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November 17, 2006

Table of Contents
Leftists Trying To Buy Up U.S. Beef For PR Purposes
National ID Is Operating In Two Different Spheres
Nurture Your True Dreams
Random Thoughts On Cattle & The Corn Rally
Beef Exports Projected Higher
Russia Moves Closer To WTO Entry
New Mexico Southwest Beef Symposium Is Jan. 16-17
Study Says Biodiesel To Boost Economy By $24 Billion
110th Congress To See New Leadership Faces
House Passes Animal Terrorist Act
Mississippian Nominated For USDA Post
Work Still Remains For Lame-Duck Congressional Session
Protect Yourself Against Cattle Rustling
Register Now For 2007 Cattle Industry Convention
Trouble-Shooting Reproductive Failure
Another View On Ethanol Production


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Our Perspective
Leftists Trying To Buy Up U.S. Beef For PR Purposes
One of the Leftist opposition parties in South Korea has launched a campaign to buy the first shipment of U.S. beef and destroy it. It's part of a protest revolving around its claim that government measures are insufficient to ensure the public's safety from BSE.

The nine tons of U.S. beef has been in limbo since arriving in South Korea in late October. The Democratic Labor Party (DLP), claiming the beef could be tainted by BSE, is trying to raise about $107,000 to buy the beef.

Admittedly, it's a great public-relations stunt for the DLP, and a relatively inexpensive one. Purchase of a little more than $100,000 in beef could translate into millions in free publicity.

Of course, it can never be seen as a positive to have this kind of negative press about beef. But it is akin to what we see in this country when some radical activist group elects to grandstand an issue, only to end up playing to a yawning public turned off by its tactics.

One thing is for sure: there happens to be a lot of pent-up demand for beef in South Korea. On the bright side, every pound destroyed by such groups offers up the prospect of another pound we get to ship.
-- Troy Marshall


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National ID Is Operating In Two Different Spheres
Attend a national conference, talk with your university and Extension folks, or listen to leading feeders, packers, and our retail, restaurant and export customers. You get the impression national ID is a foregone conclusion.

Age and source verification is similar to pre-conditioning and vaccinating calves; it's simply something the market is demanding. And the government, after having to embrace the biosecurity threats this industry faces, will mandate it if the industry doesn't implement it.

However, there's a giant disconnect between cow-calf producers, as a whole, and our customers on this subject. The cow-calf side sees it as a government-driven program that poses grave threats and considers it far from a foregone conclusion. How there can be such a huge difference in perspective is a fair question.

I'd put the blame on a lack of leadership. USDA left it up to the industry, setting only set deadlines for implementation steps. While great in theory, it left a vacuum, with a predictable result -- very little momentum.

The McDonald's, Wal-Marts, and our foreign customers also have deferred on the issue -- stating what they want but offering no input on how to get there. The result is we've struggled to find a clear direction.

While the most common concerns from producers are over privacy and cost, there's also an inability to conceptualize the details of a complex but still theoretical and ambiguous program. And that isn't surprising.

There also are legitimate concerns the industry is moving toward adoption of an electronic ID system and defacto standard that may be far from ideal, perhaps even inferior to other technologies.

Some leadership is seriously needed. The difference between the two spheres is staggering and must be addressed sooner rather than later. We must bear in mind that the January 2008 and January 2009 implementation dates are looming larger, regardless of how anyone feels about using the information infrastructure that's being created.
-- Troy Marshall


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Nurture Your True Dreams
As children, we all entertain dreams. It might have been to be a professional football player, a world champion cowboy, or a gold medal skater. Many of those dreams fade with time and not much regret, because we never actually invested ourselves in them. In essence, they were really wishes, not dreams.

But at some point, the vision you have for your life becomes real -- who you want to be, how you want to change the world, and what it is you want to achieve.

Barry Dunn, who heads up the King Ranch Institute for Ranch Management at Texas A&M University-Kingsville, is a big proponent of applying the balanced-scorecard management approach to ranching. It's not something I'd have embraced when I emerged from grad school with aspirations of creating my own legacy in agriculture like those of my heroes.

But I find myself on the precipice of the magical 40-year-old milestone, and my perspective has changed. I'd hesitate to trade 1,000 of the best registered cows in the world for three happy and well-adjusted kids that love God and their dad. And I'd forego a major bank account for a happy marriage.

If ranching isn't your dream, then stop and pursue what is. If ranching is your dream, I'd recommend looking at the balanced scorecard approach to achieve it. It forces you to begin by articulating a shared vision, which enables you to build a balanced set of goals and strategies to help you achieve that vision. A lot of shattered dreams in this business could be avoided with the balanced scorecard approach.

Learn more by downloading "Using the Balanced Scorecard for Ranch Planning and Management: Setting Strategy and Measuring Performance" at: agbiopubs.sdstate.edu/articles/EC922.pdf.
-- Troy Marshall


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Random Thoughts On Cattle & The Corn Rally
There are a lot of facts surrounding ethanol that aren't facts at all. One, however, has appeared in several industry articles, so let's assume that it, if not accurate, at least has some basis in fact. That is, that at $1.80/gal. for ethanol, the ethanol industry can afford to pay $3/bu. for corn (providing the 50¢ subsidy stays in place). If that's the case, and you believe the projections for gas prices moving forward then, long term, it's hard to imagine corn not maintaining a $3/bu. price level.

On another note, the discussion about corn prices changing emphasis on growth or carcass weights is somewhat misleading. Yes, it may raise the cost of producing Yield Grade 4s, or make feeders far more cognizant of selling cattle when they begin to tip over that efficiency line. But as long as fed cattle are trading at prices above cost of gains, the incentive to add weight remains.

Feeders may market on a timelier basis if they perceive the market to be at risk as their incremental improvement for additional weight will be smaller, but the incentive to make cattle larger will remain. In the near term, this will likely even be more exaggerated; with cost of gains rising so dramatically, breakevens are exploding, encouraging feeding of cattle to heavier weights.

This may be mitigated somewhat by the fact placement weights have been lower. One of the market's age-old sayings is: "light in, light out; heavy in heavy out." This rule is likely to increase weights from a longer-term perspective because, with cost of gains in the feedyard soaring, there will be incentive to put gain on outside of feedyards, which likely will mean heavier placement weights.

Cattle feeders caught in this corn rally will pay the price as they work through these higher-priced feeder cattle. And they've already begun adjusting feeder-cattle prices to reflect higher gain costs.

But there's no escaping the fact the cow-calf segment most directly benefits or is hurt by changes in supply, demand and input costs. This corn situation is especially acute for the cow-calf industry, which faces lower prices, higher feed costs, and eventually higher pasture costs when feeders/stockers compete for grass resources in a shift from calf-feds to yearlings.

It amazes me that producers have taken a far greater hit due to corn prices driven by ethanol production, and most importantly by an artificial demand distorting 50¢/gal. government subsidy, than they experienced with the loss of their beef-export markets. Yet, when it comes down to it, there's very little outcry about a subsidy that's creating a false economic environment and creating havoc on the cattle industry.
-- Troy Marshall


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Foreign Trade
Beef Exports Projected Higher
U.S. beef exports continue to gain ground with Columbia and Peru lifting post-BSE bans on U.S. beef last week. Overall, U.S. international beef sales are expected to be up 36% next year, says Phil Seng, U.S. Meat Export Federation president and CEO.

There are obviously still major issues to resolve with some key trading partners, though. For instance, though it appears South Korea may be ready to back away from its zero-tolerance policy on bone fragments, there are still no specifics.

And, last week, Japanese importing procedures at Swift's Greeley, CO, plant were temporarily deferred after Japanese officials discovered a box of thymus gland among an 11-ton shipment of 760 boxes containing chilled beef and chilled tongue.

According to Swift & Company, "The box of thymus gland in question was not listed on the export certificate issued by the USDA. At this time, thymus gland is not on Swift's eligible product export list to Japan. Thymus gland is not a designated specified risk material and is eligible for import into Japan. The box in question was derived from cattle under 21 months of age and presents no risk to food safety."

Swift officials explain, "Swift intends to fully cooperate with U.S. and Japanese officials to expedite the resolution of this import deferral issue. Swift's three other beef facilities in the U.S. remain eligible to export products to Japan."

Import procedures for shipments from the Greeley beef facility will be temporarily deferred pending a final USDA investigation and subsequent implementation of corrective procedures. Japanese government officials intend to visit the Greeley facility to conduct a final confirmation of the corrective measure implementation. Import procedures for the Greeley facility aren't expected to resume until completion of the official visit.
-- Wes Ishmael, BEEF Stocker Trends


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Russia Moves Closer To WTO Entry
The U.S. and Russia reached a bilateral market access agreement concerning Russia's entry into the World Trade Organization (WTO). According to the U.S. Trade Representative, the agreement will continue the 2003 Bilateral Meat agreement, which covered beef, pork and poultry, through 2009. The tariff commitments will benefit food processors of wheat, corn, barley, apples, pears, grapes, raisins, almonds, walnuts, pistachio nuts, dairy, soybeans, soybean meal, soybean oil, pet food, pork, beef and poultry, once Russia joins the WTO. Russia imports about $1 billion in U.S. ag products.
-- P. Scott Shearer, Washington, D.C., correspondent


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Industry News
New Mexico Southwest Beef Symposium Is Jan. 16-17
The Southwest Beef Symposium, a joint effort between the New Mexico Cooperative Extension Service and Texas Cooperative Extension Service, is set for Jan. 16-17 at the Fifth Season Inn in Amarillo, TX.

Established to annually provide producers with timely info about current industry issues and practical management, the first day's program begins at 1 p.m. and is themed: "Critical success factors to the beef enterprise." It includes sessions on: "The beef enterprise: Aligning the vision," "Cow type and the Southwest environment," "Reproductive management strategies for profitability" and "Creating flexibility in your beef system."

The next day's morning program will focus on current topics, including: "Impact of ethanol production on grain, feed and cattle markets," "Ethanol feed byproducts and their uses in cattle production," "Trichomoniasis in the Southwest," "Practicality of pregnancy determination via blood test," and "Age and source verification." The afternoon program will focus on market trends and include: "Addressing consumer trends: The producer and retailer perspective," Opportunities and challenges in sourcing feeder cattle into verified programs" and "Trends in markets for non-fed beef." The meeting adjourns at 5 p.m.

To learn more, visit cahe.nmsu.edu/ces/swbeef.
-- Joe Roybal


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Study Says Biodiesel To Boost Economy By $24 Billion
A new study, "Contribution of the biodiesel industry to the economy of the U.S.," predicts biodiesel and its related industries of production and job creation will add $24 billion to the U.S. economy between 2006 and 2015. The study by the National Biodiesel Board predicts total production capacity in the U.S. will grow from 75 million gals. in 2005, to 650 million gals./year by 2015, creating 39,100 new jobs during that time.

Landlinemag.com reports soybeans continue to be the crop of choice to produce the oil that can be made into non-toxic biodiesel, but other vegetable oils, animal fats and recycled grease are also common. A blend of 20% biodiesel and 80% petroleum-based diesel runs efficiently in all trucks, the board says.

Meanwhile, the price of oil fell by more than $2/barrel Thursday, its lowest level in a year. The Associated Press cites falling OPEC output, a slowing U.S. economy, and an abundance of home-heating fuels going into the winter-heating season. Meanwhile, gasoline prices at the pump are averaging $2.23/gal., nationwide, 6¢ below year-ago levels.
-- Joe Roybal


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Government
110th Congress To See New Leadership Faces
With the change in control of the Congress, there will be a number of new leaders. In the U.S. Senate: Harry Reid (D-NV) will serve as Majority Leader and Dick Durbin (D-IL) will be Majority Whip. Mitch McConnell (R-KY) will serve as Minority Leader and Trent Lott (R-MS) as Minority Whip. Durbin serves on the Senate Ag Appropriations subcommittee, and McConnell is a member of the Senate Ag Committee.

In the House of Representatives, Nancy Pelosi (D-CA) will be the first female Speaker of the House. The new Majority Leader will be Steny Hoyer (D-MD), while James Clyburn (D-SC) will be the new Majority Whip. Speaker Dennis Hastert (R-IL) says he won't serve as a leader of the House Republicans. Republicans were electing their new leaders at press time.

On the House & Senate Ag Committees, Collin Peterson (D-MN) will be the new chairman of the House Ag Committee, with Bob Goodlatte (R-VA) serving as Ranking Member. There will be at least seven new members of the House Ag Committee. About 75% of the new committee members have never been through a farm bill debate.

Meanwhile in the U.S. Senate, Tom Harkin (D-IA) will serve as chairman of the Senate Ag Committee, while Saxby Chambliss (R-GA) will be the Ranking Member. The Democratic leadership has appointed Senators-elect Bob Casey (D-PA), Amy Klobachar (D-MN), and Sherrod Brown (D-OH) as new members of the committee. The Republican leadership will make their appointments next month.
-- P. Scott Shearer, Washington, D.C., correspondent


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House Passes Animal Terrorist Act
The House of Representatives passed the "Animal Enterprise Terrorism Act of 2006." The legislation increases penalties for criminal acts against animal enterprises (farms, meat processing companies, labs, animal shelters, pet stores, breeders or furriers). The measure revises criminal prohibitions against damaging or interfering with the operations of an animal enterprise to include "intentional damage or loss to any real or personal property and intentional threats of death or serious bodily injury against individuals." The legislation passed the Senate in September. President Bush is expected to sign the legislation.
-- P. Scott Shearer, Washington, D.C., correspondent


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Mississippian Nominated For USDA Post
Mark Keenum, chief of staff to Sen. Thad Cochran (R-MS), has been nominated to be USDA Under Secretary of Ag for Farm and Foreign Ag Services. Keenum , who has been involved in a number of previous farm bills, is a former Mississippi State University assistant professor of economics.
-- P. Scott Shearer, Washington, D.C., correspondent


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Work Still Remains For Lame-Duck Congressional Session
A number of issues need to be finished before the 109th Congress adjourns. The main items the House and Senate leadership hope to finish are appropriations bills, including ag, tax extenders and the Vietnam trade bill.
-- P. Scott Shearer, Washington, D.C., correspondent


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Tips for Profit
Protect Yourself Against Cattle Rustling
The recent spate of cattle rustling in some areas, which always increases with the price of cattle, underscores the value of making it harder for thieves to consider stealing from you.

At least one confessed cattle thief says things like brands, ear tags, and feeding away from the road make cattle less desirable targets. Interestingly he also said the presence of a sign stating the producer's affiliation with an organization that prosecutes crime is also a deterrent. In this case, he was referring specifically to signs posted by members of the Texas and Southwest Cattle Raisers Association (TSCRA), an organization well known for its Special Rangers and attention to livestock crime.

TSCRA offers the following theft-prevention tips:
  1. Display TSCRA member sign (or other affiliation) on gates and entrances; it is an excellent deterrent.
  2. Lock gates.
  3. Brand cattle and horses; make sure the brand is recorded with the county clerk (or state brand office).
  4. Put driver's license number on all saddles, tack and equipment.
  5. Video horses and tack. Keep complete and accurate descriptions on file. Establish an organized, easy-to-find, proof-of-ownership file to save valuable time in recovery process.
  6. Count cattle regularly.
  7. Vary the time of feeding. Don't establish a routine. Be cautious in giving out keys and combinations.
  8. Park trailers and equipment out of view from the roadway.
  9. Keep tack rooms and saddle compartments on trailers locked.
  10. Don't feed in pens.
  11. Participate in neighborhood Crime Watch programs.
  12. Don't build pens close to a roadway.
  13. Never leave keys in tractors or other equipment.
Look for more info, and listen to the comments of a cattle thief, at: www.texascattleraisers.org/theftProtectionTips.asp.
-- Wes Ishmael


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Register Now For 2007 Cattle Industry Convention
Early registration is now open for the 2007 Cattle Industry Annual Convention and Trade Show, Jan. 31-Feb. 3 in the Nashville, TN, at the Gaylord Opryland® Resort and Convention Center. Early registration is available through Jan. 5 by visiting www.beefusa.org/convregistration.aspx or call 303-694-0305 for a copy of the registration brochure.

The event features joint meetings of the National Cattlemen's Beef Association, the Cattlemen's Beef Board, the American National CattleWomen, the National Cattlemen's Foundation, and Cattle-Fax. It's the U.S. cattle industry's largest gathering, and its largest trade show.

The week's activities kick off on Jan. 31 with Cattlemen's College® -- the industry's most educational and comprehensive workshop. Producers can choose from 18 instructional sessions, including: navigating the changing business environment, the 2007 Farm Bill, estate and tax planning, maximizing the effectiveness of conservation programs, dealing with drought, branded beef marketing programs, and auction barn selling strategies.

Registration for Cattlemen's College® also includes admission to the Cattle-Fax Outlook Seminar on Feb. 1. Experts from Cattle-Fax will provide an in-depth look at factors that will impact the cattle market in 2007.

To view the entire lineup of events, visit: www.beefusa.org/convcattleindustryannualconventionandncbatradeshow.aspx
-- Joe Roybal


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Trouble-Shooting Reproductive Failure
With fall preg-checking season well underway, some herd owners are surely pleased with their results. Meanwhile, others are looking for bred females to purchase.

The goal shouldn't be to have 100% of your cows bred each year. Herds at or near 100% pregnant year after year generally represent one of two situations -- a very extended calving season or overfeeding. Neither option is cost-effective for overall herd profitability.

Financial analysis indicates a pregnancy percentage of 90-95% in 65 days is both achievable and likely most profitable. If your herd is below this level, some investigation by you and your herd-health veterinarian is needed.

When I investigate a reproductive problem, I break it into the following categories: For bull problems, it's Breeding Soundness Exam (BSE), overuse, or lack of libido. For cow problems, I look at nutrition, environment, disease and genetics.

Bull problems
When a large percentage of cows are open, my first thought is generally a bull problem. With a national annual average of about 10% of bulls failing their BSE, an annual BSE on every bull before turnout is a must. Nearly every year I've been in practice, I've seen a group of cows all open due to a sterile bull. It's an easy situation to figure out.

Another bull problem is simply overuse. My rule of thumb for Midwest herds is you need a month of bull age for every cow in a 65-day breeding season. If you have 100 cows in a group, you need "100 months of bull" to breed them.

This means three bulls at three years of age, or two bulls at four years of age, would be adequate bull power. We know some bulls can service more than 50 cows in a breeding season, but 50 cows to a bull is our upper limit.

We also know using bulls of greatly differing ages doesn't work well. Having a yearling bull in the pasture with a three- and four-year-old adds up to 100 months, but the yearling will likely get no cows bred due to dominance issues by the older bulls.

The final bull problem is lack of libido. These bulls generally get some cows bred but not enough. To diagnose this problem, place a group of open cows with the bull(s) in question. If the bull lies down in the shade when a cow is in heat, he's asking to leave the herd.

Cow problems
Nutrition tends to be the most common reason for a less-than-desirable pregnancy percentage; the most common nutritional problem is lack of Body Condition Score (BCS) before calving. This is primarily an energy deficiency.

The period between weaning and the third trimester of pregnancy is the most cost- effective time to improve BCS. A good BCS prior to calving is key to breeding back in a timely fashion.

If thin cows are over-represented in the open pen, you may already have the answer. If your younger cows are over-represented, it can be the same problem.

Mature cows that calve too thin (below BCS 5) are at higher risk of being open, compared to cows in good BCS. Young cows are also at increased risk of being open as they need additional energy for skeletal growth. If you have a cow both young and thin, she's at a severe disadvantage.

Post-calving cows need 45% more energy and 40% more protein than a pre-partum cow. Be sure not to shortchange cows at this critical time.

Mineral and vitamin deficiencies also can reduce pregnancy percentage. While phosphorus deficiency historically was listed as a cause of reproductive failure, it's now very rare as most all cows are adequately supplemented with phosphorus.

Other elements that can cause reproductive failure include deficiencies of selenium, vitamin E, cobalt, copper, iodine and manganese. Check with your nutritionist, Extension beef specialist or herd-health veterinarian for requirements in your area.

Environment
A cow herd out of synch with what's going on in the environment can pose problems. The biggest concern is an overly productive cow in an average or poorer environment. We don't want high-maintenance cows weighing 1,700 lbs. trying to get rebred while grazing infected fescue.

Heat stress can also affect reproduction. It can cause reduced embryo viability early in pregnancy, as well as reduced sperm quality and breeding activity by the bull.

Disease
When disease causes reproductive failure, other manifestations of the same disease are generally seen. Abortions, early embryonic death, calves born weak or dead, and calves that die soon after birth are common manifestations. Most disease factors don't simply cause an increase in the percentage of open cows. This is another area where you need to get your herd-health veterinarian involved early in the course of the problem.

Genetics
There are differences in the inherent fertility of different beef breeds. Research also indicates an increase in pregnancy rate in crossbred vs. purebred cows. If you can't attain the pregnancy rate you desire, there may be an underlying genetic component.

If your herd's fall pregnancy results look good, then congratulations. If it's less than desirable, work with your beef team to get to the bottom of the problem. This time next year, you can be reflecting on a job well done.

Editor's Note: For more on Breeding Soundness Exams of bulls, and body condition scoring of cows, visit www.beefcowcalf.com. Type either topic into the "Search for:" box on the opening page.
-- W. Mark Hilton, DVM, is a clinical associate professor of beef production medicine at Purdue University in West Lafayette, IN, and a regular contributor to BEEF magazine.


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Cow-Calf Weekly Mailbag
Another View On Ethanol Production
I think people who argue ethanol doesn't make sense because it uses nearly as much energy as it produces are missing the point. If one applies that logic to coal- or natural gas-fired electric plants, electric generation wouldn't make sense, either, as it uses several times more energy than is produced. Still, it clearly makes sense to convert a form of energy that isn't as useful (coal) into one that is (electricity).

The ethanol industry is doing the same. Diesel and gasoline make up only a very small portion of the energy used. Most of the energy used is from natural gas, coal, biomass, methane etc. For the most part, it's difficult to burn those fuels in your automobile.
-- Butch Shadbolt
Shadbolt Cattle Co.
Gordon, NE


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