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Top Beef Purchasers Headline BEEF Quality Summit

The BEEF Quality Summit, set for Nov. 14-15 in Oklahoma City, OK, promises a one-of-a-kind, business experience for beef operators interested in learning the ropes and making the connections to participate in the value-added profit opportunities of today's beef cattle market.

The first day's program will focus on what "quality" means to consumers, and examine the opportunities that exist in U.S. and export markets. In addition, attendees will be provided with real-life examples by folks already participating in those opportunities.

Meanwhile, the second day's program will focus on what to look for in selecting a marketing partner.

Headlining the first morning's session are three national reps of the HRI beef trade. Together, they're responsible for purchasing billions of dollars of beef each year. The trio, which consists of the giants of the quick-service, retail and restaurant trade, respectively, includes:

  • Robert Cannell, supply chain director for McDonald's USA;
  • Tony Ribble, beef category manager for Wal-Mart Supercenters;
  • Steve Erickson, vice president of Outback Steakhouse.
The three speakers will kick off a two-day program narrowly focused on providing attendees with the background and the connections to plot their course in the new beef-value chain. To view the entire speaker list and agenda, or to register, go to www.beef-mag.com or call 800-722-5334.
-- Joe Roybal

Two More States Join National Disease Reporting System

All but six states now actively participate in the National Animal Health Reporting System (NAHRS). Only Connecticut, Georgia, Iowa, Missouri, New Mexico and Rhode Island are non-participants. The announcement was made during the joint meeting in Minneapolis this week of the U.S. Animal Health Association and the American Association of Veterinary Laboratory Diagnosticians.

Under NAHRS, state animal health officials report monthly on the occurrence or non-occurrence of specific diseases listed by the World Organization for Animal Health (OIE). The data provides the basis for the USDA Animal and Plant Health Inspection Service's annual report to OIE. It also supports trade negotiations and is useful in providing access for U.S. animal ag products in world markets.
-- Joe Roybal

National Beef Ambassador Hails From Florida

Mathew Peebles, Silver Springs, FL, won the title of 2007 National Beef Ambassador at the annual competition, held in Minneapolis, MN. The competition was established on behalf of the Cattlemen's Beef Board and state beef councils by the American National CattleWomen, Inc. (ANCW).

Twenty contestants vied for the title and $5,000 in cash prizes sponsored exclusively by Tyson Foods, Inc. Additionally three educational scholarships totaling $2,250 were given by the American National CattleWomen Foundation, Inc.

Peebles received $2,500 cash and a $1,000 college scholarship. Second place went to Amanda Rankin, Caliente, CA, who received $1,200 and a $750 scholarship. Third-place winner JoAnna Strom, Beresford, SD, received $800 and a $500 scholarship. Christie Molinaro, PA, and Londa Johnson, MN, received $250 each as honorable-mention awards.

Peebles is a member of FFA, and the Junior Florida Cattlemen's Association. He enjoys promoting the beef industry, raising cattle and team roping. His career plans are to become a veterinarian.

While preparing for this national speaking competition, youth learn about the importance of the beef industry and beef as an ag product, says Beef Ambassador program director, Carol Abrahamzon, Caledonia, MN.

"The program highlights the positive impact the cattle industry has on our economy and families," she says. "Trained youth ambassadors address industry issues and misconceptions, while they help educate peers, consumers and producers about food safety, nutrition and the beef checkoff program."

Contestants presented a speech about the promotional aspects of beef, completed interviews with media and beef-industry representatives, and attended a checkoff-funded educational workshop titled "Telling the Production Story." The workshop was sponsored by the Beef Checkoff Program.
-- Clint Peck

Cloned Food Is Closer To Approval

The Food and Drug Administration (FDA) plans to release a draft risk assessment on livestock cloning before the end of the year. Following that, there is expected to be a 60-day comment period. Afterwards, FDA likely will lift a voluntary moratorium on the sale of milk and meat from cloned animals and their offspring.

The Consumers Federation of America said in a press release, "By not requiring cloned milk and meat be labeled, the U.S. Government is permitting these ethically questionable products to be foisted on a reluctant public through secrecy and stealth. There will be no freedom to choose in the cloned milk and meat marketplace."
-- P. Scott Shearer, Washington, D.C., correspondent

Cattle-Fax Sees Higher Corn Prices Continuing

Higher corn prices are here to stay, says Randy Blach, vice president of Cattle-Fax. Speaking at last week's joint convention of Texas Cattle Feeders Association and Texas and Southwestern Cattle Raisers Association in Amarillo, TX, Blach said the ethanol boom and continued feed demands will pressure feed costs at feedyards.

"This isn't a short-term thing," he said, noting U.S. ethanol production will likely see its corn usage increase from nearly 3 billion bu. to about 6 billion bu. within a few years. In addition, feedyard capacity increased by 22% from 1990-2004, "and we're still adding pens," he says.

"The need for good fundamental market information is greater today than it's ever been," Blach says.

Clayton Yeutter, USDA Secretary from 1989 to 1991, said the government's 51¢/gal. subsidy for ethanol production allows an ethanol plant to "pay for itself in 18 months. So ethanol is the real wild card for beef production costs."

Yeutter projects higher corn prices in the short term, and possibly the intermediate term. He believes increased ethanol production could foster more flexibility in the next farm bill, as some want more Conservation Reserve Program acres put back into production to help meet the demand for more corn.
-- Larry Stalcup

Canadians Ask USDA To Drop Its New Border Fee

The Canadian government formally asked USDA to drop its intent to charge Canadian truckers a new fee for crossing the border into the U.S. USDA has indicated it plans to charge truckers $5.25/crossing, or $105/year, to fund a safety program on imported ag products. Landlinemag.com says Canada is protesting the fee, which applies to all Canadian truckers, not just haulers of ag products. Canada also contends the plan may also violate NAFTA.
-- Joe Roybal

AG Coalition Pushes For Vietnam PNTR

The Ag Coalition for U.S.-Vietnam Trade sent a letter to every member of Congress urging the passage of Permanent Normal Trade Relations (PNTR) for Vietnam. According to the coalition, products benefiting would be beef, pork, dairy products, grapes, apples, pears and soybeans. Under the agreement, tariff rates for 75% of U.S. ag exports to Vietnam would decline to 15% or less. According to the U.S. Trade Representative, tariffs would be reduced as follows:

  • Pork: Tariffs on pork offals immediately will fall from a 20% rate to 15% with further reductions to 8% over four years. Tariffs on other key pork and pork products will be reduced by 50% over five years, including tariffs on hams and carcasses, which will fall from 30% to 15% in that timeframe. Rates on processed pork products will be reduced from 20% to 10% over five years.
  • Beef: Tariffs on U.S. beef offals will fall from the current 20% to 15% immediately and phase down to 8% over four years. Boneless beef will be cut from 20% to 14% over five years. The duty on beef sausages, currently at 50%, will drop to 40% immediately and be reduced to 22% over five years.
  • Hides and Skins: Tariffs on hides and skins will be bound at zero immediately. This is currently one of the largest U.S exports to Vietnam.
  • Grains: Vietnam will bind its applied rate of 5% for both corn and wheat.
  • Soybean products: Tariffs on full fat soybean meal and flour will be reduced from 30% to 8% over five years. Tariffs on soybean oil also will be significantly reduced, from 50% to 30% with additional reductions to 20% over five years.
Congress is expected to consider the PNTR legislation in November or December. Members of the coalition include: American Farm Bureau Federation, American Meat Institute, American Soybean Association, National Association of Wheat Growers, National Cattlemen's Beef Association, National Corn Growers Association, National Cotton Council, National Milk Producers Federation, National Pork Producers Council, and U.S. Apple Association.
-- P. Scott Shearer, Washington, D.C., correspondent

CME & CBOT To Merge, Create $25-Billion Exchange

Chicago Mercantile Exchange (CME) Holdings Inc. and CBOT Holdings, Inc. have signed a definitive agreement to merge. The combined company, named "CME Group Inc., a CME/Chicago Board of Trade Co.," is expected to transform global derivatives markets, creating operational and cost efficiencies for customers and exchange members, while delivering significant benefits to shareholders. Corporate headquarters will remain in Chicago.

A company release says the merger will strengthen the new entity and provide an average daily trading volume of 9 million contracts/day, representing $4.2 trillion in notional value. The combined company will provide customers efficient, global access to a wide array of benchmark exchange-traded derivatives based on U.S. interest rate yield curve, equity indexes, foreign exchange, agl and industrial commodities, energy and alternative investment products such as weather and real estate, the company says.
-- CME release

$200-Million Beef Plant Set For Oklahoma

Hooker, OK, located in the Oklahoma Panhandle at the juncture of Highways 54 and 64, is the site of a $200-million beef processing plant Smithfield Foods plans to break ground on in January. The announcement on the 50/50 joint venture was made this week by Smithfield Beef Group Inc., and ContiGroup Companies.

Construction of the 650,000-sq.-ft. plant, the first of its size in more than 20 years in the U.S., is scheduled for completion in mid-2008, and will have a processing capability of more than 5,000 head/day. Five Rivers Ranch Cattle Feeding LLC, the world's largest cattle-feeding enterprise, another 50/50 joint venture between ContiGroup Companies and Smithfield Foods, Inc., will supply most of the cattle for the packing venture. Five Rivers consists of 10 feedyards in Colorado, Idaho, Kansas, Oklahoma, and Texas with a one-time capacity of 811,000 head.

According to Meatingplace.com, Smithfield Beef Group CEO Richard Vesta said the company explored 30 locations before settling on Texas County. The proximity of the Five Rivers operations was cited as one reason for the decision, which would save transportation costs and provide traceability advantages.
-- Joe Roybal

Population Growth Holds Good And Bad For Beef

One of this week's big news items was the Census Bureau's estimate that the U.S. population has reached 300 million people, trailing only the countries of India and China.

What does a growing population mean for the U.S. cattle industry? Obviously it's good for beef demand -- with per-capita consumption remaining relatively stable and carcass weights exploding, population growth is vital to maintaining our cowherd at constant levels.

Conversely, as the population grows, so will the competition for land and open space, as well as for natural resources, energy, etc.

The one thing we do know is, despite all the purveyors of doom, the U.S. remains the world's greatest success story. Incomes continue to rise, assets grow with each generation, and children continue to enjoy better lifestyles than their parents.

Paul Johnson writes in Forbes -- "In the five years since 9/11, America's GDP has increased by $3 trillion. This increase alone is roughly equivalent to the world's fastest-growing economy (China)."

America's market-driven system remains the envy of the world. As long as that's the case, the world will continue to want to come to the "Land of Opportunity."
-- Troy Marshall