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December 17, 2014
Livestock and Ag Credit News

Beef Consumption & Demand Are Two Different Measures

By Nevil Speer, BEEF Magazine, 12/8/14—While the broader news media has focused upon retail prices, there's also been lots of discussion around the beef industry's sharp reduction in production during over the past 10–15 years. Within that context, conventional wisdom generally attributes one single factor to higher prices – declining supply. Accordingly, per–capita beef consumption has also declined.

With that said, an analysis of consumption alone isn't very reflective of consumer perception of beef and/or beef products. It really tells us nothing about the price/value relationship when consumers make beef purchases.

A more accurate measure of beef competitiveness is reflected by the beef demand index. Demand reflects both supply and price. In other words, even with low supply, if consumers aren't favorable toward beef, there's little pricing power to clear the market. Steady consumption does NOT mean steady demand; nor does declining consumption reflect declining demand. In fact, consumption has declined during the past several years while demand has improved. Stated another way, supply has helped stretch the market to a series of new record–highs this year. However, higher prices can't be passed on if consumers favor the competitors (pork/poultry). Beef's pricing power has been formidable during the past several years – the direct result of better demand.

GIPSA NEWS: 12/10/14

Livestock and Ag Credit News

New Video Offers Tax Strategies for Cattlemen

By Amanda Radke, BEEF Daily, 12/16/14—"You must pay taxes. But there's no law that says you gotta leave a tip," said Larry Kopsa, CPA, in a recent webinar hosted by the National Cattlemen's Beef Association (NCBA). Kopsa, a Nebraska–based accountant, was referencing a quote used in an advertisement by Morgan Stanley, and it's pretty accurate as we wind down 2014.

Colin Woodall, NCBA senior vice president of government affairs, and Kent Bacus, NCBA associate director of legislative affairs, discussed what's happening in Congress in relation to tax rules. For example, during the lame duck session of Congress, NCBA is focusing on tax reform in 2015, such as reinstating Section 179 expensing and 50% bonus depreciations to 2013 levels, and extending the conservation easement tax credit and key charitable deductions. Watch the full discussion HERE.

As Beef Industry Deals With Drought, Researchers Eye Less–Thirsty Cattle

By Logan Layden, State Impact OK, 12/15/14—The ongoing drought in Oklahoma affects everyone in the country. Well, everyone who likes to eat beef, that is. Beef and veal prices will have risen by about 11.5 percent in 2014, and, as Reuters reports, "will increase significantly again in 2015″ because of drought in the Southern Plains. Researchers from Oklahoma State University are using a $1 million grant from the U.S. Department of Agriculture to study how to make herds more resilient for future droughts.

Megan Rolf, an OSU animal scientist, said the purpose of the grant is two–fold. Researchers are looking at the amount of feed and water certain breeds of cattle consume, with the long–term goal of developing cattle that are more adaptable to certain climate conditions, including drought. The group is also working to expand the Mesonet's cattle comfort index, a tool that shows ranchers how climate conditions are affecting their herds, she said.

Patent Issued for 'Peanut Brittle' Livestock Vitamin Supplement

Beef Producer, 12/16/14—A candy–like coating that protects vitamins and other micronutrients given to cattle and other ruminant animals from being prematurely digested by bacteria in the animal's digestive system has been issued a U.S. patent. The coating, which is compared to peanut brittle, was developed by Kansas State University researchers Jim Drouillard, professor of animal sciences and industry, Tom Herald, food chemist and adjunct professor of grain science and industry, and Matthew Greenquist, former graduate student. The coating provides an easy, inexpensive method for delivering undiluted dosages of vitamins, amino acids and other nutrients to livestock, a K–State announcement said.

No Magic Bullets, But Pork Industry Research Builds Toward Future Solutions

By Lora Berg, National Hog Farmer, 12/12/14—National Hog Farmer has a long tradition of delivering research–based information targeted specifically for our pork producer readers. Our December issue, arriving in your mailboxes soon and posted on the website, is devoted to the most–current research published within the last year to help support our industry. There are a lot of great minds working hard to solve many of the challenges pork producers are facing.

Sometimes these technical papers are not necessarily "light reading," and require some additional interpretation. It's always good to keep the results of each study in perspective, too. It may take a series of methodically done studies to reach a practical conclusion that can immediately be put to work in producers' barns.

Consumers Rank Taste, Value as Most Important in Beef Purchases

By Burt Rutherford, BEEF Magazine, 12/11/14—Consumers feel good about beef. That finding from a checkoff–funded study reported earlier this year is just one more indication that in spite of the highest retail beef prices in recent memory, beef isn't backing up a bit to its competitors. In fact, when separated out into "buckets," or segments of consumers who view beef either positively or negatively, the beef industry has made some significant strides.

In bucket one are consumers who say beef's positives strongly outweigh its negatives. In bucket two are consumers who say the positives somewhat outweigh the negatives.Together, these two buckets totaled 70% in May 2007, says John Lundeen, senior executive director of market research at the National Cattlemen's Beef Association.

Capitalize on Implants

By John Maday, Drovers CattleNetwork, 12/12/14— First introduced in the early 1950s, growth–promoting implants have evolved considerably and proven their economic value, but in many cases remain underutilized. That was a message from Kansas State University feedyard specialist Chris Reinhardt, PhD, in a presentation during the recent Academy of Veterinary Consultants conference.

Reinhardt outlined decades of research and practical experience in using implants at all production stages. Implants, he says, are the only treatment at processing that pays in every animal. Antibiotics, vaccines and dewormers provide value across the population, but some percentage of cattle would do fine without them. Implants provide about the same improvement in gains and feed efficiency for every animal, provided the implant is administered properly.

Classifying Bison as Livestock Would Doom Restoration

By Tim Preso, Missoulian, 12/15/14— United Property Owners of Montana (UPOM) appears to be laying the groundwork for a campaign to change the law to suit its purposes. UPOM wants to transform wild bison into livestock whenever the state acts to restore wild bison to their historic range. But UPOM's arguments are flawed.

UPOM claims that the existing classification of wild bison as wildlife leaves Montana private property owners helpless to prevent bison from entering their property and gives them no recourse for any damages they may cause. This argument ignores the provisions of an existing law that was enacted by the 2011 Montana Legislature for the very purpose of establishing protections for private property when wild bison are transplanted onto private or public land.

The change in classification would shift jurisdiction over such bison from Montana Department of Fish, Wildlife and Parks (FWP) to the Montana Department of Livestock, an agency established to protect the state's livestock interests. Unlike FWP, the Department of Livestock has indicated no interest in restoring wild bison to their historic range and has no statutory mission to do so.

Global Livestock News

Sustainability Is in Sight

Canadian Cattlemen, 12/12/14—The sustainability movement picked up a full head of steam last month in Sao Paulo, Brazil when the Global Roundtable for Sustainable Beef (GRSB) released its master plan for establishing sustainable beef production around the world.

The GRSB defines sustainable beef as a socially responsible, environmentally sound and economically viable product that prioritizes the planet, people, animals and progress. This is further refined into five core principles: natural resources, people and the community, animal health and well–being, food and efficiency and innovation.

It's now up to national and regional roundtables to apply the GRSB blueprint at the local level. In Canada, that task falls to the Canadian Roundtable for Sustainable Beef (CRSB). The current membership includes provincial and national beef industry associations, dairy and barley producer groups, conservation organizations, and businesses representing the packing, retail, food–service, animal health, and financial sectors.

Some of the pieces are already in place such as the Verified Beef Production program, the Beef InfoXChange System (BIXS), and environmental farm plans but the CRSB will be spending a good part of 2015 developing other sustainability indicators, according to Fawn Jackson, the Canadian Cattlemen's Association manager of environment and sustainability.

Scotch Beef Named Scotland's Favourite Food

The Cattle Site, 12/11/14—Farmers, butchers and processors throughout Scotland are celebrating the news that Scotch Beef PGI has been revealed as the nation's favourite Scottish food.The research was commissioned by "2014 Food & Drink", the campaign dedicated to promoting Scottish food and drink producers during 2014. The YouGov poll to celebrate Scottish Food Heroes, revealed the Scottish public's number one food is Scotch Beef PGI. To qualify to be sold as Scotch Beef, meat must come from cattle which have born reared and slaughtered in Scotland. The brand is also underpinned by Quality Meat Scotland's quality assurance schemes which ensure high standards of production and animal welfare.

Global Livestock News

Joint Statement by NCBA and PLC on Senate Passage of Funding Bill

Beef USA News Release, 12/15/14—The $1.1 trillion omnibus package passed by the Senate today held several strong wins for the cattle industry. National Cattlemen's Beef Association President Bob McCan and Public Lands Council President Brenda Richards remarked on Senate Passage of 2015 Funding Legislation:

"We greatly appreciate Congress' passage of this important legislation which contained a number of critical provisions that will support the viability of our industry for the year to come. The bill made a major step in addressing over–burdensome regulation from the EPA by withdrawing the Interpretative Rule as part of the Waters of the United States proposed regulation. The rule, which attempts to clarify farming and ranching provisions under the Clean Water, adds uncertainty rather than explanation for landowners and threatens fines of up to $37,500 per day. While not a complete fix, this is a critical step in addressing the strong concerns farmers and ranchers have with this regulation."

USDA Announces Early Release of Commodity Tables for USDA's Agricultural Projections to 2024

USDA News Release, 12/16/14—On Dec. 18, 2014, at 11:00am EST, the U. S. Department of Agriculture (USDA) will release selected tables from its upcoming USDA Agricultural Projections to 2024 report. USDA will post online tables containing long–term supply, use, and price projections to 2024 for major crops and livestock products, and will include supporting U.S. and international macroeconomic assumptions.

The USDA will release the complete USDA Agricultural Projections to 2024 report, as scheduled, on Feb. 11, 2015. The complete report includes a full discussion of the commodity supply and use projections, as well as projections for global commodity trade, U.S. trade value, and farm income. The early–release tables will be posted to the Office of the Chief Economist's (OCE) website at The tables will be in MS Excel format.

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Prepared by Polly Welden