonstrates that safe trade can and should continue with appropriate safeguards in place,” said Agriculture and Agri-Food Minister Andy Mitchell. “The consistent public and animal health measures that the United States and Canada have adopted will allow us to move toward the full reintegration of our markets.” The proposed regulations have been published in Canada Gazette I. A 30-day comment period ends March 1. In the interim, current import restrictions remain in effect. The CFIA is developing a broader BSE-related import policy that will apply to any country that has reported the disease. As with the proposed regulations, this new policy will reflect the government’s ongoing commitment to follow recognized science and the most current understanding of BSE, the agency said. The CFIA is confident that moving Canada’s import policy toward international guidelines will encourage other countries to adopt similar approaches. — WLJ

Treasure Bull Test has now completed the 60 day test on 175 Angus bulls consigned by breeders from eight states. Considering the recent cold weather the bulls are performing extremely well. The 144 spring Angus bulls on test are gaining 3 lbs. per day with an average weight per day of age (ADG) of 3 lbs. The 31 fall bulls have an ADG of 3.13 and post a WDA of 3.13. The test is being conducted at the Broken O Ranch Feedlot, Simms, MT. The top gaining bull at the 60 day mark is Lot 189 on a bull owned by Harrison Angus Ranch, Doug & Jason Harrison, Boyd, MT, on an 1,185 lb. son of HARB Big Top 2000 JH with an ADG of 4.58 lbs. per day. The second top gaining bull is Lot 119 from Rocky Mountain Angus, Cal Kinney, Weiser, ID, on an 1,170 lb. son of Rito 111 of 2536 Rito 616 with an ADG of 4.25. The third highest gainer at 4.08 lbs. per day is Lot 118 also from Rocky Mountain Angus on a 1,005 lbs. son of BR Midland. Other top gaining bulls include: Lot 165, Bee Haven Ranch, Rick Katovich, St. Maries, ID, on a 1,010 lbs. son of Blackcap Mountain with an ADG of 4; Lot 103 Majic Valley Cattle Co., Mary & Judy Bell, Mesa, WA, on an 1,155 lb. son of Boyd New Day 8005 with an ADG of 4; Lot 155, KG Ranch, Greg Strohecker, Mgr., Three Forks, MT, on an 1,110 lb. son of Bon View New Design 878 at 4 lbs. per day; Lot 110, S Bar J Angus, Stephen & Jennifer Briggs, Garneill, MT, on an 1,165 lb. son of RR Hero 6267 of 2418 at 3.92; Lot 126, Rich Love, Great Falls, MT, on a 1,245 lb. son of Hyline Right Time 338 at 3.92; Lot 164, Bee Haven on a 1,090 lb. son of Paws Up Alliance 9561 at 3.92; Lot 167, TSR Angus, Cliff Trout, Coeur d’Alene, ID, on a 965 lb. son of High Valley OC22 of 3D22 at 3.92; and Lot 177, Dalbey Angus, John Dalbey, Hamilton, MT, on a 1,210 lb. son of B/R New Frontier 095 at 3.92. Leading all bulls in the weight per day of age category is Lot 19 from the Jackpot Division consigned by Junior Member Katrina Dubs, Billings, MT, on a 1,225 lb. son of JR Something Special with a WDA of 3.78 and Lot 219 from South Peak Angus Ranch, David & Nola Anderson, Geyser, MT, on a 1,085 lb. son of SPAR Updates Spade at 3.78 lbs. per day. Other top WDA bulls include: Lot 4 Granger Angus, Jim & Beth Granger, Great Falls, MT, on a 1,250 lb. son of Hyline Right Time 542 with a WDA of 3.77; Lot 189 Harrison Angus Ranch on the top gaining bull, Lot 189, a 1,185 lb. son of HARB Big Top 2000 JH with a WDA of 3.68; Lot 199, Milk River Genetics, Kathy Creighton-Smith, Chinook, MT, on a 1,070 lb. son of SAY 598 Bando 5175 with a WDA of 3.61; Lot 126 Rich Love, Great Falls, MT, on a 1,245 lb. son of Hyline Right Time 338 with a WDA of 3.60; Lot 224, Corey A Ranch, Barbara Korenjak, North Plains, OR, on a 1,065 lb. son of AAR Really Windy 721 with a WDA of 3.60 and Lot 218, South Peaks Angus on an 1,120 lb. son of SPAR Oscar Black Sambo with a WDA of 3.53.

China expects to export double the corn crop it did last year, while Argentina appears on pace to raise its exportable corn harvest slightly. Corn exports from China will experience a partial revival this year with the government considering more policies to boost overseas sales, state media reports, citing an expert at the National Grain and Oils Information Center. Exports of corn from China are forecast to more than double to 5 million metric tons in the marketing year ending September 2005, the China Daily reports, citing forecasts by an unnamed expert at the center. The center predicts that China's corn output will rise 14 percent to 131.7 million metric tons in 2005, due to a 6 percent expansion in the area sown with crops to 25.6 million hectares. In 2004, China exported 2.32 million tons of corn, a dramatic slump from the 16.4 million tons exported in the previous year. But that decline was blamed on a delay by the government in issuing export quotas until after the end of the 2004 marketing year. To revive exports in 2005, the government may introduce measures such as increasing export quotas and waiving railway construction funds for the transportation of corn, the newspaper reported, citing the expert at the grain and oilseeds center. Exempting corn from the rail construction levy would help lower delivery costs from production bases to ports by 30 percent, the expert said. China already pays an export rebate to corn producers, but the refund is calculated at a fixed price for grain, which is usually lower than the actual free-on-board rate. Under the World Trade Organization rules, China can also directly subsidize farmers up to 8.5 percent of the country's total agricultural production. Argentina's farmers have planted 99.9 percent of the 2004-05 corn crop, the Buenos Aires Cereals Exchange said Feb. 1. Farmers will begin collecting the 2004-05 harvest, which is expected to total 17.9 million metric tons, in February. The exchange sees the planted area of exportable corn at 2.58 million hectares. Last year area totaled 2.28 million hectares. As of Jan. 29, farmers had planted 2,556,300 hectares. The average yield will total 7 tons per hectare this year, the exchange has said. Yields have risen steadily over the past decade, according to exchange data. In 1993-94, the average yield totaled just 4.2 tons/hectare. Yields are rising as farmers become better at rotating crops and applying agri-chemicals like fertilizer and herbicide, among other things. In addition, last year farmers in some areas began planting a new kind of genetically modified corn seed made by Monsanto. This is expected to boost output by allowing farmers to plant the crop in areas that are not typically apt for good growth. In some areas, yields are even expected to total 10 tons/hectare, the exchange has said. Last year Argentina produced 13.1 million metric tons of corn, according to the exchange. The U.S. Department of Agriculture has forecast Argentina's 2004-05 output at 17 million tons while the Agriculture Secretariat has put it at between 18 million and 19 million. — WLJ