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BEEF'S COW CALF WEEKLY    April 6, 2007  |  A PENTON MEDIA PUBLICATION
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    Table Of Contents
> Korean FTA Represents A Critical Crossroads
> U.S.-Korea FTA Leaves Beef Producers Behind
> When Was The Last Big Mistake You Made?
> Groups, Pols Withhold FTA Support Over Beef Trade
> U.S. & Korea Reach FTA Agreement
> Prepare Now For Breeding Season
> Ethanol, Corn Will Weigh On Livestock Industry
> Gasoline, Diesel Up Significantly For The Week
> Ruling Halts Horse Slaughter In The U.S.
> USDA Predicts 4% Increase In Hay Acres In 2007
> Clemson, Auburn Join Grass-Fed Beef Project
> Combat Lower Calf Prices With More Pounds
> Third-Party Verification Boosts Calf Premiums
> Beef Improvement Federation To Gather June 6-9
> Kansas Sets Beef Cattle & Forage Crops Field Day
> Series Of Cull-Cow Management Workshops Set
> Feedback On Implants/Fertility Study



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    Our Perspective
      Korean FTA Represents A Critical Crossroads

Get ready to add a new acronym to your vocabulary -- KORUS FTA -- the Korean-U.S. Free Trade Agreement. On April 1, at the last possible moment, the U.S. and South Korea reached agreement on a free-trade deal (FTA) -- the most significant trade agreement since NAFTA.

Click here to read more of this story by Troy Marshall

      U.S.-Korea FTA Leaves Beef Producers Behind

Futility, they say, is doing the same thing over and over and expecting different results. U.S. trade negotiators are apparently willing to put that old adage to one more test.

Having been surprised by South Korea's recalcitrance in stepping back from the zero-tolerance agreement on boneless beef that the U.S. accepted in 2006 as a hoped-for starting point in re-instituting a full beef trade with South Korea, U.S. negotiators seemingly hopped back into the same pot.

At one time, the U.S. contended that failure to fully reopen beef trade -- even though the issue wasn't part of the free-trade agreement (FTA) itself -- was a deal breaker. Later, U.S. negotiators seemed to back away from that position, which some folks chalked up to being a strategic move to lessen its importance as a bargaining chip in the South Korean mind. Meanwhile, the South Korea contingent remained steadfast in its contention that even the mention of opening up rice as a trade issue in an FTA negotiation was a deal breaker.

When the dust cleared on a U.S.-Korea FTA early this week, both sides were heralding a great outcome, but the beef issue was still in limbo and rice was strictly off the books. It seems the U.S. side -- a little hungrier for an agreement -- was mollified by South Korean assurances that it would open the market at some later date -- perhaps even by year's end. Seems like we've heard that song somewhere before.

South Korea needs this FTA, and the U.S. bargaining position will never be stronger. The Korea Ministry of Commerce, Industry and Energy on Thursday said foreign direct investment in South Korea will increase by more than $3 billion, thanks to the FTA.

Citing a report compiled by the Korean Institute for International Economic Policy released last year, the ministry said foreign direct investments worth a combined $3 billion will flow into the nation -- $500 million from the United States, $2.5 billion from European Union member countries and Japan.

South Korea's textile, automobile, information technology and steel industries are likely to be among the biggest winners in a U.S-Korea FTA, the Korea Herald reports, as their export volumes could jump due to tariff elimination. Ratification of an FTA obligates the U.S. to immediately remove its 2.5% tariff on Korean autos with below 3,000-cc engine capacities, with tariffs being phased out over a three-year period on vehicles with engines of over 3,000-cc capacities. Automobiles account for 25% of Korean exports to the U.S., with Korea selling 700,000 cars in the U.S. market annually while just 4,000 U.S. vehicles are sold in Korea.

"Over 95% of Korean exports, in terms of value, are manufactured items," said Kim Do-hoon, an economist at the Korea Institute for Industrial Economics and Trade. The Korea-U.S. FTA means that 94% of Korean manufactured goods will undergo early tariff elimination.

The Yonhap News reported today that South Korean Vice Finance Minister Chin Dong-soo said Korea has no plans to renegotiate an FTA with the U.S. There's been speculation that additional talks might be held over the beef-market question but Chin said the details of the U.S.-Korea FTA are done.

Understandably, many U.S. folks are incensed at the outcome of these FTA negotiations. Beef producers should be, too, and legislators should stand firm against this FTA until South Korea fully reopens its beef market in accordance with international standards.

For a summary of the Korea-U.S. FTA, visit www.keia.org/4-Current/USTRKORUSFTAFactSheet.pdf and www.keia.org/4-Current/FTASummary.pdf.
-- Joe Roybal

      When Was The Last Big Mistake You Made?

Business gurus ask this question in a lot of different ways, but their point is really quite simple. The problem usually isn't that a business is making too many mistakes but that it's not making enough mistakes.

Business gurus make the case that if you're not experiencing failures, then you're not taking enough chances, stepping outside of the box, or thinking boldly enough. Such advice is easy to disregard in agriculture, however, as just about every day presents several minor disasters that need fixing.

Problems, however, aren't the same as aggressively attempting so many new things that you're discovering what doesn't work. It's difficult to break out of a commodity mindset, where everything is essentially done the same, and your constant focus is on making incremental changes rather than trying innovative new ideas.

Even when we commit to being willing to accept failure, and to think outside of the box -- and not just in terms of making incremental improvements -- there's still a major obstacle. That is trying to create something revolutionary.

Being radical isn't something that makes a typical cattleman get excited. But the important thing to remember is that being radical doesn't mean you have to reinvent or re-imagine your business from the beginning. It means implementing five or six new things in your business that potentially can result in a revolutionary breakthrough.
-- Troy Marshall

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    Foreign Trade
      Groups, Pols Withhold FTA Support Over Beef Trade

The U.S. and South Korea failed to reach an agreement on the resumption of U.S. beef exports. This caused a strong reaction by many in Washington, D.C., who indicated they'll withhold support for the U.S.-Korea Free Trade Agreement unless Korea reopens its market to U.S. beef.

Sen. Max Baucus (D-MT), chairman of the Senate Finance Committee, said it was "an entirely unacceptable outcome." Rep. Sandy Levin (D-MI), chairman of the House Ways and Means Trade Subcommittee, had earlier written the U.S. Trade Representative and USDA stating that the "FTA must include the resumption of full market access to U.S. beef prior to the conclusion of the FTA negotiations."

The National Cattlemen's Beef Association (NCBA) said, "If we aren't selling beef in Korea, the benefits of this trade agreement and the potential of the Korean market hold little value to U.S. cattle producers. Therefore, NCBA is withholding support... until commercially viable beef trade is occurring based on the internationally recognized guidelines established by the World Organization for Animal Health (OIE)."

Similarly, the American Farm Bureau Federation (AFBF) said, "Commercially viable trade for U.S. beef based on OIE guidelines must be in place with South Korea before AFBF will consider supporting the U.S-South Korea Free Trade Agreement. South Korea continues to unjustifiably ban imports of U.S. beef without regard to international standards."

Meanwhile, the National Pork Producers Council praised the agreement, saying it will "generate hundreds of millions of dollars in new pork exports and ensure that U.S pork exports to South Korea will be on an equal footing with pork from other countries." U.S. pork exports to South Korea in 2006 increased in volume by 52%, and by 50% in value, over 2005 exports. South Korea is the 4th-largest export market for U.S. pork.
-- P. Scott Shearer, Washington, D.C., correspondent

      U.S. & Korea Reach FTA Agreement

The U.S. and South Korea reached an agreement on a free-trade agreement (KORUS FTA). U.S. Trade Representative (USTR) Ambassador Susan Schwab said, "This is a historic moment for our two countries. KORUS FTA will provide U.S. farmers, ranchers, manufacturers and service providers exciting new market opportunities in a growing, dynamic country. It will contribute to Korea's successful transformation to a 21st century economic power."

Korea is currently the seventh-largest trading party for the U.S., with two-way trade valued at $72 billion in 2006.

According to USTR, U.S. agriculture will receive the following benefits under the FTA:
  • "More than half ($1.6 billion) of current U.S. farm exports to Korea will become duty-free immediately, including wheat, feed corn, soybeans for crushing, hides and skins, and cotton, plus a broad range of high-value agricultural products such as almonds, pistachios, bourbon whiskey, wine, raisins, grape juice, orange juice, fresh cherries, frozen French fries, frozen orange juice concentrate, and pet food.
  • U.S. farm products benefiting from expanded market opportunities with two-year tariff phase-outs include avocados, lemons, dried prunes, and sunflower seeds.
  • U.S. farm products benefiting from expanded market opportunities with five-year tariff phase-outs include food preparations, chocolate and chocolate confectionary, sweet corn, sauces and preparations, other foods and forage (alfalfa), breads and pastry, grapefruit and dried mushrooms.
  • Other U.S. farm products benefiting from expanded market access opportunities through tariff rate quotas include skim and whole milk powder, whey for food use, cheese, dextrins and modified starches, barley, popcorn, and soybeans for food use.
  • Market access was also expanded for beef and pork products, pears, apples, grapes and oranges."
-- P. Scott Shearer, Washington, D.C., correspondent

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    Breeding & Selection
      Prepare Now For Breeding Season

April showers bring May flowers; they also give you time to begin planning and preparing for the upcoming breeding season. Jack Whittier, Colorado State University (CSU) Extension beef specialist, offers these tips:
  • Purchase replacement bulls or line up artificial-insemination services at least 30 days before the start of breeding season. New bulls should be brought into their environment about a month prior to turnout so they can adapt to their new surroundings.
  • Use EPDs along with visual observation to select bulls that best fit your goals.
  • Have your vet perform a breeding soundness exam on all bulls to be used this year. It's important to find sub-fertile bulls early to allow for replacements to be purchased, or for the bull in question to be treated and rechecked.
  • Make final replacement-heifer selections based on performance, weight, pelvic size and reproductive tract score. Immunize your replacement heifers for respiratory diseases like IBR and BVD.
  • Breed heifers in a short (42-45 days) breeding season. Some producers like to breed heifers a month before the start of breeding season for mature cows. First-calf heifers normally take longer than older cows to return to heat after calving. If first-calf heifers calve early, they're synched with the older cows for their second calf. In addition, you can watch the heifers more closely early in the calving season and provide additional attention if needed.
-- CSU release

    Industry News
      Ethanol, Corn Will Weigh On Livestock Industry

Future ethanol production and demand for distiller's grains will lead to lower cattle prices and higher consumer meat prices, David Anderson, a Texas Cooperative Extension economist, told attendees of the 2007 Texas Ag Forum in Austin recently.

Click here to read more of this story by
Southwest Farm Press

      Gasoline, Diesel Up Significantly For The Week

Retail gasoline prices jumped 9.7¢ to $2.707/gal., while diesel rose 11.4¢ to $2.79/gal., for the week of April 2, reports the Energy Information Administration. The increase represented the ninth consecutive week of increases for gasoline, which is now 11.9¢/gal. higher than at this time last year. Meanwhile, diesel prices are now 17.3¢/gal. higher than at this time last year.

All regions reported higher gasoline prices, with the East Coast up 9.6¢ to $2.671/gal., the Midwest up 9.6¢ to $2.614, and the Gulf Coast up 12.3¢ to $2.565. In the Rocky Mountains, prices jumped 8.1¢ to $2.619, and the West Coast was up 8¢ to $3.096. California was up 7.6¢ to $3.228/gal., 48.5¢/gal. over last year.

Meanwhile, all regions reported price increases for diesel. The East Coast was up 10.7¢ to $2.764/gal., the Midwest up 12.5¢ to $2.78, the Gulf Coast up 12.3¢ to $2.766, and Rocky Mountain prices up 10.4¢ to $2.884. The West Coast jumped 8.2¢ to $2.885/gal., while California rose 7¢ to $2.939 -- 12.7¢/gal. over this time last year.
-- Joe Roybal

      Ruling Halts Horse Slaughter In The U.S.

Operations stopped last week at the last remaining U.S. horse slaughter facility -- Cavel International in Dekalb, IL, after a U.S. District Court for the District of Columbia ruled it illegal for horse plants to pay USDA for voluntary inspection services. USDA had agreed to allow paid voluntary inspection for the nation's three remaining horse slaughter plants last year, after Congress cut off funding for federal inspections.

Click here to read more of this story by
Southwest Meat Association and Burt Rutherford

      USDA Predicts 4% Increase In Hay Acres In 2007

Producers expect to harvest 63.1 million acres of all types of hay in 2007, up 4% from 2006 harvested acres, according to the USDA Planting Intentions report released last Friday. About 60.8 million acres of hay were harvested in 2006 -- 21.4 million acres in alfalfa, and 39.4 million in other hays.

Harvested hay acres are expected to increase in 2007 throughout the Great Plains and Southeast. Because last year's drought reduced hay production and supplies, harvested area is expected to increase by more than 100,000 acres/state throughout the Great Plains and in Alabama, Missouri and Minnesota.

South Dakota anticipates the largest increase -- 700,000 acres more than in 2006. Harvested acres in the Pacific Coast region, Tennessee Valley, the Northeast and much of the Corn Belt are expected to decline or remain unchanged from 2006. Iowa is expected to register the largest decrease in harvested area, with a decline of 100,000 acres. California hay growers expect to harvest 50,000 fewer acres.

USDA predicts U.S. corn plantings to increase by 15% in 2007 to 90.5 million acres -- the highest acreage planted in 63 years. Those increases are expected to come at the expense of cotton and soybean acres, down 20% and 11%, respectively. Meanwhile, wheat plantings are expected to be up by 5% over 2006 at 60.3 million acres. The 2007 winter wheat planted area, at 44.5 million acres, is 10% above last year and up 1% from the previous estimate.
-- USDA release

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    Tips for Profit
      Clemson, Auburn Join Grass-Fed Beef Project

Year-round grazing is a reality in the Southeast, an advantage that Clemson University and Auburn University want their home-state producers to take to the bank. The two universities have joined Pasture-Based Beef Systems for Appalachia, a research program also involving USDA, Virginia Polytech and West Virginia University.

"There's a growing demand for forage-fed beef across the country," says Steve Meadows, resident director at Clemson's Edisto Research and Education Center (REC). Over the next five years, he'll supervise development of a herd of 150 brood cows to help identify the genetics for herd improvement, develop suitable forage systems and produce a better steak.

Besides being leaner than grain-fed beef and containing greater concentrations of desirable fatty acids and antioxidants, pasture-raised animals contain less total fat and saturated fat per serving, he says. Research also shows such beef contains almost twice the amount of conjugated linoleic acid (CLA) -- a potent anticarcinogen naturally produced in beef cattle -- than grain-finished beef.

The search for the best cattle breeds for forage systems has already begun with 30 head of Angus and Hereford. The project will also look at which forage species are suitable for finishing cattle in the geographical area and how they impact meat quality. Edisto REC intends to have beef ready for tenderness and taste-panel testing within two years.

"More than ever, consumers want their food to be produced in an environment that minimizes the use of pesticides and antibiotics," Meadows says. "This project minimizes animal confinement, reduces the concentration of animal waste, and replaces cereal grains such as corn and oats with forages that grow readily here."
-- Tom Lollis, Clemson University, Southeast Farm Press

      Combat Lower Calf Prices With More Pounds

With today's high-dollar corn, growth implants may be an efficient and economic strategy for ranchers to add pounds to their calves and gain extra income next fall.

Click here to read more of this story by Kindra Gordon, BEEF magazine

      Third-Party Verification Boosts Calf Premiums

Better prices are available for calves and yearlings with third-party verification (TPV) of solid preconditioning and age and source verification. But you may have to find a special sale to take it to the bank.

Click here to read more of this story by Larry Stalcup, BEEF magazine

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    Industry Meetings
      Beef Improvement Federation To Gather June 6-9

The 2007 Beef Improvement Federation (BIF) Annual Research Symposium and Meeting is June 6-9 at the Hilton Fort Collins in Fort Collins, CO.

BIF was founded 40 years ago as a means to standardize programs and methodology -- and to create greater awareness, acceptance and usage -- of beef cattle performance concepts. This year's meeting features opportunities for producer input on guiding the future of genetic evaluation and genetic improvement of the U.S. beef herd, as well as becoming informed about the field's latest research findings and progress.

The meeting kicks off the evening of June 6 with a National Association of Animal Breeders symposium examining "40 Years of Beef A.I." The Thursday session begins at 8 a.m. with a look back at BIF history, before moving into the day's focus of "Performance programs at a crossroads." Among the day's topics are: "Who benefits and who pays from genetic improvement," "Are beef genetics research, education and Extension relevant?" "Does the seedstock industry focus on the needs of the commercial cow-calf producer?" and "Defining the ideal beef animal -- how will we get there?"

Friday's morning program will tackle the theme: "Challenges to conventional wisdom." Topics to be explored include: "Can we build the ideal animal?" "Why haven't we seen an improvement in quality grade?" and "Are there benefits to using DNA markers?" Lunch and committee meetings will make up the afternoon program.

To learn more about the conference agenda, visit: www.beefimprovement.org/2007_BIF_Program.pdf.
-- Joe Roybal

      Kansas Sets Beef Cattle & Forage Crops Field Day

Kansas State University's Beef Cattle and Forage Crops Field Day is May 3 at the Southeast Agricultural Research Center near Mound Valley. The program begins at 9 a.m. with presentations on: utilization of distiller's grains by grazing cattle, cattle economic outlook, cattle insect control update, post-drought pasture management, and the latest fescue variety grazing research. For more info, call 620-421-4826.
-- Joe Roybal

      Series Of Cull-Cow Management Workshops Set

Texas A&M University (TAMU) and the Texas Beef Council are teaming up on a four-part series that tackles beef-quality management of calves and cull cows. All sessions are in San Angelo.

"Cull cows and bulls typically make up 20% of an operation's income," says Dan Hale, TAMU Extension meats specialist. "We aim to help producers learn how to maximize cull-cow profits." The sessions, which also will look at feeder calves and fed cattle, include:
  • Session 1 -- "Feeder-Calf Evaluation And Management," April 26, Producers Livestock Auction, will cover nutrition, genetics and health factors affecting the value of feeder cattle.
  • Session 2 -- "Cull-Cow Management Dollars And Sense," July 12, Angelo State University. Participants will tour a cow-processing plant and observe cattle from holding pens through fabrication of beef cuts.
  • Session 3 -- "Factors That Impact Feedyard Performance And Finished Steer Evaluation," Sept. 27, Angelo State University. Group will review the feeder calves evaluated in Session 1 as they complete the feeding phase of the production chain.
  • Session 4 -- Beef 706 -- "Finished Cattle And Carcass Value Wrap-up," Oct. 9-10, Angelo State University. This 1 1/2-day session will follow the Session 1 feeder cattle through harvest, grading and fabrication.
Registration is $45. Call Janice Alexander at 325-659-6523.
-- Burt Rutherford

    Cow-Calf Weekly Mailbag
      Feedback On Implants/Fertility Study

The "study" published in Human Reproduction ("Study Links Mom's Beef Diet & Male Infertility," March 30 BEEF Cow-Calf Weekly) is an indicator of just how suspicious consumers are of hormone and steroid use in beef production. Never mind that the study is a complete sham from a scientific standpoint, the fact is that the public is ready to believe any negative garbage about this practice.

The appropriate response for the beef industry is to stop using these products (implants). The old adage of "the customer is always right" isn't a bad one. It's not difficult to produce beef without these products; much of the rest of the world does.

Suspending use of these products would:
  • Garner tremendous positive response from our consumers;
  • Reduce the total level of production of domestic beef, resulting in
  • Increase the quality of U.S. beef, as there's ample evidence that implants have a detrimental effect on quality grade;
  • Open the European Union and other foreign markets to U.S. beef;
  • And eliminate possible unknown health risks. If there is heath issues associated with these products, which I doubt, the risk is hundreds of times greater for the people involved in cattle production than it is for the general public.
-- Butch Shadbolt
Gordon, NE



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