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Monday, March 21,2005

It’s a common goal

by WLJ
I received a letter and renewal from a reader last week that has taken WLJ for three generations, starting with my grandpa Nelson Crow. He said that grandpa always wrote the paper for the rancher. I would imagine that this reader has seen a lot of change in the U.S. cattle/beef industry. Through this entire BSE issue I have been accused of not representing the producers, and I’d like to say that is simply not true. Without you, the producer, there is no WLJ. If we’re not telling you what you want to hear, I apologize. Our goal is to report on the entire cattle/beef industry and report factual stories, so you can make good business decisions. It’s unfortunate that producers feel they have to choose sides on issues when the fundamental goals are the same. You have to admit, there has been some absolutely wild stuff going on. Starting with beef checkoff, which the U.S. Supreme Court is expected to rule on in the next few weeks. This producer-funded program has done a lot of good over the past 20 years and to kill it over a lousy $1-per-head is crazy. Even if you have to associate NCBA with it, killing it is the worst crime that a handful of cattlemen have committed, and, trust me, it is just a handful who have tried to kill your only promotion and research program. Next it’s free trade or fair trade, whatever you want to call it. Neither truly exists, or will exist. All we can hope for is access to markets. Every country plays a few games on trade, and we’re no different. R-CALF had a big win when they received their emergency injunction. The cattle markets took a big swing—$6-8 on feeder cattle and $4-6 on fed cattle. There were many in the industry—I include packers—who were ready to ship live cattle south. Many were betting that the border would open on March 7, and Canadian cattle would be on their way to utilize unused slaughter capacity at U.S. packing plants. I believe that the futures market already had an open border priced into the market. Last week R-CALF was told by Japanese officials that their meddling in the Canadian border situation and activity with Congress will only delay trade with Japan. R-CALF ran an ad in the Washington Post thanking the Senate for upholding the closure of the Canadian border and asked the House to do the same. The Senate also passed a resolution that would impose trade sanctions with Japan to open beef trade, really nothing more than a little saber rattling. On one hand, the Senate wants to keep Canada closed, and on the other it wants Japan to open to U.S. beef, which sounds good to constituents. But I would imagine that it sounds a little hypocritical to the rest of the world, especially from a country that has been built on creating freer and fairer trade. The R-CALF reply about the Japanese diplomat was that they didn’t know that he represented government, they thought he was just an industry person, which sounds a little naive. Bill Bullard, R-CALF’s CEO, said that R-CALF’s actions, relative to the Canadian border should have no impact on whether Japan reopens its market to imports of U.S. beef and that R-CALF is not aware that Japan has given any indication that it is willing to accept Canadian beef. R-CALF is probably here to stay, and if they intend on being an industry leader I think it’s time they start acting that way. They have been able to get a lot of things done with few resources, which is remarkable. They certainly may represent producers, but I think it’s time they step into the big leagues and represent this industry responsibly. — PETE CROW

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Monday, March 21,2005

Montana labeling bill praised

by WLJ
The Montana Stockgrowers Association (MSGA) applauded members of the Montana House of Representatives for passing HB 406, the "Country of Origin Placarding Act," with an amendment to postpone implementation until October 2006 when the national country-of-origin-labeling is scheduled to be in place. The bill, which passed the House by 63-37, requires specific commodities offered for sale in Montana to be displayed with a placard indicating country of origin of that food. The law will require producers, growers and shippers of beef, processed whole grains, honey, pork, poultry, and lamb to label each individual portion, piece or package of that commodity in a conspicuous place. Bill Donald, a rancher from Melville and president of MSGA, said his organization supports labeling on both the state and national levels. "The Montana Stockgrowers Association was an original proponent of national COOL," said Donald. "We think it is important to have our beef and other products labeled as to their origin. However, we realize we have to go about this in a manner that is economical and practical to ranchers." Donald said the amendment to delay implementation of the Montana placarding act until 2006 will allow time for a national COOL system to be established, which will ease the burden of having a statewide-only system in Montana. "Montana is a raw commodity state. We send most of our products out of state for processing before they return to Montana in retail form," said Donald. "If we were to try and implement this now, Montana retailers would have many more challenges than if we wait until labeling is required nationally."

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Monday, March 21,2005

Letters

by WLJ
BSE issue gone too far Dear Mr. Crow, I couldn't agree more with your editorial March 7. This BSE issue has certainly gone too far. The R-CALF crowd is leading the public to believe this is a contagious disease of cattle, or that muscle cuts of beef from Canadian cattle could in some way be a consumer health threat, is far from factual. R-CALF leaders seem all too willing to risk eroding consumer confidence in our product in order to further their own protectionist agenda. Thank you for speaking out. Ralph D. "Shorty" Jones Midland, SD Science used as a smoke screen Dear Pete, Are those that advocate the continued closing of the Canadian border being hypocritical in their reasoning for doing so? Let’s see if we can noodle this one out without too much rancor. Those that advocate keeping the border closed reference OIE as the source of scientific advice. These advocates say that the science is just not yet complete on BSE eradication in Canada and therefore we should not allow any cattle or beef from cattle raised in Canada into the U.S. That seems reasonable on its face. After consideration of such arguments, a federal judge issued an order prohibiting Canadian cattle from coming into the U.S. and some members of Congress are writing bills to do the same. However, certainly those in Canada and some in the U.S. question the validity of such science. Now, let’s think back to the European ban on hormone treated cattle. Advocates in the EU said and still say that hormone implanted cattle and the resultant beef should not be allowed into the EU. They state as scientific evidence that studies show that the implanted hormones may cause problems later for those who consume such beef. The U.S. government retaliated with tariffs on EU produced products imported into the U.S. The U.S. cattle industry raised a clamor that such “scientific” evidence was fallacious and should not be used as a “non-tariff” trade barrier. How can we have it both ways? Our treatment of Canadian cattle and the EU treatment of some U.S. cattle seem to me to be a similar use of “science” to advocate a cause. To me, both are based on science of convenience. So I ask you Pete, are we in the U.S. beef industry being hypocritical when we use “science” as the reason for banning Canadian cattle but yet ridicule the “science” the EU used to ban US cattle? Or, has “science” been used as a smoke screen for greed on the part of both the EU for its ban on hormone treated cattle and some U.S. beef producers for their wanting a ban on Canadian cattle and beef? Sincerely, Mack H. Graves Latigo Management & Marketing Consultants, Inc. Centennial, CO Change: A fact of life Dear Editor, I cannot let the letter from Mr. McClure, claiming "misinformation" from NCBA go unchallenged. My husband and I have been active members in NCBA and predecessor organizations since the late 1950s when he served one year as president of the Jr. American National Cattlemen. We have seen many changes, usually working for the good of the cattle/beef industry (where we and two of our sons' families make our living), I might add. We realize some in the cattle business fear and/or dislike change. It is a fact of life, and often is an improvement. Running water and disposable diapers for babies are two of my personal favorites witnessed in the years of my adulthood! Mr. McClure is off base in accusing you and NCBA of misinformation, in my opinion. We look forward to the arrival of WLJ as an important and factual source of news of our industry. Mr. McClures' claim of "a few controlling NCBA" flies in the face of the fact that over 6,000 people attended the recent annual meeting, and that the vast majority of NCBA members are cattle producers, with feeders following in number, and they are ALL eligible to vote either at convention or through the mail. Issues brought up by members from either local or state organizations proceed through the committees or are brought to the floor at the convention and are acted upon by the members. Rather typical, sometimes boring procedures, but necessary to a well conducted meeting. COOL cannot, under the law as currently written, be "quite simple." There are conflicting trade laws. The prevention within the law of mandatory-ID, yet requirement for packers to "source verify" their product, is an internal conflict. The exemption of a huge portion of imported beef from the law via foodservice and the restaurant trade all serve to make it very difficult at best, and more likely impossible, to administer. Labeling beef produced in the USA is available and being used currently in the best possible way—by people who are adding value to their product and putting their label on it. Some consumers are choosing to pay the cost of such an identified product—some are not. Private enterprise at its best! Until you show some viable proof of your accusations, Mr. McClure, it seems to me you should be the one eating your words, rather than (Pete) Crow! Sincerely, Maxine Jones Midland, SD

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Monday, March 21,2005

Obit

by WLJ
Judith (Little) LaFranchi Judith Antoinette LaFranchi, 66, passed away February 15, 2005. LaFranchi was born January 19, 1939, on the Onyett Dairy in Gridley, CA, to Irvin Leroy Little and Ella Onyett Little. LaFranchi attended College of the Pacific and graduated from Sonoma State College with a Master’s degree. LaFranchi began showing Guernsey dairy cattle in 4-H at the age of 10 and won her first Showmanship class in 1951. Over the years she won numerous contests and was named California Guernsey Queen for the 100th California State Fair. In 1962 she married fellow dairyman Henry LaFranchi of Calistoga. They showed Ayrshire Dairy Cattle very successfully for many years, winning the “All Americans” title many times. In 1965 they entered the National Dairy Cattle Congress Exposition in Waterloo, IA, the largest dairy cattle show in the world, winning every class they entered. Survivors include her father Irvin Little and step-mother Pat, Gridley; brother Dennis Little and wife Loretta of Orland; son Erik LaFranchi and wife Steffani, Calistoga; daughter Cheryl LaFranchi and husband Frank Mongini, Calistoga; and grandchildren, Rachael, Logan and Ashley LaFranchi and nieces, nephews and cousins. Contribution can be made to the California Junior Angus Association, Abbie Nelson, 12211 Pear Lane, Wilton, CA 95693.

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Monday, March 21,2005

Seasonal high seen due to Easter rally

by WLJ
— Calves, yearlings strong on fed profits. Fed cattle markets were quiet most of last week, feeders were looking to get $94-95 on the heels of a very active market a week earlier, which was the result of a combination of seasonal Easter demand and the Canadian border remaining closed. Packers were offering $88, and they weren’t getting much bought through Thursday. Other than formula cattle, just a handful traded in the northern Plains at $149 dressed, $92 live, $1-2 lower than the prior week. Northern feeders were again early to trade while southern Plains feeders were comfortable with current inventory. The April live cattle contract moved lower during the week. April hit a high two weeks ago of $91.45 on March 9 and then slipped to $88.47 last Thursday. Cash markets were starting to feel the pressure. Packers have been earning a little money since the boxed beef cutout moved higher based on a little pre Easter panic buying by retailers, the Choice cutout was $156.55 and Select was at $150.18. The latest packer margin index shows packers earning $18 per head based on a average live cattle buy of $92.89 two weeks ago. The boxed beef market was expected to soften after the Easter holiday buy was complete. Boxed beef volume was much slower last week Slaughter levels have remained fairly strong for current times. Processors moved just over 599,000 head through packing plants. Many packers were announcing cut backs just after the Montana federal judge decided to keep the border closed. Either holiday orders are very strong, the slowdown talk was just talk, or is coming this next week. Cattle feeders were also seeing some positive margins as many breakevens on fed cattle are between $88-94. Analysts at HedgersEdge.com think that the seasonal winter high may have been made two weeks ago at $94. The lean beef market has been showing significant strength over the past few weeks. Ninety percent lean was trading at $156.23 last week and the 50 percent trim market was at 76.60. John Nalivka, analyst at Sterling Marketing, Vale, OR, said that food service was starting to feel the pinch on hamburger prices, “the ninety-nine cent hamburger may be a thing of the past,” he said. Some West Coast markets were reporting slaughter cows in the 60-cent range reflecting seasonal trends. The cow beef cutout was $121.13 and the West Coast cow carcass price was up $5 from the prior week to $85-87. Wayne Purcell, ag economist at Virgina Tech, said that the court ruling to block the opening of the Canadian border as scheduled on March 7 has injected huge uncertainly into the cattle markets. The April live cattle futures had been as low as $85.35 on March 2 and then surged after the court action to $92.25 on March 9. “Current prices are well off those highs, and we have seen a similar pattern in the June futures. I do not think we are ready to hold a $90 market even with the border still closed and in spite of the limited trade we saw last week,” Purcell said. “There continues to be talk of lagging demand in the institutional market even though the demand index for the fresh beef market shows a modest increase in the forth quarter compared to the forth quarter of 2003. Boxed beef values for the Choice beef are back above $155 and that will leave the packers some room to pay batter prices for cattle. It is a nervous and uncertain market, and I would react by being a seller on rallies to the recent highs.” He also suggested producers take profits on long hedges on March feeder cattle around the $106.40 high, seen back on March 9. “If you had moved out and placed long hedges in the summer in the August contract, look at taking profits on those positions around its March 9 high of $106. I do not see a reason across the next several weeks for these contracts to trade up and hold a new contract high,” Purcell said. Calves and yearlings were both stronger nationwide last week with the continued ban on Canadian feeder cattle and good spring grazing prospects both helping demand for all classes of cattle. Calves were bringing $2-4 more last week, while heavier, more feedlot-ready cattle were bringing $3-5 more than the previous week. Analysts said that many cattle feeders started reporting some profits two weeks ago when fed cattle started bringing $93-95 and that trend was expected to continue. Several analysts said cattle feeding profits ranged between $30-50 per head. Jim Robb, chief analyst with the Livestock Marketing Information Center (LMIC) said, the psychology of the industry is bullish all around right now, and that includes the feeder market,” “Plus, there are fewer cattle than normal for this time of year, and this is usually a short supply season anyway.” In addition, feedlots in northern states were reportedly looking for replacements and were waiting for March 7, which is when Canadian feeder cattle were expected to be allowed back into the country. When U.S. District Court Judge Richard Cebull, Billings, MT, granted a temporary injunction against that, cattle feeders were forced to look at getting back into the domestic feeder cattle market, sources said. Feeder cattle prices were also helped by better quality cattle coming off of southern wheat pasture, particularly Oklahoma and Texas. According to Bob Miles, USDA auction market reporter from Oklahoma, feedlots like cattle coming off of wheat pasture because they are a little bigger framed than cattle coming right off of cows, and they can pack on the weight at a more rapid pace without as long of a transition phase. “We have been seeing a lot of wheat cattle since Feb. 21, and that shows with the increase in price being paid for yearling cattle,” Miles said. “This will probably last another week and then the wheat cattle market will subside until the last half of April.” Producers who graze-out their wheat normally do so until the end of April or beginning of May. “Right now, cattle are being pulled off of wheat because, if they wait any later, any chance of harvesting the crop for grain is jeopardized,” said Miles. The first three days of the week saw feeder cattle futures rally significantly before sliding backward Thursday. For the week, however, the first few listed contracts were still all up $2-3 compared to the end of the previous week. The CME feeder cattle index last Wednesday was at $106.10, compared to $103.16 the same day the week prior. On the calf side, backgrounders and stocker operators are both fighting for available supplies, which are very tight right now. Backgrounders still have the availability of less expensive corn to feed calves in an effort to get them ready for a feedlot scenario, while stocker operators can feed cheaper corn until spring grazing actually kicks up, over the next month or so. Commodity analysts said the cash price for feed corn last week was running between $3.60-4 per cwt prior to delivery. Forecasts for spring grazing are abnormally bullish across most of the country, with the primary exceptions being in the Northwest and the eastern part of the northern and central Plains. Calf prices were also helped by the profits being reaped by stocker operators and backgrounders. An informal survey of nine market analysts and extension economists indicated that those two sectors were showing anywhere between a $50-90 per head profit on cattle bought this past fall and sold during the first half of March. — WLJ

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Monday, March 21,2005

Wild and Scenic Rivers Act could eliminate grazing

by WLJ
Recent court decisions regarding the Wild and Scenic Rivers Act (WSRA) have heightened awareness of possible ramifications of a misapplication of this law on the beef industry. With another Wild and Scenic Rivers case decision pending, producers may need to advocate to maintain grazing in these areas. In the 1960s, Congress created the National Wild and Scenic Rivers System to protect and preserve rivers in response to concerns that rivers were being dammed, dredged, diked, diverted and degraded at an alarming rate. In October 1968, the newly enacted Wild and Scenic Rivers Act pronounced that, “certain selected rivers of the Nation which, with their immediate environments, possess outstandingly remarkable scenic, recreational, geologic, fish and wildlife, historic, cultural or other similar values, shall be preserved in free-flowing condition, and that they and their immediate environments shall be protected for the benefit and enjoyment of present and future generations.” The legislation continues on to say, “Each component of the national wild and scenic rivers system shall be administered in such a manner as to protect and enhance the values which caused it to be included in said system without, insofar as is consistent therewith, limiting other uses that do not substantially interfere with public use and enjoyment of these values.” Designating an area as a wild and scenic river is not like designating a national park because the Wild and Scenic Rivers Act does not generally lock up a river like a wilderness designation. The goal, as outlined by Congress, was to halt development and preserve the character of a river. Uses compatible with the management goals of a particular river are supposed to be allowed under the act. However, grazing seems to be a use that is not being recognized under WSRA. The National Cattlemen’s Beef Association (NCBA) and the Public Lands Council (PLC) have become increasingly aware that grazing in wild and scenic areas is beginning to be eliminated altogether. Jeff Eisenberg, director of public lands for NCBA and executive director of PLC, said, “Numerous operations and families in Oregon and potentially many times more people throughout the western United States have been adversely impacted by the court decisions applying the WRSA to grazing.” PLC cited ONDA v. Green in which Oregon Natural Desert Association (ONDA) challenged federal agency management of grazing in Donner und Blitzen wild and scenic corridors from late 1990s to the present. With this case, the court ruled that grazing could only continue so long as it met the statutory requirement to “protect and enhance” the value for which the river designation was established. Then the court used this statute to authorize federal agencies to exclude cattle from the river areas. ONDA raised the same issue of cattle grazing in two other cases brought against the Bureau of Land Management involving the Owyhee River area. In the first decision, the court asserted that agencies have the “duty—not only to restrict it, but to eliminate (grazing) entirely” along designated corridors if it violates the “enhance and protect” standard. “More than 50 operations ran cattle along the subject area of the Donner und Blixen, Owyhee, and Malheur Rivers,” said Eisenberg. “These decisions affected hundreds of people if you consider that each operation often consists of several different families.” Currently, ONDA is involved in another case challenging grazing along the Malheur Wild and Scenic River. This case is called Oregon Natural Desert Association v. U.S. Forest Service. Eisenberg said about five ranching operations are at risk if the court makes the same decision as in the other three cases. “We respect the fact that Congress has passed that statute, but we want there to be a balance between respecting the existing uses and protecting the resources,” said Eisenberg. “The fact that cows are always getting kicked off because of the protected and enhanced statute is a problem.” NCBA is currently talking to different people to see what can be done to see that the balance between people and resources is restored.

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Monday, March 21,2005

Withdrawing ‘A20' rule pondered by USDA

by WLJ
Officials with the United States Department of Agriculture (USDA) confirmed with WLJ last week that they are considering pulling the 20-month-and-under cattle rule from Japanese consideration if the Pacific Rim nation continues to refuse to move forward with the process to reopen its border to U.S. beef. In addition, U.S. Agriculture Secretary Mike Johanns said his agency may not hand over any more documentation on the BSE issue until Japan makes that “good faith effort.” “We have done everything they have asked for and more as it concerns making sure BSE has no chance of entering their country,” one USDA trade official told WLJ. “We are very frustrated the Japanese haven’t had the courtesy to move forward in an expeditious and efficient manner to resolve this issue. It’s five months since we came up with the original agreement and they aren’t any further along in the process than they were in early October.” In meetings with members of Japan’s ministries of health and agriculture earlier this month, USDA representatives indicated the previously proposed “A20" rule could be pulled in an effort to try to get beef from cattle up to 30 months of age approved in the future. Under the A20 rule, USDA would be allowed to use current grading methods to determine cattle that are 17 months of age or younger with beef from those animals being eligible for export to Japan. In addition, cattle that have a verified paper trail showing they are 20 months or younger will also be eligible for export. However, USDA officials have said it appears Japan cares very little about international science that shows younger cattle are at very low risk of carrying the prion responsible for the disease and that they may pull A20 to go after a less restrictive export program. “It doesn’t seem to matter whether we go 20 or 30 months right now; the Japanese appear to want to play hard ball and we can do that,” a USDA spokesman said. “We have science on our side in both instances and we can call Japan out on that in the long run. “The concession to only ship beef from cattle 20 months and younger was a special marketing program. If the Japanese don’t ever act on that, we ought to go back to international standard which is you can safely trade meat from animals of any age and not test any animals under 30 months of age.” In addition, Johanns last Wednesday said if Japan doesn’t reciprocate in some manner over the very near future he will look into not complying with future requests for sending further documentation on the issue. He pointed out, during a press briefing, that it took over seven months for Japan to take the original documentation from USDA and come up with a preliminary decision from Japan’s Food Safety Commission (FSC) that younger beef presented a “negligible” to “very minimum” risk of being infected with BSE. “We need to have some preliminary action now,” Johanns said. If the FSC refuses to move forward with changing rules regarding testing of cattle for BSE, Johanns indicated he would stall the process even further by denying Japan’s ability to look at any further documentation.

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Monday, March 14,2005

Beef Bits

by WLJ
McDonald's reports sales increase McDonald's Corporation last week announced a 4.4 percent increase in February for global systemwide sales, compared with February 2004. Comparable sales for McDonald's restaurants worldwide increased 1.6 percent, marking the 22nd consecutive month McDonald's has reported an increase in global comparable sales. McDonald's CEO Jim Skinner said, "The ongoing strength of the strategic U.S. menu, marketing and service initiatives, as well as strong consumer response to our nationally advertised Chicken Selects sampling event, contributed to the monthly performance.” Wendy's reports weak February Wendy's International Inc. said its same-store sales last month were down 2.4 percent, compared to February of 2004. Last year same-store sales increased 9.9 percent for April. Wendy's franchises fared better, slipping only .7 percent to .9 percent, compared to last year's eight percent increase. The company's Tim Hortons restaurants posted a 6.2 percent increase in Canada to 6.6 percent, and an 8.1 percent increase to 8.5 percent in the U.S. Company CEO Jack Schuessler said Wendy's poor results were because of winter storms, particularly in the eastern half of the country. Fast-food burger traffic up Quick-service hamburger outlets served more than 500 million more customers last year than the previous year, a four percent increase in overall foot traffic, according to industry research group The NPD Group. By comparison, coffee restaurants served in excess of 200 million more customers in 2004, while donut shops served about 150 million more people than the previous year. Traffic at all restaurants in 2004 grew by two percent, the first solid growth since 2001, NPD said. By category, NPD said quick-service and casual-dining operators each grew by two percent, while mid-scale restaurants dropped one percent in traffic. Drought forces Aussie cattle sale About 11,000 head of cattle were auctioned off in the Australian city of Roma as the continuing dry conditions force graziers to sell-off stock Livestock agent Jason Carswell said cattle were trucked in from western Queensland, South Australia and the Northern Territory. "The panic has sort of set in some places where it's drier than most and we're seeing that now with large numbers coming through that people have sort of waited for the rain and it's just getting to the stage to do something before it does get proper dry," he said. Chain restaurant sales growing The chain-restaurant industry has enjoyed more than a year and a half of sales growth, according to market research firm The NPD Group. Based on data collected from more than 40,000 units, for the week ending Feb. 21, same-store sales rose 4.6 percent from the year earlier period. The average increase in same-store sales for the 86 weeks was 4.4 percent. Chains also continue to erode the market share of independents. According to NPD, major chain restaurants captured an additional three percent of the market between 2001 and 2004. Texas targets genome project The Texas Beef Council board of directors, representing the state’s beef producers, approved funding of $100,000 in Texas checkoff funds for the international bovine genome project. This funding represents the second of up to three annual installments of $100,000 each that TBC has committed to this $53 million research. Other U.S. contributors include the national beef checkoff program, the state of Texas, the National Institutes of Health and USDA. Meat cutters may be replaced Tops Markets LLC and the union representing local meat cutters met in Cleveland, OH, last week to discuss the chain's plan to stock 49 Northeast Ohio stores with prepackaged meat, which would effectively eliminate the need for retail meat cutters. The company has already lined up a vendor to handle the meat packaging. Tops is going against the trend of other grocery chains to provide more and better service in its meat departments in order to compete with nonunion Wal-Mart Stores Inc. After meat cutters at a Texas Wal-Mart voted to join a union in 2000, Wal-Mart eliminated butchers in its grocery departments and switched to prepackaged meat. McDonald's launches fitness ads McDonald's Corp. is now encouraging customers to get fit with a new advertising campaign. The promotion leads with the slogan, "It's what I eat and what I do … I'm lovin' it," and features athletes, including Venus and Serena Williams. The campaign will use animation to show McDonald's drink cups, lettuce, straws and burgers performing exercises. One commercial even suggests, "Maybe you should spend less time with your TV.” The effort includes new packaging, an updated Web site and a series of videos featuring Ronald McDonald—the new fitness mascot—teaching children how to eat well and stay active.

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Monday, March 14,2005

Beef Bits

by WLJ
McDonald's reports sales increase McDonald's Corporation last week announced a 4.4 percent increase in February for global systemwide sales, compared with February 2004. Comparable sales for McDonald's restaurants worldwide increased 1.6 percent, marking the 22nd consecutive month McDonald's has reported an increase in global comparable sales. McDonald's CEO Jim Skinner said, "The ongoing strength of the strategic U.S. menu, marketing and service initiatives, as well as strong consumer response to our nationally advertised Chicken Selects sampling event, contributed to the monthly performance.” Wendy's reports weak February Wendy's International Inc. said its same-store sales last month were down 2.4 percent, compared to February of 2004. Last year same-store sales increased 9.9 percent for April. Wendy's franchises fared better, slipping only .7 percent to .9 percent, compared to last year's eight percent increase. The company's Tim Hortons restaurants posted a 6.2 percent increase in Canada to 6.6 percent, and an 8.1 percent increase to 8.5 percent in the U.S. Company CEO Jack Schuessler said Wendy's poor results were because of winter storms, particularly in the eastern half of the country. Fast-food burger traffic up Quick-service hamburger outlets served more than 500 million more customers last year than the previous year, a four percent increase in overall foot traffic, according to industry research group The NPD Group. By comparison, coffee restaurants served in excess of 200 million more customers in 2004, while donut shops served about 150 million more people than the previous year. Traffic at all restaurants in 2004 grew by two percent, the first solid growth since 2001, NPD said. By category, NPD said quick-service and casual-dining operators each grew by two percent, while mid-scale restaurants dropped one percent in traffic. Drought forces Aussie cattle sale About 11,000 head of cattle were auctioned off in the Australian city of Roma as the continuing dry conditions force graziers to sell-off stock Livestock agent Jason Carswell said cattle were trucked in from western Queensland, South Australia and the Northern Territory. "The panic has sort of set in some places where it's drier than most and we're seeing that now with large numbers coming through that people have sort of waited for the rain and it's just getting to the stage to do something before it does get proper dry," he said. Chain restaurant sales growing The chain-restaurant industry has enjoyed more than a year and a half of sales growth, according to market research firm The NPD Group. Based on data collected from more than 40,000 units, for the week ending Feb. 21, same-store sales rose 4.6 percent from the year earlier period. The average increase in same-store sales for the 86 weeks was 4.4 percent. Chains also continue to erode the market share of independents. According to NPD, major chain restaurants captured an additional three percent of the market between 2001 and 2004. Texas targets genome project The Texas Beef Council board of directors, representing the state’s beef producers, approved funding of $100,000 in Texas checkoff funds for the international bovine genome project. This funding represents the second of up to three annual installments of $100,000 each that TBC has committed to this $53 million research. Other U.S. contributors include the national beef checkoff program, the state of Texas, the National Institutes of Health and USDA. Meat cutters may be replaced Tops Markets LLC and the union representing local meat cutters met in Cleveland, OH, last week to discuss the chain's plan to stock 49 Northeast Ohio stores with prepackaged meat, which would effectively eliminate the need for retail meat cutters. The company has already lined up a vendor to handle the meat packaging. Tops is going against the trend of other grocery chains to provide more and better service in its meat departments in order to compete with nonunion Wal-Mart Stores Inc. After meat cutters at a Texas Wal-Mart voted to join a union in 2000, Wal-Mart eliminated butchers in its grocery departments and switched to prepackaged meat. McDonald's launches fitness ads McDonald's Corp. is now encouraging customers to get fit with a new advertising campaign. The promotion leads with the slogan, "It's what I eat and what I do … I'm lovin' it," and features athletes, including Venus and Serena Williams. The campaign will use animation to show McDonald's drink cups, lettuce, straws and burgers performing exercises. One commercial even suggests, "Maybe you should spend less time with your TV.” The effort includes new packaging, an updated Web site and a series of videos featuring Ronald McDonald—the new fitness mascot—teaching children how to eat well and stay active. © Crow Publications - Any reprint of WLJ stories, except for personal use,  without permission, written consent and appropriate attribution is prohibited. ©1996-2005 Crow Publications. All rights reserved.

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Monday, March 14,2005

Beefnet to auction Mexican cattle

by WLJ
Beefnet, an Internet cash commodity exchange, announced a partnership with Union Ganaderas de Chihuahua. The Union, a cattle association in Chihuahua, Mexico, plans to market Mexican producer cattle over the Internet using the Beefnet Exchange. The complex world of purchasing cattle in Mexico has forever frustrated U.S. buyers. The development of the Internet and the ability to trade directly with the cattle owners will mean major improvements for both buyers and sellers, according to a Beefnet press release. A centralized marketplace will allow the best buyer to find the best seller resulting in improved pricing for both. Lower transactions cost created by the electronic exchange will complete the package delivering better prices and lower costs, the release says. “We have combined click and buy trading with electronic settlement and clearing on the financial side,” said David Huseman, Beefnet technical designer. “The Beefnet site allows members to match trades for the purchase of cattle and when delivery occurs to transparently watch the money flow after the parties have agreed to the final settlement.” Regular Internet auctions will be hosted on the Beefnet Web site. The trading fee will be $6/head with buyer and seller paying $3 each. “From the click of a mouse to make the purchase to the e-confirm purchase contract, transparency and efficiency will rule”, said Beefnet developer, Bill O’Brien. “U.S. buyers expect to receive what is represented to them, and we have built a trading platform to assure purchases meet those expectations.” “Our Mexican producers want a competitive market for their cattle and the centralized marketplace developed by Beefnet presents the future for livestock marketing,” said Bilo Wallace, association president. Membership in Beefnet will be free. All Members agree to be bound by the terms and conditions of sale posted on the web site. More information and sign up for membership are available at www.beefnet.org. — WLJ

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