The questions are the same, no matter where you might be: "How long will this market stay this way? When's it going to hit the end and break?" The question becomes the same in a very short time. The unexplained advance and strength of this livestock trade have many people in what you might call Livestock America in a quandary.
Well, I'm no different than many. I've seen the market go up before, and I've seen the market go down before. It isn't always the same, and it isn't always for the same reasons. This particular scenario -- when you see feeder calves and yearlings selling at record prices, when you see fed cattle advancing, when you see corn dropping in value, and when you see the supply of product dwindling, involves several situations. Last but not least is demand. World demand for beef is huge, the largest we've ever seen, I believe. Wonder why these cull bulls and slaughter bulls and cull cows are bringing so much money? Because of the strong hamburger demand. Beef demand in general, I say again, probably never in any one's lifetime has been stronger.
One factor is that China -- one of the most populated areas of the world, proudly displaying two billion one hundred million people -- is now the number one country of the world in beef imports and also in many other products that go under the food headline.
Another factor is that supply is limited. We have one of the smallest beef herds in the United States since 1949-1952. We simply do not have the numbers out there right now.
Now we aren't the only country that has markedly reduced supplies of cows and grinding meat and beef. Federal and international sources show where cattle producing regions in Australia are also very short on beef. There are many areas of Australia that have been devastated with drought. Much of the west coast and south parts of America have also been drought stricken. Many of those folks have been forced to liquidate. However, the available supply of cows and bulls, the product that makes lean beef hamburger, also is continuing to fall.
Some of the experts across the country that have been watching this thing closely are indicating that the cowherd in America is trying to rebuild some. It looks as though there's going to be a lot of heifers bred to start filling up the gap that's come about by the drought, cow killing, and other situations which have reduced those numbers. However, it's going to take awhile.
So you see, there are quite a few reasons why this cattle market is strong, and the predictability of its staying strong for some time is real because we don't have the replacement cattle standing in line as we've had in past eras. We've been on the short side, and the world's supply is recorded as the short side as well.
In the meantime, there are more mouths to feed in the world... I mean millions more people... than we had a few years ago. And beef is in high demand. You in the cattle business as well as those connected to the cattle business should be supportive of this because it is real. It makes me very high, and I feel better about you ranchers and farmers out there across America who own cows, have a decent place to feed them, have some grass, and are putting up some hay. Take care of those cows because they are going to be very valuable and an extensive part of your success as we move forward. As I've said before, there are an awful lot of folks on the television and various other places pushing gold and silver as the way to safeguard your money. My answer to anyone that proposes this to me is this: I'm in the cattle business, and that's what I'm trying to do the best at. If I was in the gold business, that would be a different deal, but I'm not. I don't like the smell of gold at all. Gold doesn't have babies. You can't depreciate gold on your tax returns. I'll show you in black and white that the amount of money it costs to buy an ounce of gold will also buy a bred female, and I'll show you the end product in ten years. The bottom line is such that gold will be looking for a little help from behind the tree. Cows are here to stay.
All of us here in this country who are involved in the production of food one way or another are a big part of the food supply for the world's human beings. You must remember that, when this country was begun, we had a whole host of great thinkers and planners, and they were very bold in their prediction that this country, this land of freedom and opportunity, would attract millions of people, many of whom would farm and produce food. And they did.
Our part is to take care of those producers of food and the land because countries that have gone broke and out of existence all, without exception, did so for the same reason: lack of food. Remember this: America will run out of food, and the world will run out of food BEFORE they run out of people. Act accordingly in your own thinking and in your own family. Make sure you keep yourself in the business of food production some way or another because I'll predict that, if this country survives this wreck it's in, it will be because of food production. We are the greatest food-producing nation in the world, and there are hundreds of countries and billions of people looking at us for help with their food needs.
I'm so excited about this cattle business, and I hope you are because, ladies and gentlemen, it's for real. If you're in this business, value it. Take care of those cows that are eating that grass and hay. Take care of those bulls you put in on that cowherd because they are half the reason why you might go ahead or go behind. You have decisions to make but you're able to do that; I know that. Don't short change yourself.
Good luck for the summer. It's upon us now. July and August are going to be hot with a lot of fires around so be ready for that. Remember to take care of that herd and make sure they have water. You can have one of the best grass ranches in your whole state but, if you're short of water where your cattle run, you don't have a ranch; you just have some acreage. As I've said many times, if you have the grass, it's wonderful, but if you grass but no water, you don't have a ranch... you just have a place to put fence posts.
BLM fire management program to focus on Sage Grouse protection...
The Bureau of Land Management (BLM) has announced that it is making sage grouse habitat and protection a high resource priority and that it will focus its hazardous fuels program on areas where sage grouse habitat protection is most critical. The targeted areas are primarily located in the Great Basin states with the highest probability of wildfire occurrence. "This week's fires in the West highlight the fact that wildfire is a significant threat to a healthy and sustainable sage grouse habitat," said BLM Deputy Director Steve Ellis. "After firefighter and public safety, the BLM will focus its fire program on protecting, preserving, and enhancing sage grouse habitat." The agency says that, by protecting and enhancing this habitat, the BLM is also supporting other populations of sage grouse, including the Gunnison Sage Grouse, Bi-State Sage Grouse, and Columbia Basin population sub-groups of the bird.
BLM preventative actions will include creating fuel breaks to limit the spread of wildfires, reduction of fuel loads and wildfire starts along travel corridors, pre-positioning firefighting resources to quickly respond to one or multiple fires, and expanding the training and use of Rangeland Fire Protection Associations, Rural Fire Departments, and other local, non-federal agency individuals as liaisons in wildland fire detection and suppression. Funding will support the planning and implementation of fuel treatments in order to reduce the start and spread of wildfires in sage grouse habitat. The federal FY2015 budget includes a request for $30 million for the Resilient Landscapes Initiative, from which some funds will be used to supplement the new BLM focus.
Mid-Year Report: U.S. cattle herd continues to shrink...
Released on July 25, the USDA's Cattle Report shows reductions in almost all classes of cattle since July 2012. (No report was issued in 2013 due to the sequestration, which temporarily reduced funding for federal agencies.) Compared with July 1, 2012, all cattle and calves in the U.S. -- at 95 million head -- are down 3%; cows and heifers that have calved are down 2%; beef cows, at 29.7 million head, are down 3%; all heifers weighing 500 pounds and over, at 14.9 million, are down 5%; and beef replacement heifers, at 4.1 million, are down 2%. Steers weighing 500 pounds and over are down 4% at 13.5 million head. The 2014 calf crop is forecasted to be 33.6 million, down 2% from 2012. The July 2014 Cattle on Feed report shows an overall reduction in feed yard inventories of 2% over a year ago.
Senators meet with EPA administrator on Water Rule...
The Senate Ag Committee's Republican members met with Gina McCarthy, Environmental Protection Agency Administrator, last week and asked her to withdraw the agency's Waters of the U.S. interpretive rule. Senate Ag Committee ranking member Thad Cochran (R-MS) said the Waters of the U.S. proposal and the ag interpretive rule are "a source of uncertainty and distrust for rural constituents." Senator Pat Roberts (R-KS) said, "Farmers and ranchers had hoped they would be able to persuade you (McCarthy) to recognize the far-reaching and negative impacts of the proposed and interpretive rules, but the reports back have not been positive. To hear that their concerns were categorized as 'silly' or 'ludicrous' is truly frustrating."
At this point, there is no indication that the agency will withdraw the rule.
Drought draining underground water resources...
Scientists studying the effect of the drought in the western U.S. on underground water resources say the threat to the water supply in the Colorado River Basin is greater than previously understood. The new study involves underground aquifers in seven Western states including Arizona, Colorado, Utah, Wyoming, California, New Mexico, and Nevada. Published in the journal of Geophysical Research Letters, the study says that the total amount of water loss is almost double the volume of the nation's largest reservoir, Nevada's Lake Mead, and that, from 2004 to 2013, satellite data shows that the Colorado River Basin, which supplies water to some 40 million people in seven states and irrigates about 4 million acres, lost nearly 53 million acre feet of fresh water. Experts have long said that water levels and losses in rivers and lakes can be well documented, but that underground aquifers are not as well understood. Satellites used in the study were able to detect below ground water by measuring the gravitational pull of the region as it changed over time due to rising or falling water reserves. "Combined with declining snowpack and population growth, this (water loss) will likely threaten the long-term ability of the basin to meet its water allocation commitments to the seven basin states and to Mexico," says the study.
Need propane? Buy NOW, analysts say...
The vice president of the Nebraska Propane Gas Association says customers should be filling their propane tanks or contracting low rates far ahead of the fall season in order to avoid the price spikes that occur when harvest starts and the weather cools off. Last winter prompted higher demands and record prices for the gas, with prices rising to nearly $5 per gallon... more than three times normal levels. Prices will ultimately depend on how cold the coming winter is, how long it's cold, and how much propane ag producers will need to dry grain after harvest. In general, say experts, propane customers in grain-producing states should get their tanks filled or contracts signed before grain-drying season begins.
Youngberg to lead MT Farm Bureau...
John Youngberg will succeed Jake Cummins as the executive vice president of the Montana Farm Bureau. Cummins retired in mid-July after 23 years with the group. Youngberg has served in Montana Farm Bureau's governmental relations division for 20 years, beginning his career with Farm Bureau as field staff and then as a lobbyist. "Montana Farm Bureau is well respected in Montana, and I'm looking forward to working with this exemplary organization as it continues to increase its membership and serve as the voice of Montana's farmers and ranchers," said Youngberg.
Savor the victory!
Appeals Court upholds COOL!
By Leesa Zalesky
For the third time in a little over a year, a U.S. court has upheld the U.S. country of origin labeling (COOL) law (which gives the WAR editor a small dose of optimism for the eventual outcome of this long-awaited but viciously harassed most excellent law). On July 29, the full Court of Appeals for the Washington D.C. Circuit upheld the USDA's authority over the COOL law for meat and held 8:3 that COOL disclosure requirements are legitimate and that the meatpacking industry does NOT have a First Amendment right to withhold origin information from consumers about where animals are born, raised, and slaughtered.
The D.C. Circuit’s en banc panel heard oral arguments in the case last January after a three-judge appeals panel upheld a lower court's decision to reject appellants’ motion for a preliminary injunction that would've halted the COOL program immediately. Judge Stephen F. Williams of the U.S. Court of Appeals for the District of Columbia, who was also on the three-judge panel, wrote for the majority of the full panel, saying the government's interest in COOL is “substantial” because there is a long history of such disclosures and a time-tested consumer interest in knowing where their food comes from.
The lawsuit began in July 2013 when the National Cattlemen’s Beef Association (NCBA), the American Meat Institute (AMI), and seven other Canadian, Mexican, and U.S. groups filed a complaint in the U.S District Court for the District of Columbia claiming that “beef is beef no matter where it’s produced” and seeking a preliminary injunction to halt the program altogether because, they argued, COOL constitutes a First Amendment violation. The lower court rightly rejected their claims and denied their motion, and predictably, the groups appealed to the three-judge panel. Their claims were rejected again, but the three-judge panel suggested in its opinion that the full appeals court might want to hear the case. The full court agreed, briefs were filed, and oral arguments were heard.
And on July 29, the anti-COOL crowd's claims were again rebuffed.
The plaintiffs in this case have the right to ask the U.S. Supreme Court to consider hearing their appeal. As this is written, AMI, NCBA, and the other plaintiffs have only said that they’re exploring their options… With three courts essentially telling them there’s little hope of winning this lawsuit, it will be interesting to see what they choose to do. (The WAR editor is confident that they will exhaust every underhanded option available to them.)
Leo McDonnell, director emeritus of the U.S. Cattlemen's Association (USCA), which is one of four defendant-intervenors in the lawsuit, says U.S. cattle producers who believe in their right to put a U.S. label on their product for consumers need to stay the course. “This is a landmark decision and a victory for U.S. ranchers and consumers,” said McDonnell. “But we’re NOT out of the woods yet. These groups could appeal to the U.S. Supreme Court. In the meantime, they are also trying to persuade Congress to rescind COOL legislatively. USCA had been at the forefront of this battle to defend COOL for years, and we'll continue to be… whether that’s in court, in Congress, or at the WTO. Now is the time to apply some pressure to your elected representatives. Let them know that you expect them to support COOL and to stand up for U.S. producers.”
Food ingredient fears target wheat
By Stewart Truelsen
It's one of the most iconic scenes from America's Heartland - combines sweeping slowly over golden fields of wheat, sun peaking from behind puffy white clouds, and trucks on the edge of fields hauling wheat to silos that look like prairie castles from afar. But every now and then the sky darkens and a thunderstorm rolls through, and that's what is happening to wheat with the gluten-free diet craze. Wheat has become a victim of food ingredient fears.
There is a medical basis for certain people to avoid bread and other foods made from wheat. These are people with celiac disease, who cannot tolerate gluten, a protein found in wheat, rye, and barley. This genetically-based, autoimmune disorder affects an estimated 1 in 133 persons, fewer than 1% of the population. Celiac disease damages the lining of the small intestine and interferes with the absorption of nutrients from food. There are several hundred symptoms of celiac disease, although some people with the disease have no symptoms at all. Typical symptoms include fatigue, depression, bloating, and abdominal pain. The only way to obtain a diagnosis is through a blood test and endoscopy biopsy. The Celiac Disease Foundation warns people not to attempt self-diagnosis. Yet, that's exactly what many seem to be doing. They either think they have celiac disease or non-celiac gluten sensitivity, for which there is no recommended test.
According to NPD Group, a market research firm, nearly 30% of the people responding to a recent survey said they were trying to avoid gluten. Fears about gluten now go way beyond gluten intolerance. They include unsubstantiated claims linking it to dementia, Alzheimer's, autism, epilepsy, and multiple sclerosis. In other words, diseases and health problems that have baffled medical researchers are now suddenly linked to eating gluten. Crazy as it seems, some people believe this.
Cornell University researchers are amazed at how easily food misconceptions spread without any real evidence. In one study, they found that people who feared food the most were better educated but got most of their food facts from Facebook newsfeeds, Twitter, blogs, or friends. Compared to the rest of the population, they also had a greater need to share their opinions with others. The Wall Street Journal counted 1,000 groups on Facebook with "gluten-free" in the name including a dating group for gluten-free singles.
It may seem like hysterical nonsense, but don't tell food marketers and restaurants that. They are cashing in on the trend with gluten-free products and menus. The same holds true for the publishers of diet books and self-appointed experts like a popular neurologist who advises everyone to stop eating all grains. This has become the next big wave after fat-free and non-GMO foods.
Except for a small segment of the population that can't tolerate the protein, avoiding gluten in the diet has no proven basis for being a healthier choice. In fact, gluten-free products may contain fewer vitamins, less fiber, and more sugar, and typically they cost more.
- American Farm Bureau Federation, Focus on Food, 7/23
Note: Stewart Truelsen is a food and ag freelance writer.
Western Watersheds Project responds to lawsuit from ranchers' group
The Western Watersheds Project (WWP) has released a statement in response to a lawsuit filed against it by a collection of ranchers, including some from Fremont County, Wyoming. Last month, WWP was sued by a group of Wyoming ranchers who alleged the group trespassed in order to collect samples of poor quality water from streams within public grazing allotments on federal land.
On July 25, Western Watersheds Project filed its answer to those claims, refuting all of the ranchers' allegations and raising counterclaims against the plaintiffs, including their abuse of process for bringing the lawsuit in order to intimidate and destroy WWP and to conceal their own wrongdoing and the illegal environmental conditions on these lands. "The ranchers really didn't want the public to find out how much harm their cows were causing to the public waters," said Travis Bruner, WWP Executive Director. "Instead of spending time and money cleaning up their operations, the ranchers and Karen Budd-Falen are bringing a frivolous lawsuit. It is so clearly intended to silence us, but you'll note that no one is claiming the data showing the astoundingly poor water quality conditions were wrong."
WWP collected and submitted water quality data to the Wyoming Department of Water Quality that showed E. coli bacteria occurring at harmful levels. E. coli is a coliform bacteria spread by livestock through defecation in or near to water, and this causes harm to wildlife habitat, endangers drinking supplies, and puts people at risk of infection. The Wyoming DEQ is obligated to release a list of the state's impaired waters. Rather than release the report to the public, the DEQ released the draft to affected ranchers who then concluded, with no additional evidence, that trespass might have occurred up to nine years prior.
WWP is being represented in its response by leading environmental and civil liberties law professors, who are taking the case pro bono because it is such an obvious attempt to sabotage the important work the organization does to uncover livestock industry abuses of public trust resources. The attorneys, Justin Marceau and Justin Pidot from the University of Denver Sturm College of Law, support WWP's efforts to reveal the profound environmental impacts of these grazing operations to the public. "This lawsuit has all the markings of an attempt to muzzle one of the few groups in the country that holds persons accountable for polluting our public waters. From what I have seen so far, this is really shameful conduct by a group of ranchers with too much to hide and too much money to spend on lawyers harassing small non-profits," said Justin Marceau.
"Federal law has long relied on groups of concerned citizens, like those involved with WWP, to monitor pollution and enforce rules designed to protect our shared environment. Trespass law has become a favored tool to which individuals and businesses profiting from environmental degradation turn in an effort to silence criticism and conceal information about the consequences of their activities. Winning is often beside the point to plaintiffs in these lawsuits," said Justin Pidot, attorney on the case. "Just filing the lawsuit imposes substantial costs on the defendants and chills citizen involvement in protecting public natural resources. To counter that chill and to protect the crucial role that citizens play in enforcing environment law, it is particularly important for defendants like WWP to have access to high quality, pro bono representation."
- County10.com, 7/26
Editor's note: Remember that WWP is rural America's public enemy number 1. LG
The carnivore's dilemma
By Alan Guebert
If most Americans followed commodity prices as blindly as they follow the Kardashians, the national dinner menu might well feature bushels of cheaper-by-the-day grains and teaspoons of record-priced pork, beef, poultry, and fish. Call it the revenge of the vegan or (with apologies to author Michael Pollan) the carnivore's dilemma, but 2014 is fast becoming a year of dirt-cheap grain protein and to-the-moon expensive animal protein.
It began with nearly ideal weather across most U.S. grain-growing areas. Timely planting of plenty of acres this spring has led to a price meltdown this summer: wheat futures slashed a knee-buckling 30% since early May, new crop corn futures a similarly smacked 30% lower since mid-May, and 2014 soybean futures clipped 17% since late May.
Meanwhile back at the ranch, hog farm, or poultry barn, the story is blue sky, clear sky, and sky high. After a mid-July stumble, feeder cattle futures, live cattle futures, and lean hog futures are back testing their lofty highs -- $2-plus for feeders, $1.50 for fat cattle, and $1.13 for hogs. Yes, those are either record or near-record prices. Yes, those prices are unsustainable. And, no, not even the big roosters at the U.S. Department of Agriculture are willing to bet the price run-up is over for fear of getting run over. "With the end of the grilling season in sight," noted USDA's monthly Livestock, Dairy and Poultry Outlook report of July 17, "consumer concerns [over high prices] will likely be realized, but at what price levels, and how sustainable will those levels be in the face of anticipated tight supplies...?"
I don't know, you don't know, and for the record, USDA doesn't know.
Widespread drought in southwest U.S. -- the biggest, hottest cause behind dwindling cattle numbers and rocketing beef prices -- continues. Until cattle country receives relieving rains, consumers can't expect much relief at the meat case. And that, in short, could be a long time; well into 2015 reckons USDA.
The picture is not as muddled on hog side. U.S. pork production, according to the July 17 report, is forecast to fall another 2% in 2014 as the deadly PEDv disease continues to ravage herds and boost prices. To make up for the shortfall in numbers, USDA says, producers will feed healthy hogs to heavier weights. Bigger pigs can't make up the fewer pigs, however, and USDA forecasts July-through-December hog prices 25 to 30% higher than 2013. Next year may see numbers climb, but prices, guesses USDA, won't fall much - maybe a tiny 5%. The takeaway? Eating high - or low, for that matter - off the hog is gonna get even more expensive this year than last.
Corn prices don't have that problem. On July 11, USDA pegged 2014 production, given normal weather, at 13.86 billion bushels. The weather across most of the U.S. corn belt, however, hasn't been normal; it's been spectacular. That near-perfection should show up in the next big USDA crop report August 12.
Private analysts aren't waiting. Many now peg 2014 production in the 14.3 billion bushel area, a healthy leap above 2013's record 13.9 billion bushel crop. The higher number comes courtesy of higher estimated yields: 170 bushel per acre nationwide compared to USDA's 165 bushel per acre. Harvest prices, already under $4, suggest the bigger, private numbers are already in the market.
Soybean prices are sliding south, also. Record acres combined with great weather easily will yield record production. The acre-weather combo already is yielding below-$11 per bushel futures prices, a mark not seen since late 2010.
The bigger question right now for soybeans may be how deeply today's cheap futures prices will cut 2014/15 South American plantings. The answer might be this winter's growing baby bull. In fact, it might be this winter's only baby bull when looking at 2014 grain markets halfway through this near-perfect summer.
Now, anyone have any bacon they can spare this BLT-crazed omnivore? I'll pay...
(c) 2014 ag comm