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BEEF'S COW CALF WEEKLY    March 30, 2007  |  A PENTON MEDIA PUBLICATION
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    Table Of Contents
> Are You Prepared To Document Your Animal Welfare?
> Politics Indeed Creates Some Strange Bedfellows
> Working With Your Vet Is An Investment
> Beef-Demand Strength Surprises Pundits
> U.S.-South Korea FTA Frenzy Continues To Deadline
> Wal-Mart's Japan Retailer Debuts U.S. Beef
> Final Report On Spinach Outbreak Is Inconclusive
> The Bull Is Only Half The Equation
> "Natural" Market Growing
> Earlier Mandatory COOL Proposed In Senate
> Twelve Questions On Natural Beef Production
> Japanese Consumers Weigh-In On Beef Traceability
> Koreas To Convene Over FMD Control
> Retail Gasoline Continues Uptick; Diesel Slides
> Study Links Mom's Beef Diet & Male Infertility
> Two National Chains Announce Welfare Intentions
> USDA Projects Largest Corn Planting In 63 Years
> Bill Pushes Expansion Of Renewable Fuel Production
> Senate Ties Ag Disaster Assistance To Iraq Bill
> Creekstone Farms Wins BSE-Testing Court Case
> Beef Cattle SPA Workshop Set For May 2



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    Our Perspective
      Are You Prepared To Document Your Animal Welfare?

This week, Burger King announced its plans to eliminate the use of crates among its pork and poultry suppliers. Cynics will say the chain is talking the talk more than walking the walk, as its initial plans are to procure only 2% of its eggs and 10% of its pork from such sources, but Burger King is a very big customer for eggs and pork.

It's true that Burger King can't procure enough of such product at the current time, but the chain is among a growing number of food providers responding to consumer demands. It may be activist groups that are driving the animal welfare bus, and their goals may be drastically different from those of cattlemen, but it would be a mistake to not appreciate that the American consumer is the engine of growth for this movement.

History tells us there will be small premiums paid initially, until the industry adopts enough of the techniques and technologies to meet the demand. And eventually, what were premiums will become discounts as such practices become the de facto industry standard.

Irrespective of the premium and discount arguments, a large percentage of the consuming public seemingly is concerned about animal-welfare issues and wants accountability. Such assurances on animal welfare likely will be packaged right along with other health assurances, including preconditioning, and source-, age- and genetic-verification programs.
-- Troy Marshall

      Politics Indeed Creates Some Strange Bedfellows

The ethanol debate is creating some unlikely bed partners. Having already formed alliances with the pork and poultry industries in calling for an end to the ethanol subsidies and tariffs that have created such an enormous market-distorting set of economic signals, the cattle industry is also finding support for its position among environmental groups, and even other renewable energy advocates. The rallying point is why ethanol has been bestowed preferred status by the government.

While the environmental benefits of ethanol are debatable, the economics are well known and decidedly against ethanol production. But the political momentum is too strong to expect any decision to be made on a realistic cost vs. benefit basis, at least in the near future. Instead, it will be a long-term educational process that will require many allies to convince the American consumer that while the goal is great and noble, ethanol is an extremely poor avenue with which to reduce U.S. dependence on Mideast petroleum.

Most important is convincing consumers that ethanol should be forced to compete on a level and real-world playing field with other renewable energy sources. It's always been, and continues to be, a very bad policy for government to set aside economic realities in favor of a political aim.

We must move beyond the emotional response of believing anything is better than nothing, to focus on viable long-term solutions. Make no mistake about it, the problem is real, and ultimately we will have to find a realistic option to address it.
-- Troy Marshall

      Working With Your Vet Is An Investment

It's the end of March and you awake to find your cows in an average body condition score of 4.8. Calving is underway and you worry herd fertility will suffer. This is the most costly time of the cycle to put weight on cows -- early lactation.

Click here to read more of this story by
Mike Apley, DVM, PhD, Kansas State University

    My Perspective
      Beef-Demand Strength Surprises Pundits

The $100 question this spring has been, "Will beef demand be strong enough to give packers some margin at these higher price levels and allow us to sustain the strong fed prices we've been experiencing?"

Click here to read more of this story by Troy Marshall

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    Foreign Trade
      U.S.-South Korea FTA Frenzy Continues To Deadline

Final moves and posturing to make the March 30 deadline for forging a free-trade agreement (FTA) between the U.S. and South Korea were frenetic on Thursday, with even the heads of state wading into the fray. South Korean President Roh Moo-hyun and President George W. Bush talked via telephone for 20 minutes on Thursday and exchanged their views on the remaining obstacles, including automobiles, agriculture and textiles, reports the Korea Herald.

Click here to read more of this story by Joe Roybal

      Wal-Mart's Japan Retailer Debuts U.S. Beef

Japanese retailer -- Seiyu Ltd. -- of which Wal-Mart Stores Inc. owns 51%, will begin marketing U.S. beef in 20 stores in Japan's Kanto region tomorrow. The Seiyu Group operates about 400 stores in Japan.

A Seiyu release says the beef will be certified as originating from U.S. cattle 20 months of age or younger. The release says "Seiyu's beef buyer went to the U.S. and inspected the control system in the meat-processing facility, the traceability procedures from the farm thorough export, and confirmed its accuracy and consistency. Therefore, we believe our customers will again welcome safe U.S. beef."

On Thursday, U.S. Ambassador to Japan Tom Schieffer participated in a kick-off celebration at Seiyu's LIVIN Kinshicho location. Wal-Mart says it and Seiyu will closely monitor consumer interest in the new beef offerings and increase the availability of U.S. beef accordingly. Offered are U.S. beef chuck for steak, thin-sliced U.S. beef chuck, and sliced U.S. beef chuck for barbecue.
-- Joe Roybal

    Consumers
      Final Report On Spinach Outbreak Is Inconclusive

Popeye is probably still trying to recover from all the media reports last September about an E. coli outbreak in California spinach. The California Department of Health Services and FDA released a final report last Friday on the investigation into the outbreak, but it's not likely Popeye and other spinach lovers will find much comfort.

The 50-page report describes the investigation in detail, as well as the environmental factors most likely involved in the outbreak. Those risk factors included the presence of wild pigs in and around the spinach fields that produced the contaminated spinach, and the proximity of irrigation wells to surface waters exposed to cattle and wildlife. However, the investigation was unable to definitely determine how the contamination occurred.

To read the report, log on to www.DHS.ca.gov.
-- Burt Rutherford

    Breeding & Selection
      The Bull Is Only Half The Equation

This year's bull sale season validated the same long-term trends we've been seeing for some time. The good bulls (genetics) are worth more than ever.

In fact, trying to apply economic differences to the genetic differences, it's easy to make the case that good bulls aren't a cost but a very solid investment. Meanwhile, a poor bull (genetics) can spell economic ruin.

In a similar fashion to our calf and fed markets, the price spreads between good and bad bulls is growing wider, but is still probably much narrower than what it should be. With that said, the right genetics are simply the foundation of creating value.

Increasingly, the industry is coming to understand that properly managing those genetics and putting them in appropriate systems to capture that value is critical. As one cattle feeder put it: "You can't make one that doesn't have the genetics to do it, grade, convert efficiently, gain, and grade. But there are a thousand ways to make an animal with the right genetics perform no better than average."

That will be the challenge.
-- Troy Marshall

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    Beef Marketing
      "Natural" Market Growing

Consumer desires are changing and that shift is being felt at the ranch gate. The natural and organic food segments are among the fastest growing market segments both worldwide and in the U.S., says Erica Kuhlmann, managing director and head of BMO Capital Markets' Food Group.

The natural and organic food segments have experienced double-digit growth over the last two years. Based on the investments being made in the industry, BMO Capital Markets projects that growth rate to exceed 15% in 2007 and 2008. In 2005, U.S. consumers spent $44.5 billion on natural and organic foods, which accounted for about 8.6% of the total U.S. food supply. By 2010, the group says spending on such food will be nearly $70.9 billion, of which meat, fish and poultry will account for about $6 billion.

"Consumer perception is that organic and natural foods are more nutritious and safer because the use of pesticides, hormones, antibiotics or biotechnology are limited or non-existent in their production," Kuhlmann says. "What once was a small niche market has become a significant market segment that both large and small retailers are trying to capture."
-- Burt Rutherford

      Earlier Mandatory COOL Proposed In Senate

Sen. Byron Dorgan (D-ND) proposed an amendment to the Iraq war supplemental appropriations bill that would have moved the implementation date for mandatory country-of-origin labeling (COOL) to Sept. 30, 2007, a year earlier than current law. The amendment was ruled out of order but we may see it resurface during the farm-bill debate.

The National Cattlemen's Beef Association (NCBA) urged the Senate to oppose this effort. In a letter to all senators, NCBA said, "NCBA has long understood the significance of labeling as a marketing tool for cattle producers to showcase the high quality of U.S. beef. The current law, however, does not accomplish this task, and as such, NCBA remains dedicated to working with Congress, producers, retailers, and consumers to develop a beneficial labeling program that adds true value and avoids excessive costs to our producers and consumers -- a program that truly gives consumers a choice and allows cattlemen to see a return on their investments."

The American Meat Institute (AMI) reminded Senate members that the potential costs of COOL "will outweigh benefits to producers and processors."
-- P. Scott Shearer, Washington, D.C., correspondent

      Twelve Questions On Natural Beef Production

South Dakota State University (SDSU) Extension beef feedlot specialist Erik Loe, Marshall county (SD) Extension educator Tyler Melroe, and SDSU Extension veterinarian Russ Daly answer some of the most common questions about natural-beef production.

Click here to read more of this story by
Lance Nixon, SDSU Agricultural Information

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    Industry News
      Japanese Consumers Weigh-In On Beef Traceability

A Japan Ministry of Agriculture, Forestry and Fisheries survey found Japanese consumers regard beef traceability as important and necessary, Meat & Livestock Australia (MLA) reports.

Japan's domestic traceability program, "Indication and Relay of Individual ID Numbers on Designated Beef," has been the law since December 2004. It allows consumers to trace individual cattle information by accessing a designated Web site and entering a 10-digit ID code included on retail packaging labels. Information provided on domestically produced beef includes: date and place of birth, sex, type of cattle, and when/where it was slaughtered.

The survey found 35% of respondents to be "familiar with the traceability system," while a majority (81%) believes the current required system should be continued, with 41% citing the program as useful in preventing BSE from spreading. Few people (only 6% of the total respondents) actually utilized the ID program's Internet service to check on the ID numbers, however.
-- Meat & Livestock Australia

      Koreas To Convene Over FMD Control

Quarantine officials from South and North Korea met today to discuss ways of stemming the spread of foot-and-mouth disease (FMD) in North Korea, Yonhap News reports. Earlier this week, South Korea sent $280 million (US) in emergency medicine and medical equipment to its Communist neighbor, and plans additional shipments after today's assessment of the situation by quarantine officials. North Korea has culled hundreds of cows and thousands of pigs infected by the disease since July, after which it called on the South for help in preventing the spread.
-- Joe Roybal

      Retail Gasoline Continues Uptick; Diesel Slides

The Iranian snatching of British marines surged the national average price of diesel by 3¢ to $2.73/gal. from Tuesday to Wednesday this week, ProMiles reports. But for the week ending March 26, retail diesel prices had fallen for the second consecutive week, according to the Energy Information Administration. Meanwhile, gasoline prices had continued their upward trend for an eighth consecutive week.

The average retail price for a gallon of regular gasoline rose 3.3¢ to $2.61, 11.2¢ higher than at this time last year. All regions reported upticks, with the East Coast up 2.7¢ to $2.575/gal., the Midwest 3.3¢ to $2.518, and the Gulf Coast 3.4¢ to $2.442. The largest regional increase was in the Rocky Mountains with a 5¢ jump to $2.538/gal., while the West Coast registered a 3.9¢ increase to $3.016/gal. California rose 3.1¢ to $3.152 -- 48.3¢/gal. over last year's price.

Retail diesel fell 0.5¢ nationally to a $2.676/gal. average, but remains 11.1¢/gal. higher than this time last year. East Coast prices fell 0.4¢ to $2.657, Midwest prices fell 1.1¢ to $2.655, the Gulf Coast saw an increase of 0.3¢ to $2.643/gal., while the Rocky Mountains were up 1.5¢ to $2.78, and the West Coast recorded a 1¢ drop to $2.803. California fell 0.6¢ but at $2.869/gal. remains 14.2¢/gal. over last year.
-- Joe Roybal

      Study Links Mom's Beef Diet & Male Infertility

A story making headlines this week claims a link between infertility in adult males with the amount of beef consumed by their mothers during pregnancy. The study published in the British journal, Human Reproduction, speculates that the culprit is growth implants and "other zenobiotics" in beef.

Click here to read more of this story by Joe Roybal

      Two National Chains Announce Welfare Intentions

Burger King and Wolfgang Puck made major announcements in their animal welfare standards preferences recently. The announcements come on the heels of a January announcement by Smithfield Foods, the world's largest pork processor, to phase out crate confinement of pigs over the next decade.

The Associated Press (AP) reports that earlier this month Burger King sent People for the Ethical Treatment of Animals (PETA), which earlier led a "Murder King" campaign against the word's second-largest hamburger chain, two letters outlining the chain's new supply guidelines.

The letters, forwarded by PETA to the AP, said Burger King had started purchasing 10% of its pork from suppliers that don't use sow gestation crates, and intended to double that amount by the end of 2007. In addition, Burger King also said it plans to procure 2% of its eggs from cage-free hens, with the intention to double it by the end of 2007. Burger King also will favor processors -- when available -- that use gas rather than electricity to stun birds.

Last week, celebrity chef Wolfgang Puck announced his companies and dining venues will only use eggs from cage-free hens, and all-natural or organic crate-free pork and veal. It also will serve only certified sustainable seafood, eliminate foi gras from its menus, serve all-natural or organic chicken and turkey meat from farms compliant with progressive animal welfare standards, and write to suppliers regarding more humane harvest methods for poultry.
-- Joe Roybal

      USDA Projects Largest Corn Planting In 63 Years

U.S. corn producers are expected to plant 90.5 million acres of corn this spring -- the highest acreage planted in 63 years. According to USDA's March 30 Prospective Plantings report, released this morning, the increases come at the expense of cotton and soybean acres, down 20% and 11%, respectively.

The report says corn acres would be the highest since 1944, when 95.5 million acres were planted. Expected acreage is up in nearly all states due to high corn prices.

Illinois farmers intend to plant a record high 12.9 million acres of corn this spring, up 1.6 million acres from last year. North Dakota and Minnesota growers also expect to plant record high corn acres, up 910,000 and 600,000 acres, respectively.

Soybean producers intend to plant 67.1 million acres in 2007, down 11% from last year. If realized, this will be the lowest planted area since 1996. Acreage decreases are expected in all growing areas, except in New York and the Southeast.

Large decreases in soybean acreage are expected across the Corn Belt, with the largest decline expected in Illinois, down 1.4 million acres from 2006. However, area planted to soybeans is expected to increase in the Southeast, with Georgia expecting the largest increase from last year at 95,000 acres. Planted acreage in New York is expected to be the largest on record at 210,000 acres.

All wheat planted area is estimated at 60.3 million acres, up 5% from 2006. The 2007 winter wheat planted area, at 44.5 million acres, is 10% above last year and up 1% from the previous estimate.
-- Elton Robinson, Farm Press

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    Government
      Bill Pushes Expansion Of Renewable Fuel Production

Sens. Jeff Bingaman (D-NM) and Pete Domenici (R-NM) introduced legislation to expand the use of renewable fuels over the next 20 years. The "Biofuels for Energy Security and Transportation Act" would require America's fuel supply to contain higher amounts of renewable fuels, from 8.5 billion gals. in 2008, to 36 billion gals. in 2022. From 2016 to 2022, the legislation requires an increasing portion of the renewable fuels consumed to be advanced biofuels, such as cellulosic ethanol, biobutanol and other fuels derived from unconventional biomass feedstocks. The legislation increases the Department of Energy's funding for bioenergy research and development by 50%.
-- P. Scott Shearer, Washington, D.C., correspondent

      Senate Ties Ag Disaster Assistance To Iraq Bill

The Senate provided $4.2 billion in agricultural disaster assistance in the FY 2007 supplemental appropriations bill. This legislation also includes a March 31, 2008 target for ending U.S. combat operations in Iraq. The White House says it will veto the legislation because of the Iraq war language and millions in non-defense items.
-- P. Scott Shearer, Washington, D.C., correspondent

    Animal Health
      Creekstone Farms Wins BSE-Testing Court Case

U.S. District Judge James Robertson, whose court is in the District of Columbia, ruled yesterday afternoon that USDA can't block Creekstone Farms Premium Beef from BSE-testing the cattle it processes.

Creekstone Farms wanted to privately test for BSE in an attempt to regain its ability to export beef to Japan. USDA refused to allow Creekstone to do so, after which Creekstone took the agency to court. While the judge ruled that USDA can't prevent Creekstone Farms from testing for BSE, he gave the agency time to appeal his decision, putting his order on hold until June 1. If USDA doesn't appeal before then, the order becomes effective and Creekstone Farms can begin testing.

In the trial, USDA argued, among other things, that because the BSE test must be done on brain tissue after animals are dead, it has the authority to regulate the tests because it is used in disease treatment. Robertson rejected that argument, saying that regulating the test might be appropriate through the Federal Trade Commission or the Commerce Department, but that the authority does not exist as the law is written now.
-- Burt Rutherford

    Tips for Profit
      Beef Cattle SPA Workshop Set For May 2

The 2006 drought brought higher fuel, fertilizer and hay prices to cow-calf producers, and hiked the cost of running a breeding cow in the Texas Rolling Plains to more than $400. That calculates to an $84/cwt. breakeven price for weaned calves, says Stan Bevers, Texas A&M University (TAMU) Extension economist in Vernon.

Identifying and managing such costs is the aim of a Beef Cow-Calf Standardized Performance Analysis (SPA) Workshop set for May 2 at the TAMU Research and Extension Center in Vernon. Bevers says the course, which begins at 8:30 a.m., will be a hands-on workshop where each attending ranch will be supplied with a computer and assistant, and aided in completing its own SPA analysis for the 2006 calf crop.

SPA provides ranchers the opportunity to analyze their ranch operation from both a production and financial side. Intended as an annual tool to be used by the cow-calf producer, SPA facilitates the comparison of an operation's performance between years, producers, production regions and production systems.

Registration is $50/ranch and includes the software, educational materials, lunch and refreshments. Early registration is encouraged in order to sufficiently organize an operation's data for the SPA analysis.

Learn more by calling Stan Bevers at 940-552-9941, Ext. 231.
-- Joe Roybal



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