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USDA Modifies Country-of-Origin Labeling

The Agricultural Marketing Service (AMS) recently modified its Country-of-Origin Labeling (COOL) Program’s Web site.
On May 13, 2002, the Farm Security and Rural Investment Act of 2002, more commonly known as the 2002 Farm Bill, became law. One of its many provisions requires country of origin labeling (COOL) for beef, lamb, pork, fish, perishable agricultural commodities, and peanuts. On January 27, 2004, Public Law 108-199 delayed implementation of mandatory COOL for all covered commodities except wild and farm-raised fish and shellfish until September 30, 2006.
On November 10, 2005, Public Law 109-97 delayed implementation of mandatory COOL for all covered commodities except wild and farm-raised fish and shellfish until September 30, 2008. As described in the legislation, program implementation is the responsibility of USDA’s Agricultural Marketing Service. The recently enacted Food, Conservation and Energy Act of 2008 (2008 Farm Bill) expands the list of covered commodities to include chicken, goat meat, ginseng, pecans and macadamia nuts.
Beef

Herefords Bring Premium at Annual Feeder Calf Sale

KANSAS CITY, Mo. — Buyers and sellers gathered for the largest offering yet at the annual Tennessee Hereford Marketing Program feeder calf sale Oct. 27, 2008. Ninety-six consignors sold 1,121 head of age, source and health-verified Hereford and Hereford-influenced calves in the program’s 10th year, earning sellers more than $29,000 in premiums.

According to a University of Tennessee analysis, the calves sold for $26 per head more than the average feeder calf in Tennessee that week.

The Certified Hereford Beef® (CHB) and Hereford Verified eligible calves sold from nine states – Kentucky, Indiana, West Virginia, South Carolina, North Carolina, Georgia, Alabama, Mississippi and Tennessee.

Leaders from the Tennessee Polled Hereford Association (TPHA) and Tennessee Horned Hereford Association have guided the Tennessee Hereford Marketing Program to achieve its goal of providing a marketplace where producers can sell small groups of Hereford calves at fair market price. That goal has long been surpassed, attracting repeat buyers, as now the group has created an outstanding market where consignors earn a premium for their calves. The average number consigned was 12 head, with consignments ranging from one to 44 head.

Also aiding the success of the sale was the demand for CHB. Buyers from two CHB-participating feedlots purchased more than 700 head of the cattle offered.

“This is a great example of how cattle producers that have small herds can work together to pool their calves into larger groups in order to attract buyers willing to pay premium prices for high-quality calves,” says Darrell Ailshie, manager of Tennessee Livestock Producers, which hosted the sale in its new auction facility in Columbia.

The sale was also broadcast live on the Internet at www.LMAAuctions.com, where viewers from 17 states logged on. Also this year, the organizers hosted more than 100 people for a pre-sale dinner sponsored by the TPHA and Boehringer Ingelheim (BI). BI works closely with consignors on proper health programs for growing quality cattle.

The American Hereford Association with headquarters in Kansas City, Mo., is one of the largest U.S. beef breed associations. The not-for-profit organization along with its subsidiaries, Certified Hereford Beef (CHB) LLC, Hereford Publications Inc. (HPI), and American Beef Records Association (ABRA), provide programs and services for its members and their customers, while promoting the Hereford breed and supporting education, youth and research. For more information about the Association, visit Hereford.org.

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Contact: Sara Gugelmeyer, [email protected], (620) 271-4983

Election Reflections From The BEEF Quality Summit

At last week’s BEEF Quality Summit, Burton Eller and Terry Stokes from the National Cattlemen’s Beef Association (NCBA) discussed the impacts of the election on issues relative to the beef industry. It was clear from an NCBA standpoint that the organization is making a very dedicated effort to be involved with the transition team, and ensuring cattlemen have a seat at the table.

From an ag standpoint, Obama probably represents less change than a McCain policy; the general farm framework isn’t expected to change dramatically under Obama. While ethanol policy will be under less scrutiny, energy policy certainly will be an Obama Administration focus.

Pundits are in agreement that the initial focus will largely be on the three Big E's – economy, energy and the environment – with the economy being the driving issue. In fact, at least initially, the policies on energy and the environment will be greatly influenced by their economic impacts.

While the issues affecting the cattle industry aren’t partisan issues per se, the election results will likely result in a much more difficult environment for cattle industry issues. Depending on your perspective, that statement can be a little disconcerting. After all, one might argue that, given the difficulty of the last several years for cattle-industry interests, things couldn't get much worse. Conversely, one could also argue that if we thought things were bad before, just wait.

Personally, I take comfort in the fact the new Congress and the Obama administration will be focused on the economy, and thus will be constrained by the unprecedented fiscal constraints imposed by never-ending bailouts. Next to the economy initiatives, which will initially focus on stimulus packages and spending the bailout dollars wisely, a lot of emphasis will go toward “paying back” organized labor, which raised unprecedented dollars for the last election. In just the last couple of weeks before the election, labor raised more than $80 million, and hundreds of millions in total. From that, we can assume the auto-industry bailout will be big.

We can expect a continued stalemate on free-trade agreements (FTA). Obama is likely to insist that all new agreements have both a labor and environmental pillar added to them, which will likely short-circuit the Colombian, Peru, Panama and Korean FTAs. There are many who advocate a European model for the economy, trade and the environment, which could result in an animal-welfare pillar being added to trade agreements, as well.

A few years back, Wayne Pacelle promised to build the political status of the Humane Society of the U.S. to one equivalent to the National Rifle Association. This past election, in which California Proposition 2 passed handily, indicates he may be close to his goal.

The anti-livestock components of the environmental movement achieved significant success as well, and climate change issues will be a primary concern.

Under Obama and a Democratic Congress, the Bush tax cuts will be allowed to expire, while any hope for the demise of the estate tax is now gone. The new focus will be on mitigating the impact of increased taxes and regulation on the industry. There’s also likely to be a renewed push to take food-safety issues away from USDA and combine FDA's and USDA's roles into one agency.

The bottom line is that – whether it be on trade, taxes, the environment, animal welfare, industry regulation, bio-fuels or simply rural America’s political clout – the winds are not blowing in our favor. Our views will largely be the minority position in the administration and in Congress.

The activist groups aligned against us are better funded and re-energized. As an industry we must both engage and educate, looking to create non-traditional alliances to gain political clout. As individual producers, we’ll have to be much more active in the political process than we have been historically, if we hope to mitigate the negative impact of new ag policies.

Perhaps our greatest positive comes from the fact that ag isn’t on the radar screen of priorities. Still, it’s important to understand that the Big Three of energy, the economy and the environment are pretty darn important to agriculture, as well.

Grassroots involvement will be huge in making sure our voice is heard. The key will be working inside the system to make sure our interests are understood.

Is The Sky Falling Or The Sun Rising?

Some producers who sold their calves this summer or early fall are delivering calves right alongside salebarn calves for as much as a $200 difference! It’s an interesting time – sellers aren't willing to sell significant numbers at these reduced prices, and buyers haven't been overly aggressive buyers either.

Retained ownership is on the rise and producers are warehousing calves waiting for the market to rebound. Heifers, which are selling at a steeper discount than in the past, are being kept back to either be put on feed or bred to sell as bred heifers.

The debate is simple. Are we heading lower? Or has this been an overreaction that will correct itself with just a little time?

It all boils down to the macro-economic picture. Will the credit markets find stability and consumer confidence strengthen? Or will we see a whole new wave of financial disruptions that send the country and world into a prolonged funk?

Put me in the optimist column. Yes, commodities may not have seen their lows in the very short term, but people still like to eat. Sure, we may see more hamburger being sold, and less demand for $50 steaks at a restaurant, but we have a growing population. Despite any short-term liquidity crisis, there are too many people around the world embracing capitalism to make the case that growth won't return.

This economy, which withstood the explosion in energy and commodity prices, the cost of the Iraq war and all the election-year rhetoric designed to create a feeling of malaise among voters, was still growing right up until the financial crisis. Certainly it was the tipping point in the global economy, but who can't be bullish on the world long term?

At the risk of sounding out of touch, the fundamentals of our business are very good. We’re competing for the center of the plate more effectively than ever. Global conditions will improve, and we’re regaining access to lost markets.

Americans – despite all the gloom and doom about our failures – are still the most productive and entrepreneurial. The talk that we can’t compete with South America, Australia or New Zealand on a cost-of-production basis is a false argument. Sure, our input costs (land, labor and feed) are higher, but we are without peer in size, efficiency and infrastructure.

Direct comparisons between the U.S. and other beef-exporting countries (excluding Canada) aren’t valid. If the world preferred grass-fed beef, or if we had to compete on a grass-based system, then we would be in trouble, but we don't! We’re not only competitive, but we’re the world's standard when it comes to producing high-quality, corn-fed beef.

I'm actually excited about the environmental movement and our ability to compete in a "green" economy. Anyone who spends time on a ranch understands the one fundamental truth about our business and the environment. We are the heroes of the environmental movement; we are the stewards of the ecosystems that not only provide safe, wholesome food, but maintain wildlife habitat and open space. Nobody does what we do any better.

Cattle-Fax is projecting fed prices to average in the upper $90s next year despite demand concerns. Corn and energy prices have fallen, and prospects for profitability on the feeder and stocker sides are greatly improved.

Take a moment and look at global trends, and ask yourself: “which industry would you rather be involved in right now?” I suspect it's a pretty short list.

Now’s A Good Time To Plant Grasses & Legumes

Grasses and legumes are normally planted in early spring, but planting during the dormant season can be nearly as successful, says Bruce Anderson, University of Nebraska Extension forage specialist.

Anderson says dormant plantings succeed as long as soil is relatively dry and soil temperature is too cold for seeds to germinate.

“That's the main key – too cold to germinate. When these conditions exist, seed just lies in the soil until conditions favorable for germination occur next spring. Then seeds begin to grow as if they had just been planted,” he says. “If you want to plant grass but never seem to have enough time or the right soil conditions to do a good job in spring, try dormant planting.”

Warm-season grasses, like those used in Conservation Reserve Program and range plantings, are especially well-suited to dormant planting, he points out. They won't germinate until soil temperature exceeds 45° F. Since soils generally remain colder than this for most of the winter, dormant plantings of these grasses can be made anytime between late November and March. In addition, the alternate warming and cooling of the soil in spring stimulates a natural process in these seeds that improves their germination.

Cool-season grasses and legumes, however, can germinate at soil temperatures as low as 35°. "Our soils often are warmer than 35° for several days in a row during winter, so cool-season grass seeds occasionally germinate and then die when soils freeze again. As a result, dormant plantings of cool-season species are successful a little less often than warm-season grasses," Anderson says.
-- Bruce Anderson, University of Nebraska Extension Forage Specialist

Beef

American Angus Association Makes “840” Tags Available to Producers Through the USDA Process Verified AngusSource Program

“840” tag options are now available through the AngusSource® Process Verified Program. The 840 tag is an official ear tag that can be used for all regulatory programs such as interstate commerce, disease control programs, COOL, etc. It has the 15-digit Animal Identification Number imprinted on the tag, the first three numbers, 840, stand for U.S.A.

“At the American Angus Association® we strive to stay ahead of industry trends and requirements. As we look to the future we believe that making the 840 tags available through AngusSource will position us to offer our members and their customers an opportunity to meet evolving government and marketing requirements,” says Jim Shirley, American Angus Association vice president of industry relations.

“The use of the 840 tags in American Angus programs is significant,” says Neil Hammerschmidt, Coordinator, National Animal Identification System (NAIS). “Moving forward with national animal identification through industry-based programs that can also enhance disease control measures is a win-win for everyone. Having animals identified with 840 tags before a disease event happens provides the infrastructure to respond in a timely way and minimize the detrimental effects; it’s really taking the proactive approach. We would not be where we are today without the support and leadership of partners like the American Angus Association.”

Producers wishing to utilize the NAIS-approved 840 tags must have properly registered their premises. They will then be able to choose between two 840 tag options. AngusSource will offer an 840 visual ($1) and an 840 RFID-matched pair set ($3.25). 840 tags will be printed just like the traditional AngusSource program compliant tag. The only change is that instead of a 15-digit USA number, the tag will utilize a 15-digit “840” number and the visual tag will carry the U.S. shield on the front and back. The words “Unlawful to Remove” will also be printed on the back. Producers must pay a $10 processing fee for each order in addition to other program charges.

“It is important that producers realize this is just one option, not a requirement,” Shirley explains. “Producers who do not want to register their premises or utilize the 840 tags can continue to use the traditional AngusSource program tags.”

Regardless of what tag option the producers choose, all cattle enrolled in AngusSource are source, age and genetically verified and all producers receive marketing support through an on-line listing site and the ability to customize marketing documents.

AngusSource is just one of the programs of the American Angus Association designed to help commercial producers market their Angus-sired calves. The Association, with headquarters in Saint Joseph, Mo., provides programs and services like AngusSource to its more than 36,000 members and thousands of commercial cattle producers nationwide. For more information go to www.angus.org.

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© Copyright 2008, All rights reserved.

Data Access and Use

American Angus Association®

3201 Frederick Ave.

St. Joseph, MO 64506 Contact us:

phone 816.383.5100

fax 816.233.9703

e-mail [email protected]

For More Information Contact:

Sara Snider at 816-383-5151 or [email protected]

Recapturing Agriculture's Youth

21 years ago today, my parents, Dave and Peggy, were on their way to the hospital in Sioux Falls, SD. The date was November 13, 1987, and their first daughter, Amanda, was entering the world. As the story has been told to me, my dad was racing down the interstate, a nervous soon-to-be daddy trying to get his wife to the hospital to ensure a safe delivery and a healthy baby.

Then it hit him. It was the morning of Friday the 13th. Certainly, this wasn’t a good sign to have your baby born on a day filled with bad luck.

“Peg, do you know it’s Friday the 13th?” my dad asked, with worry in his eyes.

“Well, I’m not waiting until tomorrow!” my mom hollered back. Needless to say, I think I have an average load of bad luck, no worse than the next guy. No worries.

Yes, it’s my birthday. So why do you care? Well, being 21 years old today reminds me that my youth is quickly passing me by. Soon I will graduate from college, get a job, buy a house, maybe get married and start a family. Then I start to wonder, will cattle be in my adult story? Will I be able to continue my family’s cattle operation or start my own? Will I have to find new ways to market my cattle in order to make it? How will I get the money to pay for new equipment, purchase cattle and pay the bills?

Perhaps it’s these worries that send so many young people “packing” away from a career in agriculture. Perhaps it’s time to start thinking about how we are going to assist our nation’s youth in this endeavor. So many young people ditch the country life for more lucrative jobs in the cities, and they mourn the loss of wide-open spaces, pastures of cattle and chores to do in the evening. Yet, it is much easier to make it financially by following this path.

This is the exact topic that I will be presenting at two conferences this winter, Women In Blue Jeans in Mitchell, SD and The Great Lakes Regional Dairy Conference in Grand Rapids, MI. I hope to get people to stand up and take action on this issue. And, I'm not the only one talking. In the past few months, Alaina Burt has written an excellent series of stories to help youth find their homes in agriculture. I suggest you check them out, if you haven’t already in our print version.

So what do you think? Are you making room in your business model for your next generation? Are you encouraging these young people to continue the beef cattle tradition? Post your comments; I’m up for a big discussion.

*Disclaimer: Thanks Mom and Dad for letting me share bits and pieces of your life on this blog, too! You guys are the greatest parents a kid could ask for! Don't forget to get me a birthday present!

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Note: This is a picture of my parents and I at SDSU's Little International. Stories about this event to come this Spring!

Weighing in on Beef Cattle Markets

It’s a mixed bag when trying to predict the future of the calf and feeder cattle markets, but there may be some good news heading into 2009, according to a Texas AgriLife Extension Service economist.

“We may see (cattle) prices better than 2008 simply because of where we are in supplies,” said Dr. David Anderson, who spoke recently at the 37th Annual South Central Texas Cow-Calf Clinic.

A continued reduction in beef cattle numbers due to dry weather and higher input costs could cause prices to edge higher in 2009, according to Anderson.

For the short term, recent price swings in cattle futures and even auction markets across the state have been a direct result of a declining stock market. These factors have lowered prices paid in the calf and feeder markets, Anderson said.

“If we go into a deep recession, we could see some more pullback,” he said. “People are eating out less and grocery store spending is going up. We’re seeing that more people are doing more home cooking.”

Stocker cattle operators are using caution as wheat pastures continue to emerge this fall.

“They’re very cautious right now,” Anderson said. “It’s a wait-and-see approach with the current financial state of the economy.”

The livestock industry is currently in a “cost-price squeeze,” Anderson said. Production inputs, which include everything from feed to fuel, are higher than in years past and those costs are incurred throughout the beef-production chain.

“Even though corn (futures) have moved under $4 a bushel, and we’re seeing some retrenchment in feed costs, these are still very high feed costs,” Anderson said. “And we can’t rule out the speculative fund activity which has affected commodity prices. That’s having an effect on the cattle market.”

Anderson said there’s a current tug-of-war going on in the calf market. Tighter supplies are keeping prices higher for calves, but there’s also the high cost of feed.

“(With) the state of the economy, calf prices in the spring may be below what we saw this year,” he said. “We still had fairly high prices during the first part of this year. However, I think we will see higher calf prices during the second quarter of next year. What we may see at the end of 2009 may be higher than now due to tighter calf supplies.”

Right now, there’s incentive to market heavier calves to help feeder operators offset high feed costs.

“If you have grass and a way to hang onto to those calves, there’s an opportunity there to make more money by holding onto them into next year,” he said. For the feeder cattle market, Anderson said he also expects to see prices better than 2008 due to reduced supplies.

“And there’s still good demand for beef,” he said, “If prices stay in the 90s (per hundred weight), that’s still better than where we were in the first quarter of 2008.”

Spring 2009 predictions, according to Anderson, could result in 500-600-pound steers averaging $1.05 a pound for No. 1 steers.

Due to declines in wheat prices, Anderson said, there may be more incentive to have stocker cattle graze those pastures and cash in on the weight gain. Weather will play a big factor in that determining that outcome, he said.

Short Term Energy Outlook

  • The current U.S. and global economic downturn has led to a decrease in global energy demand and a rapid and substantial reduction in crude oil and other energy prices. As a result, projections for both energy demand and prices are considerably lower than last month’s Outlook.

  • The monthly average price of West Texas Intermediate (WTI) crude oil fell from over $133 per barrel in July to about $77 per barrel in October, indicative of the abrupt decline in world petroleum demand growth. The annual average WTI price is now projected to be $101.45 per barrel in 2008 and $63.50 in 2009.

  • The average U.S. prices for regular-grade gasoline and diesel fuel, at $2.22 and $2.94 per gallon respectively on November 10, were both more than $1.80 per gallon below their highs in mid-July. With a weak economy continuing through most of 2009, along with lower projected crude oil prices, the annual average retail gasoline and diesel prices in 2009 are projected to be $2.37 and $2.73 per gallon, respectively.

  • Residential heating oil prices during the current heating season (October though March) are projected to average $2.75 per gallon, a reduction of about 17 percent from the 2007-2008 heating season. Residential propane prices are projected to average $2.22 this winter, a decrease of 10 percent from last winter. Residential natural gas prices are projected to average $13.02 per thousand cubic feet (Mcf), an increase of 2 percent from last winter.

  • The impact of the economic downturn on demand is also lowering current and expected natural gas prices. The Henry Hub natural gas spot price is projected to average $9.27 per Mcf in 2008. The projected 2009 annual average Henry Hub price is $6.82 per Mcf compared with $8.17 in the previous Outlook.

Economic Outlook

The recent dramatic deterioration in the outlook for economic growth in the United States and the rest of the world has led to a significant reduction in this Outlook’s assumptions for world economic growth and projections of energy demand and prices. World real gross domestic product (GDP) growth is projected to slow from about 4 percent in 2006 and 2007 to about 2.5 percent this year and 1.8 percent in 2009. Last month’s Outlook assumed world GDP would increase by 3.0 percent in 2008 and by 2.8 percent in 2009. Previous lows for world economic growth were 0.3 percent in 1982, 1.7 percent in 1993, and 1.5 percent in 2001.

The year-over-year changes in U.S. real GDP in last month’s Outlook were 1.8 percent growth in 2008 and 0.8 percent growth in 2009. U.S. real GDP growth in the current Outlook has been lowered to 1.3 percent for 2008 and is projected to decline by 1.4 percent in 2009. The 2009 average unemployment rate has been raised from 6.2 percent to 7.9 percent in this forecast. The U.S. manufacturing production index was lowered by 1.1 percent and 7.0 percent for 2008 and 2009, respectively, with the 2009 growth rate of the index falling from a positive 0.5 percent (growth) to negative 5.5 percent (decline).

To view the full report, see the U.S. Department of Energy Outlook

Sales Strong for McDonald's Beef

Sales rose again in the McDonald's food outlets. Recent data shows the sales have grown by 8.2% for the month of October.

In the United States, sales increased by 5.2%. However, there was significant strong growth in the UK, France and Russia. Meanwhile, the company's Middle East, Asia and Australian operations also saw 12% growth for the month.

The company has achieved outstanding results, far above analysts' predictions, especially in light of the current global economic turmoil. The company has established a policy of reducing the size of meals, rather than increasing the prices, in order to combat global price increases for raw materials.