Final news and notes from Denver
The Cattle Industry Convention came to a close on Saturday with a joint meeting of the boards of the National Cattlemen’s Beef Association and Cattlemen’s Beef Board and the annual membership meeting for NCBA.
Here are some of the actions that took place:
- Bill Donald of Melville, Montana was elected to succeed Steve Foglesong as president of NCBA. J.D. Alexander of Pilger, Nebraska was elected as NCBA president-elect and Scott George of Cody, Wyoming the new NCBA vice president.
- David Dick of Sedalia, Missouri was elected chairman of the Federation of State Beef Councils. Craig Uden of Cozad, Nebraska is the new federation vice chairman.
- Tom Jones of Arkansas was elected chairman of the Cattlemen’s Beef Board, with Wesley Grau of New Mexico as vice chairman and Weldon Wynn of Arkansas as secretary/treasurer.
- According to a news release from the Federation of State Beef Councils, the federation adopted a charter that details its financial and decision-making independence from the National Cattlemen’s Beef Association (NCBA). The 12-point “Federation Charter of Principles” details independent functions, such as financial practices, while also retaining beneficial business ties (i.e., non-profit tax status) the two entities have shared during their 15-year relationship. A Federation Structure Working Group drafted the charter in response to a resolution passed by Federation directors at the summer 2010 cattle industry conference.
- According to a news release from NCBA, members voted to establish policy on immigration reform in order to represent producers living along the border. The resolution calls for full authority for federal agencies as well as state and local authorities to secure the border, including the suspension of all pending legislation and funding for federal-land designations along the border. The resolution states that federally-owned lands along the border with certain designations such as “wilderness areas” provide unfettered access for illegal cross-border activities by restricting the motorized access of federal agents responsible for patrolling the land.
During the Cattlemen’s Beef Board on Thursday, it was announced that the USDA’s Inspector General will conduct an audit of the beef checkoff and USDA’s Agricultural Marketing Service. The audit begins on February 7th.
CattleFax predicts record prices in ’11 and ’12
As usual, there was a big crowd on hand for the CattleFax Outlook Seminar in Denver on Friday—and, for the most part, the news was very positive. Bottom line—CattleFax predicts strong cattle prices will continue into the foreseeable future, with prices on all classes of cattle at record high levels in 2011 and 2012. In his closing remarks, CattleFax CEO Randy Blach summarized the various presentations made by CattleFax analysts.
AUDIO: Randy Blach (13 min MP3)
Points to Ponder (from the CattleFax Outlook 2011 Executive Summary)
- Global beef supplies decline and global beef demand rebounds. Many global economies are recovering much quicker than the U.S.
- Expanded market access to Japan and reopening China to U.S. beef exports would be very supportive to wholesale beef and cattle values.
- U.S. consumers will eat less beef at higher prices for at least the next three to four years.
- Calf prices will get to high enough price levels for herd expansion to kick in. This will happen during the next one to two years. Stocker operators need to be prepared for profit margins to narrow significantly during 2012-14.
- Ethanol production will use nearly 40 percent of U.S. corn production during 2011-12. Whether or not you love it or hate it, this topic will be on the front burner the next two years as global demand for grains exceeds supply.
- Farm and ranch land values are poised to increase significantly during the next two to three years. Gross incomes for farming and livestock operations will be record high.
- Costs will also increase! Managing for a solid margin will be critical. The market is expected to be more volatile and extreme during the next few years than any time in history.
- It is going to take a pile of money to operate in the years ahead. Many operations may be forced out of business because of lack of access to necessary credit.
- It is going to be volatile–have a plan and be disciplined. In this environment it will be very easy to be wrong. “Bet not thy whole wad!”
- Prices on all classes of cattle will be record high in 2011 and 2012.
Discussing taxes, FTAs and transportation
NCBA manager of legislative affairs Kent Bacus is fairly new to the organization, having started last fall. But he has hit the ground running on such issues as the estate tax, free trade agreements and the Mexican trucking dispute. In an interview with Brownfield’s Ken Anderson, Bacus also talks about pending legislation that would allow states to increase their truck weights.
USDA official says EPA’s Bay model is flawed
The chief of the USDA’s Natural Resources Conservation Service (NRCS) says the EPA used flawed agricultural data in formulating its TMDL rule for the Chesapeake Bay region.
White addressed NCBA’s Property Rights and Environmental Management Committee on Friday. According to an NCBA report on that meeting, White confirmed there are big differences between NRCS’ data on the effects of conservation practices on cropland and the data used by EPA.
“Where we have a problem is we think this Bay model is not 100 percent accurate when it comes to agriculture,” White said. “There is just some erroneous stuff in there. We believe 88 percent of cropland (in the Bay areas) is under no-till. EPA is saying 50 percent. That’s a big, big difference.”
Ashley Lyon, NCBA deputy environmental counsel, said it was reassuring to hear White reinforce the need for an accurate study.
“Given the seriousness of this issue and potential regulatory consequences to agriculture, it is absolutely imperative that a more accurate study is conducted. The regulations that will likely be derived from EPA’s flawed model will put farmers and ranchers out of business,” Lyon said. “This regulation not only impacts agricultural producers living on the Chesapeake Bay watershed but lays the foundation for all watersheds. Sound science must be the basis for any regulations.”
White said NRCS continues to work with EPA to collect accurate, science-based information.
Cattle industry turmoil still evident in Denver
Despite several calls for unity at the Cattle Industry Convention in Denver, there is still quite a bit of turmoil in the industry. Bob Drake of Davis, Oklahoma brings an interesting perspective to the story. Drake served as president of the old National Cattlemen’s Association in the mid-90’s—and he has been a member of the Cattlemen’s Beef Board (CBB) for 12 years. In Drake’s opinion, the big issue is that the larger cattle producing states of Texas, Nebraska, Kansas, Oklahoma and South Dakota—the ones that pay the most money into the beef checkoff—have “little or no representation” in CBB leadership positions. In fact, Drake led a charge at this year’s meeting to nominate an alternative slate of officers to lead the CBB. Drake agrees it’s time to start healing wounds in the industry. If that doesn’t happen, he fears the beef checkoff could go away altogether.
Using killed vaccines in the feedlot
Dr. Dennis Hermesch is a professional service veterinarian with Novartis Animal Health. He is trying to dispel the notion that killed vaccines only have application on the cow-calf side of the business. He says some recent research shows that there is a place for killed vaccines in the feedlot as well. Brownfield’s Ken Anderson talked with Dr. Hermesch at the Cattle Industry Convention and asked him why this information is important to feedlot operators.
Nebraska cattleman now NCBA president-elect
J.D. Alexander of Pilger, Nebraska has moved up to the position of president-elect of the National Cattlemen’s Beef Association. At the Cattle Industry Convention, we sat down with Alexander to visit about current issues facing the cattle industry. And while the higher prices being enjoyed by cattlemen right now are not what you would call “an issue”, Alexander says he is concerned about the general volatility in the markets for both inputs and outputs. He says good risk management is a requirement for today’s beef producer.
USMEF chair has a diversified operation
Keith Miller of Great Bend, Kansas currently serves as chairman of the U.S. Meat Export Federation. In addition to his cattle operation, Miller also has 7,000 acres of cropland. He raises and markets alfalfa hay and also grows winter wheat. At the Cattle Industry Convention in Denver, we visited with Miller about Roundup Ready alfalfa, which he has been growing for several years—and the condition of his winter wheat crop, which he says is “in tough shape.”
Educating new members of Congress is a priority
Getting all of those new members of Congress up to speed on agriculture is one of the challenges facing agricultural groups this year. NCBA’s vice president for government affairs Colin Woodall says with 85 new members in the House of Representatives, the beef industry has its work cut out for it. In fact, 75 percent of those on the House Agriculture Committee are new members. In our interview with Woodall, we also discussed what NCBA president Steve Foglesong calls “the regulatory rollercoaster ride” taking place in Washington, D.C.
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