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Articles from 2012 In September


Drought Snatches $100+ From Cow-Calf and Feedlot Returns

Drought Snatches $100+ From Cow-Calf and Feedlot Returns

“It is fair to say the drought of 2012 caused average returns for a cow-calf operation to decline by about $125/cow compared to the no-drought situation,” said analysts with the Livestock Marketing Information Center (LMIC) last week.

Early this year, record-high calf prices and expectations for a bin-busting corn crop had LMIC estimating 2012 cow-calf returns over cash costs and pasture rent at $180/cow, compared to $86/cow a year earlier. The most recent estimate is or a return of $57/cow.

LMIC analysts add, “Of course, producers in the most drought-stricken regions had even lower margins.”

Estimated feedlot returns are substantially worse.

Assuming a cattle feeder marketed steers every month, LMIC calculates the annual loss to be $150/steer, more than the previous record estimated loss of $126/head in 2008; and almost double the estimated loss of $88/head in 2011. To estimate returns, LMIC assumes a 750-lb. steer that is fed to finish. Costs are basis a commercial yard in the Southern Plains. Calculated returns include neither risk management nor price premiums.

Watch Corn & Added Near-Term Beef Tonnage

Watch Corn & Added Near-Term Beef Tonnage

Live Cattle futures will likely see some follow-through selling, at least through the front end of the week, as packers seek to extend the leverage they gained this past week.

Along with heavier carcass weights, John D. Anderson, the American Farm Bureau Federation's deputy chief economist, pointed out in this week’s In the Cattle Markets newsletter that bullish placements in the previous week’s monthly Cattle on Feed (COF) report were muted by bearish news on marketings.

“August marketings were considerably lower than expected, below even the most pessimistic pre-report forecasts, Anderson explains. “Marketings were down 4.5% from a year ago. Despite soaring feed costs, marketings in August did not look terribly aggressive. This comports with data in last week's Livestock Slaughter report, which showed an 18-lb. increase in steer dressed weights for this August compared with a year ago. Despite the slower pace of marketings, the total on-feed number was about in line with expectations: down just a touch year-over-year. On balance then, the marketing figure may keep some pressure on front-month futures, but the overall story coming out of the COF is still one of further tightening of cattle and beef supplies.”

Feeder Cattle could see an extension to the near limit-down losses of Friday, which were driven by limit-up and near limit-up moves in the corn market. USDA’s quarterly Grain Stocks report released Friday fueled the buying spree. According to the report, old-crop corn stocks are 12% less than a year earlier, a stouter reduction than the trade anticipated.

But supply fundamentals should limit pressure on the calf market.

In his market comments following the Cattle on Feed report, Derrell Peel, Oklahoma State University Extension livestock marketing specialist, pointed out that feedlots have been able to maintain high inventories, relative to the cow herd, largely due to imports, especially from Mexico. Those imports should recede with improving forage conditions south of the border.

“…Feedlots have not placed the large numbers of lightweight cattle that will stay on feed for many months like they did last year,” Peel says. “While lightweight placements will increase seasonally the next couple of months, the weight distribution in feedlots suggests that feedlot inventories will pull below year-earlier levels and stay below for many months. Additionally, feeder cattle imports will drop, if not immediately, certainly in the next few months, contributing to the inability of feedlots to maintain feedlot inventories. Finally, in the absence of drought in 2013, increased heifer retention combined with a still smaller calf crop will further reduce feeder supplies. The short supply of feeder cattle, masked by the impacts of two years of drought, is finally catching up with us.”

Calf-Feeder Prices Take A Breather

Calf-Feeder Prices Take A Breather

It would be easy to blame the bearishness of this past week’s outside and futures markets for calf prices that were weak to $4 lower. But analysts with the Agricultural Marketing Service (AMS) suggest that the wider temperature swings and seasonally increasing calf health challenges were the primary drivers.

“Typical hot days and cool nights are taking their toll on newly purchased un-weaned calves and sick pens are starting to swell,” AMS analysts say. “Backgrounders want to take a break before taking on additional shipments, and many who farm their own wheat ground need some tractor time to sow this fall’s pasture.”

Feeder cattle ended the week unevenly steady after starting out on a higher note before dipping lower mid-week when Live Cattle futures broke.

According to the AMS folks, “Tuesday’s sharply lower futures market was the catalyst for lower cash feeders, as investment funds were suddenly pulled from Chicago’s Live Cattle pit. Yearling buyers immediately lowered their bids in an effort to keep their purchases within earshot of a fully hedged position.”

Outside markets moved sharply lower Tuesday, fueled by new concerns over the European Union financial crisis. The Dow Jones Industrial Average dropped 101 points that day. Choppy trade through the remainder of the week left the Dow Jones 140 points lower week-to-week. The broader S&P 500 was 20 points lower.

Struggles in the wholesale beef market added pressure. Choice boxed-beef cutout values closed the week $4.36/cwt. lower. Select boxed-beef cutout values were down $6.01.

“...the fall price peak (fed cattle) usually comes a little later, and it is doubtful there will be much of a resurgence later this fall,” said Andrew P. Griffith, a University of Tennessee livestock economist, in his weekly market comments Friday. “Low marketings in August bode well for increased marketings in the near term, which would likely continue downward pressure on prices. Cattle feeders have been producing and marketing heavier fed cattle due to high feed costs, thus placing more meat on the market relative to the number of head slaughtered. Weekly average steer carcass weights are 16 lbs. heavier than a year ago and 13 lbs. heavier than the five-year average.”

Light sales of cash fed cattle were mostly $3 lower than the previous week at $122-$123; $3-$4 lower in the beef at $190-$191.

“Northern Plains markets resisted much of the market pressure on both calves and yearlings this week as temperatures have been milder and farmer-feeders are wrapping up this year’s disappointing harvest,” say AMS analysts. “However, supplemental feed is more plentiful in the Midwest and cattle growers are anxious to acquire their fall purchases as most believe offerings will much tighter this fall than normal.” 

Added snugness in supplies could come from farmers who normally aren’t in the cattle business. Various reports from the Corn Belt reflect on the number of fields where stalks are being baled and speculate some of those folks figure they’ll add value to it through stocker gains.

CHB LLC Experiences Record Growth In 2012

Fiscal year 2012 was excellent for Certified Hereford Beef (CHB) LLC, despite a challenging economy. CHB LLC  posted a record year in volume at 47 million lb. sold – a 17.5% increase, and 2 million lb. higher than the previous record of 45 million lb.

This translates to CHB® influencing the marketing of more than 350,000 head of cattle.

Foodservice was the big winner with 27% growth and a total of 14 million lb. sold. Retail increased by 14% for a total of 33 million lb. sold.

2012 proved to be a very successful year in both growth and exposure for the brand, says Craig Huffhines, American Hereford Association (AHA) executive vice president. CHB LLC is a subsidiary of the AHA with its fiscal year ending Aug. 31.

“The CHB brand continues to increase in recognition with the consumer,” Huffhines says. “This translates to increased benefits to CHB retailers and distributors who feature the CHB name and logo.”

One of the greatest areas of growth occurred with The Fresh Market, a specialty grocery retailer, currently with 124 locations in 24 states.

“The Fresh Markets continues to buoy sales of CHB,” Huffhines says.

In addition, retail growth of CHB occurred among many independent retailers in the west Texas, New Mexico and Oklahoma markets, which are supplied by Affiliated Foods Inc., Amarillo, Texas.

In addition, 244,624 head of cattle were certified through the program this fiscal year.

Currently CHB is offered in 253 retail supermarkets in 37 states, as well as 37 foodservice distribution centers serving restaurants in 25 states. Since the inception of CHB, 4.2 million head of cattle have been identified through licensed packing plants as meeting the live animal specifications to carry the CHB name.

Certified Hereford Beef (CHB) LLC is a wholly owned subsidiary of the American Hereford Association, which is a not-for-profit, producer-owned organization dedicated to improving the Hereford breed in economic efficiency and the production of tender, flavorful beef to meet the growing consumer demand for a quality beef eating experience. For more on CHB LLC visit Herefordbeef.net.

Gardiner Angus Ranch 8th Annual Fall Bull Sale

The bovine genomic map was first created in 2004. In the eight years since the discovery, scientists in our industry and the American Angus Association have developed tools and evaluation measures to incorporate the technology into a common language for producers. Gardiner Angus Ranch has embraced the technology as one more opportunity to add predictability and profitability to GAR Angus seedstock and GAR-influenced beef cattle. The genetic information for the 2012 fall sale offering, bulls and commercial females, provides even more reliability for beef producers regardless of end point.

The two top selling bulls were evaluated with the Pfizer HD50K genomic test. Lots 1 and 9 each sold for $16,000. Jerry Bornemann, Mount Vernon, MO, purchased Lot 1, GAR/SJH 5050 of 6108 1063, a 5050 son out of an outstanding Rito 1I1 of 2536 Rito 6I6 daughter. 1063 is a near perfect example of the “pounds in the right package” product we strive to produce. His +7 CED, -.1 BW, +125 YW, +.86 Marb, +1.01 RE and $B value of $90.82 indicate his potential to sire explosive growth. ABS Global, DeForest, WI, had the winning bid to own Lot 9, GAR Daybreak M5421. This impressive Daybreak son found many friends through his video prior to the sale. His +13 CED, -.3 BW, +.77 Marb and top 1% of the breed for $Beef value makes this young herd sire extremely versatile.

Another Daybreak son, Lot 6, GAR Daybreak M5591 sold for $11,500 to Lindy Sheppard, Sylvania, GA. M5591 is a powerhouse with a +.6 BW EPD, +9 CED and a top 1% $Beef value of +86.40. Adding to the power package is his impressive 119 IMF Ratio and 113 REA Ratio. Albert Biggs, Seymour, TN, waited until midway through the auction to have the winning bid, at $11,000 on Lot 176, a 15 month old Summitcrest Complete son, GAR Complete N5211.

Gene Wagner, Concordia, MO, paid $10,000 to purchase Lot 8, GAR Daybreak M5671. Gene is a long-time repeat GAR commercial customer that retains ownership on his home raised calves. He recognizes the genetic potential of the Daybreak-Objective mating to add value to a carcass and profit to his bottom line. Denny Lillard, Louisville, TN and Lindy Sheppard each paid $10,000 to purchase Lots 29 and 236, respectively.

Lots 2, 3 and 15 each sold for $9,500 to Kenny Ogden, Lockwood, MO, Kevin Cantrelle, Raymond, CA and Dave Warne, Mankato, KS. All three bulls combined superior ultrasound data, EPDs and top 1% of the breed $Value rankings. Bryan and Carrol Switzer, Bucklin, MO, had marked Lot 25, GAR/SJH 454 of 8902 1017 in their catalog and paid $8,750 to own him.

Three bulls, Lots 5, 12 and 18 sold for $8,500 to Gene Wagner, Ryan Shotkoski, Maysville, GA, and Aileen Henderson, Chandler, OK, respectively.

LiveAuctions.TV Internet bidder, Charles Rosson, Louisa, VA, purchased Lot 13, GAR Daybreak M5721 for $8,000. Proceeds from the sale of this outstanding Daybreak son will be donated to the Henry C. Gardiner Scholarship and Lecture Series at Kansas State University.

Four bulls, Lots 7, 11, 16 and 36 sold for $7,500. Greg Williams, Morrilton, AR, Virgil Lawlis, Bastrop, TX, Joe Mayer, Guymon, OK and John Paul Kimzey, Ft. Worth, TX purchased these bulls, respectively.

Lot 23, GAR 454 New Day AB159, sold to Clarence Yanke, Sunray, TX for $7,000. Joe Mayer and John Paul Kimzey each added purchases of Lot 107 and 113 for $6,750.

Three bulls, Lots 4, 35 and 77 sold for $6,500 to Jack Edwards, Pittsburg, TX, Richie Longanecker, Lithia, FL and Blake Sherrod, Birmingham, AL. Richie Longanecker also added Lot 248 to his purchases at $6,250.

Nine bulls sold in the $6,000 range to eight buyers from five states. Twenty bulls sold for $5,500 to 15 buyers representing nine states. Four bulls, Lots 28, 134, 170 and 240, sold for $5,250 to Bill Mason, Gaffney, SC, Kevin Cantrelle, Raymond, CA, Dennis Winkler, Clinton, MO and Jim Benedict, Harwood, TX. Sixteen bulls sold for $5,000 to 13 buyers from 10 states.

One hundred forty bred commercial females sold in 10 head lots at the conclusion of the bull sale. The entire group was genomic tested with GeneMaxTM, the DNA tool designed to evaluate marbling and post-weaning gain, and combine these two scores into a single user friendly index. This is a tremendous tool to identify and add value to commercial herds using registered Angus sires. GeneMax results were provided on all heifers selling prior to the sale.

Slagle Montgomery, Claremore, OK, purchased commercial Lots 1 and 2, 20 head total, for $2,200 and $2,300 respectively. Stan Benkenstein, Lufkin, TX purchased the next two lots, 3 and 4, for $2,000 per head. Micheal Flowers, Princeton, MO, also a buyer in the bull sale, purchased commercial lots 5, 6 and 7 for $2,050 per head. Stan Benkenstein also added two more 10 head lots to his load, paying $2,000 per head for lots 8 and 9. Internet buyer, Jeff Graham, Dublin, GA, purchased the final 10 head group, Lot 14, for $1,700 per head.

Volume Bull Buyers: Joe Howard Williamson, Archer City, TX; Jim O’Brien, Mullen, NE; John McCarty, Gaviota, CA; Jon Means, Van Horn, TX; Kevin Cantrelle, Raymond, CA.

Volume Commercial Female Buyers: Stan Benkenstein, Lufkin, TX; Micheal Flowers, Princeton, MO.

The 2012 fall bulls and commercial females sold in record time to 121 buyers from 24 states.

Sale Total & Averages

Registered Bulls

Total Lots            Category                     Gross            Average

208              15-18 mo. Old Bulls            $983,750            $4,729

 62                Yearling bulls                      $253,250             $4,084

270                Bulls Total                          $1,237,000          $4,581

Bred Commercial Heifers

140            Bred Commercial Heifers            $274,000            $1,957

410            Total Lots                                   $1,511,000            $3,685

 

Forage Sorghum Is A Versatile, Economic Alternative To Corn Silage

Dairy and cattle farms across the country are dealing with extensive feed shortages and skyrocketing forage commodity prices due to abandoned fields, reduced acreages, and lower yields of corn and alfalfa.  The drought is underscoring the need for productive forage crops with lower water requirements and production costs.  Independent studies have shown forage sorghum saves farmers an average of $200 per acre in total production costs compared to corn silage.  The following chart details how the newest forage hybrids including the Brachytic Dwarf and Brown Midrib-6 characteristics stack up against corn silage.

Selected Production Costs for Irrigated & Dryland Forage Sorghum and Corn Silage

 

Total Production Costs $/Acre

Costs $/Ton

State

Sorghum1

Corn2

Sorghum

Corn

Texas High Plains (irr.)

424

569

17.66

27.04

California (irr.)

665

904

27.70

30.13

Pennsylvania

402

662

26.80

36.77

Average

497

712

24.05

31.31

1 – Brachytic Dwarf, BMR-6 Hybrid – 7 lbs seed/acre, 2 – Traited Corn Hybrid – 34,000 seed/acre

2009 Texas AgriLife Extension Service, University of California Cooperative Extension, Penn State Cooperative Extension Service

 “Forage sorghum with the Brachytic Dwarf and BMR-6 combination can produce high yield and feed value equal to corn with a variety of uses including hay, silage and grazing,” says Barry Lubbers, U.S. sales manager for Alta Seeds.  “Sorghum’s water use efficiency is one of its greatest strengths.  Sorghum is a hardy, drought tolerant plant that can perform with up to 40 percent less water than corn. According to research published by Texas AgriLife Extension in 2001, BMR-6 forage sorghums will yield 1.75 tons of biomass per one inch of water applied, while corn will produce less than one ton per inch of water applied. For irrigated producers, greater water-use efficiency means pumping less water, reducing the cost per acre of the forage produced.”

According to Mark Marsalis, an extension agronomy specialist at New Mexico State University, forage sorghum is often a viable alternative to corn silage, especially in areas where rainfall or irrigation is limited.  Marsalis released a recent paper* stating the case for more growers to consider planting forage sorghum.  “Input costs can be considerably less with forage sorghum than corn,” Marsalis says. “Silage growers can potentially save on fertilizer expenses when growing forage sorghum.  Excellent yields (up to 30 tons/acre with conventional types) have been obtained with 200 lb/ac or less or nitrogen, which is less than what is commonly put on corn for the same yield goal.”  Sorghum seed costs approximately $15 per acre compared to corn in the $100 per acre range, including traits.

“Silage producers must face the challenge of growing adequate feed supplies with considerably less inputs than in the past,” Marsalis says.  “The drought and heat tolerance of forage sorghum combined with the ability to resume growth after drought makes it an ideal candidate for silage systems in dry climates facing water supply concerns.” His research has shown that forage sorghum can produce comparable or better yields than corn when irrigation water becomes limiting or when growing conditions are less than ideal.

The Alta Seeds product line-up offers several forage options for farmers, ranchers and dairies seeking an alternative to corn silage.  “Whether it’s an irrigated or dryland farming operation, sorghum’s adaptive nature, high production efficiency, and versatility make it a valuable tool and the best choice for forage producers demanding a reliable crop that produces high quality feed,” says Lubbers.

*M.A. Marsalis, Extension Agronomist, New Mexico State University, Agricultural Science Center at Clovis, 2346 SR 288, Clovis, NM 88101; In: Proceedings, 2011 Western Alfalfa & Forage Conference, Las Vegas, NV, 11-13 December, 2011. UC Cooperative Extension, Plant Sciences Department, University of California, Davis, CA 95616. http://alfalfa.ucdavis.edu/+symposium/2011/files/talks/11WAS-10_Marsalis_SorghumSilage.pdf

About Alta Seeds

Alta Seeds is a brand of Advanta US, an operating unit of Advanta.  Advanta is an India-based global seed business that combines proprietary crop genetics and plant breeding capabilities with biotechnology to produce high quality seed products and solutions for its customers around the world.  Advanta is a member of the UPL group of companies. For more information visit: www.AltaSeeds.com

Choose The Appropriate Electric Fence Wire

Choose The Appropriate Electric Fence Wire

There are a number of different types of electric fence conductors available, and knowing which one to choose can be a bit tricky for those new to electric fencing. This overview of the different electric fencing conductor wires, and the benefits of each, will help you choose the most suitable type for your application.

Electric poly tape is highly visible, strong, can withstand all weather conditions, and won’t rust. It’s available in a variety of colors (white, brown, and green), making it easy to choose a color that best suits your conditions. White tape is more visible against green vegetation or brown landscape, whereas brown or green tape is more visible against a snow background.

Electric poly tape is available in three different widths – 12, 20 and 40mm – with each width being better suited for different applications. Because of its enhanced visibility and superior strength, the 40-mm tape is recommended for perimeter fences, but it’s not the best solution in areas that experience strong winds – in these situations, poly rope would make a better choice for perimeter fencing.

The 20 or 12-mm tape are better suited for use in windy areas as their thinner width provides less resistance to winds, and thus are less inclined to suffer wind damage. The width of the poly tape does affect the price, with wider tape costing more.

Electric poly wire fencing lacks the strength of steel wire fencing but it won't rust and is more visible to animals. It’s suitable for containing animals that don't move too quickly, such as sheep or cattle, rather than horses, which move much faster. As it’s available on a reel, it provides a convenient option for temporary fencing solutions, such as strip grazing, and also offers a cost-effective option for subdividing pastures.

Electric poly rope fencing is much thicker than poly wire and is reinforced with stainless steel woven throughout the rope, making it both robust and a highly effective conductor. Like poly tape, it’s available in a range of color options to make it more visible, and won't rust. Because of its superior strength and conductivity, poly rope is very effective for constructing perimeter fencing to contain horses. Because of its much thinner profile than 40-mm poly tape, it offers the best solution for perimeter fencing in windy conditions.

Electrified high-tensile wire fencing may be your best option if you want to construct permanent fences over a large area. However, as wire fences don’t give like a poly tape or poly rope fence, high-tensile wire fencing isn’t suitable for fast-moving animals, such as horses, who could succumb to serious injury if they run into the wire at speed.

High-tensile wire is available in two options: galvanized steel and aluminum. Both are strong, hard-wearing, and low maintenance, and are a good choice for constructing perimeter fences to contain slow animals. Galvanized steel offers an economic solution that will effectively carry an electric charge long distances. Aluminum offers superior conducting capabilities – four times as much as galvanized steel, and generally comes with a lifetime warranty. However, it tends to be more expensive than steel wire.

Electric fencing offers a convenient and cost effective method of containing livestock. Choose the electric wire that best meets your requirements to ensure that you have the most effective conductor for your application to save yourself unnecessary expense later.

This content is provided by Fi-Shock, manufacturers of top-of-the-line electric fence systems since 1968 and recognized as a leader in the electrical fencing industry. Learn more at www.fishock.com.

Here Comes The Brazilian Corn

Here Comes The Brazilian Corn

The U.S. is the world’s greatest producer and exporter of corn. So it was big news this week when Reuters reported the U.S. purchase of 750,000 metric tons of corn from Brazil.

Purchased by North Carolina hog producers Prestage Farms and Murphy-Brown LLC, along with poultry producer Nash Johnson & Sons' Farms Inc., the imported corn is actually about 5% cheaper than U.S. product transported from the Midwest, Reuters reports. In fact, USDA is projecting record imports of corn into the U.S. this year – nearly 2 million metric tons. We’ve already seen elevated levels of Canadian wheat coming into the U.S., as livestock producers have moved to replace expensive corn in their rations.

This being an election year, no one believed that the renewable fuel standard (RFS) mandate would be reduced. But in its place has risen the question of creating a national grain reserve, similar to the national petroleum reserve, in which the government would release grain in drought years and purchase grains to support prices in times of need. With today’s budget constraints it’s hard to imagine this idea gaining much traction. And with corn prices at historically high price levels, and no end in sight, it’s hard to imagine when the government could initially fill a grain reserve without causing another price explosion.

It’s important to keep in mind that while this drought is being described as the worst in 50 years, the reduced corn crop is still one of the largest in history. But it’s also the smallest in the last six years, which has been a period of unprecedented corn production in the U.S. A truly small crop would be nothing short of devastating.

The livestock industry has responded to the increase in corn price by greatly reducing the amount of corn it feeds cattle, largely shifting to other grains and byproducts. These measures reduce the situation in the short term, but they don’t lower the risk associated with a true short crop in the future.

Lessons From The 2012 Political Campaign

Lessons From The 2012 Political Campaign

With 40 days to go until election day, both sides will tell you the outcome is uncertain. The presidential debates, the first of which is next Wednesday night, are seen as perhaps the last great chance for Mitt Romney to narrow the gap.

There’s been a lot of debate about the accuracy of the national polls, with pundits arguing that the 2008 turnout models being used aren’t valid for 2012 and thus overstate the Obama lead. That argument is likely true, and we saw evidence to that in the 2010 midterm elections and in statewide elections like the Scott Walker’s recall vote in Wisconsin. In both cases, the polls famously were wrong.

View results from BEEF's reader poll on the election outcome here.

While the polls may be wrong, they are still great reflections of trends. And it appears that the race in the key battleground states has moved decidedly in recent weeks in President Obama’s favor.

The Obama campaign has been both brilliant and focused up to this point. With the worst economic environment since the Great Depression, a skyrocketing deficit, widespread disillusionment about the direction of the country, and a foreign policy that has been an utter failure in shaping events in America’s best interest, it was thought that all an Obama challenger had to do to win was not to be Obama.

But the Obama campaign has succeeded in doing what the political pundits said could not be done. They have blamed their poor record on the previous president, while claiming they have a “new” plan that will make the future better.

All the pundits had predicted for months that the 2012 campaign would be the dirtiest ever, and it has been. Obama has raised more dollars than any candidate in history and those dollars largely have been used to create a negative image of Romney, the success of which has been phenomenal.

In contrast, the Romney campaign, despite knowing that hundreds of millions would be spent to define him in a negative light, seemed unprepared for the attacks aimed at depicting him as an uncaring rich guy only out to help the top 1%. The Occupy Wall Street movement is considered a joke, but Romney finds himself as being seen as among the villainized 1%.

Not only has the Romney campaign failed in making the election about Obama’s record, but also in articulating its vision for the future. Some fear that the Romney campaign’s lackluster performance has even begun to compromise the gains that were assumed in both the House and Senate.

But there’s still a lot of time to go and, truth be told, Romney has the ideal position, in that Obama does not and cannot merit high marks for his first term. If Romney comes across as more likable and different than the negative image created by the attack ads, if he can appear presidential, and if he is able to articulate and get his plan and vision out to the American people to the point where they believe he could change the direction of the country, the course of this election could change quickly. 

The Democrats see this election as a tipping point; a victory will enable them to strengthen their coalition and electoral formula for decades to come. Meanwhile, Republicans are panicked: if they can’t win this election, what election can they win? The fear is that they will be reduced to nothing more than the loyal opposition.

There’s been much discussion about the importance of this election. Of course, something similar is said every four years, but both sides truly believe this election is significant. The 2016 elections might be a race that either side can win, but unless something changes neither party will want to. Because if the tough decisions are not made in the next four years, those following will have no options and the decisions won’t be popular.

Entitlement and tax reform will be painful and politically difficult to tackle. We print our own money and the dollar is still the world’s currency, which allows more time than Spain or Greece. But we are like the homeowner who went from a fully amortized home loan, to a partially amortized loan, to an interest-only loan; not only is it obvious we won’t be able to make the balloon payment, but there is doubt whether we can even pay the interest.

So, over the next few weeks, we’ll blame the parties for overused generalities, and dogma designed to divide rather than unite. We’ll complain about the lack of substantive debate and discussion. We’ll bemoan billions of dollars spent on 60-second commercials and a political dialogue dominated by 30-second sound bites.

But in the end, it’s not the parties, the process, or even the media that should be blamed. No, it will be the voting public at fault, an electorate that didn’t demand more from their leaders when it was desperately needed.

HSUS Now Goes After The Pork Checkoff

HSUS Now Goes After The Pork Checkoff

One thing you have to give the Humane Society of the U.S. (HSUS) is that the organization is consistent. HSUS has made it clear – oppose us and you will pay a price.

That’s essentially what HSUS telegraphed when it provided the money and intellectual capital to allow the Organization for Competitive Markets (OCM) and Mike Callicrate to sue the national beef checkoff. HSUS made it clear the move was payback for the National Cattlemen’s Beef Association (NCBA) having thwarted the HSUS effort in Congress to pass poultry legislation in the 2012 session. Of course, NCBA wasn’t alone; the National Pork Producers Council (NPPC) was also instrumental in helping defeat the HSUS legislation.

So it came as no surprise this week when HSUS announced it is suing USDA over the payments that NPPC receives via the national pork checkoff. Admittedly, there was very little of the populist rhetoric that was employed with last month’s lawsuit against the national beef checkoff; there were no claims about protecting the interest of producers, for instance.

HSUS, however, was pretty open that its latest action in the courts is payback for opposing the poultry legislation. HSUS was able to find a single pork producer, as they did with Callicrate in the beef checkoff suit, to serve as a front man for the action.

HSUS’s lawsuit is over the intellectual property payments that the National Pork Board, the USDA-appointed body that oversees the national pork checkoff, makes to the NPPC for the rights to the slogan “Pork, The Other White Meat,” which NPPC owns. HSUS claims the payment is too high and is illegal, as it’s just a way to funnel checkoff dollars toward lobbying, which the Act and Order forbids. But the HSUS press release announcing the lawsuit made it clear that its legal action was mainly payback for NPPC’s support of sow gestation stalls, which HSUS opposes.

A Closer Look: McDonald’s Gestation Stall Policy Means Higher Costs

The “Other White Meat” campaign is one of the most successful advertising campaigns ever employed by a commodity product. Though the National Pork Board has moved to a new marketing slogan, consumers still identify and remember the tag line, which was replaced with “Pork. Be Inspired” a few years back. In fact, the “White Meat” campaign was so successful that it caused the U.S. beef industry conniptions because it seemed to denigrate red meat at the same time it pushed the acceptability of pork.

I suppose the bottom-line question is whether the agreement for NPPC’s intellectual property is fair or not? Personally, I find the value of phrases, naming rights and intellectual property a little incredulous. At the same time, however, I also acknowledge that the phrase “pink slime” was a game changer for lean finely textured beef. And, obviously, the success of numerous products underscores the effectiveness of the billions spent on marketing slogans.

It’s true that a total of $60 million over 20 years is a lot of money, but we see astronomical figures being paid for the naming rights of sports stadiums and it looks insignificant. Forbes magazine recently published an article estimating the trademark value for companies like Google, AT&T, Apple and GE, and the values ranged from $20-$35 billion dollars – yes, with a “B.”

HSUS is not foolish enough to try and challenge intellectual property right laws, while NPPC has every right to sell the rights to use the slogan it owns. But HSUS will try and make the case that the National Pork Board’s payment to NPPC is designed to circumvent the laws surrounding the checkoff. Much like OCM and Callicrate’s beef lawsuit, the action may not be as much about winning the lawsuit as forcing the opponent to defend it. The defense will likely involve millions of dollars that the pork industry thus won’t be able to spend on lobbying.

The big difference between the pork and beef checkoff lawsuits is that HSUS is actually a party to the pork lawsuit. They have abandoned the rhetoric that HSUS was somehow doing this to benefit producers. If there was ever any doubt, the second suit makes it clear that HSUS is committed to bringing about the demise of the checkoff programs, or at the least harming the entities that have opposed their attacks on the livestock industry. Any dollars siphoned away from these commodity groups in legal defense costs means those dollars aren’t available for use in fighting HSUS in the legislative arena. 

Industry Resource Page: What You Need To Know About Animal Activists

It appears that the beef and pork checkoffs are under a full assault by HSUS, and the entities that represent the largest number of producers will be forced to fight for the checkoffs or give up any role in the checkoff programs. If the activist efforts are successful, the effect is that mainstream producers will have to leave the governance and control of the checkoffs in the hands of a very small minority.

The U.S. pork industry is very concentrated, which means the vast majority of its checkoff assessments originate from a rather limited number of producers. The Pork Act & Order is mandatory, but if it were ever rescinded, the pork industry probably wouldn't find it hard to fund its promotion and research efforts via other means. Ironically, this would be a disaster for HSUS because the restrictions prohibiting lobbying under the current Act & Order would be removed.

The cattle industry, however, would find it much more difficult to fund demand-building activities, given the number of producers. But if HSUS is successful in eliminating any input by mainstream producers, it’s likely the beef industry might look at alternative funding resources as well. 

The logic for the checkoff programs is obvious, and the programs’ successes in building demand has been phenomenal. But it’s doubtful that the large producer groups will be able to continue to spend millions defending these programs from legal attacks from deep-pocketed groups like HSUS. We may see the end of the federally mandated checkoff programs as a result.