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Monday, January 10,2005

Beef Bits

by WLJ
New boxed beef report unveiled USDA on Jan. 3 formally unveiled its new boxed beef report, which is a downsized and much simpler version of what it had been publishing twice daily for the past several years. The new report only lists the composite Choice and Select boxed beef cutouts, along with the Choice/Select spread. Previously the composite cutout was broke down into 600-750 and 750-900 pound weight categories under each quality grade. However, officials with USDA’s Agricultural Marketing Service said the detail was unnecessary and complicating the reporting. U.S. cattle leave for Cuba A shipment of 22 beef cattle left the port of Fort Everglades, FL, on Friday, Dec. 31 bound for Havana, Cuba, and landed on the country’s shore Tuesday, Jan. 4. It marked the first shipment of live cattle to Cuba since the U.S. imposed an embargo on Cuba in 1959 in the wake of the Cuban Revolution. The New Year’s Eve shipment marked the first shipment of several scheduled over the next few months. A total of 300 head of U.S. live cattle, valued at nearly $1 million, will end up in Cuba when all the shipments are made. In 2000, Congress allowed an exception to the embargo in the case of agricultural products sold for cash. Steak added to donut chain menu Dunkin’ Donuts started out 2005 introducing it’s first ever beef offering—a steak, egg and cheese sandwich. The sandwich features seasoned sirloin steak and is served on a warm bagel. The promotion is expected to run through May, but could be extended pending consumer acceptance of the new sandwich. Japan restaurant posts profit Yoshinoya D&C, one of Japan’s largest gyudon, or beef bowl restaurant chains, said it returned to profitability in the latest quarter, which ended Nov. 30. The 1,000-unit chain, which relied heavily on imported American beef for its most popular dishes, said it lost money for two consecutive quarters after American beef supplies dried up at the first of the year when Japan announced its ban on imports. The company has substituted pork bowls and a new spicy beef bowl made with Australian beef, but said it has no substitute for gyudon, which can only be made to Japanese taste with American beef. Yoshinoya saw sharp same-store sales drop over previous years, on average about 33 percent, but managed to eke out a profit through cost-cutting moves. Kuwait lifts ban on U.S. beef Kuwait, on Dec. 26, became the first country among the four Arab Gulf Cooperation Countries to lift a ban on all beef imports originating from the U.S., with the exception of the state of Washington, according to an agricultural attache from USDA’s Foreign Agricultural Service. The decision resulted from ATO Dubai’s ongoing efforts over the past 12 months to convince the host governments’ health authorities to lift the ban on U.S. beef imports. The decision by Kuwait is expected to help hasten similar action by health authorities in the remaining three GCC countries. Yum! offers health-club membership The ownership group of Taco Bell, KFC, A&W, Pizza Hut fast food chains is offering customers free, four-week memberships at Bally Total Fitness clubs during January. Yum! Brands Inc. operates more than 18,000 units in the U.S. The is designed to counter recent negative publicity from obesity-related lawsuits, which blames the obesity epidemic on the fast food industry. The giveaway is valued at $50 per person. New Ontario beef plant planned The Kent Cattlemen's Association is awaiting approval from the Canadian Food Inspection Agency to begin construction of a (US)$15 million beef processing plant that is expected to slaughter 600-800 cattle per week. The exact site of the plant will be in the region of Chatham, Ontario, and an architectural firm has been hired. However, other details are not being released until CFIA grants approval. At that time, the owners will open bids for a general contractor. Brazil cattle negative for HMD Confirmatory test results indicated there was not an outbreak of hoof-and-mouth disease (HMD) in the cattle-rich Brazilian state of Mato Grosso do Sul as was suspected last month, Agriculture Ministry officials said last Tuesday. The news was relief to Brazil's beef industry, which was put on alert after blood tests on 28 cattle from Paranhos, on the border with Paraguay, showed signs of being infected with the disease. The original test may have come up positive because the cows were vaccinated for HMD just four days before. Brazil has had two outbreaks of hoof-and-mouth disease this year.

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Monday, January 10,2005

Fed market very slow, steady

by WLJ
— Packer losses, slow demand cited. It was a tenuous week in the fed cattle markets last week. Trade volume was light and $88-88.50 live, $140 dressed was all that cattle feeders could muster despite a winter storm that passed through most of the nation’s cattle feeding region. There were several elements at work last week—futures markets were softer with the Canadian trade news and announcements that most of the nation’s major packers were going to temporarily close some plants and reduce production shifts at others. Tyson was going to suspend operations in Denison, IA; Norfolk and West Point, NE; and Boise ID, and discontinue the second shift at their Pasco, WA, plant. National Beef also announced some temporary production cuts due to “unfavorable” market conditions. The last week of the year there were 538,000 head processed with no Saturday slaughter on Jan. 1. For the first week of the year, through Thursday, 449,000 head were processed, 34,000 head fewer than the same period a week earlier. The most recent packer margin index showed packers losing almost $60 per head. Losses have been reported by packers going for nearly six months. The standard practice of reducing beef production to prop up the boxed beef market is in full swing, market analysts said. Andy Gottschalk, HedgersEdge.com, said beef demand is being pressured because of less disposable income resulting from rising energy costs. The Atkins high-protein diet is also losing favor with consumers, according to Gottschalk, and competing meats are more aggressive in pursuing market share for those high-protein dieters. “The beef industry doesn’t have sole ownership of the Atkins diet as it did several years ago,” he said. In addition, Gottschalk said, “We have a serious demand problem at work, and the current dynamics will only compound the problem. With the packing industry announcing shutdowns, we are expecting weekly slaughter for the next several weeks to be only 570,000 head. The industry needs to slaughter 622,000 head to keep feedlots current based on current numbers of cattle on feed. They are expecting the fed cattle market to trade between $85-90 with storm market factors assumed for the next six weeks.” Boxed beef sales volume was moderate last week and the Choice cutout was off several dollars from the previous week, to $139.55. In addition, there is only a $7 spread between Choice and Select, which is at $132.38. The only bright spot in the meat markets is the grinding markets, where ninety percent lean was trading at $144.71, down just slightly from a week earlier. The 50 percent trim market rallied to $72.90, up more than $20 from two weeks prior. Mark Gustafson, spokesperson with Swift & Company, said it has been very difficult to get extra value in the end meats because of the export situation. “We have been forced to put a lot of chucks and rounds, along with other items into the grinding bin when they would have a much higher value in the export markets,” he said. He added that in their Australian operations tongues are selling to Japan for over $5 a pound while U.S. operations can’t get $1 domestically. Yearlings up, calves sliding Yearling and heavier-weight feeder calves gained a little bit of ground last week, as prices ranged from mostly steady to $1 higher than the last week of 2004. Cattle feeders were scrambling to find cattle that would be ready for market during the spring of 2005, auction barn managers said. Supplies of cattle weighing 750 lbs. or more are very tight, and the fact that Canadian feeder cattle aren’t being allowed into the U.S. until March 7 is forcing cattle feeders to pay a little more for them. The fact that winter weather rolled in last week didn’t deter feedlot interest in heavier placements, particularly with the severity of winter weather being much less severe than meteorologists’ projections. Texas panhandle sources reported an inch or less of rain falling, compared to forecasts of 4-6 inches of snow. In addition, western Kansas, eastern Colorado and western Nebraska received 4-6 inches of snow, compared to forecasts of one foot or more. “They (feedlots) need the cattle right now, and heavier, more mature placements can handle what Mother Nature has doled out so far this year,” said Randy Kinnon, cattle broker with K&K Livestock, Garden City, KS. “Fed supplies could be very short the second quarter, and that means that cattle destined for market at that time could be a profit making venture.” The nearby feeder cattle futures contract remained above $104 per cwt for most of the week, and that was said to be supporting cash feeder cattle prices a little bit. Market analysts said that futures above $103 will keep cash feeder cattle at steady to improving prices week-to-week. In addition, Kinnon said that while corn futures were trending upward last week, cash corn could still be bought for well under $2 per bushel, or $3.60 per cwt. “In two weeks it (corn) may be well over $2 a bushel, however, right now, there is still plenty of old crop in outside piles or plastic, and it is being fire-saled. I’ve seen it still at $1.75 or lower (per bushel) in many areas.” Kinnon said. “That is more impetus to take the chance on older placements.” The CME feeder cattle index last Wednesday was at $104.86, about 25 cents higher than the same day the week previous. Calf prices weren’t as lucky last week, as prices paid for them ranged anywhere between $2-6 softer, as extremely cold weather deterred much interest in lightweight feedlot or stocker placements. Kinnon said several of his feedlot and stocker operator clients were adamant they didn’t want to deal with younger, immature calves because of the extra labor and expense it usually takes to keep them healthy during winter storms. He added stocker operators are no longer looking for late season grazing cattle, and cattle feeders were concerned corn prices would start to escalate through the rest of January and make feeding those cattle out a more expensive proposition. “Light calves being placed right now would normally be ready (for market) during the summer, which is a usual lull period for fed cattle,” Kinnon said. “There is still a lot of uncertainty whether or not Japan and other export markets will be open to U.S. beef by then and the fact that Canadian cattle could be entering the country at that time, makes the possible summer fed cattle supply look overly large right now.” Other cattle market analysts said the primary indicator leading to depressed cattle prices is more simple, and that economics is to blame. At $88 fed cattle are losing anywhere between $80-100 per head. Most sources said that breakevens are at a minimum of $95 right now, and that some cattle could be up around $97-98 because of being held due to severe winter weather. — WLJ

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Monday, January 10,2005

Kuwait lifts beef ban

by WLJ
Kuwait became the first country among the four Arab Gulf Cooperation (GCC) countries that banned U.S. beef imports in late 2003, to lift the said ban on all beef imports originating from the U.S., with the exception of Washington state. The Kuwaiti decision on maintaining the import ban on Washington-state results from the country’s Food Safety Committee’s doubts on elimination of the BSE risk in the state. During 2003, Kuwait imported $32.2 millions worth of U.S. beef products, FOB basis. In 2004, between January and October, U.S. exports fell to $5.9 million. All of the 2004 trade was to the U.S. military personnel stationed in Kuwait. A U.S. trade attache to Kuwait said 2005 U.S. beef exports to Kuwait are expected to go beyond 2003 levels. The decision by Kuwait should help hasten action by other GCC countries to address the bans remaining in place, the attache said, in a published report.

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Monday, January 10,2005

Red Bluff: 2005 bull entries increase

by WLJ
Far West and northern tier bull producers appear bullish about the 2005 bull sale season as bull consignments for the annual Red Bluff Bull & Gelding Sale, Red Bluff, CA, are up from last year. Not only is herd rebuilding or expansion projected this year, but sale officials said higher-than-ever calf and yearling prices for 2004 could result in more bulls being demanded and/or more money being paid for herd bulls. This year’s event is scheduled for Jan. 25-29. Bull entries for 2005 total 437, up from the 375 head consigned last year. This year’s bull sale features bulls from 12 different breeds and represent producers from five states—California, Oregon, Washington, Idaho and Montana. Of the total entries, 249 are halter bulls, with the other 188 to be a part of the Range Bull competition and sale. As in years past, approximately 1,000 head of females, mostly heifers, are expected to be sold during the female portion of Red Bluff. This year’s female auction will be broadcast via Western Video Market in addition to bidding done at the sale site. Gelding consignments total 156 this year, with seven mules also entered. Working stock dog numbers were at 15, as of press time, three less than were entered for 2004. Six of the dogs to be offered will be pups, according to Red Bluff officials. This year’s event is a far cry from the first Red Bluff Bull Sale in 1941, which featured two dozen registered Hereford bulls. The first breeds added to the sale list were Shorthorns in 1943 and Angus a year later. Records show the fourth Red Bluff Sale had 350 head of breeding stock from seven different states. Red Bluff started as a venue for producers to evaluate and select bulls in an environment that was “as natural as possible” with bulls competing in both “halter” and “range-ready” competitions. According to Red Bluff sale committee members, the fact that there’s a range-ready division has helped in the development of a buyer base that continues to grow. Bulls in the range-ready division are in their “working clothes,” which allows prospective buyers to analyze the bulls for what they actually are and see what they’ll look like when out in pasture and rangeland situations. The halter show is similar to shows held during major state fairs and stock shows. In both divisions, bulls are sifted by a three-person committee prior to the show. Sifters, and the sale veterinarian, closely inspect all bulls for important phenotypic and production traits. Muscling, conformation, structure, mobility, and production records are all looked at to determine if a bull is eligible to be shown. After being sifted, a committee of three producers judge all the bulls to determine the sale order for the bulls. This year’s sift committee consists of Gordon Bruce, Los Molinos, CA; Buttons Dougherty, Vina, CA; John Owens, Red Bluff, CA; and O.W. Hooton, DVM, Red Bluff, CA. Hooton is the sale veterinarian. The bull judging committee includes Steve Coleman, Molalla, OR; Ken Hufford, North Powder, OR; and Dave Peterson, Powell Butte, OR. Sifters and judges are on a three-year rotation, with a new judge and sifter coming on board every year to replace the one who has worked three consecutive sales. Heifers While primarily known as a traditional bull sale, Red Bluff has diversified its interests over the years. A sale for commercial replacement heifers was added to Red Bluff in 1990, and offers the largest number of head to be sold during the event. This year’s sale is expected to be around 1,000 head of first-calf heifer pairs, fall- and spring-bred heifers and open heifers. All heifer lots will be judged on both quality of individual animals and the consistency within each load lot. The 1996 and 1997 Red Bluff heifer sales were the largest in the event’s history, when 1,500 head were sold each year. Equine, canine participation In addition to cattle, Red Bluff features sales for working geldings, working mules, and stock dogs. The gelding sale at Red Bluff was started in 1963, with a total of 22 horses being shown and sold. The top selling gelding in 1963 brought $400. Last year’s sale saw 99 geldings sell for an average of $6,025. The top selling gelding in 2004 brought $21,000. Working mules are also a popular sale item at Red Bluff. Last year eight mules average $4,875. The top seller sold for $6,400. The record selling mule was sold back in 2003 for $30,000. The stock dog sale at Red Bluff has become one of the more popular spectator events at Red Bluff with audience capacity filled for both the competition and sale. “Interest in our dog work and sale has grown enormously over the past several years. With such a popular event, it is often necessary to adjust scheduling to meet the needs of our buyers and consignors. At the 1998 sale an additional work class was added in order to show the ability of these dogs to work in the open, with a larger number of cattle,” one Red Bluff official said. The dogs are first checked by the sale committee veterinarian, then put through a series of works, one inside and one outside. The dog sale begins after all dogs have worked outside. The sale is in the Don Smith building. Last year, 12 dogs made the sale and averaged $3,708, with the top seller bringing $10,500. — WLJ

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Monday, January 10,2005

Checkoff denies constitutional rights

by WLJ
To the editor, On December 8th, the U.S. Supreme Court finally heard oral arguments on whether the Beef Checkoff is legitimate "government speech." The USDA side argued that the Checkoff is constitutional because federal bureaucrats approve Checkoff Beef Board member nominations and have the power to censor program content. Our side argued that the Checkoff structure amounts to both forced taxation and forced speech and association without the basic right to publicly elected representation. Constitutional law expert Laurence Tribe spoke on behalf of the livestock auctions (Livestock Marketing Association) and the Western Organization of Resource Councils (WORC) of which Northern Plains is the Montana affiliate. Tribe's main argument was that to force cattlemen to put money into "the elaborate machinery and structure" of the un-elected, NCBA-dominated beef board system that "purports to represent them" is blatantly unconstitutional. He pointed out that we are forced in ways that the average federal taxpayer is not: we do not have the right to vote for representation or the checks of congressional budget oversight and program accountability. The Checkoff structure denies us all of the rights of dissenters that Supreme Court decisions have carefully protected over the years. Instead, the Checkoff program forces a million producers "to be homogenized into one message" and, if allowed to stand, would set the precedent for designing "programs to create ideological conformity in America," which is something that our Constitution clearly prohibits. Tribe conceded that the intent of the Checkoff law was probably not to force such ideological conformity, but observed that "the road to hell is often paved with good intentions." If you are interested, you can read the full hearing transcript for yourself on the Internet at www.worc.org. The discussion is a little hard to follow because Tribe and the Justices interact like some old married couple-interrupting each other and finishing each others' sentences. Although the Justices did not know much about the cattle industry, they did seem to understand that there are basic rights at stake here—including freedom of speech and association and no taxation without representation. Sincerely, Steve and Jeanne Charter Shepherd, MT

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Monday, January 10,2005

Pacific Rim delays Canadian beef reentry

by WLJ
South Korea said the discovery of a new case of bovine spongiform encephalopathy (BSE) in Canada, the third known infection among North American cattle, may delay a resumption in beef imports from the country. South Korea earlier banned imports from Canada and the U.S. following BSE infections. South Korea consumed 443,000 tons of beef in 2004, the fourth largest in Asia after China, India and Japan, according to the USDA’s Foreign Agricultural Service (FAS). “We’ve been banning imports of Canadian beef since May 2003, and resuming imports from Canada may be delayed further,” said Kim Kyu, a veterinary officer at South Korea's Ministry of Agriculture and Forestry. The ministry last year held talks with Canada on lifting the ban, pending assurances the meat was safe. China and Japan have not formally announced what its plans for Canadian beef are, but the lack of any action last week was said to mean both countries would probably wait to reopen its borders to Canadian beef until the situation with the U.S. is resolved. Mexico stays open While Pacific Rim and several other overseas countries have further delayed reentry to Canadian beef, Mexican officials said last week there are no plans to tighten its restrictions on beef coming from Canada. Mexico’s Agriculture Ministry said in a statement it would maintain its existing ban on Canadian imports of live cattle, plus high-risk beef products such as cranium, brain, eyes and spinal cord., but that certain bone-in products would still be allowed across the Mexican border. “We will follow the investigation underway by health authorities in Canada,” the ministry said. New sanitary controls allowed Mexico to resume importing lower-risk beef products in August 2003. Mexico’s beef imports from Canada totaled approximately 70,000 metric tons in 2004. — WLJ

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Monday, January 10,2005

Rock Springs Ranch bull test

by WLJ
The 60 day average weight was 968 lbs. with a progressively concentrated ration, currently maintained at 30 percent. Shipping fever was at a minimum this year, but some low level respiratory infection briefly resurfaced. The highlights of the 60 day progress report show the Black Angus led by test bull #116 with an ADG of 4.13 lbs. He is owned by Henson Cattle Co. of Enterprise, OR. Tied for second are bulls #108 and #119 with an ADG of 4.11 lbs. Bull #108 is a Jan. 22 calf sired by Hyline Travel Agent. He is owned by Ye Ole Bovie Ranch, Mountain Home, ID. The #119 bull is an Algoma Fame R7 son born Sept. 16, 2003, owned by Blue Mountain Angus, Prairie City, OR. Red Angus bull #301 is still out front with a 4.41 lbs. ADG. He is a PAR-LOC New Era 1757K son born Feb. 25. Second place Red Angus is bull #302 with an ADG of 3.86 lbs. He is a March 20 calf sired by Lorenzen 2320. Both bulls are owned by the Morin Ranch, Hereford, OR. Gelbvieh are led by the #604 bull with an ADG of 3.38 lbs. He is a Jan. 18 calf sired by D9076 Supreme J969. Following is the #602 bull born Christmas Day and sired by ECC 509Y. Both bulls are owned by The Bull Mart, Burns, OR. Still leading the Shorthorn on test is the #502 bull, a March 5 calf with an ADG of 3.06 lbs. currently weighing 921 lbs., sired by Wolf Ridge Samson and owned by the Moe Ranch, North Powder, OR. The second annual Rock Springs Test Sale is scheduled for March 28, 2005. Butch Booker will be the auctioneer for the sale. For further information contact Bob Ebbers at 541/372-2991. — WLJ

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Monday, January 10,2005

Tyson suspends some beef operations

by WLJ
— Four plants shut down for 3-5 weeks. — Washington plant to single shift. Tyson Foods last week announced it was temporarily shutting down all shifts in four of its cattle/beef processing facilities and suspending one of two shifts in another facility. The company’s formal statement said the shutdowns are expected to last three to five weeks. There was some indication, however, that one or two plants may be “dark” for a longer period of time. The four operations suspending all shifts are in Denison, IA; Norfolk and West Point, NE; and Kuna, ID. The second shift is being discontinued at Tyson’s cattle facility in Pasco, WA. Officials with the company said continued negative processing margins, tight cattle supplies and the absence of key export markets were primary reasons behind the decision. Despite boxed beef movement being better than expected for December, company sources also said they considered 2004 domestic beef demand “lackluster,” and that it needed to pick up before bringing all plants back on line. "We have been running at less than 75 percent of capacity over the past two months, which is 10 to 15 percent below historical levels,” said Tyson Chairman and CEO John Tyson. The operational suspensions are expected to reduce the company's weekly cattle slaughter by 25,000-30,000 head, compared to pre-holiday levels. Cattle market analysts said that at full throttle the five processing facilities affected by the shutdowns could account for 9-10,000 head daily, but that level hasn’t been seen in over four years. U.S. fed cattle marketings were down more than eight percent in 2004, but Tyson said it expects cattle numbers to increase in the coming months. Also, Tyson anticipates the reopening of the U.S. border to Canadian cattle in early March will especially benefit Upper Midwest and Pacific Northwest processing operations. Following last Thursday’s announcement, the company cut the top end of its fiscal 2005 earnings guidance by five cents a share. Tyson now expects fiscal 2005 earnings of $1.15 to $1.40 a share, compared with a November estimate of $1.15 to $1.45 a share. The company still expects the majority of its earnings to occur in the last six months of the fiscal year. A Thomson First Call mean analyst estimate projected earnings of $1.29 for fiscal year 2005, ending in October. The company still has all shifts operating at its beef processing facilities in Joslin, IL; Emporia and Finney County, KS; Dakota City and Lexington, NE; and Amarillo, TX. Several market analysts expected the company to ramp up processing chain speeds at a couple of those facilities, especially if boxed beef prices saw a $5-8 increase over the next few weeks. Most sources said it would be easier for Tyson to pick the processing volumes on existing production lines than it would be to reopen plants and not operate at close-to-maximum speed. — WLJ

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Monday, January 3,2005

Agriculture groups urge quick reform of CRP rules

by WLJ
The Conservation Reserve Program (CRP) needs to refocus on improvements to water and soil quality, according to a news release from four grain-related organizations. Those organizations urged the USDA that substantial changes need to be made in the CRP to sustain growing demand for grains and oilseeds. The CRP should shift away from whole-farm enrollments, the four organizations said in a joint statement submitted in response to USDA’s request for comments on long-term CRP policy. Under the CRP, enrolled acreage is idled under 10- to 15-year contracts, with USDA making annual rental payments and financing up to 50 percent of the cost of establishing ground cover or other approved conservation practices. The National Grain and Feed Association (NGFA), National Oilseed Processors Association (NOPA), North American Export Grain Association (NAEGA) and North American Millers Association (NAMA) said there is “compelling evidence” that USDA should not simply reenroll the 16.1 million acres represented by CRP contracts scheduled to expire in 2007 and 6.1 million acres in 2008 The organizations recommended that USDA consider allowing a “large number” of the current contracts to expire, and only reenroll or extend those that provide the most significant environmental benefits. They noted that many soon-to-expire CRP contracts represent acres that do not meet USDA’s current environmental-benefits criteria used to evaluate CRP bids. Further, heavy CRP enrollment, particularly in the plains states, has had a devastating impact on some local economies. In addition, the organizations said the CRP has given short shrift to enhancing water quality, which they said arguably is U.S. agriculture’s top environmental challenge and currently accounts for only eight percent of the “non-market” benefits of the CRP. “To enhance the intended benefits of the CRP, idled acres should focus on filter strips, buffers and the most environmentally sensitive lands, with a strong emphasis on substantially improving water quality,” the four organization said. “To make a significant long-term impact on soil erosion, conservation practices should be targeted to working farmland and assist farms to implement soil conservation practices.” The NGFA, NOPA, NAEGA and NAMA said that fewer whole-farm enrollments in the CRP would reduce economic pressure on tenant farmers, which currently account for 70 percent of U.S. agricultural production and whose economic structure will “do much to determine if U.S. agriculture can remain competitive.” There is strong evidence that the CRP and other U.S. farm programs have artificially inflated land values, the organizations said. But the CRP is particularly “pernicious” because its payments flow solely to landowners and the program puts the U.S. government in direct competition with tenant farmers bidding for land, making rental land scarcer and more expensive. The four groups recommended that USDA allow some whole-farm CRP enrollments to be bid back into active production, without penalty, to enable producers to capture opportunities from the current strong demand for grains and oilseeds while at the same time allowing those acres to be “feathered” back into production, thereby easing the transition to a lower-sized CRP. The organizations also urged that the environmental benefits index (EBI) used by USDA to evaluate CRP bids be modified because it currently give equal weight to soil erosion, water quality and wildlife benefits. “Given the environmental challenges facing U.S. agriculture, equating wildlife benefits to the issues of soil erosion or water quality is irresponsible and not a good use of scarce economic resources,” the four organizations said. “Water quality is one of the most critical issues facing U.S. agriculture and this is where the CRP can make a significant contribution by focusing enrollment on buffers and filter strips.” The groups urged USDA to more carefully evaluate the CRP benefits related to wildlife compared to the economic impact of idling land on local economies and U.S. agriculture’s ability to compete in global markets. “A common argument used to defend the CRP is that it is creating a niche industry catering to hunters and fishermen,” the organizations said. “Our members certainly are involved in and support these activities. But should those activities be subsidized through government payments?” One of the most troubling aspects of the CRP cited by the organizations is the damaging economic impact it has on local economies. The groups strongly urged that USDA strictly abide by the stipulation that no more than 25 percent of available land in a county be enrolled in the CRP. The groups cited specific counties where CRP enrollment has reached 40 percent because of measurement error or other mistakes in policy implementation. “Policies need to be chosen very carefully so we don’t take away the lifeblood of communities that are still closely tied to production agriculture,” the organizations said. In addition, the NGFA, NOPA, NAEGA and NAMA recommended that USDA increase the size of the CRP to 39.2 million acres (from 36.4 million acres) as a ceiling, not as a mandate, noting that continued CRP expansion will hamper U.S. agriculture’s ability to produce and compete in global markets. The organizations warned that the size of the CRP already has adversely affected the availability of land to build and grow an economic foundation for the grain, livestock, milling and processing sectors of the U.S. economy. “Creating overall growth opportunities for U.S. agriculture will be much more difficult if the United States becomes a big importer” of commodities for feed, animal and industrial uses. Noting upcoming farm program policy deliberations for the 2007 Farm Bill, the four groups urged USDA to “proceed cautiously” so as not to idle vast amounts of acres in the CRP for another 10 to 15 years. “We encourage an approach that reflects the administration’s commitment to free enterprise and support for U.S. agricultural growth,” the organizations concluded. — WLJ

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Monday, January 3,2005

American Wool Trust extended

by WLJ
The U.S. Congress recently approved the Miscellaneous Trade Bill, which includes language calling for a two-year extension of the American Wool Trust. As ranking member of the finance committee, Sen. Max Baucus (D-MT) led the effort in the Senate along with Sen. Craig Thomas (R-WY) in extending the trust through 2008. The American Wool Trust, which was established in 2000 in agreement with the American Sheep Industry Association (ASI), utilizes a portion of the wool tariff to advance the marketing potential for U.S. wool, improve wool quality and enhance production information. The Trust has been the instrumental factor in the success of the ASI wool programs over the last four years. The ASI Wool Council has strengthened competition for U.S. wools as well as narrowed the price margins between many U S. and Australian wools to the smallest margin since World War II. In addition, ASI’s support of U.S. wool marketers and warehouses has led to an unprecedented international demand for local wool. “We are extremely proud of the accomplishments we have achieved through the Wool Trust and of our services to U.S. wool growers as well as the domestic mills,” stated ASI Executive Director, Peter Orwick. Chairman Bill Thomas (R-CA) of U.S. House Ways and Means Committee secured approval for the Wool Trust extension last month. “We appreciate Chairman Thomas’ work with Senators Baucus and Thomas to ensure the wool package, which will continue to provide benefits to U.S. wool mills and suit manufacturers and equitable benefits for U.S. wool growers,” added Orwick. This newest budget provides for programs in the areas of wool-clip certification, poly-contamination reduction, new wool-product development and producer information and research. “With U.S. wools being utilized by eight or more countries now as well as the U.S. military and domestic mills, the extension of the Wool Trust Funding is an exciting opportunity for the ASI Board of Directors,” concluded Orwick. The Miscellaneous Trade Bill now awaits the President’s signature.

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