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NLPA News Brief
March 25, 2015
Livestock and Ag Credit News

Agricultural Water Issues Keep Overflowing

By Alison Rice, AgWeb, 03/25/15—A worsening drought in California. A public utility's lawsuit in Iowa. Water quality legislation in Ohio. Buffer zones in Minnesota. And a speech that touched on the controversial proposal known as the "Waters of the U.S." rule.

Coast to coast, the topic of water is flooding the conversation in farmland. "Are water quality issues coming to a head in agriculture all over?" asked John G. Dillard, an associate attorney at OFW Law in Washington, D.C. "Yes."

Dillard, who specializes in agricultural issues, including water quality, points to recent efforts in Maryland to regulate fertilizer use due to concerns about the Chesapeake Bay. In Ohio, lawmakers recently approved a bill that prevents farmers from spreading manure or other fertilizers on frozen or saturated fields.

And then there's Iowa, where the Des Moines Water Works has sued three Iowa counties over what it sees as their failure to manage agricultural runoff.

NOTE: Today, the National Institute for Animal Agriculture is in its second day of its Annual Conference in Indianapolis, IN discussing "Water and the Future of Animal Agriculture."

GIPSA NEWS: 03/18 to 03/24/15

Livestock and Ag Credit News

Crossbreeding Gets You More Than Just Hybrid Vigor

By Burt Rutherford, BEEF Magazne, 03/19/15—"The best thing about heterosis," says Joe Paschal, Texas AgriLife Extension beef specialist in Corpus Christie, "is that it's cumulative. So as you start down a crossbreeding program, the fact that you have daughters that are more fertile, produce more milk and have longer longevity, that's the real benefit."

But, he stresses, it's not the only benefit. "A lot of people ask, 'why should I crossbreed?' (And the answer usually is) 'I want heterosis.' You know what I say? I say it's because I get to choose the breeds I want," Pashcal says. "Breeds can be combined to fit multiple market situations and environments," he says. "Heterosis is the icing on the cake. But breeds are what determine the taste of the cake."

South Dakota Sheep Project Earns National Recognition

By Rita Brhel, Yankton Daily Press & Dakotan, 03/20/15—Texas and California have long been the nation's leaders in sheep production. And while South Dakota's 2015 inventory keeps it in the top 10 states, South Dakota's 255,000 head is well below Texas's 720,000 and California's 600,000.

What may be surprising, however, is that South Dakota has become a leader in the sheep industry in providing production education and spearheading growth in the sheep industry. The Sheep South Dakota Project (SheepSD) was recently recognized during the 2015 American Sheep Industry (ASI) annual convention in Reno, NV.

South Dakota currently sits in seventh place with Colorado, Wyoming, Utah and Idaho also ahead of it. That's not unexpected, considering that 80 percent of the nation's sheep are owned by large operations in these states, according to the 2012 Agricultural Census. Small producers, those owning fewer than 100 sheep, comprise the majority of sheep operations, although they own only 17 percent of the U.S. inventory.

Can Profitable Beef Operations Go Broke?

By Kris Ringwall, Drovers CattleNetwork, 03/20/15—Can profitable beef operations go broke? Absolutely, is the answer. Why? For one thing, the definition of profit is misused. And the longer the wrong numbers are applied to the word "profit," the more likely an operation can get into financial trouble.

Ranch and farm records, unfortunately, are very diverse, which results in difficulty in clearly understanding what the records mean. Care needs to be taken to make sure the numbers used are the numbers needed to answer the question. The market price of a calf minus the direct expenses of producing that calf often is stated as profit. However, that calculation is far from any indication of the financial status of a beef operation.

This very narrow and selective approach to business discussions makes good coffee shop talk but may or may not pay for the coffee. Starting with tax preparation, loan renewals, checking account balances, gross margins, direct and indirect expenses, depreciation, net returns, labor and management charges, and, ultimately, return on total assets, the mind can go numb.

What Happened to Select and No Roll?

By Nevil Speer, 03/19/15—Since 2000, Choice and Prime tonnage has increased by nearly 2 billion pounds, while "other" tonnage (Select and No–Rolls) has declined by 3 billion pounds. That occurrence is perhaps even more significant when considering that fed cattle marketings have declined by nearly 3.7 million head (15%) during the same time frame.

So while marketings have declined, the industry has compensated by making cattle bigger. Slaughter weights have increased by nearly 110 pounds since 2000. But meanwhile, cattle are grading better, resulting in the tonnage divergence seen in the illustration. This is an important trend. The question going forward is whether this type of divergence will continue.

Five Questions Ranch Families Should Ask Before Adding the Next Generation to the Business

By Amanda Radke, BEEF Daily, 03/24/15—Ranching is a family business, but it isn't always easy being in business with multiple generations and in–laws. Here are five questions ranching families should ask before inviting another generation into the business. According to a recent article written by BEEF contributor Wes Ishmael, "Two–thirds of family–owned agricultural businesses never make it past the second generation."

Here are five questions families should ask before adding more family members to the payroll:

1. Can the ranch support another family?
2. If not, how can the operation diversify to increase income?
3. If yes, is everyone on the same page for the expected standard of living?
4. How long is the next generation willing to wait?
5. Is labor a good trade for use of equipment, facilities and pasture?

Farm Security and Crisis Management: Dos and Don'ts in Hiring

American Sheep Industry Association Weekly Newsletter, 03/20/15—Undercover videos by activist groups targeting modern farming and ranching practices have increased in the past decade, and have been driving factors for many companies to set or change policies for their suppliers about farm animal care; some have even terminated contracts with farmers over concern for their brand. These campaigns have also driven a great deal of legislation, negatively impacting the farm community. Learn more about what you can do to protect your farm, your animals and your business, and how to proactively plan for a potential crisis.

Register now to participate in this important and timely webinar – Farm Security and Crisis Management: Dos and Don'ts in Hiring – taking place on April 13 at 8:00 p.m. Eastern Daylight Time. To register, click HERE. This webinar is funded through the American Sheep Industry Association's Let's Grow Committee.

Global Livestock News

Canadian Swine Health Surveillance Network Almost Fully Operational

The Pig Site, 03/23/15—The general manager of Manitoba Pork expects the fledgling Western Canadian Swine Health Intelligence Network to be fully operational within a matter of months. Pork producer councils in the four western provinces, in partnership with the Offices of the Provincial Chief Veterinary Officers, have established a Western Canadian Swine Health Intelligence Network to assume the responsibility of swine health surveillance in western Canada.

Farmer Confidence Hits Four Year High: Rabobank

By Tim Binsted, The Sydney Morning Herald, 03/23/15—Confidence among the nation's farmers has jumped to a four–year high as solid January rains, the falling Australian dollar and soaring beef prices bolster sentiment in the bush. Rural lender Rabobank's quarterly confidence survey, which questions 1000 primary producers across the nation, found farmers have started 2015 in high spirits following the breaking rains at the start of the year.

"Good January rains over large parts of Queensland and New South Wales saw the cattle market ignite, with prices across all categories lifting to record levels," Rabobank group executive for country banking Peter Knoblanche said. "This saw a flurry of restocker activity, which has since waned with the lack of follow–up rains but prices have held up strongly."

Global Livestock News

Committee to Begin Changing COOL Law

WNAX News, 03/20/15—Next week the House Agriculture Committee is expected to begin marking up legislation to repeal or modify the country of origin labeling law. R CALF officials are concerned about any adjustments to COOL. CEO Bill Bullard says they'll submit written comments in support of the labeling measure. He says Committee members are being pressured by the meat packer lobby to move forward with this legislation. Bullard says COOL benefits both producers and consumers and has the widespread backing of consumers. He says free market supporters should back COOL.

Bullard says those concerned about Canada and Mexico retaliating against COOL should have their fears eased by the recent Auburn University study showing the effect to Canada's cattle industry coming from a downturn in the global economy and not related to COOL. Listen to audio interview HERE.

USDA Implements 2014 Farm Bill Provision to Limit Payments to Non-Farmers

USDA News Release, 03/24/15—The U.S. Department of Agriculture (USDA) today announced a proposed rule to limit farm payments to non–farmers, consistent with requirements Congress mandated in the 2014 Farm Bill. The proposed rule limits farm payments to individuals who may be designated as farm managers but are not actively engaged in farm management. In the Farm Bill, Congress gave USDA the authority to address this loophole for joint ventures and general partnerships, while exempting family farm operations from being impacted by the new rule USDA ultimately implements.

"We want to make sure that farm program payments are going to the farmers and farm families that they are intended to help. So we've taken the steps to do that, to the extent that the Farm Bill allows," said Agriculture Secretary Tom Vilsack. "The Farm Bill gave USDA the authority to limit farm program payments to individuals who are not actively engaged in the management of the farming operation on non–family farms. This helps close a loophole that has been taken advantage of by some larger joint ventures and general partnerships."

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