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January 26, 2007

Table of Contents
Producer Survey Results Show Checkoff Changes Wanted
Light-Fingered Shoppers Most Prefer Steak
The Romance Isn't Gone But Its More Difficult To See
Call For Formation Of Biofuels Working Group
Groups Call For Priority On Competition Issues
Swift Is On The Auction Block
Korean Beef Ban Coming To A Head
Grass-Fed Beef Conference Is Feb. 28-March 2
Web Site To Connect Natural Producers To Buyers
Energy Takes Center Stage This Week
PETA Pet-Killing Pair Goes On Trial
Appeals Court Kills Texas Horse Slaughter
Colorado, Oklahoma Cattlemen Still Struggling
Hay Stocks Hit 18-Year Low
President Bush Calls For More Ethanol Production
2007 Gelbvieh Sire Summary Available
Looking For Cow-Calf Planning Calendars?
Storms & Corn Prices Costing Cow-Calf Producers
Massachusetts, Virginia Bills Look To Undercut NAIS
Texas Plans Four, Estate-Planning Seminars
Two Free Producer Programs Set For Wray, CO


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Breaking News
Producer Survey Results Show Checkoff Changes Wanted
Beef, dairy and veal producers nationwide overwhelming support the national beef checkoff, results of a USDA Beef Checkoff Survey released today show. Conducted by the Gallup Organization, the survey of 8,002 beef, dairy and veal producers nationwide found 72% of those surveyed either strongly approved or somewhat approved of the Beef Checkoff Program.

The survey was conducted from Oct. 4 through Nov. 21, with oversight by USDA, and was conducted as part of a settlement between the Cattlemen's Beef Board (CBB) and the Livestock Marketing Association (LMA). The settlement followed a May 2005 U.S. Supreme Court decision that ruled the Beef Promotion and Research Act constitutional.

The survey was funded by checkoff dollars. Representatives of the USDA, CBB, LMA and the Federation of State Beef Councils collaborated in developing the survey questions. Some highlights of the results include:
  • 66% of respondents strongly approve or somewhat approve of the CBB contracting directly "with any entity, including businesses, university researchers, advertising and marketing agencies, and other consultants." Less than 25% would disapprove of this move.

    Currently, the Beef Promotion and Research Act requires that CBB contract only with "established national nonprofit industry-governed organizations ... to implement programs of promotion, research, consumer information and industry information."

  • 82% strongly approve or somewhat approve of a periodic referendum on continuation of the Beef Checkoff Program.

  • Almost 92% strongly agree or somewhat agree that "if it were possible, all or at least some portion of beef checkoff dollars should be used to promote only U.S. born and raised beef." Currently, because importers pay into the program at $1/head on live animal imports and a $1/head equivalent on beef products, the program promotes beef in general. In total, importers account for a total of $8 million, or 10%, of total checkoff assessments collected.
USDA officials say such a modification would entail a change to the authorizing law.

To view all the results, go to www.ams.usda.gov/lsg/mpb/rp-beef.htm and click on: Beef Checkoff Program Survey Results - PDF file.
-- USDA news release


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Our Perspective
Light-Fingered Shoppers Most Prefer Steak
I don't know why but I never thought beef would be a major shoplifting item. After all, who would put a prime rib in their pants pocket and walk out of a store.

According to the Food Marketing Institute, however, meat was the most shoplifted item in America's grocery stores in 2005, ahead of analgesics, razor blades and baby formula. Historically, meat has been second to health and beauty items because pseudoephedrine, an ingredient in a lot of cough medicines, is a critical ingredient in home-cooked meth. Such medicines have been moved behind the counter, however, which allowed meat to move to the top of the list in most-shoplifted items.

Not surprisingly, top-end cuts like ribeyes and filet mignons are the most commonly lifted items. The study noted that the problem was particularly acute with premium beef brands like Certified Angus Beef.

As a result, we may soon see security tags on meat packages that would trip an alarm if someone tried to walk out the door with them. On the good side, this news indicates there's strong demand for our product; it also tells us our product is one of the priciest.
-- Troy Marshall


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The Romance Isn't Gone But Its More Difficult To See
For ranchers and cattle feeders battling the harsh winter across the Central Plains, it's been a month-long struggle against Mother Nature. And as is always the case, she's won more than her share of the battles.

I was talked to a neighbor who was lamenting higher hay and corn prices, the inability to use corn stalks that were paid for, the shrinking of feed stores, and the downtrend in the market, and he said, "It's pretty hard to see the romance of ranching at times like these."

I couldn't help but smile. After all, winter moisture always equates to spring grass.

I wanted to end our own little pity party, so I said the first thing that came to mind, and that was: "The romance is still there; it's just more difficult to see."

Heck, I can't think of anything sexier than my wife running to open a gate so I don't have to get down off that infernal tractor once again. The romance is always there; sometimes you just have to look a little harder for it. Here in Colorado, the temperature has risen above freezing, water is running and the romance of ranching is just around the corner.
-- Troy Marshall


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Industry Structure
Call For Formation Of Biofuels Working Group
The National Cattlemen's Beef Association (NCBA) and other producer and industry groups have asked USDA to form a panel to study the emerging biofuels economy and its implications for livestock producers and animal ag.

In a letter to USDA Secretary Mike Johanns, the groups said, "Public focus on ag issues continues to expand as new and exciting technologies place the ag sector in the driver's seat of America's energy future. However, with these changes and developments have come serious and significant concerns for the tens of thousands of farmers, farm families and all those involved in the $128-billion livestock, dairy, and poultry sectors."

The purpose of the working group is to "study the emerging bio-fuels economy and its full implications for these producers, the sector and the consumers they supply and serve," the groups say. Joining NCBA in the request are the National Pork Producers Council, American Meat Institute, National Chicken Council, National Milk Producers Federation, and National Turkey Federation.
-- P. Scott Shearer, Washington, D.C., correspondent


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Groups Call For Priority On Competition Issues
The National Farmers Union (NFU) and more than 200 organizations have written the leadership of the House and Senate Ag and Judiciary Committees urging them to make the issues of agricultural competition and market concentration a top priority in the 2007 farm bill. The groups support captive supply reform, a ban on packer-owned livestock, fairness standards for ag contracts, and mandatory country of origin labeling (COOL).

Some of the groups joining NFU are American Corn Growers Association, Center for Rural Affairs, Family Farm Defenders, Farm Aid, Humane Society of the U.S., National Catholic Rural Life Conference, National Farmers Organization, and R-CALF.
-- P. Scott Shearer, Washington, D.C., correspondent


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Swift Is On The Auction Block
Swift announced last week it had hired the investment bank J.P. Morgan to facilitate its sale or offer an initial public offering. Smithfield previously indicated it would be very interested in the beef plants, but Tyson and National Beef have expressed interest, as well.

Cynics would suggest that Tyson and National Beef merely want to make sure the plants bring fair market value. It would not be surprising, however, to see the Australian plants, the pork plants and beef plants sold separately.

Single packing plants could fit into certain processors' strategic plans extremely well. Thus, we could see the different meat plants go to different buyers.

Most analysts are anticipating that an initial public offering/equity drive is the least likely of the outcomes, but such a move may give Swift some leverage in pricing its assets. It is amazing to ponder, however, that IBP, National Beef and ConAgra/Swift could all be under new ownership in a relatively short period of time.
-- Troy Marshall


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Foreign Trade
Korean Beef Ban Coming To A Head
With reports this week from the U.S. Trade Representative's office that progress is being made on the U.S. and South Korea Free Trade Agreement, there was also news that discussions are expected to begin in the controversial areas of beef, pharmaceuticals, automobiles and the like. Many believe South Korea has kept the market closed for this very reason -- to gain leverage in the critical part of these negotiations.

It's also believed that the reopening of the beef market is a foregone conclusion and is considered to be a deal breaker if not met. The belief is South Korea will simply use beef to gain advantages in other areas. If this is the case, then progress still may be a ways off, but at least one can see the light at the end of the tunnel.

Fast-track authority for the President expires July 1. To meet the requirements, the President has to notify Congress by April 1 that an agreement had been reached. Thus, there's ample incentive for both sides to move quickly.

It can't be soon enough because this week South Korea announced that beef imports had increased 20% over 2005. Unfortunately, the increase has gone to our competitors.
-- Troy Marshall


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Beef Marketing
Grass-Fed Beef Conference Is Feb. 28-March 2
Producers and marketers from across the country will come together to discuss the latest developments in the grass-fed beef industry, Feb. 28 to March 2. Set for the Holiday Inn Harrisburg-Hershey in Grantville, PA, "The National Grass-fed Beef Conference: The Art and Science of Grass-fed Beef " will feature two speakers from Argentina to discuss Argentine beef production methods and more than 40 U.S. speakers on topics including forage systems, marketing, animal health and well-being, and human nutrition.

For more info or to register, call 814-865-8301 or visit www.conferences.cas.psu.edu.
-- Joe Roybal


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Web Site To Connect Natural Producers To Buyers
Ivy Natural Solutions (INS) has launched a new Web site aimed at connecting natural beef producers with branded beef managers.

A free cattle listing service, www.usnaturalbeef.com will enable branded beef managers to connect with natural beef producers who have cattle that fit their specifications, says Tom Nicholson, INS vice president for sales and marketing. INS will not be involved in the actual sales transaction.

"This listing service will allow producers to provide a brief description of their natural cattle and management program, when the cattle will be available for sale, and their contact information. Participating natural branded beef managers and feedlots will be able to contact the producers about purchasing their cattle," he says.

The service is offered at no charge. In addition to the listing service, the Web site also will be source of information and "Best Management Practices" for natural beef producers.

For more info, contact info@ivynaturalsolutions.com or call 866-553-5137.
-- INS news release


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Environment
Energy Takes Center Stage This Week
In his State of the Union address this week, President Bush called for the reduction of gasoline usage in the U.S. by 20% in the next 10 years. To accomplish this "20 In 10" program, Bush is asking for an increase in the supply of renewable and alternative fuels by setting a Mandatory Fuels Standard of 35 billion gals. in 2017.

He's also asking to reform and modernize the Corporate Average Fuel Economy (CAFE) Standards for cars and extension of the current light truck rule. According to the administration, this would reduce projected annual gasoline use by up to 8.5 billion gals. in 2017.

In addition, USDA Secretary Mike Johanns announced that USDA plans to propose $1.6 billion in new funding for renewable energy, with a focus on cellulosic energy research and production as part of USDA's 2007 farm bill proposal.

Johanns said, "It remains a priority across USDA to support the development of biofuels. We will continue to build on current programs and turn the corner on renewable energy."
-- P. Scott Shearer, Washington, D.C., correspondent


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Activist News
PETA Pet-Killing Pair Goes On Trial
Two employees of People for the Ethical Treatment of Animals (PETA) went on trial this week for killing animals. Adria J. Hinkle and Andrew B. Cook, employees in PETA's Norfolk, VA, headquarters office, are charged with 21 counts each of animal cruelty, a felony, and some assorted misdemeanor crimes of littering and dumping.

The duo is accused of discarding garbage bags of euthanized cats and dogs into a grocery store dumpster outside Raleigh, NC. PETA contends the pair provided humane deaths to unwanted animals, while local officials say the PETA workers took the animals promising to find them homes but secretly killed them.

In its defense, PETA says it actually euthanizes thousands of animals each year, claiming destroying the animals is superior to putting the animals in animal shelters.

The arrests and trials have been a public-relations bonanza for anti-PETA groups. One group, the Washington D.C.-based Center for Consumer Freedom (CCF) circled the courthouse this week sporting a banner that read: "PETA: As Warm and Cuddly as You Thought?"

"PETA doesn't deny that the two threw the dead bodies into a dumpster. And they don't deny that what Hinkle and Cook did is standard practice for a group that wants constitutional rights for pigs," CCF (www.consumerfreedom.com) says.

CCF asks, with PETA's $25-million budget, "if euthanizing these animals is more humane than keeping them in overcrowded shelters, it begs the question: If local shelter conditions really are that bad, and the preservation of animal life is PETA's singular purpose, why didn't they adopt the animals themselves? Maybe the home they'd provide is less than ideal -- but it's certainly better than being dead."
-- Joe Roybal


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Industry News
Appeals Court Kills Texas Horse Slaughter
The Humane Society of the U.S. is cheering but not many cattlemen are happy about last Friday's ruling from the Fifth Circuit Court of Appeals in New Orleans. A three-judge panel from the Big Easy ruled that a 1949 Texas law that bans horse slaughter for human consumption is valid.

The ruling affects two of the nation's three horse slaughter plants -- Dallas Crown Inc. at Kaufman, and Beltex Corp at Fort Worth. A third plant, Cavel International, Inc., is located in DeKalb, IL. The plants produce horsemeat for export to the European Union and other countries.

C.R. "Dick" Sherron, president of the Texas and Southwestern Cattle Raisers Association, says horse slaughter is an emotional issue, and a legal decision based on emotion is alarming and has threatening implications for owners of other types of livestock. There are approximately 9.2 million horses in the country, Sherron says, and USDA figures show that about 88,000 horses, mules and other equines were slaughtered in 2005.

"That's fewer than 1%," he says, "which is a good indication that slaughter is not a decision horse owners make indiscriminately."

Former Texas Congressman Charles Stenholm, a spokesman for a coalition of about 200 organizations that want to preserve the option of a humane way to handle unwanted horses, says the plants are weighing options, including an appeal to the U.S. Supreme Court.
-- Burt Rutherford


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Colorado, Oklahoma Cattlemen Still Struggling
Cattlemen in Southeastern Colorado and Eastern Oklahoma are still working to get out from under the burden that recent winter weather has handed out. On the Colorado Plains, it's heavy snow from last month's blizzards; in Eastern Oklahoma, it's the aftershocks of an ice storm two weeks ago. In both places, it's a hay shortage.

The Colorado Cattlemen's Association has a hay contact list on their web site. If you have hay, e-mail info@coloradocattle.org and include contact info, hay type, size and weight of the bales, amount available, location, shipping options and cost, or call them at 303-431-6422. The Web site is www.coloradocattle.org.

Some ranchers in Eastern Oklahoma are still without power and many need hay. Those who have hay available or can help with trucking can call the Oklahoma Cattlemen's Association at 405-235-4391.
-- Burt Rutherford


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Hay Stocks Hit 18-Year Low
Stocks of all hay stored on farms totaled 96.4 million tons on Dec. 1, 2006, 8% lower than on the same date in 2005 and the lowest since 1988, says USDA's National Ag Statistics Service. Disappearance of hay from May to December totaled 66.6 million tons compared to 73.6 million tons for the same period in 2005.

Compared to Dec. 1, 2005 figures, hay stocks decreased in most of the eastern Rocky Mountain, Great Plains, and Southeastern states. Drier conditions prevailed in many of these states, resulting in lower hay production and increased supplemental feeding of hay. Meanwhile, stocks increased compared to the previous year's levels in several states throughout the Northeast and Intermountain Region. The reason: favorable growing conditions allowed for multiple cuttings and provided good pasture and grazing conditions.
-- eHay Weekly newsletter


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Government
President Bush Calls For More Ethanol Production
If there was any doubt as to the political mood of the country, President Bush's call for more renewable fuels, and ethanol production in particular, to reduce U.S. dependence on foreign oil illustrated it. The proposals, outlined in Bush's State of the Union address on Tuesday night, received applause from both sides of the aisle that was as robust as any other point he made.

The President offered the goal of blending 35 billion gals. of biofuels by 2017 (a fivefold increase from today's levels) and to reduce gasoline usage by 20%. He also proposed increasing U.S. petroleum production and doubling the size of the petroleum reserve.

On the positive side, the economic numbers continue to be surprisingly strong; the Dow Jones Average hit an all-time high on Wednesday. Meanwhile, the economy remains generally supportive to overall beef demand. Oil prices have been falling pretty sharply as OPEC has failed to restrict production, and demand has been moderate due to the overall moderate 2006-07 winter thus far.

The subsidies for ethanol are politically popular and are seen as an important offset to farm subsidies that will likely be reduced in the upcoming farm bill.
-- Troy Marshall


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Tips for Profit
2007 Gelbvieh Sire Summary Available
The American Gelbvieh Association (AGA) has released its 2007 Sire Summary. The 2007 Gelbvieh Sire Summary is available at no cost on the AGA Web site. Individuals can also request a CD of the Gelbvieh Sire Summary in a Microsoft Excel spreadsheet form or a printed copy for $5 each. Contact AGA at 303-465-2333 or info@gelbvieh.org.
-- AGA news release


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Looking For Cow-Calf Planning Calendars?
If you're looking for a handy scheduling tool for routine tasks in operating a cow-calf enterprise, visit the "Calendars For Production/Health" section at www.beefcowcalf.com. It's on the opening-page menu of management and information categories.

The Web site is a free service of BEEF magazine and offers links to 2,000 fact sheets and papers on a multitude of cow-calf production and management topics from North America's top animal scientists. Check out the site, then bookmark it for quick future reference.
-- Joe Roybal


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Storms & Corn Prices Costing Cow-Calf Producers
Between a surging corn market and some tough winter weather, cattle producers in the Central Plains have been hit hard. Feedlot cost of gains (COG) for most pens of cattle are likely surpassing $75/cwt. at the current time, says Dillon Feuz, Utah State University economist.

Writing at www.lmic.info/, Feuz says cattle purchased with a COG expectation around $60/cwt., are likely facing sizeable losses at market time.

"At the same time, cow-calf producers are seeing the price for calves dropping with each new surge in the corn market. For producers who held their calves until after the first of year, they probably are looking at losses on that decision," he says.

He expects cow-feeding costs this winter to potentially increase by $50/head, and cow-calf producer revenues to drop $50/head relative to last year. Such a large swing may alter the expansion some producers were planning prior to the corn-price surge and inclement weather.
-- Livestock Marketing Information Service


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Animal ID
Massachusetts, Virginia Bills Look To Undercut NAIS
Two bills filed this week in the Massachusetts legislature seek to block funding for state use in building the National Animal Identification System (NAIS). Milford Daily News reports two identical bills filed separately in the House and Senate want to force the Massachusetts Department of Ag Resources to return any money it received from the USDA for help launching the national livestock ID and traceback program. Vermont's Agency of Agriculture stopped applying for USDA funding for the program last year.

USDA responded that the NAIS program is voluntary so producers can choose to participate or not.

Meanwhile, in Virginia, a bill seeks to prohibit the states ag commissioner from participating in establishing an animal ID system.

"This would effectively eliminate the Virginia Department of Agriculture and Consumer Services (VDACS) from playing any role in the critical issue of animal health, and it would have serious marketing implications for livestock and poultry producers," said Wilmer Stoneman, associate director of governmental relations for Virginia Farm Bureau Federation. As of Jan. 16, VDACS had registered 3,865 farms in the voluntary premises registration phase of the NAIS.
-- Joe Roybal


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Industry Meetings
Texas Plans Four, Estate-Planning Seminars
Texas Cooperative Extension will hold four, estate-planning seminars in February and March. The seminars are Feb. 21-22 in Denton, March 6-7 in San Angelo, March 13-14 in Houston, and March 27-28 in Weslaco. The seminars, which cost $125, will discuss all aspects of estate planning. For info or to register, contact Sharon Wehring at s-wehring@tamu.edu or 979/845-2226.
-- Burt Rutherford


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Two Free Producer Programs Set For Wray, CO
The Wray, CO, First Presbyterian Church is the site for two practical beef production programs being offered free of charge on Feb. 6 and Feb. 8. Both programs include lunch.

The Feb. 6 program is a beef production seminar set for 10 a.m.-3:30 p.m. and session highlights include: current issues in Animal ID, establishment and management of irrigated pastures, dryland forages, utilizing corn co-products in beef ration, metabolizable protein, beef cow mineral nutrition, beef nutrition and ration evaluation, and what's new in beef home study. Register by calling 308-352-2683.

On Feb. 8, from 9:30 a.m.- 3:30 p.m., Mike Slattery, DVM, and University of Nebraska-Lincoln economist Matt Stockton will present a Beef Cow Nutrition & Economics 101 workshop. Slattery will provide practical advice on ruminant function, various feed supplements, different forms and costs of protein, and the nutritional implications of calving at different times of the year. Stockton will demonstrate an interactive feed cost calculator intended for home use by producers. He'll also discuss the hidden costs of drought feeding and cost-effective decisions. For more info on the Feb. 8 program, call 970-332-3173, ext. 3; or email julie.elliott@co.usda.gov.
-- Joe Roybal


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