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Acting with certainty in uncertain times in the cattle business

Washington DC

The cattle market and the political environment today have a lot in common—nobody seems to know what is happening or what the outcome will be, but they do know that it is a totally different environment than we are used to dealing with.  

On the political front, the experts want to call it a shift to populism. I struggle with that definition a little bit; I would narrow it down to the key components of populist messages and just call it an environment of fear and anger. Washington D.C. never has had a long-term perspective. The next election cycle is about as long term as they get.

That seems like an eternity away now. Neither the administration or Congress seem to have a time horizon beyond the issue of the day, and those are not even positions as much as they are political decisions in a game designed to score some sort of victory. But even victory is scored differently. It isn’t about accomplishing a political means, but simply winning the public opinion poll at the end of that given day.

The issues that are important to agriculture are simply not on the agenda. Agriculture didn’t move the needle in the last election and even on issues like trade, where we should play a big role, our voice is not being heard.

The one thing you can say with certainty about the Beltway right now is that uncertainty reigns and the focus is already on the 2018 elections. Both sides of the aisle are petrified about what that means. Both parties in Congress want to run against Trump, but that may be politically unfeasible for the Republicans and potentially disastrous for the Democrats.

Neither party can afford to ignore their populist segments, but neither party knows how to deal with the Trump and Bernie movements either. As a result, both parties appear more out of touch and incompetent than ever before. The Republican leadership seems to be the most in disarray simply because they are actually leading and somehow have managed to lose every major issue to this point from health care to the budget.

Trump’s political missteps and war with the media have been devastating to advancing his agenda, but the political ineptitude of the first 100 days perhaps was not unexpected with the lack of political experience in the inner circle. I’m still betting that they learn the game and truly start shaking things up. If they don’t right the ship quickly, though, it will be a squandered opportunity.

The Republican leadership? They, too, seem unprepared to lead and that is far less excusable. If they don’t get their act together, they will pay dearly in 2018.

The Democrats, of course, have had the easy course of opposing everything and holding no power, yet scoring some wins on big issues. While it may seem like wins for the Democrats, whether or not that translates to electoral gains is another question. The disconnect, and discontent, among voters is growing and the beef industry is going to have to find a path forward in this precarious environment.

Then there is the cattle market. The experts are struggling to explain why the market has done what it has done, let alone predict what is to come. From a cattleman’s perspective, the result seems to be checking the board once or twice a day and focus on the management side of things because that is what we can affect.  

The political environment and the cattle market are more unpredictable than they have ever been, and while their impact on our bottom line is growing, there is more uncertainty. As the old saying goes, the trend is your friend, and the overall trend lines are moving in the right direction, at least for now. 

Mother’s Day is every day in the cattle business

Ranch Scenes

In the cattle business, sire lines always get a lot of press, but in reality, it is the momma cow that is the primary focus for cattlemen. After all, the cowherd is the factory, our legacy and is the distinguishing asset for most cow-calf operations.

For ranching families, the story is similar. It is mom who usually holds the place together and makes our day-to-day lives special.

Representing the male viewpoint, I think the whole “mom thing” is difficult for us to wrap our minds around. I always feel a combination of guilt and awe at the willing self-sacrifice of moms. It just seems like moms contribute more to a family than anyone else.

In order to justify the inequality of this dynamic within my own family, I sometimes chalk it up to God’s plan and the power of the mothering instinct to explain how much moms end up contributing to families on a daily basis.

At times, from a guy’s perspective, the contribution of moms is humbling. Moms don’t seem to need sleep or to be asked twice when someone in their family is in need. For most of us, just saying the word “mom” brings to mind a type of love that sustains us while defying understanding.

As a guy, a mom’s love just creates awe and appreciation. Of course, it is difficult to express the appreciation for all they do, in large part because a mom’s love is so pervasive and such a strong influence in our daily lives that we almost take it for granted. 

So, we find ourselves doing an inadequate job of saying thanks 364 days out of the year. Then, on Mother’s Day, we are supposed to somehow come up with something that lets us express what we all feel and should have done throughout the year. Father’s Day seems about right from a timing standpoint, but a month isn’t long enough to tell a mom thanks for all she does. 

It isn’t that I’m not a romantic, as much as I’m uncreative. I’ll buy lunch after church, and I’ll get some flowers or chocolates and I’ll get a card—inadequate, of course, but it is the thought that counts, isn’t it?

Thankfully, moms really don’t want even that much. I just hope they know that when we say they are the greatest mom ever, and that our kids, our family and our lives are made so much better from their love, that our appreciation is an understatement.

There is something poetic about that, I think. We can’t adequately express our love of moms, so we embrace the eloquence of simplicity, hoping a couple of heart-felt words and token gifts are enough. 

But just in case, I think I will buy that zero-turn mower and put a bow on it. Since we need it, she might not make me take it back. Diamonds are forever, but a mower gets the grass cut. Who says I’m not a romantic?

Happy Mother’s Day to all the moms!  You really are the best!

Meat Market Update | Choice Box Beef rally continues

The tremendous Choice Box Beef cutout rally continues and has risen well over last year. The Choice middle meats continue to push the rally higher and the daily Choice Rib primal had jumped 45 in only six working days which widened the Choice-Select spread $5 higher to $19.30 on Friday. However the total weekly loads of Box Beef sales has started to drop at a time of the year when it normally goes higher.

MIDDAY-MidwestDigest-05-11-17

After yesterday there was one Obama rule that Congress didn't turn around. Senate fell one vote short of repealing rule limiting venting of methane on public lands. President Trump have been able to erase 13 Obama era regulations of which four were related to natural resources.

Some analysts say national corn yield will be coming down with last planting. But ending stocks are still large.

In Liberty, Mo., today holding funeral service for Judy Herbster. Died at family farm near Falls City, Nebraska. Was president and CEO of Conklin Company. She was 62.

Open mic with Ag Sec. Sonny Perdue

National Hog Farmer, Cheryl Day David Struthers, pork producer talks with Sec. Perdue about Foreign Animal Disease

America’s farmers and ranchers waited the majority of President Trump’s first 100 days for Agriculture Secretary Sonny Perdue to be officially confirmed.  So, two weeks on the job the questions along with the farmers greeted him at Crouser family farm near Nevada, Iowa.

David Struthers, Iowa pork producer:  You know as veterinarian what a foreign animal disease could do to the United States. If we were to get a disease something such as foot and mouth, it would not just hurt agriculture but the whole economy of the United States.  I would encourage you to look at getting the vaccines we need and the capability to get those vaccines distributed.

Perdue:  Just the fear of that (FMD) can send shockwaves through the U.S. economy. We have seen an example of that in 2015 just with Avian Influenza. When I leave here, I am heading up the road to Ames to Animal and Plant Health Inspection Service facility- world class lab. I want to hear from those professionals, scientists and biologists on how we can be more prepared for any kind of threat. We have to understand that food-borne terrorism is possible and we have to be prepared.  

National Hog Farmer, Cheryl Day

Austin Doty, Nevada FFA Officer:  Do you plan on advancing renewable fuels technology?

Perdue:  Do you know who I work for?  A fellow named Donald J. Trump. Did you hear what he said during the campaign? Renewable energy, ethanol is here to stay. We are going to look for new technology to be even more efficient. I look forward to giving the President better ideas.  We are not going to mess with renewable fuel standards.

Andrea Bachman, Export- Import Bank of U.S.: How can we be more competitive overseas?

Perdue:  The resources and funding are important in financing agriculture commodities, but there are barriers.  We do not have as free and fair economy system around the world as we do here.  We have to negotiate fairness.

America’s farmers are not afraid of competition.  We do not want barriers.  We want to open those up because we are not afraid to compete.  It is mostly about breaking down the tariffs. It has to be balanced.  NAFTA has been great for agriculture but maybe not as great for manufacturing. We have to balance that out so American economy can thrive across the spectrum.

NHF:  What is next for GIPSA?

Perdue:  We extended the Grain Inspection, Packers & Stockyards Administration comment period, and I am trying to get up to speed on that issue.  No one likes to be discriminated against.  We have to very careful not to pick winners and losers in the market. We want our food supply chain to work together in healthy, commercial arrangement.  I don’t like messing with commerce in a way that disrupts that supply chain.  So, I cannot tell where we are going to come down on that, but GIPSA is important in our poultry, pork and beef.

As you can imagine there are many different views in those areas, we are going to consider it very carefully.  I told you we (USDA) are fact-based, data-driven decision makers. We are going to listen to everyone and hopefully come up with the best decision for all involved.

Media:  What is the goal for filling your remaining USDA staff positions?

Perdue:  Overall, the goal of a good leader is to get diversity across the board. Geographic, industry-wide, gender and racial diversity are important. I want USDA to look like America.  I want to be the best and more effective managed agency, and that starts with good people.  We are searching out for the cream of the crop across the United States for the right people.

 

MORNING-MidwestDigest-05-11-17

Fewer unemployed Americans have given up on their job search. About 1/3 have thrown in the towel in looking for job. In Illinois, 44% of people who are unemployed have given up.

Third time Sonny Perdue come to heartland of America is today. First ag secretary from South in 20 years. Making USDA reorganization announcement today in Cincinnati.

US Transportation Secretary will be in North Dakota in few days. 2017 Drone Focus Conference will be her destination.

Do you see a lot of historical markers as you travel around your state? There are 2,499 in Kentucky.

 

Farm Progress America, May 11, 2017

Kansas State University professor Mike Apley offers frank conclusions about the use of antibiotics in livestock production. Max Armstrong shares his perspective on the use of these tools, noting that veterinary students should think be cautious about using those products to preserve these valuable tools.

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.

Secretary of Agriculture announces USDA reorganization efforts

Secretary of Agriculture
U.S. Secretary of Agriculture Sonny Perdue has announced a reorginazation plan for USDA

U.S. Secretary of Agriculture Sonny Perdue today announced the creation of an undersecretary for trade and foreign agricultural affairs in the U.S. Department of Agriculture (USDA), recognizing the ever-increasing importance of international trade to American agriculture. 

As part of a reorganization, Perdue also announced that a newly-named Farm Production and Conservation mission area will have a customer focus and meet USDA constituents in the field. Finally, Perdue announced that the department’s Rural Development agencies would be elevated to report directly to the secretary of agriculture in recognition of the need to help promote rural prosperity.

Perdue issued a report to announce the changes, Congressional direction in the 2014 Farm Bill , to create the new undersecretary for trade, and also serves as a down payment on President Trump’s request of his cabinet to deliver plans to improve the accountability and customer service provided by departments.

“Food is a noble thing to trade,” Perdue said. “This nation has a great story to tell and we've got producers here that produce more than we can consume.  Our people in American agriculture have shown they can grow it, and we’re here to sell it in markets all around the world.”

Undersecretary for Trade and Foreign Agricultural Affairs

The change recognizes the importance of agriculture to America’s economy. U.S. agricultural and food exports account for 20 percent of the value of production, and every dollar of these exports creates another $1.27 in business activity.  Additionally, every $1 billion in U.S. agricultural exports supports approximately 8,000 American jobs across the entire American economy.  As the global marketplace becomes even more competitive every day, the United States must position itself in the best way possible to retain its standing as a world leader.

“Our plan to establish an undersecretary for trade fits right in line with my goal to be American agriculture’s unapologetic advocate and chief salesman around the world.  By working side by side with our U.S. Trade Representative and Secretary of Commerce Wilbur Ross, the USDA undersecretary for trade will ensure that American producers are well equipped to sell their products and feed the world,” Perdue said.

USDA’s reorganization seeks to place agencies in more logical order.  Under the existing structure, the Foreign Agricultural Service (FAS), which deals with overseas markets, and the Farm Service Agency (FSA), which handles domestic issues, were housed under one mission area, along with the Risk Management Agency (RMA).  Now, FAS will operate under the new undersecretary for trade.

AG GROUPS RESPOND

Agriculture commodity organizations offered mostly positive support for the change.

“The National Corn Growers Association has long advocated for a dedicated position at USDA focused on increasing U.S. agricultural exports, and we pushed for this provision in the 2014 farm bill. We are pleased to see that post finally become a reality today,” said NCGA President Wesley Spurlock.

“Secretary Perdue’s announcement signals to farm country that the Trump Administration is listening to America’s farmers and ranchers. In this farm economy, trade is more important than ever to farmers’ incomes. Overseas markets represent 73 percent of the world’s purchasing power, 87 percent of economic growth, and 95 percent of the world’s customers. Now is the time for U.S. agriculture to fully capitalize on the long-term, increased global demand for our products around the world. Today’s announcement is a big step toward that goal.

David Schemm, president of the National Association of Wheat Growers (NAWG), said the reorganization recognizes the importance of trade to U.S. agriculture.

“NAWG applauds the USDA for emphasizing the importance of trade by creating a specific mission area devoted to the Department’s trade programs,” Schemm said. “This move highlights the significance that programs like the Market Access Program (MAP) and Foreign Market Development (FMD) program play in promoting wheat and other ag commodities all over the world. 

House Agriculture Committee Chairman K. Michael Conaway applauded the reorganization and singled out creation of the Undersecretary for Trade post as significant.
“I commend Secretary Perdue and the Administration for, after just two weeks in office, putting forward a thoughtful reorganization plan that seeks to ensure all the critical mission areas at USDA are operating efficiently and effectively,” Conaway said. “I look forward to the new Undersecretary for Trade playing an active role in gaining additional market access for our products, while working to ensure that our trading partners honor the commitments they have made.

“The committee will take a very close look at each of the proposed changes, and this will be one of many important topics we cover when the Secretary appears before the committee next week."

Perdue also noted other reorganization efforts.
 Undersecretary for Farm Production and Conservation

A new undersecretary will be selected for a newly-named Farm Production and Conservation mission area, which is to focus on domestic agricultural issues.  Locating FSA, RMA, and the Natural Resources Conservation Service under this domestically-oriented undersecretary will provide a simplified one-stop shop for USDA’s primary customers, the men and women farming, ranching, and foresting across America.

The undersecretary for natural resources and environment will retain supervision of the U.S. Forest Service. A reduction in USDA workforce is not part of the reorganization plan.

Elevating Rural Development

The USDA reorganization will elevate the Rural Development agencies to report directly to the secretary of agriculture to ensure that rural America always has a seat at the table.  Fighting poverty wherever it exists is a challenge facing the U.S., and the reality is that nearly 85 percent of America's persistently impoverished counties are in rural areas. 

Rural childhood poverty rates are at their highest point since 1986, affecting one in four rural children, with deep poverty among children being more prevalent in rural areas (12.2 percent) than in urban areas (9.2 percent).  The vitality of small towns across our nation is crucial to the future of the agricultural economy and USDA must always argue for the needs of rural America.

The National Sustainable Agriculture Coalition, NSAC, expressed dismay over what it terms a demotion of the Rural Development Mission Area.

“NSAC is deeply troubled by the proposal to eliminate the Rural Development Mission Area and to demote Rural Development to ‘office’ status,” read a statement released shortly after Perdue’s announcement.

“This demotion, taken together with the Administration’s recent attempt to wipe out rural business programs through the appropriations process, sends a clear signal that the President does not understand the critical nature of rural development to the American economy. NSAC is committed to working with our 118 member organizations, senators and representatives from across the country, and our allies in the rural and agricultural communities to reverse this misguided decision,” the statement continued.

USDA’s report detailing the reorganization was transmitted to Congress Thursday morning. You may click here to view the report on the USDA website.  USDA employees and members of the public may comment on the reorganization plan by visiting this page hosted by the White House.

 

Amazon lowers free shipping minimum back to $25

Amazon has lowered its free shipping minimum back down to $25, the latest policy change amid a free-shipping battle with Walmart. The change seems to have been made sometime last week, but it went unreported until today. BestBlackFriday alerted us to the change.

This is the second time this year that Amazon has lowered its free shipping minimum. In February, Amazon lowered the minimum from $49 to $35. Now that it’s down to $25, the minimum has returned to the place it sat at for more than a decade, before Amazon starting raising it back in 2013.

Amazon began bumping up the minimum on free shipping in part as a way to promote Prime, which covers all shipping costs regardless of how much a customer is buying. Prime seemed like a much better deal when the minimum was at $49, since it opened up the ability for subscribers to place much smaller orders.

Read more

How can USDA improve animal disease traceability?

livestock auction

One of my enduring memories from being on the front lines of the BSE debacle that started with the Cow that Stole Christmas and continued for many years after is sitting in a private meeting with Bob Hillman, who is now retired but was the Texas state veterinarian at the time. A cow in the state had been diagnosed with variant BSE and it fell on Hillman and the Texas Animal Health Commission (TAHC) staff to trace the cow back throughout her life and find and trace her calves and any progeny they might have had.

I had, and still have, tremendous respect for Hillman. He was a true professional, both as a veterinarian and an animal health official. Yet he was profoundly frustrated with his inability to do traceback on the Texas cow. As I recall, total traceback on the index cow and all her calves was never fully completed.

READ: Beef producers split on animal ID

For those of you who question my agenda regarding animal traceability, here it is: I was on the staff of the Texas Cattle Feeders Association at the time and my responsibilities included being the person who got to stand up in front of the TV cameras and field the slings and arrows, and occasional mortar attacks, launched by media types on a feeding frenzy. And rest assured, BSE was a flashpoint issue with the media at the time.

The thought of trying to explain to circling piranhas why the beef industry couldn’t trace the Texas cow or her calves was not pleasant to contemplate. Fortunately, at least for me, the traceback efforts took several years before the decision was reached that TAHC had followed every rabbit trail they could find and most led to dead ends. By then, BSE wasn’t a flashpoint issue.

But the problem remains. If the U.S. should have another major animal disease outbreak, can we find, quickly, all the animals of concern and stop an epidemic before it becomes an international trade issue?

I’m skeptical, even with the USDA animal disease traceability system that we now have.

Which brings me, finally, to the point of this blog. I sat in on a recent USDA listening session in Denver about the animal disease traceability (ADT) rule now in place in the U.S. Neil Hammerschmidt, who oversees ADT, stated during the meeting that USDA has no plans to include feeder cattle in the system at this time. The purpose of the meetings are to discover what needs to be improved in ADT as it now stands.

And make no mistake, the system needs to be improved.

Jim Santomaso, owner of Sterling Livestock Commission in Sterling, Colo., laid out many of the areas that need improvement. Livestock auctions, he said, are the low-hanging fruit in the system and that’s where much of the responsibility for adhering to ADT rules falls.

Livestock auctions, and their veterinarians, have to run all eligible cattle leaving the state back through a chute to either read tags the cattle may already have or tag the cattle, and then record the tags. Then the vet has to issue the Interstate Certificate of Veterinary Inspection, or ICVI. Since state regulations vary, that can become a time-consuming process to stay in compliance.

It also, Santomoso said, exposes both the cattle and the auction staff to more stress and more opportunities for injury.  “There has to be some marrying of things where it’s simpler,” he said. And it’s got to run at the speed of commerce, which doesn’t happen when there are trucks idling, waiting to load cattle, and everything leaving the state has to be run through the chute to be tagged and recorded.

Speed of commerce was an issue raised by many during the listening session. Other concerns included who pays for the process, what’s the value to individual producers, the ability to protect the information, general distrust of government programs and potential liability to producers.

Yet, consider this: One rancher told the group that he’s been on trade trips to other countries and has hosted foreign groups on his ranch. All the people he has talked with tell him they can’t believe the U.S. doesn’t have a nationwide disease traceability system.

ADT is not a marketing program. It’s an animal disease traceability program. But an animal disease outbreak is a marketing issue—just look back at BSE and how long it has taken us to regain full access to international markets.  What’s more, animal traceability is a consumer issue as well.

We need animal disease traceability that is robust, works at the speed of commerce and still provides us the necessary information to deal with a disease epidemic in a timely way.

We don’t have that.

USDA will hold additional listening sessions throughout the country. I encourage you to attend one and make your views known. If you can’t make one of the remaining sessions, you can visit with your state veterinarian’s office to express your thoughts, stop in your local FSA office or email USDA at [email protected].

I understand the varying opinions on individual animal identification. But ADT is absolutely necessary. Let’s do what we can to make it as useful for its intended purpose as possible.