LMD Dec 2013

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Livestock “The greatest homage we can pay to truth is to use it.” – JAMES RUSSELL LOWELL DECEMBER 15, 2013 • www. aaalivestock . com


Digest Volume 55 • No. 12

Will We Ever Learn? by Lee Pitts ell, another year of attrition in the cattle industry has gone by and the top story for the year was the devastating blizzard in western South Dakota. It diminished us as an industry and its repercussions will be felt for a generation by decent, hardworking South Dakota ranchers. Our hearts go out to them. In my opinion, the second most important story of the year was the Zilmax® debacle. Since I believe you should never let a fiasco go to waste I’ve come up with ten lessons the Zilmax® misadventure should have taught us. #10 – Captive supplies are weapons of math destruction. I’ve been writing about captive supplies and their negative impact on the cattle industry for 30 years and critics always counter that I had no statistics or mathematical proof that captive supplies are bad for business. I never dreamed that a multinational drug company would be the one to provide clear evidence that captive supplies lower the price we all receive for cattle. You want proof? I’ll give you proof. Beta agonists have been around for a decade; Optaflexx® from Elanco won approval from

The easiest way to find something lost is to buy a replacement.



the FDA in 2003 and Merck’s more potent Zilmax® followed three years later. It’s estimated that prior to the withdrawal of Zilmax® that 70 percent of the cattle in U.S. feedlots were treated with a beta agonists. Since the makers recommended that they only be used during the last 20 days prior to slaughter the cattle became like ripe bananas. When they had to go . . . they had to go. Gerald Timmerman, a vocal critic of beta agonists, told

me that, “A feeder called the packer and scheduled a kill date for the cattle 20 days after they started feeding the cattle Zilmax®. Then the cattle feeder took what the packer would give that day. There’s no way they could bargain.” Mike Callicrate told the Wall Street Journal that, “Now, you only have so many days after an animal has been fed a beta agonist before it's got to go to slaughter or it becomes so lame

it can’t move.” As a result they became captive cattle. Timmerman estimates the price of cattle went up five cents after the last Zilmax cattle were killed because the cattle no longer had an expiration date. He attributes half of that increase to the packers no longer being able to dictate the price. They no longer had the cattle feeders over a barrel because the feeders could pass on the price and hold out for a higher one. # 9 – Ranchers have no idea what happens to their cattle after they leave the ranch. After we came out with our beta agonist story in February I was shocked how few ranchers had any idea such products existed. One rancher I spoke with has fed tens of thousands of cattle over the last 40 years and he had never heard of them, yet they were being fed to his cattle at that very moment without his knowledge. It was the same with continued on page two

Federal Takeover of State Water Rights? Part 1 BY HEATHER SMITH THOMAS

t’s happening in Klamath County in Oregon and now its showdown time in western Montana. The Montana water rights controversy centers on the Flathead Indian Reservation, and the present conflict revolves around the proposed Federal Reserved Water Rights Compact between the state of Montana, the federal government and the Confederated Salish and Kootenai Tribes (CSKT), and whether the Compact (a forever document) is fair to all parties or even legal. Many people in Western Montana are still not aware of the potential negative impact on their way of life, should this plan come to fruition. Negotiations between the three parties have been underway for several decades, however. The current version of the Compact was completed in February 2013, with a big push to get it passed by the Montana legislature. The Compact proposed that federal dollars, along with $55 million of Montana’s money be given to the tribes to settle this water issue, in addition to the state giving up water rights for most if not all of the water in western Montana—giving it to the federal government in trust for the tribes. The bill was defeated at that point partly because two groups of concerned citizens


Riding Herd

became aware of what was happening and worked hard to fight it. The Flathead Reservation is somewhat unique in that it was opened by the federal government to settlement in 1904 and there is a great deal of private land located within its boundaries; nearly 80% of the reservation’s population is non-Indian. Of the 28,000 people living there, 23,000 of them are not Indians. Yet the proposed Compact would give all water running through and under the reservation to the tribes. It would also give all of the water in Flathead Lake, and all of the water in the Flathead Irrigation Project to the federal government and adversely affect irrigators throughout 11 counties in western Montana in the Clark Fork and Kootenai River Basins. It would ultimately affect about 360,000 people. CONCERNED CITIZENS - Terry Backs lives on private land within the exterior boundaries of the Flathead Reservation. “I became involved in early 2012 when I saw a newspaper article that indicated the tribe was getting close to finalizing negotiations for their reserved water rights and they were holding firm concerning their ownership of all the water in their aboriginal territory. Until then, I had absolutely no idea what was going on. So I started researching the


ObamaCow Dateline: A presidential press conference from the left wing of the White House. President Obama: I am proud today to be joined by an unwed Holstein cow and an unemployed beef cow to announce the rollout of the Affordable Cow Act. After the Supreme Court ruled that the government can force people to buy things they don’t want, and after ObamaCare was such a resounding success, I was shocked to find that there are thirty million beef cows and their children in this country who have no health insurance whatsoever! So today I take great pride in rolling out ObamaCow. Reporter from Cattle Today: Have you exempted any rancher from having to buy health insurance for his or her cows? Obama: Any Congressman who owns cattle will be exempt. Progressive Cattleman: Let me get this right. So the people who voted for ObamaCow excluded themselves from it? Obama: That’s right. Also, ranchers who own over 300 cows will be exempt for one year to give them time to come up with a permanent loophole. Ranchers with fewer than 20 part-time or open cows will also be exempt from the employer mandate. Livestock Weekly: But won’t that cause a glut of cows on the market from small operators selling off a few cows to get under the 20 head requirement? Obama: That’s ridiculous. I might add that Mexican steers coming across the border will continue to get their health care for free. That will not change. I promise. New Mexico Stockman: What if ranchers refuse to buy insurance for their cows? Obama: They must pay $95 per uninsured cow or risk being audited by the IRS. Western Livestock Reporter: Will ranchers be able to keep their own vets? Obama: Of course (wink, wink), although based on our experience with ObamaCare, many veterinarians may choose to leave their continued on page six

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