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Monday, February 14,2005

Beef Board releases fiscal 2004 report

by WLJ
Beef producers invested checkoff dollars into promotion, education, research and information programs aimed at extending the upward trend in consumer demand for beef during the last year. These programs are outlined in the 2004 annual report of the Cattlemen’s Beef Board, released this week at the Cattle Industry Annual Convention in San Antonio. The annual report highlights some of the leading checkoff programs accomplished during the year and provides detailed, audited financial information for the 2004 fiscal year, which ran Oct. 1, 2003 through Sept. 30, 2004. The report includes state-by-state checkoff revenue listings and compares 2004 expenditures to those in 2003. “Amid some big challenges for the beef industry in 2004, we kept our focus on building consumer demand for beef through a variety of programs centered on beef safety, nutrition and promotion,” said Beef Board Chairman Nelson Curry, a cattleman from Kentucky. “The results of these programs were extremely positive and, as a producer, I’m pleased with the accomplishments of my checkoff dollars toward enhancing cattlemen’’s opportunities for profit,” Curry said. “When you stop and realize that demand for beef has increased more than 25 percent since it turned the corner in 1998, it’s hard to be anything but proud.” During the latest fiscal year, checkoff programs spanned the spectrum, from “Beef. It’s What’s for Dinner” television, radio and print advertising promoting beef and veal, to research efforts focused on maintaining the safety of the U.S. beef supply. In addition, checkoff dollars funded consumer information programs aimed at delivering accurate, science-based messages about beef to media, consumers, health professionals and educators, as well as foreign-marketing efforts to rebuild demand for U.S. beef abroad in the wake of a single case of BSE in the U.S. “One of the end results was increased consumer confidence in the safety of U.S. beef,” Curry said. “In fact, surveys indicated that 91 percent of U.S. consumers remained confident that their beef was safe from BSE in January 2004, just a month after the BSE case. And at the close of the fiscal year in September 2004, that confidence level was still above 90 percent and has been even higher since then.” — WLJ

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Monday, February 14,2005

Bullish fed market outlook turns sour

by WLJ
— Limited trade $1-2 softer. — Packers slow down further. Optimism for a $2-3 stronger fed cattle market early last week hadn’t come to fruition through mid-afternoon Thursday. In fact, the limited cash trade that had happened as of press time Thursday was mostly $1-2 lower than the week prior. After gaining more than $1.50 Monday through Wednesday, the first few listed live cattle futures contracts slid more than $1.50 Thursday, and that put the brakes on any significant desire from packers to come to the table with anything more than $90 per cwt live, $144 dressed. However, most cattle feeders weren’t ready to “cave in” either, and were still asking mostly $94-95 live, $145-147 dressed. As of close of business Thursday, less than 10,000 head of cattle traded in both Nebraska and Kansas at $143 dressed, $89 live, respectively. Market analysts expected trade to happen Friday, but most didn’t feel comfortable forecasting what prices would be paid. Packers appeared to slow their chain speeds down even further last week, and by last Thursday several sources said that slaughter-ready supplies were in place through the week ending Feb. 18. Between Monday and Thursday processors had slaughtered 459,000 head, 8,000 below the same period the previous week and 23,000 below a year ago. Total slaughter for the week was expected to be 580-585,000, still 15-20,000 more than is needed to meet current beef demand, according to market onlookers. “They may need a few cattle to fill some holes, but as slow as they are working packers can probably carry over at least one day’s worth of production week-to-week, if not a second day,” a Midwest market analyst told WLJ, on the condition of anonymity. “Looking at the narrowing Choice/Select boxed beef spread, I would guess that most packers are dipping into their own cattle supplies right now, particularly lighter-than-normal animals, and bypassing the cash market. That would make some sense particularly since processing margins are negative $40-plus per head. Independent cattle feeders usually aren’t as ready to ship cattle at a lighter weight, even though they may still grade (Choice). The less weight there is the less money that comes their way.” While both Choice and Select beef prices had gained $5-6 during the first half of the week, the Choice/Select spread narrowed to just over $3.03, the lowest, according to analysts, in almost a year. Choice had gotten up to $147.39 on Thursday, while Select was at $144.37. In addition, packers had paid mostly $91-91.50 on cattle that were processed last week, and most analysts said $152-plus Choice and $147-plus Select was needed for profits to be reported. Unlike two weeks ago that saw a couple of consecutive 500-plus-load days, cash boxed beef movement was very anemic last week, with the largest day being Wednesday at 413 loads. February live cattle futures got up just over $92 last Tuesday and Wednesday, however, as of close of business Thursday the contract had dropped to $89.75, and that took any gains in cash fed cattle out of the mix through the rest of day. April lost $1.40 on Thursday, closing at $86.72. Floor traders with the Chicago Mercantile Exchange (CME) said that Ag Secretary Mike Johanns announcement concerning Canadian live cattle trade wasn’t construed as positive news. “Instead, it kept intact the March 7 date for Canadian feeder and fed cattle, which means some cattle from north of the border will be added to the total cattle supply and packers won’t have to pay as much for what they need,” one floor trader said. “We’ve heard the reports from several trade teams that have traveled into Canada that no wall of cattle is there, however, even a few cattle right now will hurt prices.” Feeder, stockers gaining Despite fed cattle prices struggling last week, stocker and feeder cattle prices gained on very good demand. Prices on younger, lighter calves gained $2-3 last week and continue to be helped by the prospects for unusually good spring grazing seasons in not only normal hot beds of stocker grazing, but also in some areas that were hit by drought the past few years. Stocker operators from parts of Colorado, Nebraska, Wyoming, the West Coast and Northwest are adding competition to stockers from Missouri, Oklahoma, Texas, Kansas, and the Midwest. In addition, some higher quality heifers were bringing $3-5 more due to prospects for additional herd rebuilding in areas hit by drought the previous four or more years, auction managers said. Heavier feedlot-ready cattle were steady to mostly $1 higher as several feedlot managers reported slight profits on cattle that were marketed the week of Jan. 31-Feb. 5. In addition, news that even more corn was available nationwide helped spur another 5-10 cent downtrend in cash corn prices last week. According to USDA, beginning of year corn carryover totaled 2.01 billion bushels, 50 million bushels larger than the government’s previous estimate. Several reports had cash corn bringing $1.60-$1.75 per bushel FOB, $2.85-3.15 per cwt. In addition, weather has become very mild and mostly dry across major cattle feeding areas, and that has spurred some interest from cattle feeders because they think they can get cattle through the transition phase before inclement weather rears its ugly head again. The CME feeder steer index was at $104.31 last Wednesday, compared to $103.18 the previous Wednesday.

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Monday, February 14,2005

CBB: Survey shows checkoff support at 10-year high

by WLJ
Producer support for the $1-per-head beef checkoff program is at a 10-year high, with 73 percent of beef producers voicing approval of the Beef Checkoff Program in a January 2005 survey. That’s up from 70 percent in July 2004. Cattlemen’s Beef Board Chairman Nelson Curry told Cattle Industry Annual Convention participants that the new data shows a level of support for the beef checkoff that is unmatched since the early 90s, when approval levels were in the low 80-percent range. The new research further indicates that only 18 percent of cattlemen disapprove of the checkoff, while 9 percent are undecided or neutral. “The research results were positive on many levels,” said Curry, a Kentucky cattle producer. “Eighty percent of producers said they believe the beef checkoff had helped contribute to the positive trend in beef demand, 80 percent believe that the checkoff has value even when the cattle market is down, and 74 percent said they think the checkoff is a good value for the money invested. Conducted for the Cattlemen’s Beef Board by Aspen Media and Market Research, Boulder, CO, the telephone survey of a random sample of beef and dairy producers nationwide was completed between Dec. 19 and Jan. 8. It has a margin of error of plus or minus 2.8 percent. Aspen Media’s lead researcher Dan Hoffman said the increased support for the program could be attributed, at least in part, to its increased visibility in the news. Forty-one percent of producers had recently seen, read or heard something about the beef checkoff, up from 34 percent in the summer survey. “Many cattlemen are aware that the beef checkoff’s fate is in the hands of the U.S. Supreme Court,” said Hoffman. “That fact seems to have them paying more attention to their program.” Curry said he finds it “ironic that two negative issues have helped shine a beacon on the value of this program.” “First, BSE found in the U.S. and Canada has illustrated the need for a comprehensive public communications and crisis management effort,” Curry said. “And second, litigation challenging the Beef Checkoff Program is threatening to take away the crisis management program that we do have, as well as the promotional equity producers have in ‘Beef. It’s What’s For Dinner.’” Cattlemen also were asked to rank the importance of key Beef Checkoff Program areas. Listed were 10 strategic areas where checkoff dollars are focused to build demand for beef. Cattlemen ranked all of the strategies as important, but two were prioritized as particularly essential: maintaining consumer confidence in the safety of beef; and communicating beef’s nutritional value. Other important focus areas, as ranked by producer respondents, were: promoting beef’s enjoyment; promoting U.S. beef exports; new product development; working with retailers; working with restaurants; producer communications; product enhancement research; and consumer education and crisis response. On other fronts, the January data shows that producer optimism is at 78 percent, down slightly from July 2004 when 82 percent of respondents reported feeling optimistic about the direction of their industry. Results also indicate that 73 percent of producers consider themselves informed about the checkoff, up 5 percent from July 2004. The semi-annual survey of 1,225 producers is demographically representative of the various types of U.S. beef, veal and dairy operations in the United States, based on the 2002 Agricultural Census. “As a researcher,” Hoffman said, “I can say that these survey results provide a positive report card for the beef checkoff.” — WLJ

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Monday, February 14,2005

Common 1031 exchange questions answered

by WLJ
The past several years a growing portion of U.S. ranch transactions have been done utilizing Section 1031 language in the U.S. tax code. Several sources have indicated that nationally between 35-45 percent of ranch purchases have been done via Section 1031 Exchange rules, and several brokers and Realtors have indicated they think that trend could grow even more, perhaps above 50 percent over the next few years. In a typical transaction, the property owner is taxed on any gain realized from the sale. However, through a Section 1031 Exchange, the tax on the gain is deferred until some future date. Section 1031 of the Internal Revenue Code provides that no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business, or for investment. A tax-deferred exchange is a method by which a property owner trades one or more relinquished properties for one or more replacement properties of "like-kind," while deferring the payment of federal income taxes and some state taxes on the transaction. The theory behind Section 1031 is that when a property owner has reinvested the sale proceeds into another property, the economic gain has not been realized in a way that generates funds to pay any tax. In other words, the taxpayer's investment is still the same, only the form has changed. Therefore, it would be unfair to force the taxpayer to pay tax on a "paper" gain. The like-kind exchange under Section 1031 is tax-deferred, not tax-free. When the replacement property is ultimately sold, the original deferred gain, plus any additional gain realized since the purchase of the replacement property, is subject to tax. The following are answers to some commonly asked questions that WLJ presented to a couple of property acquisition specialists with the IRS. Q: What are the benefits of 1031 exchanges? A: A Section 1031 exchange is one of the few techniques available to postpone or potentially eliminate taxes due on the sale of qualifying properties. By deferring the tax, there is more money available to invest in another property. It’s like receiving an interest-free loan from the federal government, in the amount that would have paid in taxes. Any gain from depreciation recapture is postponed. Finally, properties can be acquired and disposed of to reallocate an investor’s portfolio without paying taxes on any gain. Q: What are the five types of exchanges allowed? A: They are: • Simultaneous Exchange: The exchange of the relinquished property for the replacement property occurs at the same time. • Delayed Exchange: This is the most common type of exchange. A delayed exchange is when there is a time gap between the transfer of the Relinquished Property and the acquisition of the Replacement Property. It is subject to strict time limits set by the U.S. Department of the Treasury. • Build-to-Suit Exchange: This technique allows the taxpayer to build on, or make improvements to, the replacement property, using the exchange proceeds. • Reverse Exchange: When the replacement property is acquired prior to transferring the relinquished property. The IRS has offered a safe harbor for reverse exchanges, which became effective Sept. 15, 2000. These transactions are sometimes referred to as "parking arrangements" and may also be structured in ways that are outside the safe harbor. • Personal Property Exchange: These are not limited to real property. Personal property can also be exchanged for other personal property of like-kind or like-class. Q: What makes up a valid exchange? A: First it must be said that certain types of property are specifically excluded from Section 1031. Among those exclusions are property held primarily for sale; inventories; stocks, bonds or notes; other securities or evidences of indebtedness; interests in a partnership; and certificates of trusts or beneficial interest. If property is not specifically excluded, it can qualify for tax-deferred treatment. Both relinquished and replacement property must be held for productive use in a trade or business or for investment. Taxpayers’ personal residences do not qualify. Replacement property acquired must be "like-kind" to the property being relinquished. In addition, relinquished property must be exchanged for other property, rather than sold for cash and using the proceeds to buy the replacement property. Q: How can all taxable gain be deferred? A: According to brokers, the value of the replacement property must be equal to or greater than the value of the relinquished property; equity in the replacement property must be equal to or greater than the equity in the relinquished property; debt on the replacement property must be equal to or greater than the debt on the relinquished property; and all of the net proceeds from the sale of the relinquished property must be used to acquire the replacement property. Q: Can replacement property be converted to a primary residence or vacation home? A: Yes, but the holding requirements of Section 1031 must be met prior to changing the primary use of the property. There are no specific regulations on holding periods. However, it’s recommended that taxpayers hold replacement property for a proper use for a period of at least a year. Q: Are there time restrictions? A: A taxpayer has 45 days after the date relinquished property is transferred to identify possible replacement properties. The exchange must be completed by the date that is 180 days after the transfer of the relinquished property, or the due date of the taxpayer's federal tax return for the year in which the relinquished property was transferred, whichever is earlier. Q: What if replacement property isn’t identified within 45 days, or there is failure to close on replacement property before exchange deadline? A: If taxpayers do not meet time restrictions, the exchange will fail and taxes arising from the sale of relinquished property have to be paid. There are no extensions available! Q: What’s the limit on identified properties? A: There are three rules that limit the number of properties that can be identified. Taxpayers must meet the requirements of at least one of these rules. The three-property rule limits buyers to three potential replacement properties without regard to their value. The 200 percent rule allows an unlimited number of properties to be identified but their total value cannot exceed twice the value of relinquished property. The 95 percent rule allows people to identify as many properties as desired, but must also acquire replacement properties with an aggregate fair market value equal to at least 95 percent of all the identified properties. Q: Are 1031 exchanges limited to real estate? A: No. Any property that is held for productive use in a trade or business, or for investment, may qualify for tax-deferred treatment under Section 1031. In fact, many exchanges are "multi-asset" exchanges, involving both real property and personal property. — WLJ

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Monday, February 14,2005

Georgia bill would protect rendering plants

by WLJ
Livestock rendering plants have been the subject of numerous court cases and citizen complaints for a decade or longer. However, a proposal before the Georgia state Senate would prevent neighbors from suing the facitilities for being a “nuisance.” State law currently protects farms and livestock ranches from being sued by neighbors for bad smells, loud noise and other activity that could disturb them. But, most recently state Sen. Casey Cagle, R-Gainesville, proposed giving rendering plants the same protections. Cagle, whose hometown is one of the nation’s leading poultry producers, said the plants should already be protected under the law and his bill merely clarifies that. However, citizen groups, environmental activists and other lawmakers are lining up against the plan, saying it takes away one of the main tools to control an industry that has been guilty of multiple environmental violations and violating “good neighbor etiquette.” The primary reasons for lawsuits being filed against renderers is the noxious smells and steamy haze normally associated with the processes. “There are ample ways in which you can address a problem facility. There are remedies to those issues, but not on the grounds of it being a nuisance,” said Cagle. Opponents of Cagle’s proposal say no state law, other than nuisance laws, protects property owner’s from unpleasant smells—a common rendering plant complaint—and environmental laws can only be used after a plant has already caused damage. “We don’t understand why property rights of the rendering plants should trump the rights of the homeowners,” said Mark Woodall, who monitors legislation for the Georgia chapter of the Sierra Club. A state Senate committee advanced the bill with little discussion late last month, but some lawmakers say it’s in for a fight if it goes further. Several processing organizations said they are aware of similar rendering plant protection bills being drafted in at least 10 other states, and that at least five states already have some protection afforded to renderers, if past environmental violations aren’t overly egregious and persistent. — WLJ

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Monday, February 14,2005

IMI Global USDA Process Verified approved

by WLJ
IMI Global Inc. has just been approved as a USDA Process Verified Company, a status obtained by only a few companies. The following IMI Global products have been approved: BeefPassport Online, BeefPassport Chuteside, BeefPassport WebIntegrator and USVERIFIED. With these USDA approved products, IMI Services can provide 100 percent lifetime traceability of an animal, meet the data capture and analysis needs of an organization interested in individual animal data, and capture and store a unique individual animal number as well as source/premise information. The BeefPassport Product Suite captures several important data fields, including animal birthdate and individual animal identification while providing a mechanism for livestock traceability The BeefPassport products are also very user-friendly, the company says, and have the flexibility to allow entry of customized information fields. In announcing the company’s USDA approval IMI Global CEO John Saunders said BeefPassport Online, IMI Global's base traceability product in the BeefPassport Suite, will now be offered free to the cattle industry. "We understand that demand will be large and immediate. We will work diligently as a company to get all interested producers enrolled in this traceability solution as quickly as possible. Our new pricing strategy will apply to current BeefPassport Online customers as well.” The free service begins on March 1. Enrollment will be on a first-come, first-served basis, he said. IMI Global will back the free software with low cost, ISO compliant electronic ear tags, readers, equipment, and source and age validation audits. “The need for traceability continues to increase daily,” according to Saunders, “and BeefPassport Online offers an opportunity for the industry to adopt these systems quickly. The U.S. must protect the integrity of our cattle herd and maintain a healthy export market as verification demands continue to grow.” BeefPassport Online (www.beefpassport.com) is a Web based livestock management system designed to track all aspects of cattle production from birth to harvest. BeefPassport Online allows the user to view records, print summary reports, and develop customized reports to make management decisions. As a security measure, the information can only be accessed by the individual producer or the system administrator. — WLJ

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Monday, February 14,2005

New Mexico BQA program moves online

by WLJ
New Mexico State University announced changes recently in its long running beef quality assurance (BQA) certification program, offering the training for beef and dairy producers online for the first time. “This definitely increases accessibility to the program,” said Clay Mathis, an NMSU Extension livestock specialist. “By putting this program online, our hope is to get many more people educated on the importance of becoming beef quality assurance trained or certified producers.” In the past the growers had to attend the voluntary two- to three-hour classes in person, then take a test, he said. Now, producers can log on from home or at an Extension office at http://cahe.nmsu.edu/bqa or use newly developed CDs as study aids, and then come to an extension office for their test. Both the live and online training sessions combine science, research and education to teach production methods that focus on beef quality from the ranch to the dinner table, Mathis said. Among the topics are recommended needle sizes and types for vaccination, beef’s quality measurements, treatment of sick animals and monitoring drug withdrawal times. Other sessions focus on drug storage and record keeping. The beef quality assurance certification program was developed to ensure that cattle in New Mexico are maintained properly to produce nutritious, safe beef, said Ron Parker, head of NMSU’s extension animal resources department. Beef quality assurance training has two levels. Those who attend the sessions and pass a brief written test are designated as Beef Quality Assurance trained producers. Cattle producers who want to use the program as a marketing tool for their livestock can complete two additional requirements to become Beef Quality Assurance certified producers. They must sign a critical management plan affidavit of compliance, and obtain a signed document indicating they consult with a veterinarian. Producers who were originally certified can become recertified through the same process. Recertification will be valid for three years. The New Mexico Beef Quality Assurance Program is sponsored by the New Mexico Cattle Growers’’ Association, Dairy Producers of New Mexico, New Mexico Livestock Board, New Mexico Beef Council and related organizations and industries. NMSU’’s Extension Service provides the leadership and instructors, while the state livestock board certifies attendees. For more information, contact Mathis at 505/646-8022 or cpmathis@nmsu.edu. —WLJ

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Monday, February 14,2005

Japan confirms vCJD death

by WLJ
The Ministry of Health, Labor and Welfare Feb. 4 confirmed Japan’s first case of the human form of BSE, variant Creutzfeldt-Jacob, in a Japanese man who died in December, according to Kyodo. The ministry suspects the patient in his 50s was infected with the disease in Britain where he had stayed, though only for about a month, in 1989 while the country was in the midst of an outbreak of the disease. But the ministry said the case will not affect Japan’s safety measures against mad-cow disease and negotiations over resuming U.S. beef imports, with an official saying, “The current safety measures almost completely eliminate the risk of human infection, so our position remains unchanged.” At the same time, however, the ministry said its will provide public consultations across the country for people who feel concerned. It has also set up a telephone hotline and will create a question-and-answer section on the ministry’s website. On the deceased man, Tohoku University professor Tetsuyuki Kitamoto, who heads the ministry’s experts committee on CJD and other diseases, said, “Al1 patients diagnosed with the variant disease outside of Europe had a history of staying in Britain and it is very likely that this patient was also infected there.” But this case is the first in which the infected person had been in Britain for only one month, according to the ministry. The man first showed neurological symptoms of the disease in December 2001, such as being irritated, when he was in his 40s and later developed dementia. He was bedridden for the few months before his death, according to the ministry. The ministry said it will further investigate the source of infection by asking the man’s family about details of his stay in Britain, and check to see if he made blood donations or underwent surgery in an effort to find whether he may have passed on the disease to other people. Computer records of the Red Cross from April 1995 showed that the man had not donated blood since then, but the ministry is trying its best to check all records dating back to 1989. In light of the latest case, the ministry will for the time being, prohibit persons who have stayed in Britain for a month or more since 1980 from donating blood, up from the previous rule of six months or more. Prime Minister Junichiro Koizumi indicated the government is planning to investigate how the man contracted the disease. “I would like experts to probe the process that led up to this development and its cause, he told reporters at his office. Chief Cabinet Secretary Hiroyuki Hosoda said the government will try to assure the public the disease is not communicable. “This disease is not contagious. It is a problem with protein and basically terminates with the death of the individual concerned,” the top government spokesman told a press conference. Asked about possible implications for the issue of Japan’s plan to lift a ban on imports of U.S. beef, Hosoda said, “Japan and the United States are holding consultations based on scientific evidence. We will address the issue squarely and take this (latest development) into future discussions.” Consumer groups expressed concern about the safety of beef. “We feared an event like this could happen because the variant type is said to take time after consumption until symptoms appear,” Yoko Tomiyama, an official of the Consumer Union of Japan, said. Last September, the ministry convened a meeting of a surveillance committee to diagnose the patient’s disease while consulting with experts in Britain. — WLJ

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Monday, February 14,2005

NCBA policy goes beyond BSE, trade issues

by WLJ
— New Mexico group granted reaffiliation. While BSE and ongoing trade battles with Canada and Japan took a lot of focus of NCBA members during the group’s annual meeting Feb. 1-5 in San Antonio, TX, several other policy objectives were passed on other situations important to U.S. cattle producers. On the marketing side, NCBA members passed policy that still calls for a more producer friendly, voluntary country-of-origin-labeling (COOL) law. Specifically, NCBA members have asked for self certification of origin for livestock producers; protection of personal records; simpler, easier-to-understand COOL retail labels; and tempering of penalties during implementation. Under a similar subject matter, NCBA members also tentatively passed policy calling on the organization to defeat efforts to label beef and beef products as “North American Beef” or any similar language that has the intent of grouping beef from other countries with that from the U.S. Packer ownership of livestock remained a hotbed of debate during the convention, however, existing policy upholding NCBA support of “captive supplies” was renewed. That policy was set aside during the group’s general membership meeting on Saturday, Feb. 5, however. Less than 20 members voted against renewing that packer ownership directive after it was debated for about 10 minutes. The approved packer ownership policy said, “Be it resolved, NCBA oppose federal legislation which would eliminate packer ownership/control of livestock because the legislation would eliminate value based pricing, reduces risk management options and/or eliminates a significant number of buyers of cattle in the U.S.” From a federal lands standpoint, NCBA members voted in favor of removing national grasslands management out from under the U.S. Forest Service (USFS). However, the policy did not state what other agency or agencies should take over that responsibility. Staff from NCBA’s Washington, DC, office said that policy is just stating the simple fact that current management of those lands is unacceptable and that USFS needs to either change their protocol or give it up to somebody that can manage them better. Some NCBA members indicated that the Natural Resources Conservation Service (NRCS) might be better suited for that task. From a cattle health aspect, policy was tentatively passed to ask USDA’s Animal and Plant Health Inspection Service (APHIS) for rules that would allow regionalization of bovine tuberculosis areas within individual states an that cattle from and around the Greater Yellowstone Area be allowed to be shipped across state lines under the auspices of guidelines set forward by the Wyoming Brucellosis Task Force. The longest policy debate during the annual board of directors meeting, held the morning of Feb. 5, was over the Conservation Reserve Program (CRP). After 15 minutes of debate the policy that was unanimously agreed to was “Be it resolved, NCBA opposes whole field enrollment in (CRP) in the next reauthorization of the Farm Bill. Be it further resolved, NCBA shall work to target new CRP acres in riparian corridors, in an effort to increase wildlife habitat and address water and air quality issues. Be it further resolved, NCBA supports giving farmers and ranchers the option of enrolling their expiring CRP acres in an incentive-based Grassland Reserve Program (GRP)-type program dedicated to keeping acreage in grassland for grazing or forage harvest.” Another conservation program policy that was passed was on asking USDA to allow custom operators to participate in the Environmental Quality Incentives Program (EQIP) in the exact same way that direct operators are allowed. NCBA members will be sent a mail ballot concerning all policy initiatives and directives that were passed by both the board of directors and the general membership. NCBA officials said those ballots will be sent by Feb. 18, and members will have at least a month to send them back. For the mail ballot to be formally utilized by NCBA, 20 percent of the members from four of the association’s seven regions must be returned. One non-policy vote of note happened when the association’s board of directors voted unanimously in favor of allowing the New Mexico Stockgrowers Association (NMSGA) once again be accepted as an affiliate member of NCBA. The state organization voted in favor of leaving NCBA last year, however, at its annual convention last November the group voted to reaffiliate. “This will probably be a yearly occurrence, at least in the near future,” said Caren Cowan, executive vice president for NMSGA.

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Monday, February 14,2005

NCBA: Selective Canadian border policy passes

by WLJ
— Ban on 30-month-plus cattle asked for. — Japan trade contingency also requested. Despite hearing new information from a recently commissioned trade team to Canada, members of the National Cattlemen’s Beef Association (NCBA) preliminarily passed a policy supporting reentry of Canadian live cattle and an expanded category of Canadian beef into the U.S. starting March 7, but only after USDA agrees to 11 conditions. Under the policy directive, NCBA members asked Washington, DC, lobbyists to tell USDA to open the border to additional Canadian beef and live cattle only if the 11 stipulations were met. Those requirements are: • Prohibit the importation of cattle and beef products from cattle more than 30 months of age; • Assure that all Canadian firewalls to prevent BSE—specifically adherence to a ban on ruminant meat and bone meal (MBM) in ruminant feeds—are functioning properly; • No Canadian feeder cattle be imported until agreement is reached on harmonization of animal health standards between the U.S. and Canada, especially concerning bluetongue and anaplasmosis; • Movement of Canadian cattle into the U.S. be managed to minimize market disruptions; • Fed cattle imported for immediate slaughter must be certified to be less than 30 months of age at the time of importation; • Ban the use of fetal bovine serum from heifers imported for immediate slaughter; • USDA grades and stamps not be allowed on any imported beef product; • Canadian feeder cattle must be branded with a “CAN,” individually identified with an ear tag, certified to be less than 30 months of age at time of slaughter, shipped in sealed trucks from the border directly to approved feedlots, then moved directly in sealed trucks to slaughter; • Feeder heifers from Canada must be spayed; • USDA must work with primary U.S. trading partners to ensure that expanded export access for U.S. beef is not in any way jeopardized by expanded importation of cattle and beef from Canada; and • An agreement to reestablish beef and beef byproduct trade with Japan, South Korea and Mexico, including possible economic sanctions, be formalized before the Canadian border is reopened. The policy directive was unanimously approved by the policy division of NCBA’s board of directors and was unanimously upheld by NCBA members in attendance during the group’s general membership meeting Feb. 5. The unanimous passage of that policy shocked several industry onlookers, particularly as members of a nine-person trade team to Canada reported there was no evidence of a “wall of Canadian cattle” waiting to enter the U.S., the perceived shortcomings of the Canadian feed processing industry were incorrect and human and animal health is not being compromised if Canadian beef and cattle are allowed reentry to the U.S. The nine-member NCBA and university trade contingent, which visited Canadian feedlots, packing houses and feed mills during January, told NCBA members that USDA’s live equivalent figure of two million head of Canadian cattle entering the U.S. annually is greatly overstated and that the figure would most likely be a million head, or possibly less. Homer Buell, cattle producer from Nebraska and member of that trade group, indicated that feedlots in Canada are only 65-70 percent of total capacity and that calf numbers are somewhat restricted due to Canadian producers not calving out as many cows. Tom Field, professor of animal science at Colorado State University, was also on the trade mission to Canada and said that the feed manufacturing industry in that country is not as problematic as earlier reports indicated. He stated that Canadian feed mills all have dedicated production lines for ruminant and non-ruminant feeds, and that many of them will be moving to three dedicated lines, including a production line for only ruminant meat-and-bone meal and other specified risk materials (SRMs). In addition, Field said Canadian feed manufacturers indicated the proposal by the Canadian government to remove ruminant protein from all livestock feeds is a very serious proposal and that doing so would put the U.S. at a very serious competitive disadvantage. Scientifically there is no validity for doing that, however, public perception would be that Canada is getting ahead and addressing consumer concerns better than the U.S., Field indicated. “It’s unfortunate, but doing that would put the U.S. beef industry at a competitive disadvantage,” he said. “We weren’t real encouraging with them on that proposal.” In interviews with several leaders from the four-state group that initially drafted the policy directive, it was indicated that there are still major concerns from “grass roots” cattle producers that Canada’s recent history of having BSE in its cattle herd could unfairly and unnecessarily harm the U.S. industry, and that having additional “safeguards” in place insures the “future competitiveness of U.S. beef in a global beef market.” According to convention sources, the four states that had affiliate groups initiate the 11-point initiative were California, Montana, Texas and Iowa. Affiliates from Kansas, Nebraska, and nine other states put their backing behind the proposal upon presenting it to the group’s board of directors. The directive will be part of a mail ballot sent to all NCBA members on Feb. 17. Members will be asked to approve or reject all policy decisions passed at convention. For the ballot to be valid, there must be a 20 percent return from four of NCBA’s seven regions. The deadline for those ballots to be returned was unknown as of press time last week.

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