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Blach predicts beef industry contraction

The beef industry will continue to experience the effect of the downsizing of the beef cow herd and the consequent excess feedlot and packing plant capacity this year, and "this industry is going to consolidate," according to Randy Blach, chief executive officer of CattleFax.

A smaller cow herd and feeder supply caused fed cattle production to decrease 1.6 million head from 2008 to 2012, and production will decrease another 470,000 head this year alone, he said.

Because of this, he said feedlots and plants are having problems operating efficiently, with feedlots having 25-30% excess capacity and plants having 15% excess capacity.

Furthermore, he said feedlots are "commanding" more and more of the beef prices, noting that the fed steer price as a percent of the beef cutout was higher last year than in the last 12 years.

Nevertheless, feedlots are losing money, as are packers and as are retailers on their beef programs, he said. "We are pushing up against a ceiling," he said, and something has to give. "People downstream need to make money or 'cry uncle,'" he said.

Indeed, "the first domino has already fallen," he said in reference to the decision by Cargill Inc. to close a major plant in Plainview, Texas (Feedstuffs, Jan. 21).

On another issue, Blach said the cash cattle market is becoming "thinner and thinner," pointing to how the cash cattle trade has decreased from 52.1% of the market just seven years ago to 26.0% today, with alternative marketing options increasing from 47.9% of the market then to 74.0% today.

Blach delivered his remarks to the CattleFax market outlook at the Cattle Industry Annual Convention & Trade Show in Tampa, Fla., Feb. 8.

GMO label legislation fails in New Mexico

The New Mexico legislature has tabled a bill that would have required animal feed and food for human consumption that contained genetically modified organisms (GMOs) to carry a GMO label, effectively killing the measure. 

Sen. Peter Wirth, who sponsored the bill in the Senate, said he is confident similar legislation will pass in other states where GMO-label legislation in being considered.

NCBA developing voluntary program to 'enhance' checkoff

The national beef checkoff was established in 1985, and "a lot has changed since then," according to Bill Donald, a cow/calf producer from Montana and past president of the National Cattlemen's Beef Assn. (NCBA).

The global population has increased from 4.8 billion people to 7.0 billion people, he said, corn has tripled in price, fed cattle prices have more than doubled, retail-level beef prices have more than doubled and the $1 that's checked off is now worth just 47 cents.

The beef checkoff collects $1 per head in all cattle selling transactions and funds beef advertising and promotion, consumer information, industry research and producer education. It was established by Congress, and checking off is mandatory. 

The checkoff is managed by the Cattlemen's Beef Board, and NCBA is the board's primary contractor for checkoff programs.

Donald, co-chair of NCBA's demand resource working group, in remarks to NCBA's board of directors Feb. 9, introduced a plan to "enhance" the checkoff with an additional voluntary collection.

Co-chair Dave Hamilton, a cow/calf producer from Nebraska, noted that beef checkoff revenues are declining while pork checkoff revenues are increasing, decreasing the competitiveness of beef in the retail stores next to pork.

He said increasing beef demand is "a big concern" given how retail-level beef prices are increasing and unemployment is not recovering. The industry needs more resources to address this, he said.

He also said the industry needs more resources to address activist challenges, including ones surrounding animal rights, the environment and human health and nutrition.

He said the first opportunity to raise those resources through the checkoff, as this would require legislation, would be through a farm bill in 2015 or later. However, a voluntary effort does not require legislation, he said.

Donald said NCBA is working with other organizations with interests in the beef industry, including the American Farm Bureau Federation, National Farmers Union, National Livestock Producers Assn. and U.S. Cattlemen's Assn., to create a united front to encourage producers to contribute to a voluntary program.

Scripting the voluntary effort "is a work in progress," Donald said, but currently, the concept would be to set an amount that would be paid by feedlots and matched by packers, with ranchers and stockers also being encouraged to make contributions.

He said the resource working group hopes to be prepared to present the full program to the NCBA board at its summer meeting in August.

The board met during the 2013 Annual Cattle Industry Convention & Trade Show.

Resolution

The board passed a related resolution saying should NCBA pursue enhancements in the actual checkoff, the improvements should be targeted at building beef demand effectively and efficiently, assuring that the checkoff is accountable to producers, enabling strong national and state partnerships that maintain state input, maximizing grassroots involvement, minimizing government control and restoring the ability to fund programs "to a significant level."

USDA proposes action plan for swine brucellosis, pseudorabies

The U.S. Department of Agriculture's Animal & Plant Health Inspection Service (APHIS) has drafted a proposed action plan that presents current thinking and concepts about modifications that could be made to its domestic programs for swine brucellosis and pseudorabies.

"This action plan outlines a potential new approach to our regulations," John R. Clifford, deputy administrator for APHIS' Veterinary Services program, said. "We recognize that our animal health status related to these diseases has changed, and we'd like to bring our regulations up to date to address current risks."

No states have had recent outbreaks of either disease in commercial production swine. Therefore, all states are currently considered free for swine brucellosis and pseudorabies, and there are no restrictions on the interstate movement of any swine within the U.S. for these diseases.

In recent years, APHIS has identified several swine herds throughout the U.S. that were infected with swine brucellosis or pseudorabies. None of these herds were commercial production swine and the infections were all attributed to exposure to feral swine or to herds that may have had feral swine exposure, which is reservoir of swine brucellosis and pseudorabies.

APHIS said the proposed action plan incorporates the risk of disease introduction presented by feral swine, which is not addressed in the current regulations.

This proposed action plan details issues with the existing regulations and sets forth a draft regulatory framework to potentially address these issues, to reduce the regulatory burden associated with outmoded provisions of the programs, and to combine the swine brucellosis and pseudorabies programs into one program.

This proposed action plan is published in the Feb. 7 Federal Register at http://www.regulations.gov/#!docketDetail;D=APHIS-2010-0086.

Feed industry working on lifecycle analysis

Environmental footprinting has gained more and more traction in the agriculture industry, as consumers and activist groups increasingly question how effectively various sectors of the economy use scarce natural resources. A global consortium of feed companies and industry organizations says it will reach a major milestone in gauging the environmental footprint of livestock feed production in 2013.

Among the chief criticisms of various studies of sustainability of, or environmental effects from a given industry is a consistent, logical methodology for measuring and interpreting various factors in a lifecycle analysis (LCA), the so-called “cradle-to-grave” assessment of environmental impacts associated with every stage of a product's life. To harmonize the methodology used for environmental footprinting of compound feed production, the American Feed Industry Association (AFIA), European Feed Manufacturer’s Federation (FEFAC) and the International Feed Industry Federation (IFIF) will publish an interim version of the Feed LCA Recommendations and an accompanying guidance document this April.

Born from a consortium formed by AFIA and FEFAC in 2011, and now part of a UN-led effort to benchmark and monitor the environmental performance of livestock supply chains, the group says it is critical to have a uniform set of standards for assessing the global environmental footprint of feed production.

“With the need to reduce the impact of livestock products on the environment, being able to measure the impacts associated with feed using a sound and harmonized methodology is a first step to initiate mitigation options,” said Joel Newman, AFIA’s president and CEO.

The interim version of the Feed LCA Recommendations will be presented during the 4th Global Feed and Food Congress, hosted by IFIF in South Africa this April. Feed LCA recommendations are being developed in accordance with accepted international standards, and taking place within the UN Food and Agriculture Organization partnership, a three-year project announced last summer (Feedstuffs, July 9, 2012) and chaired by University of California-Davis professor Frank Mitloehner.

Along with the interim recommendations, the group will also release a database of greenhouse gas emissions of major processed feed ingredients.

AFIA and FEFAC’s original consortium, established prior to the UN partnership, is a collaboration of seven feed companies, including giants Cargill, De Heus and Nutreco, as well as seven feed associations including AFIA and FEFAC.

 

Pork Board schedules sow group housing webinars

The National Pork Board has scheduled a number of webinars about housing options for gestating sows that address group housing.

The 45-minute webinars are free and will be on successive Tuesdays and Thursdays at 1 p.m. CST. Each will feature experts who will discuss group housing management as follows:

March 26 -- Group housing system choices and designs,

March 28 -- Forming sow groups,

April 2 -- Floor space allocation and group size,

April 4 -- Genetic considerations,

April 6 -- Feeding practices,

Aprll 11 -- Production flow and management,

April 16 -- Conversion and new construction and

April 18 -- Economics of sow housing conversion.

A question and answer period will follow each webinar, according to the announcement.

Registration is requested at www.pork.org/sowhousing, and additional information is available from Sherrie Niekamp at [email protected] or (515) 223-3533.

 

Bill introduced to reduce RFS

U.S. Reps. Gregg Harper (R., Miss.) and Jim Matheson (D., Utah) introduced a bill Feb. 6 that takes the pressure off of meeting the cellulosic ethanol requirements in the Renewable Fuels Standard.

The U.S. Environmental Protection Agency (EPA) has required the nation’s petroleum supply to contain a blend of more than 20 million gallons of renewable fuel additives, commonly referred to as cellulosic biofuel, since 2010. However, the nonpartisan Congressional Research Service recently reported that cellulosic biofuel is not estimated to reach commercial volumes until at least 2015.

“This legislation simply requires the EPA to rely on actual industry production instead of bureaucratic predictions,” said the lawmakers, who serve on the House Energy and Commerce Committee.

Noncompliance fines are issued to energy producers who fail to meet the EPA’s fuel rules. Refiners may also purchase credits through the agency to avoid the fees.

“The agency’s current method for calculating these fuel standards leaves America’s energy suppliers with two options: pay government penalties or buy government credits,” Harper added. “Either way, the cost is likely passed through to consumers who are already paying high gas prices.”

Matheson called it a "common sense bill" because it requires the EPA to take into account actual production numbers and protects business and consumers from unrealistic goals resulting in higher costs.

A recent U.S. Court of Appeals decision knocked down the EPA’s 2012 mandate, saying that the agency is not allowed “to let its aspirations for a self-fulfilling prophecy divert it from a neutral methodology.” The EPA has moved forward with its 2013 numbers that increase last year’s standards by an additional six million gallons.

A statement from Fuels America called the bill "short-sited" and Growth Energy added it is a "well-disguised end run around the RFS, attempting to eliminate the use of biofuels in the commercial marketplace" by "pandering to the wishes of the oil industry."

The bill will be referred to the House Energy and Commerce Committee for consideration.

Groups concerned of USPS rural impact

Starting in August, the U.S. Postal Service (USPS) will no longer deliver regular mail to street addresses on Saturdays, yet will continue package deliveries. Rural groups fear the action will have a significant negative impact on rural America.

In a release from USPS, market research conducted by the Postal Service and independent research by major news organizations indicate that nearly seven out of ten Americans (70%) supported the switch to five-day delivery as a way for the Postal Service to reduce costs in its effort to return the organization to financial stability.

The Postal Service said mail will be delivered Monday through Friday. Mail will also still be delivered to P.O. boxes on Saturdays. Post office locations currently open on Saturdays will remain open on Saturdays. The operational plan for the new delivery schedule anticipates a combination of employee reassignment and attrition and is expected to achieve cost savings of approximately $2 billion annually when fully implemented.

The Postal Service is currently implementing major restructuring throughout its retail, delivery and mail processing operations. Since 2006, the Postal Service has reduced its annual cost base by approximately $15 billion, reduced the size of its career workforce by 193,000 or 28%, and has consolidated more than 200 mail processing locations, USPS said.

The Postal Service is an independent government agency and does not receive tax money to support its operations, USPS said. It relies on the sale of postage, products, and services to fund its operations.

National Farmers Union president Roger Johnson said the elimination of Saturday delivery, coupled with the loss of good-paying postal jobs, spread over the entire nation, will negatively impact the economy.

“The impacts on rural America will be particularly harmful," Johnson said. "In many cases, local and regional newspaper delivery to outlying areas will be delayed for days. This not only damages the circulation numbers of the newspaper, but also devalues local information and advertising. Rural businesses do not need this economic blow delivered via the mailbox." 

Ed Luttrell, president of the National Grange, said six-days-a week mail service prevents rural Americans from suffering as they often don't have access to high-speed internet used by those in urban and suburban areas to conduct professional and personal business.

National Grange Legislative Director Grace Boatright said elderly Americans living in rural areas could stand to lose the most should more drastic steps be taken or requested by the USPS to remedy its failing financial condition.  

"The postal service provides delivery of medicines for many of our citizens in remote areas or who are less-than-agile, along with delivery of medications for livestock. Without dramatic reform from Congress, the USPS may be forced to continue eliminating much-needed services," Boatright said.  

While the change in the delivery schedule announced is one of the actions needed to restore the financial health of the Postal Service, USPS said "legislative change is urgently needed to address matters outside the Postal Service’s control." The Postal Service continues to seek legislation to provide it with greater flexibility to control costs and generate new revenue and encourages the 113th Congress to make postal reform legislation an urgent priority.

In recent months, the National Grange - America's oldest advocacy organization for rural America and agriculture - has encouraged Congress to relieve the USPS of their requirement to prepay future retiree health benefits, a mandate that costs the USPS $5 billion annually, as well as liberate the USPS to a private entity, free of congressional control.  

Beef producers have high support for checkoff

Producer support for the National Beef Checkoff remains strong, according to a nationwide survey of beef and dairy producers conducted by Aspen Media & Market Research. 

The survey found support at 76%, identical to year ago, remaining at a historical high.

The survey also found that 80% of producers say the checkoff has helped create a positive trend for beef demand, 70% of producers say the checkoff contributes to profitability for their operations and represents their interests and 70% of producers say the checkoff is well managed.

The checkoff collects $1 per head in all cattle selling transactions to fund beef advertising and promotion, consumer information, industry research and producer education.

The results were announced at the 2013 Cattle Industry Convention & Trade Show in Tampa, Fla., Feb. 6.

USDA reports synthesize literature on climate change effects

The U.S. Department of Agriculture released two comprehensive reports Feb. 5 that synthesize the scientific literature on climate change effects and adaptation strategies for U.S. agriculture and forests.

The reports, entitled "Climate Change & Agriculture: Effects & Adaptation" and the "Effects of Climate Variability & Change on Forest Ecosystems: A Comprehensive Science Synthesis for the U.S. Forest Sector," were created as inputs to the National Climate Assessment. Scientists from the federal service, universities, non-governmental organizations, industry, tribal lands and the private sector contributed to the peer-reviewed studies.

"These reports present the challenges that U.S. agriculture and forests will face in this century from global climate change," said William Hohenstein, director of the climate change program office in USDA's Office of the Chief Economist. "They give us a framework for understanding the implications of climate change, in order to meet our future demands for food, feed, fiber and fuel."

The reports indicate how climate change is affecting U.S. farms, forests, grasslands and rural communities. While U.S. agriculture and resource management have long histories of successful adaptation to climate variability, USDA said the accelerating pace and intensity of climate change presents new challenges to be addressed, as highlighted in the reports.

For example, USDA said the agricultural report indicates increases in atmospheric carbon dioxide, rising temperatures and altered precipitation patterns will affect agricultural productivity. Climate change will exacerbate the stresses already occurring from weeds, insects and disease. Increases in the incidence of extreme weather events will have an increasing influence on agricultural productivity.

The reports also explore the potential for adaptive practices to reduce the negative effects of climate change and to potentially take advantage of new opportunities in the forestry and agriculture sectors, USDA said. Successful adaptation will require research to identify management practices that enhance the resilience of these systems to climate change effects, develops stress-tolerant plant and animal varieties and establishes new approaches to conserve soil and water resources.