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Monday, April 25,2005

Beef Bits

by WLJ
Lone Star’s first quarter mixed Lone Star Steakhouse & Saloon Inc’s first quarter net income fell less than one percent as sales increased nearly three percent. In a press release April 18, the Wichita-based restaurant chain said net income for the quarter fell to $10.9 million, or 49 cents a share, from $11 million, or 46 cents a share, a year earlier. Sales rose to about $165.4 million form $160.6 million a year ago. Restaurant costs and expenses rose to about $136.9 million from almost $133.6 million a year earlier. Argentina exports jump Argentina exported 130,904 metric tons of beef during the first quarter of 2005, Senasa, reported last week. Exports are up 40 percent from 93,324 tons during the same period a year ago. First-quarter sales totaled $276 million, up 35 percent from $203 million a year ago. More countries have opened their doors to Argentine beef after previously closing them because of concern about hoof-and-mouth disease (HMD). Argentina has not has an outbreak of the disease since September 2003. Argentina sold 14,098 tons of processed beef for a total of $36 million. The main buyer of processed beef was the U.S., accounting for 6,933 tons or $17.7 million. The U.S. has kept a ban on fresh Argentine beef since early 2001, when Argentina had a widespread outbreak of HMD. The Foreign Agricultural Service of the USDA has forecast Argentina's 2005 exports at 700,000 tons. Cargill to buy processor Cargill Limited and Better Beef Limited recently announced that the two companies have reached an agreement for Cargill to purchase beef processing and related assets operated by Better Beef Limited, headquartered in Guelph, Ontario. “This combination has broad benefits and is a natural fit," said Bennie deJonge, founder and president of Better Beef Limited. Two overcome by manure fumes Two farmers were reported in critical condition after apparently being overcome by manure gases over the weekend. Dwight Johnson, 52, of Andover, IA, was found on his cattle farm April 16 in an underground manure tank that had four inches of liquefied waste inside. A farmhand, Justin Faur, 23, of Clinton, called 911 for help and then followed him inside the tank in an apparent rescue attempt, Clinton County Sheriff’s deputies said. Both were listed in critical condition at University Hospitals in Iowa City. Stewart Melvin, an engineering consultant and former farm safety engineer at Iowa State University Extension Service, said a buildup of hydrogen sulfide in manure can overcome people who climb down or fall inside the tank. Canadians prepare for Korea trade Canada Farm Direct has lined up a preliminary deal for 400 metric tons of beef per week to South Korea once the country allows imports of Canadian beef to resume. The company said all indications point to a resumption of trade in the near future. The signing of the formal contract between Canada Farm Direct and the Asian company is expected in June. Canada Farm Direct has also yet to buy beef processing facilities in western Canada. Japanese consumption growing Japanese beef consumption rose five percent during February, to 61,814 metric tons, according to Meat and Livestock Australia. The increase in beef consumption in Japan was said to be largely a result of a 15 percent increase in imported beef consumption. While 35,413 metric tons of imported beef was consumed during February, domestic Japanese beef consumption fell six percent to 26,401 tons. The decline in demand for domestic beef was attributed to the increased supply of imported beef on the market, which pushed imported beef prices down. Overall, Japanese beef consumption is still significantly lower since the ban on U.S. beef in 2003. Arby's adds new beef sandwich Arby's has added two deli-style sandwiches to its Market Fresh line, including a corned beef Reuben. The company has credited its Market Fresh line of sandwiches, wraps and salads, introduced in May 2001, with boosting its overall sales performance. New Zealand exports slide New Zealand’s beef exports for the first quarter of 2005 totaled 110,000 metric tons, down 14 percent. While New Zealand’s beef exports to Japan and Korea were at record levels—up 13 and 15 percent, respectively—shipments to the U.S. dropped 24 percent, the third lowest level since 1989. The decline in exports was largely the result of uncertainty surrounding the reopening of the Canadian/U.S. border, combined with the limited availability of female cattle, wet weather and an early Easter. © 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, April 25,2005

Letter

by WLJ
Science scrutinized Dear Editor: The Canadian border debate is not helped by resorting to epithets and name calling. Swift’s CEO John Simons’ letter of April 11 labels those who oppose reopening the border as “a group of protectionist, anti-free trade ranchers…a group of fringe ranchers” who are rife with “hypocrisy” and out to “line their own pockets.” This is neither debate nor discussion. Science does not agree on most issues, and we accordingly should always be wary of those who seek to cloak themselves in the sacred robes of “science,” as much in the Canadian debate as well as in questions such as global warming. The fact is that “science” is rarely of one accord and does not have an anointed spokesman. Mr. Simons’ “science” does have one gaping hole. His central contention is that there “is no scientific evidence that cattle under 30 months show evidence of BSE” and that cattle under 30 months are “younger than the scientifically proven onset of BSE....” The fact is there have been 20 confirmed BSE cases globally in cattle under 30 months of age. If Mr. Simons means that one who seeks to “line their own pockets” is seeking to be profitable, then I plead guilty as a cow/calf producer to such conduct, just as much as Mr. Simons seeks to maintain his company in a position of profitability. We can disagree over trade issues, science and the meaning and value of “free trade.” Name calling and labels, however, do not further the discussion. That our interests may be inimical does not mean that we cannot carry on discourse, debate and dialogue with a degree of comity. Sincerely, H. Jay Platt St. Johns, AZ © 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, April 25,2005

Spring beef prices rally feds $2-3

by WLJ
— Taiwan purchases taking effect. — Fear of late spring front-end problems. Stronger boxed beef prices, packer profits, a projected jump in spring beef demand and a $1.50-2 rally in nearby live cattle futures helped spike cash fed cattle prices mostly $2 last week compared to the week previous. Northern tier trade revved up Wednesday with approximately 45,000 head trading in Nebraska at mostly $93-93.50 live, $150 dressed. Southern trade broke loose the next day with producers selling most of their cattle around $94 live, out of a range of $93-95.50. Kansas and Texas trade was expected to total 40-45,000 each by the end of the week. The most visible bullish market indicator last week was the $3 jump in boxed beef prices last Monday through Thursday. Choice boxed beef was at $158.36 per cwt as of noon Thursday, while Select was up almost $142. Volumes were also called very good last week as cash traded volume was only under 300 loads one day over the first four days of last week, and that was Monday with 298 loads of all type of product being shipped. “Product is starting to be procured for Mother’s Day and in the eastern third of the country the amount of disposable income available for food during the spring is 10-15 percent more than history would show,” said a Midwestern meat broker. “Between the very inclement weather this winter and gas prices deterring any travel plans the past few months, money has been set aside for spring activities, of which picnicking and grilling are popular and could be even more so this year.” In addition, news last week that Taiwan started allowing U.S. beef back across its borders helped spark boxed beef movement from processors to exporters. Taiwan is allowing boneless beef from cattle 30 months and younger that were processed after April 16. Reports indicated that the first air shipments of U.S. beef would leave for Taiwan late last week. Before Taiwan’s ban because of BSE being confirmed in one cow in Washington state on Dec. 23, 2003, the Pacific Rim country was the sixth largest export destination for U.S. beef. Packers were starting to show positive margins again, with last Wednesday’s range being between $10-15 per head, and additional gains expected through the end of the week. Several sources thought packer profits late last week might get up to $25 per head. Processing volumes last week were stronger than the previous few weeks and was resulting in packers needing to come to the table for cattle that might be needed for slaughter spots the following Monday or Tuesday, analysts said. Packers slaughtered 475,000 head of cattle last Monday through Thursday, up 13,000 from the same period the week previous. Analysts were projecting a 600,000 head slaughter week, which would be the first time in several months. Average slaughter weights were still up 25-30 pounds compared to last year at this same time. However, analysts said the rate of decline in both live slaughter and carcass weights over the past several weeks have packers anticipating a need for more cattle down the road, particularly with Taiwan reopening to U.S. beef and the northern border remaining closed to Canadian cattle. For the week ending April 15, the average slaughter weight was 1,232 pounds, compared to just over 1,260 pounds during the first week of March. Carcass weights were down to 751 pounds as of April 15, compared to 765 pounds in early March. Live cattle futures helped rally the cash market a little bit early in the week, as the nearby April contract gained $1.50 from the end of the previous week to last Wednesday. The April contract got up to over $91.50, after closing the previous week at $89.80. “Futures traders are thinking a downturn in the market is inevitable, it’s just a matter of when,” said one source with the Chicago Mercantile Exchange (CME). “As soon as the cash market happened, the bears took back over here.” Calves, yearlings mixed Auction barns across the country were starting to report mostly steady prices being paid for calves and lighter weight stocker cattle, $2-3 gains for 600-800 pound feeder cattle and steady to $1 softer prices on heavier feedlot placements. While pasture conditions are still considered better than normal for most areas of the southern half of the U.S., Southwest and southern Plains auction barns said they are starting to see a need for more moisture to help extend grazing seasons longer than normal. As a result, stocker operator demand for calves and other light weight cattle has subsided. Feedlot demand for six- to eight-weight steers was called very active, as those cattle are projected to be ready for market after the normal summer lull in the fed market passes. Heavier feedlot-replacement cattle were struggling last week on the forecast that this summer will show a normal seasonal lull in the fed market, and that additional beef trade with the Pacific Rim—particularly Japan and South Korea—continues to look unlikely before the fourth quarter of the year. The supply of heavier feedlot placement cattle is projected to jump a little more than the past few years because of more wheat graze-out cattle forecasted through the end of April and the first two weeks of May, Southwest extension specialists said. According to Brent Snyder, market analyst with the Texas Cattle Feeders Association, the margins of cattle feeders selling fed cattle last week were varied with some producers reporting slight profits and others still reporting losses. “It’s very much a hit or miss on whose making a profit or still reporting losses on these cattle,” Snyder said. “A lot of these cattle were on feed longer because of the wet winter and some of the other expenses that fluctuated higher.” Of particular concern from an expense standpoint was the spike in fuel costs associated with transportation, power and feed processing. The CME feeder index, for 700-850 pound steers, was $101.90 last Wednesday, about 60 cents higher than the same day the previous week.

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Monday, April 18,2005

All markets move higher

by WLJ
Fed cattle trade was stronger last week on very light trade volume. Northern Plains feeders started trading Wednesday afternoon establishing the live market at $149 dressed while Southern Plains feeders were holding the line at $92, which is where most live trade occurred. The fed markets were generally $2.00 higher over the bulk of the prior week’s trade. Only 66,000 head traded on the national scene as of Thursday afternoon. Meat traders are having a difficult time trying to figure the market out and have adopted a hand-to-mouth buying pattern. There was some light featuring at the major grocery stores last week, and some retailers are only featuring beef as a “percent off” the regular price rather than a fixed price because of the erratic meat markets. Retailers can offer better features with poultry and pork products rather than beef. Slaughter volume has been marginal with only 582,000 head passing through packing plants during the week ending April 5. The industry should start to see slaughter volume grow, but that will be difficult because finished cattle just aren’t there. Last week daily slaughter was slightly softer with 462,000 being processed through Thursday 8,000 head below the pace the week before. The latest packer margin index showed packers earning $7.00 per head on an average buy of $90.48 and an average production cost of $91.07 Perhaps the most interesting development in the market is the Choice-Select spread, which is at $16.64. It’s normal to see the spread widen at this time of year, but it has happened very quickly and is wider than normal. The cutout would also suggest that Choice product isn’t getting any greater value, but Select is being discounted more. The latest choice cutout was at $155.51. And Select was at $138.87. These meat markets have a softer tone to them as boxed beef movement is moderate and erratic. The cow beef cutout was at $116.47 down several dollars from a couple weeks ago. And the 90 percent lean product was also down $10.00 from a couple of weeks ago. With lighter cattle and fewer Choice cattle, there is much less fat on the market; 50-50 trim has gone ballistic and is trading at $92.03 where a normal trade range would be in the $40s. Jim Rob at the Livestock Market Information Center (LMIC) said that a more normal pattern of imports is resuming on the lean beef, which has put pressure on the component used for hamburger production. We may have seen the slaughter cow and bull market top out last week, when some $70 slaughter cows were reported. Carcass weights were starting to make their seasonal down trend. The LMIC reported that from January through early April, Federally Inspected (FI) cattle dressed weights averaged nearly 15 pounds above a year ago. Some of the year-to-year increase in average cattle weights has been due to heavier cow weights coupled with relatively small cow slaughter. Slaughter steer and heifer weights also have been above a year ago. But, so far this year cattle weights have been rather normal from a seasonal perspective. By late March, FI steer dressed weights averaged 806 pounds compared to 796 pounds last year, a yearly increase of 10 pounds. For the same period, averaged dressed weights for steers were only 3 pounds heavier than the prior five-year average weight of 803 pounds. On a weekly basis, steer weights have seasonally declined most every week this year. Last year, steer weights bottomed out in late April and should post a yearly low in late April again this year. At the end March, FI heifer dressed weights averaged 747 pounds, 14 pounds heavier than 2004’s and around 4 pounds heavier than the prior five-year average. On a weekly basis, heifer weights have declined on average 2.5 pounds per week since the beginning of the year. Feeder cattle Feeder cattle and calf prices were stronger than the prior week. A limited supply of yearlings is keeping feeders very aggressive on buying replacements. The latest feeder cattle index was at $110. Feeder steer prices last week at Oklahoma City were steady to $2 higher with exception of seven weights, which were up to $4 higher than last week. Feeder heifers were steady to $1 higher and stocker cattle were steady with seven days earlier at Oklahoma City. Stocker cattle are probably close to their seasonal high for the year. However, all replacement type young animals are expected to continue very strong. When the Canadian border opens to live cattle the prices of feeder and stocker cattle are likely to be pushed lower. But the border is not likely to be opened for at least two months and may be longer. The court system moves quite slow, said Ron Plain, economist at University of Missouri. Jim Robb at the LMIC said that lightweight cattle prices have surged to new all time highs. Most of the recent price spike-up can be attributed to producers buying lightweight cattle for spring/summer grazing programs. In the Southern Plains and Southeast, many of the lightweight cattle for pasture have already been purchased and most of the recent price strength was in the Midwest and Central Great Plains where pasture green-up will begin in the next few weeks. Lightweight cattle prices have posted the largest increases. In the Southern Plains, for the first quarter of 2005, the year-to-year increase in 500- to 600-pound steer prices was $19.39 per cwt. over a year ago (18 percent). For the quarter, the annual price increase for 700- to 800-pound steers and slaughter steers was $14.92 (17 percent) and $8.82 (11 percent), respectively. Besides good grazing in most of the U.S., with notable exceptions in parts of the Northern Plains and Pacific Northwest, fundamental support to feeder cattle and calf prices has come from several sources. The key sources of price support include: 1) cyclically tight feeder cattle supplies; 2) rather strong slaughter steer prices; and 3) large year-to-year declines in corn and other feedstuff prices. On a quarterly basis, lightweight feeder (under 600 pounds) cattle prices are forecasted to set an all time record high in the second (spring) quarter of 2005, eclipsing the levels set last summer. Calf prices will likely remain strong for the balance of the year, but are forecast to be below 2004's by the fourth quarter of the year. Still, U.S. operations are expected to receive calf prices this fall that are the second highest ever for that quarter. But, 12 percent below a year earlier. For calendar year 2005, cash calf prices are forecast to be above 2004's, setting a new all time high. They are also forecast to set the annual high for this cattle cycle. Feeder steers (700-800 lbs.) prices are expected to remain strong in 2005 with annual average prices slightly below 2004’s. Red ink for cattle feeders will limit upswings in feeder cattle prices for the balance of 2005 and will likely keep prices below 2004’s for the last half of the year. In the Southern Plains during last summer’s quarter, 700-to 800-pound steer prices averaged over $117.00 per cwt., a price level will likely not be eclipsed again this cattle cycle, said Robb. After strong year-to-year increases for slaughter steer prices in early 2005, the balance of the year will bring slight increases, at best. For the remainder of the year, slaughter steer prices are forecast to mirror the normal seasonal pattern, setting seasonal lows this summer. Of course, uncertainty on the international trade front hangs over the outlook. Slaughter steer prices are forecast to average in the mid- to upper-$80s per cwt. in the second quarter, down $1.00 to $4.00 from the first quarter average. Prices will follow the seasonal trend this year, bottoming out in the third quarter, averaging in the low $80s per cwt. For the fourth quarter, prices may struggle back up to the mid-$80s. A very strong first quarter could pull the annual average slaughter steer price for 2005 slightly above 2004’s. — WLJ © 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, April 18,2005

Beef Bits

by WLJ
Sausage recall Roger Wood Foods in Savannah, GA, is voluntarily recalling approximately 10,700 pounds of sausage products that may be contaminated with listeria, the U.S. Department of Agriculture's Food Safety and Inspection Service announced. Products subject to recall include: 1-pound packages of preferred recipe, BEEF Smoked Sausage, 2.5-pound packages of GREAT GRILLERS, smoked sausage, made with chicken, turkey, pork and beef, 5-pound packages of FAMILY PAK, Chicken, Pork and Beef Wieners, 3-pound packages of FAMILY PAK, Chicken, Pork and Beef Wieners, 4-pound packages of FAMILY PAK, Chicken, Pork and Beef Wieners. The sausage was produced on March 10, 2005, and was distributed to retail stores in Florida, Georgia, North Carolina and South Carolina. The problem was discovered through regulatory sampling conducted by the state of Georgia. FSIS has received no reports of illnesses associated with consumption of these products. Processing plant moving to SD A change in contractors will delay the construction of a Ridgefield Farms beef processing plant scheduled to be built in Huron, SD. Ridgefield is relocating from its Connecticut home to South Dakota, but cost overruns by its original contractor caused the company to delay construction. The $42 million plant, originally scheduled to open in January of 2006, will now debut four to six months late. It will employ about 300 in the slaughter and processing facilities. New BSE case in Japan Japanese officials revealed April 8 that they have found a new case of bovine spongiform encephalopathy (BSE), the seventeenth since the first case was identified in the country in September 2001. The victim this time was a female Holstein, about 54 months of age. It was found on the island of Hokkaido and was identified when it became unable to stand or walk. Tops closes three stores Tops Markets, a division of Dutch grocer Ahold, will close three more stores in Ohio and lay off 450 employees in that market. In addition to the employees at the three locations (Cleveland, Solon and Sandusky), the grocer plans to lay off butchers and bakers in other Ohio stores. The chain will keep at least one butcher in each location, but ramp up its case-ready assortment to keep labor costs down. It will also outsource some of its baking. The Williamsville, NY-based grocer closed six Ohio stores and laid off 390 in January. Smithfield undecided Responding to published reports that it plans to build a new beef plant in the near future, Smithfield, VA.-based Smithfield Foods said it has had "early, exploratory discussions concerning the feasibility of constructing" such a plant, but has made no decision as yet. State bill favors antibiotic-free meat A bill being heard by the Maine legislature's agricultural committee would order all public school systems, including universities as well as all state institutions, to give preference to suppliers who could provide antibiotic-free meat. The bill concedes that costs for foodservice would rise considerably, about 11 percent at the University of Maine and by undetermined amounts elsewhere. The Maine Farm Bureau opposes the bill, while organic groups favor it. Partnership possible Elected leaders of National Meat Association (NMA) and the North American Meat Processors Association (NAMP) met in Chicago last week to discussing how each organization could benefit from a partnership. The presidents, Tom Campanile Jordan Dorfman, said in a joint statement that they have two aims: “To better enable our members to successfully operate in the rapidly changing and challenging business environment of the 21st century; and to preserve the culture of both organizations that have each served the industry for 60 years.” They added: “We are excited about the opportunities that this partnering will provide our respective memberships. They will be the first to learn of our progress as more information becomes available.” State Fair Revives Open Beef Show for 2005 The State Fair of Virginia Open Beef Show returns September 26-29 during the Fair at the Richmond Raceway Complex in Richmond. The State Fair Open Beef show will complement the long standing State Fair Youth Beef Show, which in 2004 featured 601 head and 193 4-H and FFA youth participants. The Open Beef Show returns after a ten-year absence for two reasons: to showcase this very important segment of Virginia agriculture and to present more animals for Fair customers during the event. Information is available at www.statefair.com. © 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, April 18,2005

Crop byproducts can stretch hay supplies

by WLJ
Livestock producers should consider using crop byproducts to stretch drought-affected pastures and hay supplies, said Greg Lardy, North Dakota State University Extension Service beef cattle specialist. Lactating beef cows have relatively high nutrient requirements, according to Lardy. Consequently, those cows need an adequate supply of nutrients, particularly protein and energy, to maintain their body condition. Byproducts such as wheat middlings, soybean hulls, barley malt pellets, corn gluten feed and sugar beet pulp all contain highly digestible fiber that the ruminal microorganisms can use as a source of energy, he said. Many counties in southwestern and south-central North Dakota face dry conditions this spring. In some cases, hay supplies are dwindling. The lack of rainfall has livestock producers concerned about forage availability for the upcoming grazing season. Their primary concerns are providing the proper nutrition for their cows and managing the grazing resource properly. "In areas without enough hay or pasture, byproducts can be an economical alternative or substitute for a portion of the hay in the diet," Lardy said. North Dakota processing plants produce thousands of tons of these products daily. Many of these byproducts are priced reasonably this spring, he said. How much of each particular byproduct to feed to the cowherd depends on a number of factors, such as the amount and quality of hay or pasture available, the cows' nutrient requirements and the projected cost of the ration. For more information on specific recommendations, producers should refer to NDSU Extension bulletins AS1175, AS1182 and AS1242 or contact their local Extension office. These bulletins are available on the NDSU Extension Web site at www.ext.nodak.edu/extpubs/beef.htm. A list of byproduct suppliers is available on the NDSU Web site at www.ag.ndsu.nodak.edu/aginfo/dairy/dairyext/coproduct.htm. — WLJ © 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, April 18,2005

Letters

by WLJ
Keep border closed Dear Pete: First let me introduce myself. I am a past president of the Oregon Cattlemen’s Association—two years. A past member of the Public Lands Council—five years. Twenty-six years as a member of the Oregon House of Representatives. I am acquainted with Dick and Barbara, also knew Nelson Crow. Reference is made to your article in the March 7, 2005, issue of the Journal, Vol. 84 No. 21. Now Pete, you did not come right out and say you supported opening the border, but it seemed to me you were leaning that way. You have every right to your opinion as I do mine. I would like to see it remain closed for several reasons. The packers claim they cannot get cattle to slaughter, but I do not believe that. They like Canadian cattle because they are about 35 cents per pound cheaper. In 2004, we imported 356,623 metric tons of boxed beef from Canada. If we did not import all the boxed beef, maybe our packers could sell theirs for a profit. We have 33.5 million beef brood cows in the United States. I figured those beef cows at 75 percent calf crop, which would give 25,125,000 cattle to slaughter. There are also 9 million dairy cows in the United States of which their calf crop would add another 8,100,000 for slaughter. That makes a total of 33,225,000 head. Figuring those head at 720 lbs. carcass weight, that gives us 23,920,000,000 pounds of meat. Now there are 296 million people in the United States and at 67 pounds per capita we could feed all of them with 4,088,000,000 more than needed. It would appear there are enough cattle in the United States to supply our needs. I am not going to use the BSE scare as an excuse to keep the border closed. I just want it closed period. There is no way we can compete with foreign labor when we have a minimum wage and union scale. The imports of all kinds of goods are killing us. There are economists who will look you right in the eye and tell you how great these imports are when they know it is not true. I am not a highly educated man, but I can add two and two. There are many more imported items that are hurting us, but too many to cover in this letter. I like your magazine. Please say hello to your folks for me. Denny Jones Ontario, OR Death tax repeal? Dear Mrs. Swenson: The last time I read the Republican proposal to removed the "death tax" it was going to cost me $410,200 MORE!!!!! than if things remain the same. Why? Because instead of reevaluating the property basis at the decedent's death, it keeps the basis the same for the heirs as it was for the decedent. My parents bought their farm in 1960 for $35,000. It is now worth about $1,500,000. The way the inheritance law is now we pay NO taxes at all on the first $1,900,000 (for two people). Next year it is the first $2,000,000. In other words, my brother and I inherit the farm tax free. In addition we get the stepped up basis of $1,500,000 so when we sell it we would pay no taxes. The farm is in a poor location now because of urban sprawl and my brother and I would like to sell it and buy a farm in a more rural location, but if they change the law we will be seriously hurt financially and probably won't be able to stay in farming. The version of the proposed inheritance law I read in the past says that while you don't pay any taxes when you inherit, when you do sell the property you have to pay taxes on the difference between our parent's basis and what it sells for. So if we got $1,500,000 for it we'd have to pay capital gains tax on $1,465,000!!!!! That's 28% x 1,465,000 = $410,200!!!! Screwing the middle income farmers like me and my brother—not to mention all other average Americans—will increase the amount the Federal government squeezes out of the middle class by billions. The only people who will make out good with this scheme are the SUPER RICH who already have more than they need. I think a more fair solution would be to leave the inheritance laws as they are, but change the due date to pay the inheritance tax to the date on which the capital asset is sold. That way people who inherit farms, ranches and businesses that are worth more than $2,000,000 wouldn't have to sell the business to pay the inheritance taxes. Instead they would pay inheritance taxes when they sold the capital asset. That way people who want to continue the family business could do so and not be harmed. Since you wrote the article on this subject that appeared in the March 14, 2005, issue of the WLJ, I assume you are up on the content of the current legislation under consideration. Am I correct in that if this is passed the stepped up basis will be eliminated? If that is so, I would think that most farm and ranch groups should be informing their membership and trying to expose this raw deal, rather than blissfully going along with it until it is too late. I'd really appreciate it if you could get back to me on this and let me know if I am correct or if they have made changes in the proposal that will protect people like me. Sincerely, Larryann Willis Tracy, CA Numbers off Dear Editor: These are prosperous times for many in the cattle industry––especially the ranchers in the cow/calf sector. Prices for all classes of cattle are strong. Weather finally appears to be on our side. Some of the areas of drought that led to herd reductions in the Western region of the country appear to have had some recent relief, so even more producers are going to have green grass and plentiful feed. All of these factors, combined with terrific consumer demand for beef, make for an industry that is faring well. The Beef Demand Index increased by almost eight percent in 2004––the largest year-over-year surge in the history of the index. Per capita beef consumption also rose by about two pounds per person, and per capita spending on beef rose to an all-time high of $240 per year. Consumer confidence in the safety and quality of beef is also at record-high levels. But some—who say they represent the cattle industry—would have you believe that tight beef supplies are driving up beef prices, and that our favorable market conditions are the result of the Canadian border closure. They’re not coming clean with the facts. The hard facts will tell you that strong consumer demand is sustaining cattle prices––not tight supplies. In fact, in 2004, the U.S. beef industry had the second largest net supply of beef (production plus imports minus exports) in history at 27.7 billion pounds. The largest year of supply was 2002, at 27.9 billion pounds. But American producers captured their smallest-ever share of the U.S. beef supply. The United States imported 1.1 billion pounds of Canadian boneless beef in 2004, and Cattle-Fax expects that figure to rise by 15 to 20 percent in 2005. The fact that it will arrive as boxed beef––rather than “on the hoof”––makes little difference to consumers or the price that they pay. But it does mean that cattle feeders, processors and others in the U.S. beef industry miss out on the opportunity to add value to these products. At the same time, we are bringing in Mexican cattle by the truckload. In 2004, the United States imported as many feeder cattle from Mexico as it did from Mexico and Canada combined in 2002, the last normal year of trade. Prior to our borders closing, the United States was a net exporter of beef products, representing a $1.4 billion net to cattle producers. Today, we are a net importer. In other words, cattlemen have lost at least $1.4 billion in value, reports the Livestock Marketing Information Center. Meanwhile, with economic signals strong, we are growing our domestic herd. How do we turn these numbers around and regain our position as beef supplier to the world? Certainly not by disparaging the safety of our product. The tactics employed by activist groups within our industry do nothing but delay the re-entry of the U.S. cattle industry into key export markets, costing our cattle producers an estimated $175 per animal in the process. Regaining full access to markets such as Japan, Korea and even Mexico depends on normalization of trade based on reasonable, science-based regulations—not creating a hysterical, isolationist environment that wrecks consumer confidence, weakens demand and strangles international trade. I urge cattle producers to fully commit to continuing to grow global beef demand and building a stronger and larger U.S. beef industry. The first step in this journey is to see through the empty rhetoric and misinformation that is being spread about our industry and our product. When we look at the facts, we know that science-based, fair trade policies are the only environment that will allow us to grow and thrive. Archaic, isolationist trade restrictions may have surface appeal, but they can only take us backward. Be wary of those who like to tell you they are looking out for “the little guy” or “the independent producer.” Crunch their numbers, and you will find they simply don’t add up. Sincerely, Mike John President-Elect National Cattlemen’s Beef Association Huntsville, MO R-CALF legacy Dear Editor, The R-CALF folks have now been called stupid, arrogant, selfish, and out right greedy in most of the farm press. Borderline state Michigan now has the nation's highest unemployment rate due to major losses in automotive jobs. Here is why it happened: the car people mistakenly thought 'made in USA' would overcome all else, even union wage price cars and rust bucket quality. Hello Toyota-COOL. And, with our big old steel mills and excess capacity car plants, a car company would not want to build a car in Mexico or Canada or Japan or Yugoslavia, would They? They did. R-CALF, you are about to learn a history lesson, and in doing so, you will go down in history as having destroyed part of the future of beef production in this country. What a legacy for your grandchildren. You are selling their future for a couple of short term bucks per cwt. Gary Voogt Marne, Michigan © 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, April 18,2005

Obituary

by WLJ
Henry Albert Bledsoe Henry A. Bledsoe passed away April 3, at the Wray Community District Hospital. He was 84. Henry was born Nov. 7, 1920, in Plainview, TX, the only son of Daisy Smith and Henry Bledsoe. The family owned ranches at Mule Shoe, TX, but because the nearest hospital was in Plainview that became his birth place. When irrigation began appearing in that part of the Texas Panhandle, the family traded the land in Texas for a ranch in El Paso County, CO, because the family was involved primarily in ranching. Henry graduated valedictorian of his senior class at Ellicott High School and scored a perfect 100 percent on his entrance exams to Colorado A&M (now Colorado State University) in Ft. Collins, CO. He entered college at age 14 and was a member of Alpha Gamma Rho. He graduated in 1941 with honors and a degree in Economics and served as a second lieutenant in the Reserve Officers Training Corps (ROTC). In 1943, he married Lucile Mary Driscoll, and they took up residence on the Timberlake Ranch near Cheraw, CO. Hank and Lucile were blessed with the birth of two children, Sandra Ann in 1946 and Robert Edward in 1947. In 1948, Henry and Lucile purchased the former Sullivan Ranch, north of Wray, and proceeded to add land in Colorado, Nebraska, and South Dakota. Together with his family, he incorporated a feedlot, central pivot irrigation, and wheat production into the operation. His management skills advanced corn, wheat, and cattle yields. Henry was president of the Colorado Livestock Association (PCA), the Colorado Cattle Feeders Association, Yuma County Cattlemen’s Association, and Y-W Electric Association. He served as a board member of Tri-state G&T, Trapper Mine Company and the Salt River Power Association. He was also a member of the international Flying Farmers Association. He was elected to the Ninth District Farm Credit Association board of directors, headquarted in Wichita, KS, and served many years as board president. During this time, he also served on the Farm Credit Council in Washington, DC. He was the only person to be elected to two full terms as president. He also served as an advisor to the Federal Farm Credit Board. Henry received the Jerry Litton Award as the foremost, progressive achiever in the agriculture field. The award also recognized his efforts to steer young graduates into the fields of agriculture and agricultural business. Henry received many awards and honors within the livestock arena and banking business. He acquired his private pilot’s license, but after his wife and life-long partner, Lucile, advanced her degrees in aviation, he related that he’d rather that she fly, while he’d ride along and think about business. All with whom Henry had business dealings—without fail—admired his honesty and integrity and have expressed that fact of his life. With Henry, a handshake sealed the deal. In all his activities, he didn’t neglect the home front. Henry was an active member of the Wray United Methodist Church, a 62-year member of BPOE, a former Rotarian, and one of the original 49ers. It has been said that he was the East Yuma County Sandhills Pitch Champion. Henry was preceded in death by his parents, Henry and Daisy Bledsoe, and one sister Mary Lily Bledsoe Lauerman. He is survived by his wife, Lucile, whom he called his partner and best friend; daughter Sandy Bowman and husband Jim; and son Bob Bledsoe and wife Becky. His grandchildren are Annabet Soehner and husband Curt; Grant Bledsoe and wife Katie, all of Wray; J.J. Bowman and wife Angie of Lakewood, and Doc Bowman of Madison, WI. Greatest of the great he’d say are Lauren Keithly Soehner, Madalyn Driscoll Soehner, Jaydan Marie Brotton, and Jackson Clark Bledsoe, his great-grandchildren. Receiving of Friends was on Sunday, April 10, at the Spellman-Schmidt Funeral Home in Wray. Funeral services were on Monday, April 11, at the Wray United Methodist Church in Wray with Rev. Norman Stott officiating. Memorials may be made to the Wray United Methodist Church in Wray, or the Henry A. Bledsoe CSU Memorial Fund, c/o First Pioneer National Bank in Wray. © 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, April 18,2005

Texas to randomly select herds for TB testing

by WLJ
Texas livestock health officials will randomly select nearly 2,000 of the state’s purebred or seed stock beef herds for cattle tuberculosis (TB) testing this summer, to fulfill disease surveillance obligations of the Texas Cattle TB plan. The blueprint for regaining Texas’ TB-free status was developed in 2002 by cattle industry representatives, with a recommendation for the Texas Animal Health Commission (TAHC) to implement a TB testing effort. The plan calls for TB testing all of the state’s 811 dairies and about 2,400 purebred or seed stock beef herds. Dairy herd testing has been completed, but only about 500 owners of purebred or seed stock beef herds have volunteered for testing. Federal funds for herd testing expire Oct. 1, so the TAHC is tackling the problem with a high-tech version of drawing names from a hat. “In early March, we reconvened the Texas TB Task Force, which included leaders from the purebred cattle industry, to determine how to get herds tested and meet the agreement made with the U.S. Department of Agriculture, which has funded the plan,” said Dr. Bob Hillman, Texas’ state veterinarian and executive director of the TAHC, the state’s livestock and poultry health regulatory agency. “Random selection of herds was seen as the most equitable way to complete a statistically valid disease surveillance of purebred and seed stock cattle herds. By mid-April, a computer program will pick names from a database listing purebred and seed stock producers. We then will contact the ranchers to line up the test that will be conducted by private veterinarians at no cost to the herd owner.” “We will try to accommodate ranchers’ schedules, and if an owner wants to volunteer their cattle for TB testing, we welcome their participation,” he said. “No herd is too small for testing.” Hillman said more than 500 private veterinary practitioners in Texas have completed additional TB training and are on contract with the TAHC to conduct herd tests. To volunteer herds for a test, locate a contract veterinarian, or obtain information, ranchers should contact their local TAHC area office or the TAHC headquarters in Austin at 800/550-8242. Hillman said that dairies, purebred and seed stock beef herds were targeted for testing, because, during the past 22 years, TB has been detected in 15 Texas dairies and six purebred cattle herds in nine counties, including El Paso, Karnes, Comanche, Pecos, Uvalde, Fayette, Culberson, Grayson, Zavala and Hamilton counties. Dr. Hillman stressed that dairy and purebred beef cattle are no more susceptible to TB than commercial cattle, but they usually are maintained in more confined conditions, which are conducive to TB transmission. He said that milk from the dairies is safe, as pasteurization, or heat treatment, kills the bacteria. Meat also is safe, as carcasses are inspected for wholesomeness at slaughter, and cooking meat also kills bacteria. In 2000, Texas gained cattle TB-free status, with the exception of the El Paso Milk Shed, where dairies with low levels of recurring infection were still present. In 2002, the USDA pulled Texas’ “free” status, after two infected herds were detected and depopulated, Hillman said. A third TB-infected herd was detected and depopulated shortly afterward. During the statewide dairy testing, which involved more than 335,000 head, an infected herd was identified in Hamilton County and was depopulated in 2004. “Completing the disease surveillance of the purebred and seed stock beef herds is extremely important,” Hillman said. “It will allow Texas to fulfill its agreement with the USDA and states that receive Texas cattle. We can then move forward to regain TB-free status and avoid interstate movement restrictions on Texas cattle. Secondly, it will provide Texas ranchers the assurance that there is no undetected infection in these valuable herds.” Hillman said other segments of the TB plan are ongoing and include: • Testing dairy and breeding cattle being moved from Texas. • Improved slaughter inspection by the USDA’s Food Safety Inspection Service (FSIS). • Requiring yearly TB tests on roping steers imported from Mexico. • Continuing work with Mexican states on TB control and eradication. “Cattle TB is not a disease we can learn to ‘live with,’” Hillman said. “The contagious TB bacteria can cause cattle to develop internal lesions, and in rare instances, can cause human illness. Regaining cattle TB-free status must be a priority. In Texas, 2,000 ranchers will make a profound difference by completing this disease surveillance effort.” — WLJ © 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, April 18,2005

What Canada has to say about traceability

by WLJ
Canada's food and feed-processing industries will need to take a proactive approach to the issue of traceability as consumers become more concerned about the safety and quality of what they are eating, according to presentations Tuesday at the Canada Grains Council 36th annual meeting. Delegates at the meeting were told that although agriculture is barely on the minds of consumers, this sector was the driving force behind the need to improve food safety. Scott Dutton, a media relations official with IPSOS-Reid, a marketing-research firm, said a recent survey of 2,000 adults across Canada found that 35 percent of respondents were completely confident in Canada's food safeguards while 55 percent were somewhat confident. The results were considered accurate within plus or minus four percent, Dutton said. Those not confident, one in 10, expressed concerns about animal diseases, such as BSE or avian flu, as well as food contamination and the use of pathogens. Dutton said based on another survey of 1,600 adults in Canada, the food-processing industry in Canada will take the brunt of the blame for any kind of food safety issue that may arise. He said 38 percent of the respondents would blame the food-processing sector for the problem, 15 percent would link the problem back to the farm, 15 percent to the restaurant sector, 10 percent on transportation, 10 percent on the environment at home and about 9 percent on the grocery or retail store. Kathleen Sullivan, general manager with the Animal Nutrition Association of Canada, or ANAC, said it was important for feed mills and feed manufacturers in Canada to be proactive and prepare to handle the inevitable traceability issue. She said her organization which was formed in 1996 with a goal of bringing Canadian companies on line to Good Manufacturing Practices and on board with Hazard Analysis and Critical Control Points, or HACCPs, in the feed sector. "It is important that consumers know that the feed which is going into these animals and will eventually be used in the food chain is also safe," Sullivan said. Some 179 Canadian facilities are HACCP certified, of which 70 percent are feed producers and 33 percent are commercial feed mills, Sullivan said. She said cost is the problem in getting the smaller feed mills on board with the HACCP program. But she said ANAC is looking at how to streamline these safety programs from a cost perspective. "It is only a matter of time before outlets like Walmart in North America begin demanding audits of their food suppliers," said David Trueman, with DB Information Systems from the U.K. Because of that, he said it would be wise for food processors and feed manufacturers in North America to be proactive in coming up with product traceability lines and additional food-security proposals instead of waiting for government legislators to become involved. Trueman warned Canadian food and feed processors that failure to be prepared for these changes will result in a loss of market. — WLJ © 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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© Crow Publications - Any reprint of WLJ stories, except for personal use, without permission, written consent and appropriate attribution is prohibited. 2008 Crow Publications. All rights reserved.