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MORNING Midwest Digest, April 25, 2019

Oil prices declined yesterday, and global oil markets are adequately supplied.

An Iowa congressman is jumping party fences.

The Missouri Farm Bureau president is concerned that waters won't receed in time for planting.

Be sure to heed flash flood warnings. 

Stephen Moore, a consideration for the Federal Reserve Board, is having past comments dredged up.

 

Photo: milanklusacek/Getty Images

Farm Progress America, April 25, 2019

Max Armstrong shares his insight on travels through flood country in southwest Iowa. He was in the area just before a meeting between Senators and the Army Corps of Engineers. The bipartisan panel of lawmakers gave the Corps an ‘earful’ regarding the devastation of recent flooding.

Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Max Armstrong, veteran farm broadcaster and host of This Week in Agribusiness.

Photo: Mindy Ward

R-CALF USA files federal class action lawsuit against beef packers

DarcyMaulsby/iStock/Thinkstock Cattle in feedlot

Scott+Scott Attorneys at Law LLP (Scott+Scott), a national antitrust and securities litigation firm, along with Cafferty Clobes Meriwether & Sprengel LLP (Cafferty Clobes), have filed a class action lawsuit in federal district court in Chicago, Ill., on behalf of R-CALF USA and four cattle feeding ranchers from Iowa, Nebraska, Kansas and Wyoming. The suit alleges that the nation's four largest beef packers violated U.S. antitrust laws, the Packers & Stockyards Act and the Commodity Exchange Act by unlawfully depressing the prices paid to American ranchers.

The complaint was filed against Tyson Foods Inc., JBS S.A., Cargill Inc. and National Beef Packing Co. LLC and certain of their affiliates (the Big 4), which collectively purchase and process more than 80% of the fed cattle in the U.S. annually. The suit alleges that from at least Jan. 1, 2015, through the present, the Big 4 packers conspired to depress the price of fed cattle they purchased from American ranchers, thereby inflating their own margins and profits.

The class action lawsuit seeks to recover the losses suffered by two classes believed to be harmed by the Big 4's alleged conduct. The first class includes cattle producers who sold fed cattle to any one of the Big 4 from January 2015 to the present. The second class consists of traders who transacted live cattle futures or options contracts on the Chicago Mercantile Exchange (CME) from January 2015 to the present. The complaint, which is supported by witness accounts, including a former employee of one of the Big 4, as well as trade records and economic evidence, alleges that the Big 4 conspired to artificially depress fed cattle prices through various means, including:

  • Collectively reducing their slaughter volumes and purchases of cattle sold on the cash market in order to create a glut of slaughter-weight fed cattle;
  • Manipulating the cash cattle trade to reduce price competition among themselves, including by enforcing an antiquated queuing convention through threats of boycott and agreeing to conduct substantially all of their weekly cash market purchases during a narrow, 30-minute window on Fridays;
  • Transporting cattle over uneconomically long distances, including from Canada and Mexico, in order to depress U.S. fed cattle prices, and
  • Deliberating closing slaughter plants to ensure the underutilization of available U.S. beef packing capacity.

These alleged practices are estimated to have depressed fed cattle prices by an average of 7.9% since January 2015, thus causing significant harm to U.S. ranchers.

"R-CALF USA is taking this historic action to fulfill its promise to its members to prevent the Big 4 packers from capturing the U.S. cattle market from independent U.S. cattle producers," R-CALF USA chief executive officer Bill Bullard said, adding that the group has "exhausted all other remedies, but now, with the expert help of Scott+Scott and Cafferty Clobes, our members' concerns will be addressed, and we hope U.S. cattle ranchers can be compensated for years of significant losses."

David Scott, managing partner at Scott+Scott, said, "The impact of the packers' conduct on American cattle ranchers has been catastrophic. The health and integrity of the American cattle industry is being permanently and irrevocably damaged, independent ranchers are systematically being driven out of business and consumers are losing the ability to buy high-quality American beef with confidence."

Cafferty Clobes partner Anthony Fata said the packers' alleged conduct has had a direct and significant impact on the commodities underlying CME live cattle futures and options contracts and added, "It is imperative for investors to maintain confidence in this vital financial market, relied upon by ranchers, traders and others to manage the risks associated with their businesses."

In a statement to Feedstuffs, Tyson Foods expressed disappointment in the “baseless case” that was filed.

“As with similar lawsuits concerning chicken and pork, there’s simply no merit to the allegations that Tyson colluded with competitors,” the company said. “This complaint is nothing more than another transparent and opportunistic attempt by attorneys to make money for themselves at the expense of consumers.”

Tyson continued, “Tyson operates with integrity every day. We welcome competition, which makes us a better company, enhances the quality of our products and provides more choices at greater value to our customers.”

Further, the company said it depends on thousands of independent cattle, pig and chicken farmers and ranchers as a vital part of its supply chain, noting, “Contrary to the assertions in this lawsuit, Tyson wants its suppliers to succeed.”

The company said it will “vigorously defend” itself and its proud heritage of supporting America’s farmers and ranchers.

Tyson selling stake in Beyond Meat ahead of IPO

Tyson Foods Tyson Foods logo

Tyson Ventures, a venture capital arm of Tyson Foods, confirmed to Feedstuffs that it is selling its 6.5% ownership stake in Beyond Meat Inc., a leading plant-based protein company, after investing $23 million between 2016 and 2017.

Beyond Meat announced April 22 the launch of its initial public offering (IPO) of 8.75 million shares of common stock. The IPO price is expected to be between $19.00 and $21.00 per share, before underwriting discounts and commissions.

According to a report, multiple sources told news outlet Axios that tensions had been rising between the two companies, especially after Tyson chief executive officer Noel White revealed earlier this year that Tyson is planning to develop its own plant-based protein products. No matter the reason, Tyson said it will continue to invest in the market space.

“Tyson Ventures is pleased with the investment in Beyond Meat and has decided the time is right to exit its investment,” the company said in a statement to Feedstuffs. “Beyond Meat provided an early opportunity for Tyson Ventures to invest in plant-based protein products that many consumers are seeking. We wish the leadership of Beyond Meat all the best.”

Tyson Foods said it continues to be committed to providing alternative protein as a choice for consumers and even recently announced the creation of a new business “focused on combining our creativity, scale and resources to make great-tasting protein alternatives more accessible for everyone.”

The company added, “We plan to launch an alternative protein product soon, with market testing anticipated this summer.”

Census says: More beef cattle operations

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Beef cattle operations bucked some overall trends that were revealed in the recently released 2017 Census of Agriculture from USDA’s National Agricultural Statistics Service. While total farms in the U.S. decreased 3.8% (-67,083 farms), compared to the 2012 Census, there were 1,140 more farms with beef cows (+0.16%).

Specifically, at the end of 2017 there were 729,046 farms with beef cows, according to the Census. Smaller herds continued to dominate with 79% of operations having 1 to 49 cows and 27% of all beef cows. Operations with 200 or more cows represented 4% of the population, but 38% of all cows.

For cattle perspective, the beef cowherd grew by 9.5% (+2.76 million head) from the 2012 Census to the most recent one.

READ: Beef output may keep rising after expansion ends

Besides herd expansion being in full bloom at the time, the robust economy and distance from the Great Recession likely explains at least some of the growth in beef cattle operations.

The most growth in operations, by herd size, was for those with: 100-199 cows (+17.4% or +6,346 operations); 50-99 cows (+13% or +9,227 operations); 200-499 cows (+12.7% or +2,624 operations).

Even the largest operations grew: 7.6% more operations (+323 operations) with 500-999 cows; 6.8% more (+77 operations) with herds of 1,000-2,499 cows; +17.9% (+30 operations) with 2,500 or more cows.

At the opposite end of the spectrum, the only categories of decline were for herds of 1-9 beef cows (-6.2% or -16,181 operations) and herds with 10-19 cows (-4.7% or -7,290 operations).

All of that is contrary to overall Census trends when considering all farms by total sales.

There were 77,000 farms with sales of $1 million or more, which was 2,000 fewer than in 2012, but 1,000 more farms with sales of $5 million or more.

There were 792,000 farms with sales of less than $2,500, which were 4,000 more (+0.5%) more than 2012.

In between were farms with sales of $2,500 to $999,999, which totaled 1.17 million. That was 69,000 fewer (-5.5%) than 2012. There were 39,000 fewer farms (-4.9%) with sales of $2,500 to $4,999 and 30,000 fewer farms (-6.9%) with sales of $50,000 to $999,999.

Farms with sales of $5 million or more accounted for fewer than 1% of all farms but 35% of all sales. On the other end of the scale, farms with sales of $50,000 or less accounted for 76% of the farms and 3% of the sales.

Incidentally, according to the latest Census, “The average age of all U.S. farm producers in 2017 was 57.5 years, up 1.2 years from 2012, continuing a long-term trend of aging in the U.S. producer population. Producers also tend to be experienced; they had been on their current farm an average of 21.3 years.”

On Beefshi & Chuck Knows Beef

North American Meat Institute North American Meat Institute

At a time where faux meat companies are paying millions of dollars to smear beef’s reputation with consumers, our industry needs to work double time to counteract the lies and remain at the center of consumers’ dinner plates.

On the outlook, beef remains quite popular with consumers, and domestic and export demand is robust. However, there is always more we can do as an industry to stay ahead of these emerging protein alternatives. And a good place to start is with new and unique beef product campaigns.

The Beef Checkoff is doing a tremendous job of just that. With our dollar investment, we are seeing some pretty incredible and innovative things in the works.

For starters, there’s Chuck Knows Beef. An intuitive app compatible with Alexa and Google Assistant, the program allows consumers to ask Chuck questions about recipes, cuts, nutrition, cooking tips and a whole lot more.

The virtual assistant brings the “knowledge of the rancher, the expertise of the chef and the humor of a dad” into the kitchen while enhancing the iconic “Beef. It’s What’s For Dinner” brand.  Chuck can offer tips for selecting beef cuts, and even text your grocery list for the beef recipe you want to prepare for dinner.

Give it a test run. Ask Chuck anything about beef and see if you can stump him. Click here to discover Chuck Knows Beef.

Then there’s Beefshi — a new take on traditional sushi that incorporates beef products and unique flavors that foodies will love.

In March, Beefshi was featured in New York City’s Times Square, thanks to the efforts of the North American Meat Institute (NAMI), a contractor to the Beef Checkoff.

In a 2019 campaign, NAMI has launched a series of “new fusion-food concept” Beefshi recipes that feature beef products such as bologna, summer sausage, corned beef and pastrami.

The Time’s Square promotion included the tag line, “Your Sushi is Getting Beef Up!” and featured stunning photographs of Beefshi with the link to the beefshi.com website.

“Americans have always loved beef, and over the past few decades, their love of sushi has catapulted,” said Eric Mittenthal, vice president of public affairs at NAMI, in a press release. “In fact, sushi is one of the fastest-growing categories in supermarket deli departments.”

According to NAMI, “Last year during the retail-focused Annual Meat Conference, hundreds of retailers sampled three Beefshi recipes, and 55 completed a short survey that captured their reactions. Overall, 95% of those who tried the Beefshi creations liked them, while half of the retailers said they would make sense at the supermarket.”

NAMI worked with multiple state beef councils and a chef trained at the Culinary Institute of America to develop Beefshi recipes, which include savory delights such as the Double BLT Mega Roll, Potato Stick Crunch Maki, Taco Maki, Dansk Roll, Beefy Cali Roll, St. Paul Handrool, Inside-Out Wisconsin Maki, New York Deli Roll, Carolina Sushi, Sleeping Dog Sushi and the Reuben Roll, just to name a few.

These recipes were designed to introduce the concept to consumers and to inspire them, along with retailers and foodservice operators to create their own unique Beefshi rolls.
From Chuck Knows Beef to Beefshi, these are prime examples of ways the beef checkoff, and the well-known “Beef. It’s What’s For Dinner.” brand are reaching out to consumers in new and innovative ways.

The opinions of Amanda Radke are not necessarily those of beefmagazine.com or Farm Progress.

Cows of the Seedstock 100

It takes a good cow to make a good bull. And BEEF is proud to bring you a photo gallery of some of the best cows in the business.

Consider this photo gallery a tribute to the leading ladies of beef cattle genetics. This year’s Cows of the Seedstock 100 photo gallery features pictures of many of the top cows that seedstock producers rely upon to ensure the next generation of bulls is ready to go to work. You can check out the whole Seedstock 100 list here.

And also check out BEEF’s Seedstock Directory, a list of many top seedstock operations that, while they may not market enough bulls to make the Seedstock 100 list, offer outstanding genetics for cow-calf producers. Click here for the Seedstock Directory.

 

 

MORNING Midwest Digest, April 24, 2019

Henry Block, the founder of H&R Block, passed away yesterday.

The chief executive of NCBA plans to retire at the end of the year.

Harley-Davidson reported a large drop in quarterly profit, struggling from fall in demand and tariffs. 

Iowa Congressman Steve King told constituents he knows what Jesus went through.

Some schools are imposing stricter dress codes... on parents.


 

Photo: anouchka/Getty Images

Farm Progress America, April 24, 2019

Max Armstrong shares his take on social media reports on the 2019 planting reports. He’s seeing a rise in fieldwork, tillage, fertilizer application and more. He shares a recurring theme, which you also see at harvest, is the number of accidents that happen during the busy season. These collisions happen with big equipment moving on narrow rows.

Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Max Armstrong, veteran farm broadcaster and host of This Week in Agribusiness.

Photo: yingtanthawarak/iStock/Getty Images Plus

Seasoned ranchers share how they survived the 80s

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I spoke at a Women in Agriculture event a few weeks ago hosted by a regional bank. Before heading home after the presentation, I visited with some of the lenders who helped put on the annual gathering for the female farmers in the area.

We started talking about the agricultural economy, and I asked if they were turning away more loans than usual. The bankers said they weren’t necessarily turning away farmers, but they were certainly looking over the balance sheets with a much sharper eye this year.

One lender said, “In times like this, it really separates the good managers from the bad ones. If you were a sloppy manager in good times, this farm economy is going to put you out of business. If you’ve always been disciplined no matter the economic cycle, chances are you’re doing just fine right now.”

In our family’s business, we have regular finance meetings where my husband and I make sure we’re on the same page with the budget and the short- and long-term goals we are working toward. We make sure we’re both aware of any upcoming expenditures that need to be planned for, and we prioritize what we’ll say “yes” to and what we’ll have to turn down in order to stay on track.

Recently, that meant saying “no” to an extended family vacation this summer that was more expensive than our budget would allow. But that “no” meant we could say “yes” to updating equipment and flushing some cows for the upcoming breeding season.

Realizing we could always be better financial managers, I think it’s important to be a lifelong learner in this area. That’s why I always pay close attention when the experts in this field take the time to share their wisdom.

Recently, our local bank, First Dakota National Bank, hosted its fifth annual Beginning Farmer and Rancher Program. While Tyler and I haven’t gone through the course yet, David Kohl, Ph.D., a leader in agricultural finance and small business management, shared highlights from the event.

The program featured a “vintage panel” of seasoned and “hardened warriors of the 1980s” who shared insights about how they survived and thrived during such a devastating economic downturn for so many farming families.

Kohl shared some of the key take-home messages from the panelists. These tips are aimed at young producers, but they could benefit any rancher as they weather through the ups and downs of agricultural cycles:

1. Don’t act like the hired man at age 45.

Kohl writes, “Become knowledgeable of the financial statements including the balance sheet, income statement, and cash flow. Be involved in meetings with the banker and find out what they are comfortable with concerning debt levels and overall risk. Often young people will take a passive approach to the financial aspects of the business which can lead to financial issues when the management transition of the business occurs.”

2. Transition planning can’t be done with a handshake.

“Strategic planning that goes well usually has a facilitator with a neutral interest who guides the family through the transition process,” says Kohl. “The written plan provides a vision for the future direction of the business. The ‘elephants in the room’ usually involve hidden agendas, which can be helped by increasing communication. Listening and checking one's ego at the door is very crucial for a successful business transition.

3. Develop key financial benchmarks to measure performance.

“Enterprise analysis allows the individual to make investments in capital, human resources, and other areas that generated optimal returns,” he explains. “Enterprise analysis is very critical for a diversified operation with many streams of both farm and non-farm income. Cash flow monitoring was also critical to develop a sense of urgency so that the business was not taking on water and could plug financial leaks.”

4. Set aside time to advocate for agriculture.

Kohl recaps, “One of the most notable quotes from the panel was, ‘Be at the table, or you become the menu.’ With fewer farms and ranches today, and with time-compressed schedules, the panelists recommended setting aside time to be involved as an advocate for the agriculture industry on issues ranging from environmental protection and water use, to animal welfare.

“The non-government organizations (NGOs) are putting more pressure on the agriculture industry at an increasing rate. It is important that young farmers and ranchers share their story in an authentic way to an ever-increasing population that is removed from the farm and ranch by multiple generations.”

The panelists also shared some of the “train wrecks” that they’ve witnessed in their years of ranching, which you can read here.

There are a lot of things we must master in order to be successful in production agriculture. From transition planning to creating a business plan to adapting to ever-changing market demands to cash-flowing the business and lifestyle expenditures, strong mentors and a qualified team of experts on your side can help you and your family stay on track and move the business forward even in the most difficult of scenarios.

The opinions of Amanda Radke are not necessarily those of beefmagazine.com or Farm Progress.