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NLPA News Brief
October 26, 2016
Livestock and Ag Credit News

Industry's Reaction to Technology and Consumer Demands Causing Rapid Change in Beef Business

Oklahoma Farm Report, 10/25/16—We are used to slow change in the cattle business. But after decades at that pace, a rapid transition has set in.

"Part of that is from technology," said Pete Anderson, research director for Midwest PMS, "as we add technology to any industry it tends to happen faster. Part of it is communication directly from consumers. Where we now understand to a much greater extent what consumers want and what they won't accept and we're reacting to that and part of it is speed of the way everything is happening in the globe these days."

The markets have seen increasingly wild price swings.

The price volatility of fed cattle over the last few years has exceeded what supply and demand differences would have predicted," Anderson said. "So, we know there are other forces at work. Some of that is more investment in agriculture commodities than used to be. And some of that money is sort of transient. There is money coming in and out of agricultural commodities that didn't used to pay attention to them and its some pretty big amounts. That creates volatility."

GIPSA NEWS: No new posts this week.

Livestock and Ag Credit News

USDA Moves Forward on GIPSA Rules

By P. Scott Shearer, National Hog Farmer, 10/24/16—USDA is moving forward on the "Farmers Fair Practices Rules" regarding contracting practices for livestock and poultry. The department has sent to the White House Office of Management and Budget an interim final rule on competitive injury.

This would eliminate the need for producers to provide proof of competitive injury to the entire industry in order to file a complaint. This overturns eight federal court rulings. There are also two proposed rules to address unfair practices and undue preference in violation of the Packers and Stockyards Act and poultry grower ranking systems.

Secretary of Agriculture Tom Vilsack said the USDA is leaving out a number of provisions that were proposed in the Grain Inspection, Packers & Stockyards Administration rule of 2010. These include proposals that would have prevented meatpackers from buying livestock from other packers, banned packers from entering into exclusive agreements with certain livestock dealers, and required packers and live poultry dealers to submit sample contracts to USDA for public review.

The reaction from producers and industry was immediate. The North American Meat Institute says, "It is irresponsible for USDA to advance this stale six–year–old rulemaking. The interim final rule as described will open a floodgate of litigation, up–end the established system for marketing cattle, pork, and poultry in the United States, and add costs at every step along the process from producers to consumers."

Preparing for Cattle Transport Saves Time, Money and Stress

By Jesse Fulton, National Cattlemen, October Issue—With fall upon us, many producers are beginning to plan shipment of this year's calf crop and move cattle to fall or winter pastures. When cattle are being transported several factors should be considered including loading conditions, time in transit, weather conditions, comingling, segregation of different sexes and weight classes into separate trailer compartments, driver experience, animal nutrition, health status and physical condition.

One important task that producers must work through when shipping cattle across state lines is the requirements for entry that each state animal health official prescribes. For a time, producers have had to search through state regulations to ensure they meet all the requirements to transport cattle across state lines; however a new feature offered at allows producers to enter the state of origin cattle are coming from and the final destination the cattle are being shipped to and it will provide all cattle health requirements for transportation.

This feature is not only for cattle heading to the feedlot or inspected harvest facility, but producers can also use it for sales, exhibition, and show and rodeo stock. With this new resource, producers can easily find all of the requirements to successfully transport cattle to all 50 states.

The site was developed as a partnership of The United States Animal Health Association (USAHA) And The National Institute for Animal Agriculture (NIAA).

Where Is the Swine Industry Headed In 2017?

By Steve Malakowsky, National Hog Farmer, 10/24/16—Many factors will influence what the U.S. hog market looks like for the rest of this year and into 2017 from current and expanding packer capacity to exports to China. Protecting your bottom line remains the top priority.

Looking at the hog industry and the level of growth we have experienced in 2016, we're pushing packing capacity this fall. Unfortunately, for hog producers, getting cash bids has been difficult. Two weeks ago we exceeded 2.4 million hogs processed. This number has dropped to just over 2.3 million hogs last week due to Hurricane Matthew, and the subsequent closing of Smithfield's Tar Heel, Clinton and Virginia plants. It is estimated that 150,000 hogs did not get processed last week due to the plant closures.

Weighing Consumers' Growing Appetite for 'Clean' Meat Labeling

Nielsen, 10/24/16—The call for food transparency continues to build, and with it, the use of terms like "natural," "hyper–local" and "antibiotic–free" in conversations around our food. When it comes to meat, discussions include the added dimensions of livestock care and processing, complicating the labeling of meat products well beyond what's needed for an organic banana or a package of fiber cereal. So what exactly do these meat labels mean, and what are the nuances? But perhaps more importantly, do consumers really want "cleaner" meat?

From a total U.S. consumption perspective, the short answer is yes. Sales growth for some of the meat label claims with the highest shares (natural, antibiotic–free and hormone free) is rapidly outpacing that of conventional meat.

While the growth percentages associated with these labels are strong, it's important to understand some key nuances for complete perspective. First, natural, minimally processed, antibiotic–free, hormone free and organic meat products account for a relatively small piece of the total meat department pie (or pig). That said, however, these products represent a significant amount of sales because the total meat department pulls in more than $50 billion in U.S. sales annually.

'Where's the Beef?' R-CALF Sues to Amend Check-Off Program

David Murray , Great Falls Tribune, 10/25/16—Attorneys representing Montana ranchers, the U.S. Department of Agriculture and the Montana Beef Council presented oral arguments Tuesday in a federal court case that could fundamentally change how U.S. beef consumption is promoted and advertised.

Instead of "Beef. It's what's for dinner" it could come down to "Beef. Who controls the message?" On May 2, 2016, R–CALF filed a complaint in the U.S. District Court of Montana alleging that perhaps half of the $1 per–animal assessment every Montana rancher is asked to pay when selling their cattle is being spent by an organization with no government oversight, and whose allegiance is more directly aligned with the interests of giant, multinational corporations rather than the state's independent ranchers and feedlot owners.

"This is not just a violation of freedom of speech, it's a violation of the freedom of association," said David Muraskin, a Washington, D.C., attorney representing the Ranchers–Cattlemen Action Legal Fund, United Stockgrowers of America (R–CALF USA). "It's an issue of forced association, with the potential risk that the money (half of the approximately $80 million collected annually via the national beef check–off program) would be used to fund private speech."

Global Livestock News

High–Tech Beef Cattle Monitoring Firm Pockets Growth Funds From U.K. Investor

By Dan Healing, Times Colonist, Calgary, 10/25/16—From a chart on his computer screen at GrowSafe Systems Ltd., co–CEO Camiel Huisma can describe not only how much a certain cow ate today but how quickly it ate and how much it weighs.

The animal he's describing is in Brazil, one in a herd of dozens of nearly identical beef cattle on a ranch more than 9,000 kilometres south of his company's rural headquarters just north of Calgary.

"You see this animal … just takes tiny little bites, very gently," the founder of GrowSafe says, pointing to a yellow dot on the chart representing a single cow. Indicating a purple dot, he adds: "This purple animal takes massive bites."

"After a while, it's almost like a digital fingerprint or signature. We can recognize these animals on their feeding behaviour and those sometimes correlate to feed efficiency or disease," he says.

The agricultural technology company which has grown slowly over the past 26 years is on a hiring and growth binge after winning an investment last month from U.K.–based Wheatsheaf Group, a company created in 2012 to invest in sustainable food and energy initiatives.

Cheap Frozen Indian Buffalo Meat Undercuts Australian Beef In Indonesia, with Some Consumers Unaware Of Difference

By Carl Curtain, ABC Rual AU, 10/25/16—Increasing sales of cheap, low–quality Indian buffalo meat in Indonesia are undercutting Australian beef, according to a report.

BMI Research has revealed the export price for Indian carabeef (buffalo meat) is just US$3.10 per kilogram, compared to an Australian boxed beef export price of US$4.40 per kilogram.

The figures are worrying for Australian exporters who have watched Indonesia open its market to frozen buffalo cuts just this year.

Global Livestock News

Could a USDA Bailout Help Farmers Bring Home the Bacon Again?

By Carolyn Heneghan, Food Drive, 10/24/16—Pork production reached a record high last month. While pork production rises, export demand — particularly to China — is falling. hog prices and pork industry profitability are also declining.

This situation sounds all too familiar for food and agriculture producers in recent months. If the situation doesn't improve, pork producers could start hoping for the same outcome that several other commodities have: a USDA bailout. After already announcing a $20 million bailout for cheese producers in August, USDA announced another $20 million bailout for the industry earlier this month.

The agency also provided $11.2 million in financial assistance to milk producers in August due to tightening dairy margins and purchased $11.7 million worth of shell eggs and egg products to assist egg producers later that month.

At this rate, pork could be next. Pork producers are seeing a combination of challenges other industries have also experienced, such as pressure on prices in the domestic market due to oversupply and rising competition from similar categories, like milk and cheese. Pork is also struggling with export challenges in major foreign markets, just as eggs did following last year's bird flu outbreak.

Groups Petitions US FDA to Ban In-Feed, Preventative Antibiotic Use

By Aerin Einstein–Curtis, Feed Navigator, 10/25/16—A petition to the US Food and Drug Administration (FDA) wants the agency to remove approvals for antibiotic use in livestock disease prevention and growth promotion.

Several environmental organizations including the Natural Resources Defense Council, the Center for Science in the Public Interest, and Food Animal Concerns Trust (FACT), among others, have submitted a citizens' petition to the FDA asking the agency to withdrawal approvals for the use of medically important antibiotics in livestock and poultry for disease prevention, and growth promotion.

Steve Roach, food safety director for FACT, said the groups support the use of antibiotics when a disease has been diagnosed.

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