LMD apr 2014

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Livestock “The greatest homage we can pay to truth is to use it.”

Riding Herd

MARKET

Digest T

by LEE PITTS

Out Of Order

– JAMES RUSSELL LOWELL APRIL 15, 2014 • www. aaalivestock . com

Volume 56 • No. 4

The New Rules A bumble bee is B faster than a John by Lee Pitts

y now I probably sound like the boy who cried wolf with my warnings of impending doom thanks to the big, bad meatpackers. You’ve been reading about the dangers of captive supply and industry concentration for decades now in this paper and yet we are enjoying the greatest prices in the history of the cow business. Which begs the question: if our industry is so controlled by packers how come cattleman are getting $1,000 for their calves? The Livestock Market Information Center predicts that rancher’s returns for 20142015 per cow-calf unit will be $350 . Does that sound like an industry controlled by a few greedy packers? Is our industry really destined to look like the pork and poultry industries as I’ve been saying for years now? These are all fair questions, don’t you think?

Deere tractor. percent of hog producers and 82 percent of dairymen exited those industries due to less price discovery and increasing use of contractual agreements. Missouri economist Scott Brown has predicted that a beef cow will produce a $250 profit in 2014 compared to $100 per cow in the highs of the last cattle cycle. Please note that Brown talks about the cattle cycle, to which we reply, “What cattle cycle?” We are living in new and different times that can no longer

be analyzed using the old rules or defined by such archaic parameters as the “cattle cycle”. R-CALF’s CEO Bill Bullard understands the beef business better than anyone I know and if you don’t think so, get your hands on a copy of the paper he wrote for the South Dakota Law Review titled “Under Siege: The U.S. Live Cattle Industry.” In that paper he quotes the USDA: “The last normal liquidation phase of the U.S. cattle cycle began in 1975 and ended in

1979, lasting the typical four years. The next liquidation phase began in 1982 and ended in 1990, lasting an unprecedented eight years. The liquidation phase that began in 1996 is ongoing today and has lasted an unprecedented 16 years.” Says Bullard, “In late 2007, the USDA began cautioning the industry that “some analysts suggest the cattle cycle has gone the way of the hog and dairy cow cycles. The historical cattle cycle is now disrupted, and the obvious trend since 1975 is an evershrinking cattle herd. The competition-induced demand/supply signals that once led to expectations about changes in cattle prices are no longer functioning properly.” One reason the cattle cycle isn’t working is that some ranchers don’t believe the good times will last. Chris Hurt, a Purdue economist, says “Some see the continued on page two

Their Last Hurrah

NEWSPAPER PRIORITY HANDLING

Before I attempt to defend my position I’d like to congratulate anyone who might be reading this. If you are still left in the cow business you are a survivor and deserve every beef dollar you can stuff in your Wrangler® pockets in these heady days. But please be advised, this is exactly what some other animal industries looked like just before 91

The Monster Hiding in the Closet BY CALLIE GNATKOWSKI GIBSON

hat has multiple tentacles, smiles a lot and says it is here to save you from certain doom? Certainly the correct answer is the government. In this particular instance the monster in the closet is named Landscape Conservation Cooperatives (LCCs). LCCs were created by the signing of Secretarial Order 3289, Amendment 1 on February 22, 2010, with full-blown government support and funding (http://www.fws.gov/home/climatechange/pdf/SecOrder3289.pdf). The authorizing language reads, in part, “The Climate Change Response Council will implement Department-specific climate change activities through the following mechanisms: . . . (c) Landscape Conservation Cooperatives. Given the broad impacts of climate change, management responses to such impacts must be coordinated on a landscape-level basis. For example, wildlife migration and related needs for new wildlife corridors, the spread of invasive species and wildfire risks, typically will extend beyond the borders of National Wildlife Refuges, BLM lands, or National Parks. Additionally, some bureau responsibilities (e.g., Fish and Wildlife Service migratory bird and threatened and endangered species responsibilities) extend nationally and globally. Because of the unprecedented scope of affected landscapes, Interior

W

bureaus and agencies must work together, and with other federal, state, tribal and local governments, and private landowner partners, to develop landscape-level strategies for understanding and responding to climate change impacts. Interior bureaus and agencies, guided by the Climate Response Council, will work to stimulate the development of a network of collaborative “Landscape Conservation Cooperatives.” These cooperatives, which already have been formed in some regions, will work interactively with the relevant DOI Regional Climate Change Response Center(s) and help coordinate adaptation efforts in the region. The concept has grown steadily since then, and today there are 22 LCCs across the country with some extending into Canada and Mexico. These are governed by steering committees comprised of the full alphabet stew of federal and state agencies along with disguised and not so disguised non-governmental organizations (NGOs). The idea behind these LCCs is to bring together agencies, governments, scientists, and others to collect data climate change will affect a landscape, and to develop management strategies on a landscape level. This sounds all right, until you consider that landscapes include a multitude of landowners and continued on page five

he accused entered the court room wearing on orange jump suit, with his arms shackled to his waist. He looked for his wife’s friendly face amongst the angry crowd while outside the courthouse the police and the National Guard kept an angry crowd at bay. They carried signs that read, “Free Food” and “Down With Ag”. “Hear Ye, Hear Ye, the court of public opinion is now in session, The Honorable Liberal Wingnut presiding. The court will now hear the case of the U.S. Government versus Mr. Fodder Feeder who is accused of being both a farmer and a rancher.” The government lawyer rose from his seat and approached the defendant. “Mr. Feeder, would you tell the court what you do for a living?” “I farm, have a small feedlot and run some cows.” “In other words, you use a greenhouse gas spewing tractor to grow crops that you then feed to water-wasting cattle to produce unhealthy beef. Am I missing any other heinous act you engage in, Mr. Feeder?” “But I feed people,” said Fodder in self defense. “Objection your honor. That is not relevant to this case and I’d ask that the defendant’s answer be stricken from the record.” “So ruled,” said the angry judge as he hammered his gavel and gave Fodder a dirty glance, and a $10,000 fine. “Mr. Feeder, have you ever used pesticides, herbicides, or GMO seeds?” asked the prosecutor. “Yes, admitted the defendant,” as the crowd gasped in horror. “Mr. Feeder, do your cattle belch and emit gas after eating the corn you grow?” “I suppose so. Don’t we all?” replied Fodder as those in the court tried to suppress their giggles and guffaws. “You’re out of order,” roared the Judge, “and I hold you in contempt of this court!” The prosecutor then gave Fodder a photo and said, “Do you recognize this person?” continued on page three

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