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


Digest D

AUGUST 15, 2012 • www. aaalivestock . com

Volume 54 • No. 8

Breaking The Code

by Lee Pitts


You Gotta Be Kidding


In our December 15, 2010, front page story, “The Bigger


Forbidden Foods


ack in the day when my fellow cowpokes and I rode the range on our rank stick horses, fanning Roy Rogers pistols and living by the “Cowboy Code”, life seemed much simpler. It was a more black and white world . . . there was right and there was wrong. Our heroes were the TV cowboys like Roy Rogers and Hopalong Cassidy. Roy had his Club Rules, Hopalong and the Lone Ranger had their creeds, and Gene Autry his Code of Honor. Needless to say, back then there was no shortage of rules for my amigos and I to live by. These canons of ethics were all very similar: Be neat, clean and courteous, don’t ride a horse on the sidewalk and eat your share of beans. Gene Autry told us that a cowboy never takes unfair advantage, never betrays a trust, never goes back on his word and when you make a promise, keep it. Live by those words these days and you’ll be shot down like a bad guy in the dusty streets at high noon. It’s clear that the sentimental old world view of our youth has no place in business today, as this unbelievable story will most assuredly attest.

Riding Herd

“If you find yourself in a hole, the first thing to do is stop diggin’.” They Are” I wrote about a company called VeraSun Energy. It was the largest ethanol company in the U.S. and hundreds of corn growers had contracted their crop to them, anticipating a once-in-a-lifetime bonanza due to record corn prices. We wrote, “When VeraSun declared bankruptcy on October 31, 2008, it

left farmers and grain elevators holding an empty sack of whatcould-have-beens. Instead of checks that reflected the highest corn price in history they got checks that bounced higher than Iowa corn stalks at harvest time. Even the lucky ones who cashed their checks while there was still some money in the VeraSun

bank account were told that under state bankruptcy laws anyone who got paid during 90 days prior to the bankruptcy had to repay 80 percent of what VeraSun had already paid them. Payments made during those 90 days are known as preferential payments because a debtor “preferred” to pay one creditor over another.” We wrote at the time, “such a mess could never hit the cattle business, right?” Don’t look now but it just did! When Eastern Livestock, the largest cattle broker in the country went bankrupt, it was estimated they owed more than $130 million to 743 sellers of cattle in 30 states. Eastern’s bank, Fifth Third Bank froze Eastern’s accounts on Nov. 2, 2010, after uncovering an alleged check kiting scheme and as continued on page two

Big Green lawsuits cause megafires, destroy endangered species by RON ARNOLD, Washington Examiner

rofessional foresters have known for years that environmentalists are the forests’ worst pest. Green groups’ lawsuits block federal forest health improvements and catastrophic wildfire prevention measures, leading to destroyed communities, dead animals and forests and timber jobs exported to foreign suppliers. House Natural Resources Committee Chairman Doc Hastings, R-Wash., recently convened an oversight hearing on the problem, titled, “The Impact of Catastrophic Forest Fires and Litigation on People and Endangered Species.” A single panel of four nongovernment witnesses laid out different perspectives on the hearing’s major premise: For decades, environmental groups have used the Endangered Species Act, the Federal Land Policy and Management Act, and the National Environmental Policy Act to file dozens of lawsuits that block timber fuels reduction and thinning projects that would decrease the risk of wildfires that decimate species' habitat. The issue doesn’t register on many people because it’s too technical. What are timber fuels? How could thinning prevent wildfires?


Any number of past surveys show that the American psyche sees forests as either Disneyland or Chartres cathedral: clean, safe, well-managed playgrounds or temples for the faithful. Timber fuels are anything in the forest that gets dry or combustible — grass, brush, trees, dead or downed wood — or whatever. Thinning is the removal of these things through such methods as logging, junkwood hauling, chipping and mulching, pile and controlled burn, livestock grazing to crop tall grasses in open forests, et cetera. Such management of the woods keeps them clean and safe. However, the green faithful hate development, including firefighting roads, tree cutting in fire-prone stands, and water catchments to put out megafires. When imposed by lawsuit upon an actual forest, the Big Green Bible produces a Crispy Critters National Wasteland. Humor aside, such behavior should be a felony. Committee Chairman Hastings made this point tellingly by placing a superscription over the hearing’s briefing paper. It was a 2009 quote from Kieran Suckling, executive director of the Tucson, Ariz.-based Center for Bio-

id you hear that the Mayor of New York has proposed a ban on sodas larger than 16 ounces? For the health of his constituents he doesn’t want them drinking any more 32 ounce sodas, but how dumb does he think the people are who elected him? Given enough time, even New Yorkers should be able to figure out that if they want 32 ounces of sugary soda all they have to do is buy two 16 ounce drinks. Duh! In California they have banned fatty goose and duck liver on the grounds the poultry were force fed. I wish they’d have thought of that 50 years ago so I wouldn’t have had to eat the liver my mom force fed me. It tasted like garden snail, marinated in cod liver oil and held together with library paste, all nonfood items I tasted as a young child. I go on record as being wholly in support of a ban on all liver. Yuck! Massachusetts banned junk food on school days and Indiana has mandated that half of all items sold in vending machines at schools be healthy foods. I know American school kids aren’t doing well on tests but, again, just how dumb do they think they are? It won’t be long before second grade sugar junkies are peddling M and M’s out of their backpacks at highly inflated street prices. (That’s what I’d have done.) If they insist on putting carrot sticks and broccoli in vending machines they shouldn’t expect the kids to spend their folk’s hard-earned money on them. Mark my words, there’s gonna be a whole bunch of produce and carrot juice rotting in vending machines. Rare burgers have been outlawed in California and North Carolina, so can a burger bun ban be far behind? The sale of raw milk has become a real hot issue and 20 states have outlawed unpasteurized milk because it can make people sick, but I think we’ve just become a nation of softies. I’ve never read of a single pioneer who died from drinking raw continued on page four

continued on page five

Livestock Market Digest

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August 15, 2012

Breaking the Code much as $2.5 billion in fictitious sales to related entities. I vividly recall at the time a couple of my good friends felt very lucky that their deals with Eastern were completed and everyone was paid. “There but for good fortune we could have been stuck too,” they thought. Now those same friends are madder than a rained-on-rooster because the trustee for Eastern’s bankruptcy wants them to give back most of the money they were paid, despite the fact that all they got out of the deal was a small commission. John Rodgers, cofounder of Western Video, the second largest video company in the

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the costs and delays of litigation,” the letter continued, “the Trustee has authorized us to settle the amount of the preference claim against you in exchange for payment by you in the amount of $82,272.30, representing 90 percent of the total sum of the payments your company received. Upon your written acceptance “you shall be released by the Trustee and the Eastern bankruptcy estate from all liability on account of any preferential transfers.” Keep in mind, Rodgers only received $2,100 of the money. The letter goes on, “In the absence of a consensual settlement, the Trustee will file a law-

The trustee for Eastern's bankruptcy wants them to give back most of the money they were paid.

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country, has been selling livestock both as an auction owner and repping cattle for his video firm for nearly half a century. As a former World Champion auctioneer he was weaned on a microphone and raised in the dust of a sorting alley. Like thousands of transactions every year, Rodgers repped one load of cattle for a consignor on Western Video for future delivery and those cattle were shipped and paid for 88 days prior to Eastern’s bankruptcy filing. Eightyeight days, remember that number. Rodgers repped cattle under the name The Stockman’s Market, they sold to Eastern, and the check was for $91,413.67. Rodgers made a commission of $2,100. The check was dated September 30, 2010, and cleared the bank on October 5, 2010. Everyone got paid, the cattle were delivered and everyone was happy. End of story. Right? Not quite.

A Dear John Letter When Rodgers received and read a letter dated June 26, 2012, from the Indianapolis firm of Faegre Baker Daniels who represent Eastern’s bankruptcy trustee, he couldn’t believe what he was reading. Remember that we told you to remember the 88 day figure? Eastern’s bankruptcy was filed in December 6, 2010, and 90 days prior was September 7, 2010. The time in between is known as the “preference period” and Rodger’s transaction in question fell within that time frame. By two days! We quote from the infamous Dear John letter: “Because the payments were made when Eastern was insolvent and otherwise meet the criteria for establishing a preferential payment under the bankruptcy Code, the payments can be recovered by the Trustee on behalf of Eastern’s bankruptcy estate.” “In the interest of avoiding

suit against you. Accordingly, if we do not receive payment or hear from you by July 26, 2012, we may commence litigation against you for the full amount of the preference payments we have identified. We will also seek interest and costs of suit.” We’ve heard that there were at least 400 such letters dropped like bombs on unsuspecting market men, traders, feeders, etc. around cattle country.

Fair And Square My reaction would be, “Heck no, I’m not giving you one thin dime! Why should I have to give money back that didn’t even go to me? It was a straight up deal and everyone got paid.” Those of us who were raised by the cowboy codes and creeds of our TV idols would say everything was “fair and square.” This has to be a mistake. I’m afraid not. The Bankruptcy Code assumes that anyone declaring bankruptcy is insolvent 90 days before the actual bankruptcy petition is filed. Therefore, all payments made by the company made during that period are suspect. In one instance, the attorneys are demanding $400,000 and will forgive the other $1.6 million, which is 20 percent. In Rodgers’ case they are demanding 90 percent. Every case seems to be different. According to the Livestock Marketing Association’s brilliant attorney, Ernie Van Hooser, “The preferential payment clause was included in the bankruptcy code to prevent people who knew they were going bankrupt from saying, “I like this person better than you so I’m going to pay him and not you. The idea was that this would even it up so that everyone would get pro-rata share of what was left.” But as Van Hooser points out, “Clearly continued on page three

“America’s Favorite Livestock Newspaper”

August 15, 2012

Breaking the Code this was not the case with Eastern. They did not know they were going bankrupt so they couldn’t have made preferential payments. They had no plans to declare bankruptcy. They were forced into bankruptcy.”

A Rock And A Hard Place Eastern Livestock’s revenue tripled during the year previous to bankruptcy all because it was trading with itself — kiting checks so its money movement looked like it was three times its true volume. Why didn’t any bank or regulatory agency catch on to that discrepancy? GIPSA received its first complaint about a bad check for livestock sold to Eastern on November 3. The first time most cattlemen heard about Eastern’s demise was on November 9, when the USDA issued a news release titled, “Bond Information for Producers Who Sold Livestock to Eastern Livestock Company LLC.” So how was Rodgers, or anyone else, for that matter, supposed to know in September not to do business with Eastern? Fifth Third Bank had a $32.5 million operating loan with Eastern, are you telling me they were so lax in their oversight that they did not know that Eastern was in danger of default? Shouldn’t Fifth Third bank or the Packers and Stockyards have known they were in trouble and alerted the industry so they could avoid doing business with Eastern? Rodgers makes a very important point: “As marketing agents, how do they expect us to con-

continued from page two

duct business? How can we possibly know whose checks to accept when the banks and the Packers and Stockyards don’t tell us who is insolvent?” There is evidence that Eastern was insolvent for a much longer period than the 90 days prior to bankruptcy. Theoretically the bank could have waited until Eastern’s busiest period of the year to force it into bankruptcy when they knew there would be more assets to go after. (Attention lawyers, we are theorizing, not accusing.) Rodgers hopes cattlemen realize how lucky they are that they can receive such fast payment. “We are head and shoulders,” says Rodgers, “above all other commodity groups as far as getting paid promptly.” It can take several months for producers of other commodities, like citrus and walnuts, to get paid and Rodgers wonders if part of that is simply a precaution against having to return money in the case of preferential payments demand due to a bankruptcy. Under the Bankruptcy Code, a Trustee has two years from the date the bankruptcy petition was filed in which to commence a preference reclamation action. So to be safe from preferential payment demands a marketing agent would have to keep the funds for two years before paying them out to a consignor to be safe and protect himself. But no one would put up with that. Besides, according to the Packers and Stockyards Act it would be highly illegal, as they demand

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immediate payment. So the marketing agent is caught between a rock and a hard place.

Twice The Price According to Van Hooser, the preferential payment demand has been part of the bankruptcy code for years but six or seven

That’s one problem with our marketing sector, we have no way to gather up large sums of money to pay off politicians. There’s nothing in place to pay them off.” At this point Rodgers and the other hundreds like him must make a decision. They can pay

The Bankruptcy Code assumes that anyone declaring bankruptcy is insolvent 90 days before the actual petition is filed. years ago he says it was tweaked and more emphasis put on pursuing these claims. As with almost every law being written these days, someone will find a way to exploit it for their own good. Initially years ago the preference statutes may have been written with good intentions, but as Rodgers says, “It was changed due to pressure from the big banks and their lobbyists. After studying the issue it’s hard not to agree with Rodgers. Says Rodgers, “If they can make us pay twice for the same set of cattle, indeed, our political system really is broken beyond repair. It’s a pay-to-play system in Washington, and Congressmen and Senators are literally paid off by the bankers. Banks financed their campaigns and the bankruptcy laws were virtually written by the bankers. And it’s not just one party, it’s both the Democrats and Republicans.

the amount out of their own pocket that the bankruptcy trustee is demanding; they can try to settle with the Indianapolis attorneys for a lesser amount; or they can hire an attorney to go into battle with the bankruptcy trustee over the preference claim. They will have to hire their own attorneys out of their own pocket and go to Indiana to do it, since that’s where the bankruptcy was filed. The one thing they cannot do is ignore the preference demand. As Rodgers says, “If you do some judge will issue a Summary Judgment of default against you and you have no choice but to pay it.” You can see why when Ernie Van Hooser tries to make since of this mess he says, “It makes my head hurt.” And Ernie’s a lawyer! One of the things I think we can all agree on is that the government is partly to blame

Page 3 because of their lax oversight, after all, it was the government’s job to regulate and enforce the Packers and Stockyards rules to prevent things like this from happening. It happened on their watch. They’re also to blame for having a law on the books that can be manipulated in the banks favor. We wonder then, as we did two years ago, why the government covered the huge losses of Goldman Sachs, General Motors and countless banks, and not the losses they are now trying relieve the banks of, and hand off to unsuspecting and innocent market men? One thing you can rest assured of is that Rodgers and others like him will never go back on their customers to try and recover the funds. “I will not let the banks go after a consignor. That’s our job to stand between them. We can’t allow our customers to be in jeopardy.” Rodgers hasn’t even told the consignor of that one load of cattle that he’s being asked to pay twice for. And he won’t. “There is absolutely no way in the world I’d let the banks go after one of my customers.” So, cattlemen, next time you say that the commission you pay an auction market, video sale or marketing agent is too high remember who is willing to stand between you and the bankers. Between you and the government. Between you and the courts. As this story aptly illustrates, the money you pay a licensed, bonded and fully responsible marketing firm is the cheapest insurance against lunacy you’ll ever buy.


Livestock Market Digest

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August 15, 2012

The Power of the Bureaucracy and the Press to Stop Access to Private Property by KAREN BUDD-FALEN, Cheyenne, Wyoming

hat started as an attempt to get access across Bureau of Land Management (BLM) land in western Colorado for one patented mining claim owner has turned into a full scale war by the federal government to make an example out of a private landowner to “deter [actions regarding access to private property] in the future.” Private landowner Andrew VanDenBerg is at the center of the controversy, including now being vilified by a press release issued by the Colorado U.S. Attorney’s Office (part of the U.S. Justice Department).


Access to private property is guaranteed across federal lands by the Alaska National Interest Lands Conservation Act (ANILCA). Although the private landowner is required to file an application explaining the location of such access, that application cannot be denied under ANILCA. According to the Senate Committee reports regarding ANILCA, Congress intended to eliminate the federal government’s discretion in allowing adequate and feasible access to inholdings by “direct[ing] the Secretary to grant the owner of an inholding such rights as are

necessary to assure adequate access to the inholding, and is intended to assure a permanent right of access to the concerned land across, through, or over these Federal lands by such State or private owners or occupiers and their successors in interest.” The problem with the application system however is that the BLM routinely, and many times, intentionally and unreasonably delays processing such applications, thereby denying access to the private property during the processing. It is more common than not to have an application

for access delayed years, all the while denying access to private property. How can a private landowner enjoy and use his property if he cannot get to it? So starts the story for Mr. VanDenBerg. He cannot access his private property and the federal government refuses to process his application for reasonable access. But that is not all of the story. In complete frustration at the bureaucratic delays and denials, Mr. VanDenBerg decided to use an existing road to get to his property. This road, noted as an existing road on the 2005 San Juan National Forest map and known as County Road 33A, has been in existence since 1886. The road was clearly visible on the ground as well as noted on the federal government’s maps. Mr. VanDenBerg cut dead fall timber from the roadway and moved it out of the way. Although he followed the tracks of the road and he did not get out of the roadway that has

existed for over 125 years, the BLM charged him with civil trespass charges in federal district court. Not wanting to expend the money on a huge and expensive trial, Mr. VanDenBerg decided to settle with the BLM. The settlement agreement states that Mr. VanDenBerg does not admit to ANY of the claims or assertions put forward by the government and that he is simply reimbursing the federal government for the reclamation of the dead trees he cut. Although he did not want to settle with the federal government, he recognized that

Riding Herd milk. I suppose it won’t be long before states try to outlaw ice cream and milk shakes but if you think that ban will work you must be on medical marijuana. Speaking of which, the day is probably not too far off that if you want to consume dairy products you’ll

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the federal government is represented by the largest law firm in the world, the U.S. Justice Department, and that he would be buried in litigation costs. He thought a settlement agreement would end the matter and that the BLM would process his application so that he could have the access to his private property that he was promised by Congress. But before the ink on the agreement was barely dry, the U.S. Attorneys Office issued a “press release” that incorrectly labels Mr. VanDenBerg as a “trespasser” and claiming his attempt to access his own private property is “unauthorized.” The release also states that Mr. VanDenBerg’s actions occurred in a continued on page five


have to carry a “medical milk” card. In the Wall Street Journal they mentioned that some states are banning high alcohol content beer and a liquor named Absinthe, which I, and most Americans I presume, have never heard of. Now that it’s banned I’m sure everyone will be drinking it. I suppose it might be different if they’d have outlawed foods I always hated, like the watery liquid that comes out of a ketchup bottle first and ruins your French fries. I also wouldn’t mind a ban on creamed tuna on toast, cucumbers, red cabbage, carp, peas, asparagus, arugula, marzipan, lima beans, sheep innards, beets and eggs. Especially eggs. More specifically hard boiled ones. To this day just the smell of one makes me sick. (So guess what my wife loves to eat?) I was what my mother called a “picky eater” and since my older brother liked corned beef and cabbage I had to eat it too, but I’ve always thought that corned beef is a waste of a good cow. I was sure glad when he left home. My Grandma, bless her heart, always tried to feed me Fig Newtons which is the only cookie I’ve ever disliked. Seriously, I have a real problem with these food bans. In America, the land of the free, you’re telling me that the government is going to now tell us what food we can and cannot eat? Where does it end? Will people one day have to be 18 or older to order a fast food burger or a peanut butter and jelly sandwich? Here’s an idea: instead, why don’t they ban all the chemical spices in our food and leave our beef and milk alone? They can ban all the liver they want but when the food police come after my beef, chili beans, root beer, wheat toast, Mexican food and potatoes in all forms, I will take up arms and fight them to the death. I think we can all agree to “ban” together if they come after our boysenberry cobbler with homemade ice cream. As I’m sure Patrick Henry meant to say, “Give me spuds, or give me death.”

August 15, 2012

Private Property “wilderness.” All of those statements had been disputed by Mr. VanDenBerg. Even the settlement agreement itself noted that these statements are only allegations by the United States, yet their press release states them as fact. When asked about the false and misleading statements in the press release (in addition to noting that Mr. VanDenBerg denied all of the allegations in the settlement agreement), the U.S. Attorney noted in an e-mail to Mr. VanDenBerg’s attorney, “While I realize that you and your client were disappointed in the press release, . . . it is routine for this office to issue press releases on these kinds of settlements, especially in cases where the conduct is of the kind that we hope to deter in the future.” The attitude taken by the federal government reminds me of the EPA Administrator who resigned in April of 2012 after his admission that the EPA enforcement is “like how the Romans used to conquer little villages in the Mediterranean. They’d go into a little Turkish town somewhere, they’d find the first five guys they saw, and they would crucify them. And then you know that town was really easy to manage for the next few years.” He then said the same approach could prod companies (and individuals) to obey environmental laws: “You make examples out of people who are not complying with the law.” In specifically reviewing the EPA’s tactic, often the “violations of the environmental laws” were not based upon statute or regulation, but based upon an interpre-

Big Green Lawsuits logical Diversity. Suckling said: “When we stop the same timber sale three or four times running, the timber planners want to tear their hair out. They feel like their careers are being mocked and destroyed — and they are. So, they become more willing to play by our rules and at least get something done. Psychological warfare is a very underappreciated aspect of environmental campaigning.” It’s not just wretched hidden agendas that thwart forest managers and fire fighters. The law itself, piled high with old environmental agenda items, is wildfire’s best friend. Rick Dice, president of the National Wildfire Suppression Association, told the hearing panel, “Our environmental laws individually provide important safeguards. But collectively, they overlap in contradictory ways that make it nearly impossible for the federal land managers, local elected officials, partnership groups and private firefighting

“America’s Favorite Livestock Newspaper”

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tation by EPA personnel. The same holds true in these access cases. Congress guaranteed the right of access to private property across federal land. However, the intent of Congress is being completely ignored because individual landowners do not have the time and money to enter into costly legal battles against the massive bureaucracy to enforce their right of access to their private property. Exposing these infringements upon individual rights to the public and to Congress is a way to have these governmental agencies and the individuals within the agencies stop their unlawful coercion, intimidation, and strong arm tactics against individual citizens who have limited resources to defend themselves against these injustices. Mr. VanDenBerg has continually tried to gain access approval to his private property that he has owned since 2007; the BLM refused to grant him adequate access and he still has no access to his private property. Even though the BLM and Mr. VanDenBerg settled their legal dispute with neither party proving their case and Mr. VanDenBerg specifically stating that he did not admit liability for any fact or legal conclusion, the U.S. Attorneys office still issued a press release to make an example out him like the Romans did to conquer Turkish towns. Given the magnitude of the number of private individuals harmed by these illegal types of actions, it is no wonder that the federal government is mistrusted by so many injured individuals.

Catastrophic Wildfires he wildfires in New Mexico, Colorado and throughout the West are pushing the country’s firefighters to the brink and threaten unprecedented environmental damage. Experts suggest that gradual global warming will increase the frequency of such events, further necessitating the search for solutions and preventative measures, says H. Sterling Burnett, a senior fellow with the National Center for Policy Analysis. Burnett emphasizes the government’s complicit role in inadvertently worsening the effects of these fires. Specifically, public lands and national forests have been subject to “letting nature take its course” policies that leave them vulnerable to fires and exacerbate the effects of such events. ■ The U.S. Forest Service estimates that more than 190 million acres of public land are at risk of catastrophic fires, including 60 percent of our national forests. ■ This is partially a function of the rapid growth in forest density, both among trees and brush vegetation, which legally cannot be checked by human intervention. ■ Timber harvests, for example, have plunged more than 75 percent from a peak of 12 billion board feet per year to less than 4 billion board feet per year. ■ This results in increasing compactness of trees: large ponderosa pines, which grew in stands of 20 to 55 trees per acre, now grow in densities of 300 to 900 trees per acre.


Burnett argues that the negative impacts of these policies, which largely prohibit preventative measures, can be seen in the damage reports of the most recent fires. ■ Twenty years ago, a wildfire exceeding 100,000 acres was deemed to be catastrophic, but today, such large-scale fires are the rule rather than the exception. ■ In 1998, for instance, there were 81,043 wildfires, burning 1,329,704 acres. ■ Recent years have seen a comparable number of fires result in dramatically greater

losses: in 2011, 74,126 fires left 8,711,367 acres in cinders. This significant increase in acres lost per fire could be addressed if preventative measures were permitted. ■ Burnett advocates allowance for intentional and direct mechanical thinning of vegetation and logging to reduce forest density. ■ He would also make provision for “controlled” burns as an additional measure for reducing the incidence of wild forest fires. Source: H. Sterling Burnett, “Harvesting Trees Will Prevent Fires,” New York Times, July 11, 2012.

The Best of the Bunch

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companies to navigate through the legal paperwork.” American environmental law has only STOP buttons. There are no GO buttons that can force a development through special interest litigation. Witness Alison Berry, an energy and economics expert at Montana’s Sonoran Institute, said as much. She recommended that the Forest Service “overhaul the public land laws that are dragging down federal land management. Reform should be directed at making national forests less vulnerable to seemingly endless litigation.” Hastings and his staff posted a video of this crucial hearing on the committee’s website, which everyone should watch. In the meantime, how do we put STOP buttons on the environmentalists’ psychological warfare against development, and give GO buttons to rational management of our nation’s forests?

Page 5

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August 15, 2012

First Annual “All-In” American Akaushi Association Convention ll-In” for the first annual American Akaushi Association Convention, November 9-11, Bastrop, Texas, best describes the feelings, excitement and today’s industry recognition achieved by Akaushi enthusiasts throughout the U.S. This first ever gathering of Akaushi breeders, feeders, packers, retailers, restaurants, and consumers, is one of the most anticipated in the Beef industry taking place at the Hyatt Lost Pines Resort and Spa. The “AllIn” aspect of how industry relations have combined to provide new and greater profitability through Akaushi, will be the highlight of this three-day event. Akaushi is one of the many breed’s imported for the Ameri-


can Beef industry, but that’s where much of the similarity stops for this unique beef breed originating in Japan. Through a nucleus of eight cows and three bulls first arriving in the USA in 1994, Akaushi have flourished and are now produced in all climates of the U.S. The American Akaushi, known as “Nature’s Healthy Beef”, are recognized in the industry and by consumers because of the rare, inherent oleic acid and the higher ratio of monounsaturated to saturated fat in the beef. Data confirms that these results offer consumers a proven healthier Beef selection for their diet, while providing Akaushi breeders more opportunities for higher profits.

The “All-In” American Akaushi Association Convention will bring breeders, allied partners and consumers together for the first time in an event offering information, fellowship and fun with great family-style atmosphere. Bubba Bain, executive director American Akaushi Association says, “there’s something for everyone including a trade show, speakers, panel discussion, “fun auction”, golf tournament, Taste of Akaushi, Country Church and HeartBrand Beef ranch tour. Our story and our breed has the Beef industry talking. We are extremely excited about this first convention.” Visit for the complete convention schedule and registration, or call the American Akaushi Association at 830/540-3912.

Stray Mexican Cattle captured in Texas tray livestock wandering between Chihuahua, Mexico, and Texas continue to present animal health concerns along the Rio Grande River in far West Texas according to Texas Animal Health Commission (TAHC) and United States Agriculture (USDA) officials. A total of 96 head of cattle (72 adults and 24 calves) originating from Mexico were recently captured and transported to government pens for inspection and testing. Luckily, all of the animals tested negative for both bovine tuberculosis and brucellosis, diseases found commonly in Mexico. According to Dr. Grant Wease, field veterinarian for USDA/APHIS Veterinary Services in El Paso, the primary purpose of this gather was to prevent the introduction of livestock diseases into the state of Texas and the U.S. “We have had indications that some cattle were being taken off the river and sold


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through various livestock markets in Texas and New Mexico, and that is an illegal entry of animals in the U.S.” Dr. Wease also stated that, “So far a total of 310 head of cattle and 140 head of equine have been captured this year along the Texas/ Mexico border.” According to the Texas and Southwestern Cattle Raisers Association (TSCRA) brand inspectors, all fire brands found on the cattle appeared to be of Mexican origin. There were 20 head of cattle that had no brands at all. “It took a cooperative effort between TAHC, USDA, local authorities, and cattle industry partners to make this gather possible,” said Dr. Dee Ellis, Texas’ State Veterinarian. Dr. Ellis also added, “Because of ongoing border security problems and the illegal movement of livestock, Texas and the U.S. continue to be at high risk for disease introduction.” Citizens

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are encouraged to contact local law enforcement or animal health officials to report any unusual activity regarding livestock or poultry near the border. With limited resources, the TAHC and USDA work together with state, federal and local law enforcement officials to continually monitor border areas to prevent the introduction of foreign livestock or poultry diseases from entering Texas. It is anticipated that more cattle will be captured in Texas in the future as the animals continue to move freely across the Rio Grande in certain locations.

Green jobs fraud exposed ection 1503 of the American Recovery and Reinvestment Act (“the stimulus”) granted billions of dollars to the Department of Energy for the purpose of funding projects in renewable energy. This funding, President Obama then claimed, would result in hundreds of thousands of “green-collar” jobs that would serve as the foundation for economic recovery, says Investor’s Business Daily. Three years later, it seems that this money has been altogether wasted, and that the renewable energy revolution has failed to materialize. This is evidenced first by the shoddy performance of these billion-dollar grants in creating jobs. ■ Through the broad stimulus package, the Obama administration awarded $9 billion to the Department of Energy for the creation of these green jobs. ■ According to a report by the National Renewable Energy Laboratory, a part of the U.S. Department of Energy, that funding created only 910 direct jobs between 2009 and 2011. ■ Using this figure, American taxpayers paid approximately $9.8 million per job. ■ If we allow for the broad classification of “indirect jobs,” the figure increases to 5,510 jobs created at a cost of $1.63 million per job. Near the end of this administration’s first year in office, Vice President Joe Biden promised


722,000 green jobs would be generated by the stimulus. The results, it seems, have fallen far short of this promise. Meanwhile, the current administration has done all it can to strangle job growth in the oil sector of the economy. By killing the Keystone XL pipeline to deliver oil to American refineries from the oil sands of Alberta, Canada, President Obama demonstrated a severe bias against proven job growth, favoring instead the ineffective vehicles employed by his stimulus package. ■ Mark Ayers, past head of the AFL-CIO Building and Construction Trades Department, told the Huffington Post last November that “the Keystone Pipeline represents the prospect for 20,000 immediate jobs.” ■ Further, these positions would be complemented by approximately 500,000 indirect jobs, made available by the economic multiplier effect of the project. ■ Importantly, the Keystone pipeline required no government support (that is, no tax dollars lost). While campaigning four years ago, then-Senator Obama promised that $150 billion in government spending on renewable energy projects would create 5 million green-collar jobs over 10 years. This seems altogether untrue. Source: “Obama’s Green-Jobs Fraud Exposed,” Investor’s Business Daily, June 21, 2012.

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Praise where praise is due f there are any heroes in the Abandoned / Neglected / Abused horse quagmire, it is the BLM Wild Horse Program. The “Unintended Consequences” of Wild Horse Annie’s dreams have taken the pendulum of reasonable “wild horse” management . . .to the extreme. No one who personally contributes their money or time toward the care of these animals doubts that, but many have been caught in a trap of their own making. One of the most obvious contributors to the demise and destruction of the status and value of The Horse, wild or tame (remember they are both domestic animals), are the animal rights groups. Their leader is the Humane Society of the United States. They are stumbling through the nightmare of this continuing horse-abuse landscape of their own creation, lurching like a 35-ton money-sucking tick. The Bureau of Land Management (BLM) is routinely bashed and criticized by both those who favor horse slaughter, and those who don’t. The BLM, by law, is allowed to run a limited number of horses on federal lands. The horse slaughter advocates have always accepted this premise. Most of the animal rights, anti-slaughter advocates do not understand why overrunning the range with horses is bad for both man and beast. The animal rights groups and their supporters have declared it “illegal, immoral, and abusive” to sell unadoptable wild horses to slaughter plants. But they are of no help


when the BLM has to thin the range herd. The HSUS, whose revenue in 2010 was $148 million, does not offer to feed, treat, care for or house the unwanted horses. The politicians who support HSUS (and I assume are supported by), take no responsibility either; like Rick Santorum, (PA), Senator Landrieu (LA) and Governor Martinez of New Mexico. What’s worse is they offer no help and impede those who are trying. So, the BLM pays ranchers to keep the unwanted horses in feedlots or pastures for the rest of their lives. Horsemen watching the BLM know that what has transpired, was never Wild Horse Annie’s dream. To see the carnage that has happened to The Horse in our country due to HSUS and their allies, would make her sorely grievous. I have deliberately connected the wild horse problem with the privately-owned horse abuse crisis, because their plights are entwined and laid at the feet of the same people. But my admiration goes out to those who continue to try and hold back the tidal wave of “unintended consequences”; the horse rescues, local humane societies, ranchers, farmers, deputies, vets, knowledgeable politicians and the good horsemen and women workin’ for the BLM. They are like the thousands and thousands of workers still bogged down in the aftermath of Katrina. They work while their foes continue to pour buckets of water over the levee, blind to the legacy they have created.

“America’s Favorite Livestock Newspaper”

August 15, 2012

Beef exports show no major fallout from BSE ith the April 24 announcement of the fourth BSE case in the U.S., May was the first month in which any BSE-related decline could be detected in export statistics. May beef exports did not reveal a major impact, though global totals were likely affected to some degree by the market closure in Saudi Arabia and negative media coverage in some Asian markets. “All things considered, we are pleased with the manner in which beef exports have weathered the most recent BSE case,” Seng said. “With the exception of Saudi Arabia, we have not suffered any significant setbacks in terms of market access. And though we expected consumer interest to slow temporarily in markets such as Korea, the May export results were actually quite strong.” Seng explained that while


year-to-date exports to Korea were down 24 percent in volume (58,143 metric tons) and 17 percent in value ($273.1 million), May results were higher (+5 percent in volume, +13 percent in value) in both categories. He said the main factors impacting U.S. beef exports to Korea in 2012 are an oversupply of domestic beef and a slumping Korean currency, noting that Australia’s beef exports to Korea have also declined by about onethird compared to last year. In several major markets, beef export volume has slowed moderately compared to the first five months of last year but increases in export value were still achieved. Examples include: ■ Japan, where volume was down 6 percent to 56,297 metric tons but value was 13 percent higher at $370.7 million. In May, Japan was the largest destination for U.S. beef with the highest

export volume (16,166 metric tons) in 10 months. Export value was up 28 percent from May 2011 to $105.3 million. Regulatory officials in Japan continue to examine the 20-month cattle age limit on beef imported from the United States, Canada and the European Union, but have so far enacted no change in the policy. ■ In Canada, the only $1 billion market for U.S. beef in 2011, export volume was down 7 percent to 64,260 metric tons but value was up 10 percent to $404.5 million. ■ In the Middle East, export volume was down 7 percent to 60,106 metric tons while value was up 10 percent to $138.1 million. Although Saudi Arabia was the only country in this region to close to U.S. beef due to the BSE case, confusion regarding possible restrictions (which never materialized) in some other markets may have affected May results.

Ban hamburgers, cheese and baseballs? hile most Americans celebrated Independence Day by tossing hamburgers on the grill, cheese on the fixings table and leather baseballs to each other, animal rights and radical environmental activists celebrated by demanding all three pastimes be banned for the planet (or the children). Of course, they really mean “for the cows,” but that might only motivate PETA’s Ingrid Newkirk and her legion of lettuce ladies. To counter these dubious claims, The Center for Consumer Freedom (CCF) went into the heart of cattle country, writing in the Fargo Forum. Why North Dakota? Not long ago, the Forum offered a platform to animal-rights nutrition gadfly Neal Barnard — you might remember him as the former PETA science advisor who called cheese “dairy crack.”


The executive director of CCF called out the animal-rights crowd for latching on to a flawed study: A 2006 U.N. study cited by Singer — an oft-cited prophet of the environmental movement — claimed to calculate that animal agriculture worldwide is responsible for 18 percent of greenhouse gas emissions. More than even transportation. The only problem? One of the report’s authors has since walked it back, acknowledging methodological flaws. “We factored in everything for meat emissions, and we didn’t do the same thing with transport,” he said. In other words, it is an apples-andoranges comparison. But those aren’t the only convenient omissions. When you can find a shill for a semi-vegan diet rulebook (who has a fondness for a two-egg breakfast, no less) writing in the New York Times that modern production methods for

meat and dairy are evil, it’s important to learn the real effects of modern agricultural practices: ■ Washington State University professor Dr. Jude Capper, who studies agriculture and environmental issues, quantifies just how much agriculture today has improved on farming from just a few decades ago. ■ Capper finds that the dairy industry was able to reduce its carbon footprint by 44 percent from 1944 to 2007 despite now producing more milk. How? Advances in management, animal nutrition and genetics. That should be news to activists who say we need to go “organic” to avoid “the absolute destruction of everything.” Of course, those activists also say that they “go on feelings,” which illustrates that their claims have minimal scientific support. Perhaps that’s the real “inconvenient truth” of this particular debate.

Watchdog Group Calls on Kansas AG to Investigate the Deceptive Fundraising of HSUS, a project of the nonprofit Center for Consumer Freedom (CCF), has petitioned Kansas Attorney General Derek Schmidt to investigate the deceptive fundraising practices of the animal rights group Humane Society of the United States (HSUS). released a full report today exposing HSUS’s misleading telemarketing, direct mail, and television appeals. The new analysis reveals that the animal rights group’s fundraising activities might be more than just dishonest, speculating that these tactics could violate some charitable solicitation or consumer protection laws in the Sunflower State. The new report delves into years of HSUS’s direct mail, telemarketing, and television appeals, which actively perpetuate the misperception that HSUS’s primary focus is to care for abandoned and abused cats and


dogs. However, a look through the group’s tax returns reveals just 1 percent of its multi-million dollar budget goes to local hands-on shelters and rescues. That’s a surprise to many of HSUS’s own donors. Recent public polling by ORC International determined that 71 percent of Americans mistakenly believe that HSUS is a pet shelter umbrella group, and 68 percent wrongly think that HSUS spends most of its money on pet shelters. “HSUS is a factory fundraising machine, sucking valuable dollars out of local communities with its advertisements that mislead donors into believing a majority of its budget benefits local cats and dogs,” said J. Justin Wilson, CCF’s Senior Research Analyst. “HumaneWatch’s new report clearly demonstrates that HSUS is fully aware of its deceptive fundraising tactics.” The report documents multiple occurrences of HSUS misrepresenting its work,

Despite these issues, however, May export volume (12,766 metric tons) to the region was the largest since January. ■ In Southeast Asia, export volume (25,964 metric tons) was down 12 percent while value ($112.3 million) was 13 percent higher. This trend was made possible by a surge in export value to the two largest markets, Vietnam (+21 percent to $82.6 million) and the Philippines (+31 percent to $18.9 million). Two regions in which U.S.

Page 7 beef exports are surging in both volume and value are Russia and Central and South America. Though export activity to Russia has slowed in recent weeks, January-May exports were 24 percent ahead of last year’s record pace in volume (32,307 metric tons) and 83 percent higher in value ($138.8 million). Bolstered by terrific growth in Chile, exports to Central and South America were up 42 percent in volume (14,715 metric tons) and 83 percent in value ($53.8 million).

Environmental alarmism then and now orty years ago, a multinational group of business leaders, politicians and intellectuals known as the Club of Rome made the case for arresting the rate of economic growth. In their keynote publication, The Limits to Growth, they argued that ever-increasing consumption and depletion of the world’s finite resources would inevitably lead to overextension and eventual catastrophe, says Bjørn Lomborg, director of Copenhagen Consensus Center and adjunct professor at Copenhagen Business School. From the point of view of the club’s members, the exponential growth of the human population would exhaust natural resources, leading to crisis and subsequent unparalleled human misery. If the loss of natural resources didn’t do humanity in, it would be pollution, and if not pollution, then the inability of the agricultural industry to meet increasing demand. This alarmism, however, was clearly unfounded. For starters, much of the predictions of the club’s tome have failed to come to pass. But more importantly, their fears for the loss of basic human commodities failed to account for human ingenuity and innovation. These forces constantly create new pathways to production and new means for the extraction and use of resources.

F Releases New Report Detailing HSUS’s Misleading Donation Solicitation Practices

including an appeal for donations in 2010 that begs donors to “please send your best new membership gift of $8, $12, $15 or as much as you can give to protect and save precious puppies’ and kittens’ lives.” However, HSUS doesn’t run a single pet shelter and local shelters aren’t seeing much of HSUS’s donations, with several local organizations going so far as to change their names in order to prevent donor confusion. “The truth is HSUS knows what opens Americans’ wallets and it’s not photos of HSUS’s sad-looking lawyers and lobbyists,” continued Wilson. “If HSUS wants to spend its donations funding its PETA-like agenda, it shouldn’t be doing it on the backs of America’s needy pet shelters and by misleading Americans.” You can view the report here: images/uploads/DeceptiveFundraisingPracticesofHSUS.pdf

■ Before 2012, they concluded, the world would exhaust supplies of aluminum, copper, gold, lead, mercury, natural gas, oil, silver, tin, tungsten and zinc — 12 of the 19 resources they examined. ■ These predictions relied upon contemporary estimates of known and recoverable reserves around the world, and allowed for only marginal improvements in efficiency that would lower rates of consumption. ■ That these materials are all in relatively abundant supply to this day speaks to human progress in the last 40 years in discovering new deposits and using scarce resources more intelligently. The experience of mercury in particular is instructive, as changes in its use over the past 40 years demonstrate the needlessness of the alarmism promulgated by the club. ■ In The Limits to Growth, the authors argued that known reserves of mercury would last only 13 more years, or 41 years allowing for a magical quintupling of reserves. ■ Supporting this prediction, they pointed out that the price of mercury had gone up 500 percent in the previous 20 years — a testament to its increasing scarcity. ■ Since then, technological innovations have replaced mercury in batteries, dental fillings and thermometers. ■ Mercury consumption has since collapsed by 98 percent, and the price had fallen by 90 percent in 2000. Source: Bjørn Lomborg, “Environmental Alarmism, Then and Now,” Foreign Affairs, July/August 2012.

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Livestock Market Digest

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FIRE! Preparedness Pays BY KATIE GOETZ, New Mexico Department of Agriculture

his fire season has been full of superlatives in New Mexico and across the West. The Whitewater Baldy Fire in Catron and Grant counties went down as the largest blaze in the state’s recorded history, charring more than 465 square miles of the Gila National Forest. At a little more than 69 square miles, the Little Bear Fire in the Lincoln National Forest was small by comparison, but the more than 250 homes and businesses lost to that blaze make it the most destructive in state history. Perhaps the least-told story of


Worst Case Hits Montana . . . Montana wildfire destroying almost 249,000 acres in less than two weeks has killed almost half of a cattle producer’s 800-plus herd and seriously burned more. Ranchers are assessing the damage to their operations following the wildfire in southeastern Montana but the total damage won’t be known for a few months. KPAX in Missoula reported Cecil Kolka lost an estimated 400 cows and calves that were unable to escape the blaze. Kolka anticipates further losses as he continues to find dead animals in his pastures and some livestock aren’t expected to survive severe burns. The Associated Press reported some of Kolka’s cattle were burned so badly their hides were peeling. Some surviving cattle have been shot in mercy killings, others are limping on burnt hooves.


this fire season: A handful of farmers in the Dexter area combined to donate around 25 tons of hay — nothing to sneeze at, especially considering the high price of hay lately — to the Lincoln County Fairgrounds in Capitan, which at one point during the Little Bear Fire provided shelter, feed, and water to as many as 130 head of livestock. Randall Norris, Doug Whitney, Berry Land & Cattle, and Bogle Limited Company donated the hay. “They didn’t donate old hay or bad hay or stuff they couldn’t sell,” said Gary Krantz, who rounded up the donations. “It was number-one hay.” Across the Rio Grande, members of New Mexico Cattle Growers’ Association pooled $1,100 to buy hay for livestock evacuated from the WhitewaterBaldy Fire. NMCGA Executive Director Caren Cowan said her organization put some other donations toward starting an emergency fund for the future. Both gifts are examples of something you hear time and again when talking with leaders across New Mexico agriculture: in an emergency, the self-sufficiency and neighborliness of rural New Mexicans really shines through. “The agriculture community in New Mexico is a close bunch of folks who really care for each other individually and their communities collectively,” said New Mexico Secretary of Agriculture Jeff Witte. “The response, donation, and assistance in an emergency situation are examples of the best coming out in folks.” When an emergency situation creates problems for New Mexico’s livestock owners, their first points of contact are often the county extension agent and livestock inspector. Both understand the transportation and feed issues that come with large animals, and both are well-connected within the community and at a state level — an important detail when time is of the

essence and you need to know what help is available. Still, Lincoln County Extension Agent Pete Gnatkowski said the credit for the “tremendous” response to the Little Bear Fire belongs not to any one person or organization. “[Lincoln County] still has enough people with what you would call an ag or rural background that they are able to take care of themselves and others,” he explained. Gnatkowski added that the people who needed help were those who have a few acres and a few head of livestock, namely horses, with no way to move them or any place to go. (Such animals were received at the

August 15, 2012 Capitan Fairgrounds.) Several animal shelters in the area opened their doors to receive pets from people who had to evacuate their homes. Pets weren’t an issue in the sparsely populated area threatened by the Whitewater-Baldy Fire in Catron and Grant counties, according to Catron County Extension Agent Tracy Drummond. “It was strictly range animals we dealt with,” he said. “We were able to drift the cattle out of the way of the fire.” New Mexico Livestock Board inspector Don Hatfield helped with both livestock and lawenforcement issues amid the Little Bear Fire, according to

NMLB executive director Myles Culbertson. “Being right there on the ground, Don was one of the first points of contact,” Culbertson said. “He has an excellent relationship with local law enforcement, so we were plugged in on that side right away.” The primary way agencies and industry organizations stay “plugged in” with one another when big fires break out around New Mexico is to start the day off with a conference call. They share information in order to help support local efforts and fill in any gaps. New Mexico Department of Agriculture (NMDA) hosts the call, and among those dialing in are coun-

The Big Island Draws Cattlewomen Across The West

Jean Barton, California not only enjoyed the Hawaii meeting, but provided the pictorial record of the event.

Anita Hand, Datil, with the evening torch bearer.

It was a family vacation for Susie Krentz (standing left), her mother, Louise Kimble, (standing right), and Michelle and Bill Kimble, Douglas/Apache, AZ.

The California Crew.

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John & Judy Ahmann, California

The ladies of Oregon. Special thanks to Jean Barton, Jessica Sanchez, & Alicia Sanchez for photographs.

“America’s Favorite Livestock Newspaper”

August 15, 2012 ty extension agents, livestock inspectors, Cattle Growers, and New Mexico Farm & Livestock Bureau leadership. The group thinks through the entire chain: Who has livestock in harm’s way? Can they move those animals, or do we need to identify someone who can help? Where will those livestock be taken, and where’s the feed coming from? Those and other agricultural questions are on Kelly Hamilton’s mind in an emergency situation. He directs NMDA’s Office of Agricultural Biosecurity; as part of that position, Hamilton oversees the agricultural and natural resources piece of what’s known as the Emergency Support Function (ESF)


system. Hamilton describes the ESF system as a series of “industry-specific state plans” to help bust up an emergency situation into a bunch of smaller, more manageable pieces. In other words, public health experts are left to deal with only public health issues, while hazardous materials experts are left to deal with only hazardous materials issues and so on. “Prior to 9/11, you’d just have a mass response of people and equipment,” Hamilton said. “Now it’s much more specific — you don’t have someone trying to operate in an ag setting if that’s not their area of expertise.” Several people across New Mexico agriculture say the

response to emergencies is far beyond what it was 10 years ago. “We have spent years training agency personnel and our industry partners to respond to situations such as these fires,” Agriculture Secretary Witte added. “When we experience the cooperation and coordination, it truly helps protect our livestock industry.” As smoothly as things went this fire season, as with anything, there’s always room for improvement. Hamilton said that checklists are being developed, including an animal check-in form to keep ownership straight when multiple people are moving evacuated livestock to a single location.

Page 9

“[The check-in form] will show this is the animal coming in, this is the owner . . . this is the animal going out with its owner.” Another communications piece in development is a public service announcement advising livestock owners to develop a plan for their animals in case of a wildfire or other emergency. That PSA gets down to such basics as making sure your truck and trailer are gassed up and road-ready — or identifying someone who has a truck and trailer if you don’t. “Last year during the Wallow Fire, [Cattle Growers was] able to identify a core group of people who were able to haul cattle if need be,” executive director

from some 12 western states on the mainland to

Kona, Hawaii, in late May, 2012, galvanizing forces to deliver the good news about beef and the families who grow it. In addition to educational and business meetings the group, including many husbands, dads, and brothers, visited the Big Island’s ranches and sampled local cuisine.

1 20

n rica me A 2

, Kona, Hawaii lewomen

Jessica and Alicia Sanchez, Belen, N.M., made the most of a few days away from Red Doc Farm.

Mary Jo Rideout and dad Carl Stevenson, Red Rock, Ariz., enjoyed the trip.

ANCW President Barbara Jackson (r) takes a moment with her husband Tim. In Barbara’s spare time the pair operates Animal Health Express in Tucson, Ariz.

The Arizona bunch.

Energy Efficiency and Climate Policy: The Rebound Dilemma uch of today’s energy policy assumes that regulations mandating greater energy efficiency will reduce energy use. That isn’t always the case and energy efficiency improvements are seldom as large as promised by engineering calculations because of “rebounds,” says Robert J. Michaels, a senior fellow at the Institute for Energy Research. For example, people who install lighting that is 50 percent more efficient frequently leave the lights on longer, negating some of the energy savings from greater efficiency. This is called an energy efficiency rebound, and such occurrences have been documented empirically on numerous occasions. Further, the rebound effect is even broader than many recognize. There are four basic types of rebound that might result from improved energy efficiency: ■ Direct rebounds are adjustments in the production or consumption of a good whose energy efficiency has increased (e.g., improved vehicle fuel economy that lowers the per-mile cost of driving may motivate drivers to travel more miles). ■ Indirect rebounds are changes in the production or use of goods related in use to the activity being improved in efficiency (e.g., increased fuel economy that leads to more driving also indirectly increases the demand for tires, requiring more energy use by tire manufacturers). ■ Economy-wide rebounds are the impacts of an efficiency improvement summed over all affected economic activities (e.g., if drivers are traveling more often, hotels will require additional energy to meet increased demand for rooms and services). ■ Embedded energy inputs are those that expend energy in the process of creating more energy-efficient goods (e.g., higher efficiency building insulation that lowers annual energy use requires energy inputs to install the material). Given the pervasiveness of various rebound effects, it should not be surprising that backfires have been documented, in which the resulting increase in energy consumption outpaced the original gains from efficiency. In these cases, the net impact on energy use is altogether negative.


early 200 Cattlewomen and CowBelles journeyed

l Catt iona Nat

Cowan said. “One of the things I learned this year is that we’ve got to develop that in each quadrant of the state.” Cowan envisions having a file of who’s ready, willing, and able to help if given a couple hours’ notice. The file would be complete with how each person could lend a hand — whether that’s hauling cattle or donating hay. “Ag is self-sufficient,” she said. “People cowboy up to help themselves and each other — but it’s nice to know we have a network like this in place when we need it.”

Keokee Wood (r) explains the horse-breaking process at famed Parker Ranch on Kona Island which boasts an undercover breaking pen with four pens. New Mexico had a strong contingent.

Livestock Market Digest

Page 10

August 15, 2012

Sexed Semen Options in the Beef Industry BY HEATHER SMITH THOMAS

here has been an increase in the production and use of sexed semen in beef cattle. “The major bull studs such as ABS Global, Select Sires and Accelerated Genetics first used dairy bulls for sexed semen. A dairy bull, in general, has very high fertility and high quality of semen that can be more readily processed and sorted for sexed semen. The dairy breeds are very fertile,” says Carl Rugg (Bovine Elite). Dairymen started using sexed semen, partly because of high fertility that allowed this, and partly because dairies do a lot more AI breeding than do beef producers. “Well over 70 percent of dairy cows are bred AI, while we might have 10 percent in the beef industry. It was logical for


sexed semen to be used first in the dairy business,” he explains. “A few years ago we started seeing placement of beef bulls for sexed semen production. Each of the major bull studs has a handful of beef bulls they offer for sexed semen availability. These are bulls with high fertility and high quality semen that can make it through the sex-sorting process. Not every bull’s semen can do this. We’ve seen Angus, Simmental, Hereford and a few Charolais being offered for sexed semen,” says Rugg. There are also a few bulls chosen for sexed semen in the club calf business. “The cost of producing the straw of sexed semen might be $25 to $40 so the bull studs are pricing that semen fairly high to cover their expense of processing. The breeders who want to use it are paying a premium for

it. They might also be using some in-vitro fertilization, which adds to the expense. They are taking these high-end steps, however, to produce a high-end product,” he says. Sorted semen from Genex (GenChoice, from Sexing Technologies, the company that holds the patent to the sorting process) at this point has a lower conception rate than regular AI. “We get about 8 to 10 percent reduction in conception using sexed semen, but the flip side is that we get very good results on the sex,” says Willie Altenburg (Genex). “We call it GenChoice 90 because we guarantee more than 90 percent of the calves will be the desired sex. That’s a minimum; we usually get a better sex ratio than that. We bred a lot of cows last year to a bull with sort-

ed semen for bull calves and ended up with only one heifer. She was the only heifer from that particular sire,” he explains. Morgan Johnsrud (Genex) says that only a few commercial breeders are using sexed semen at this point. “When we get the cost of production down, it will make it more attractive. Sexed semen can simplify crossbreeding systems. Many ranchers are not taking advantage of heterosis because of the logistics of maintaining a crossbreeding program with natural service,” he says. “With sexed semen you can now maintain your Angus base herd, for instance, using female semen on your heifers. Then you always have some good replacements coming on. You could use sexed male semen on the cowherd, with a terminal sire to produce good crossbred steers to

sell,” says Johnsrud. “Sexed semen allows you to do several things,” says Altenburg. “If you are breeding heifers you can use heifer semen to reduce dystocia (since heifer calves tend to be smaller at birth than bull calves), and then keep replacements out of your heifers because hopefully they will be your best genetics. If you are in the bull business you can produce males and sell $4,000 bulls instead of $1,500 heifers,” he says. “We are doing some trials right now with Dr. Dave Patterson at the University of Missouri on timing of insemination with sexed semen — on fixed time protocols to see if there are differences. We did some fall-calving herds recently but don’t have continued on page eleven

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Ranchers, farms eye new water-saving initiatives; MillerCoors partners with farmers to save water; Non-profits push “water as a crop” program by CAREY GILLAM, Reuters

exas cattle rancher Gary Price knows what it is like to worry about water. With 2,500 acres of rough range land situated about an hour south of Dallas, Price relies on rain-fed soils to provide the hearty grass forage he needs to fatten his cattle. When the animals are sold at grocery meat counters, every pound of flesh spells potential profit for Price’s family. “Ranching is really mostly about water and grass. So you’ve got to look at ways to control water,” Price said in an interview at his 77 Ranch, where tempera-




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tures over 100 degrees drive his cattle into the shade every day and have spurred swarms of hungry grasshoppers. A recent stretch of devastating drought in Texas and fears of ongoing water scarcity across many parts of the United States are pushing Price and others in ranching and farming into new frontiers of water conservation. In Price’s case, that means teaming up with a corporate partner, water-thirsty MillerCoors Brewing Co. The secondlargest U.S. brewer has been helping him build fences for new grazing rotations and plant native prairie grasses that grow thick, retain rainwater and limit runoff. Corporate America’s concerns about water availability are not new, but of late they are growing. More than 40 international corporate leaders met in June in Rio De Janeiro to reaffirm the need for concerted action to address a growing water crisis. Across the globe, water consumption has tripled in the last 50 years, and at least 36 U.S. states are anticipating some areas of water shortages by 2013, according to the Environmental Protection Agency. Farming alone consumes 70 percent of all fresh water used around the world. With that in mind, public and private interests working on water conservation have started pushing partnerships with farmers and ranchers to protect water quantity and quality. The work is starting in Texas but is intended to spread nationwide.


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like those on Price’s land, providing incentives to farmers in an area of Texas that targets 152,309 acres. “It is not going to be one organization or one company or one government that is going to solve this problem. It is going to take all of us collectively,” said Kim Marotta, MillerCoors director of sustainability. MillerCoors acted after an internal assessment showed that three of its eight U.S. breweries, including one in Fort Worth, Texas, faced potential water shortages. The company is working on water conservation at its breweries, but also is identifying large agricultural water users near its breweries and asking to partner with them on conservation. “We’re just starting that work,” Marotta said. “You have to start farm-by-farm.” The moves come as water gains stature as an critical asset, a must-have resource that everyone from farmers to investment fund managers need to control. At MillerCoors, for example, it takes about 4 gallons of water to make 1 gallon of beer. The Texas efforts follow the 2011 drought that cost state agriculture more than $7 billion in losses. Last year was the driest year in state history. While some parts of Texas have since received rain, the drought appears to be spreading to the U.S. Midwest and to parts of the southern Plains again as scorching heat and cloudless skies burn up crops and pasture. “You have to do more with less,” said Ken Klaveness, executive director of Trinity Waters, a non-profit conservation group focused on the 512-mile-long Trinity River, which supports continued on page sixteen

“America’s Favorite Livestock Newspaper”

August 15, 2012

the ultrasound results yet. Right now the recommendation is that sexed semen only be used with heat detection (which makes it less attractive to producers). We’d like to be able to do it with fixed time insemination, so we are doing these trials with some large ranches to see if there are ways we can adjust the timing and increase our conception rate,” explains Altenburg.

Each of the major bull studs has a handful of beef bulls they offer for sexed semen availability. All the synchronization protocols have different time frames (such as between 60 and 66 hours). The study is looking at whether they are breeding cows a little too early or a little too late with the sexed semen — to figure out when the optimum time would be to breed them. “Genex is also working with Oregon State University to look at some of these things,” says Johnsrud. “We know there is a slightly lower conception rate with sexed semen at this point, versus conventional semen. Early on it was used just in dairy and much of the information on conception rate is from the dairy industry. So we are looking at the economics of using sexed semen in a timed AI synchronization protocol with cows that are out on commercial ranches. This way it will be a true picture of the economics of utilizing sexed semen,” he says. For this study they are using male semen, to produce steers, and the rancher retains ownership. “We will follow those cattle all the way to the rail and get all the data to evaluate the economic advantages of utilizing sexed semen — looking at the costs of production. We are not quite through the first full year of that project so we don’t have any real data yet. It’s a 2-year conception-rate data trial, in a true commercial ranch setting,” he explains. Another tool that Genex has is a calculator they developed in conjunction with Sexing Technologies. “We can plug in the numbers and calculate a return on investment, utilizing sexed semen. This is called GenChoice Decision Aid,” says Johnsrud. Lance Ellsworth (Cattle Visions) works with a number of purebred breeders who are using sexed heifer semen. “East of the Mississippi, where bulls typically don’t sell for as high as they do in the West, female lines become more important. Sexed heifer

semen will probably become useful to the high-end purebred producers who have an opportunity to market females for more money than bull calves are worth,” he says.

The Semen Sorting Technology There are several bull studs (including Select Sires, Genex, Accelerated Genetics and ABS Global) that now offer sexed semen from beef bulls. The sexing service is provided to the bull studs by independent companies such as Sexing Technologies. “Even though the sorting process is the same, the companies and researchers involved in the sorting are trying to identify factors related to sorting that impair sperm quality. They are making changes, to try to have less sperm damaged in the sorting process. But we are still in a situation where in any ejaculate, 25 percent ends up sorted X, 25 percent ends up sorted Y, and

The industry standard now for sexed semen is 2.1 million cells. the other 50 percent is damaged or can’t be sorted. So we are still losing half the ejaculate to begin with,” says John Hall, PhD (Extension Beef Specialist, University of Idaho, Superintendent of the Nancy M. Cummings Research, Extension and Education Center). The industry standard now for sexed semen is 2.1 million cells per straw. The industry standard for non-sexed semen is about 10 to 20 million cells per straw. Research looking at the effects of dose has shown that once you get above 2 million cells, you generally don’t get much increase in pregnancy rate. “There are some bulls in which an increase in the sperm numbers really helps their pregnancy rates, and in other bulls it doesn’t. To increase the dosage-from the small amount of sperm you get from a normal ejaculate — doesn’t always make much difference,” he says. The way the process is done is based on the fact that the X chromosome has 3.8 percent more DNA than the Y. The machines can read that difference in DNA content. Semen is stained with a fluorescent dye and then passed through a machine (flow cytometer) that can sort the sperm as it goes by in a stream of single droplets. The female producing sperm with the X chromosome shines brighter than the Y because the X chromosomes are 3.8 percent

larger and have absorbed more dye. A laser in the sorting machine determines the gender of the sperm based on the amount of light it emits. The flow cytometer uses focused laser light to illuminate cells as they pass by the laser beam one at a time in a fluid stream, traveling 60 miles per hour or faster; up to 8000 sperm per second are sorted and processed. This seems fast, but it takes about 3 to 4 times longer to process sexed semen than to process conventional semen for shipping or freezing. The X-bearing sperm are sorted off in one direction, the Ybearing sperm in another, and anything of undetermined sex passes straight through as waste. The sorted sperm are then frozen in .25 cc straws to be used for AI. An ejaculate yields fewer straws of sexed semen than conventional semen.

Page 11

One advantage to the sorting process (which also helps make the sexed semen more successful in low dosage than regular sperm) is that damaged or dead sperm are sorted off. A normal ejaculate always has a certain amount of dead, dying or damaged sperm cells, so when it’s sorted by the sexing process, these are eliminated making the remaining sperm more viable. The highly purified groups of sorted semen are then frozen for future use in AI, to enhance AI programs or embryo transfer. For many years the drawback in using sexed semen was the difficulty in getting enough sorted sperm from an ejaculate to make it practical. Studies at Colorado State University helped make it feasible. Their theory was that since it only takes one sperm to fertilize an egg, why use 20 million (the recommended amount for optimum reproduction)?

Benefits of Using Sexed Semen his can be a handy tool to increase heifer numbers or steer numbers. In the beef industry, it is handy to be able to select the gender of calves if you want to keep replacement females from certain cows/bulls, or have steers from a terminal cross. In any given herd, the option of sex determination could be useful for reducing calving difficulty in first calvers (since heifer calves are typically smaller at birth than bull calves), or for producing a higher number of good females to choose from as replacements if you want to expand your herd size without buying outside cattle. If you can keep a closed herd, not having to depend on bringing in any other females, you can cut down on some of the health problems that may be inadvertently introduced, and in many cases you also have better knowledge of the genetics in your own herd. If you want your best cows to have heifers, this can give you faster genetic progress in improving your cow herd, enabling you to keep more good females and cull more deeply.


They began experimenting with low dose insemination for AI, and it worked — especially if the cow was at the optimum point in her heat period. Today, advanced reproductive techniques like in vitro fertilization (where the egg is fertilized in the lab and then used in embryo transfer) make sexed semen even more practical, since only a tiny amount of sperm is needed for fertilizing a large number of eggs. Sexed semen works well (with highest success rates) in a well-managed AI or ET program in which timing of insemination is optimum for proper fertilization of the egg, but probably works best in an IVF program. Some variability has also been noted with different bulls; semen from various bulls goes through the sorting machines differently, so some bulls are better candidates for sexed semen than others.

A producer may want heifers from the top 10 to 15 percent of their cows, and steers from the rest of the herd. When the market is good for replacement females, breeders may opt for more heifers, and when the market is better for steers they may choose to produce mostly male calves. Seedstock producers may select bloodlines for maternal qualities for brood cows and others bloodlines they are hoping to use for marketing bulls. This technology gives producers the choice, and also enables them to develop an early strategy for a potential future market. In female sales, for instance, some breeders are finding their bred cows and heifers worth more when bred with sexed semen. Bred heifers guaranteed to have heifer calves (and less calving problems) may bring a premium. Other buyers may want females that will produce only male calves. Seedstock producers marketing pen lots of bred females or pairs may find an advantage in being able to offer cattle guaranteed to have one sex or the other, or may find a premium in offering exceptional female bloodlines in a 3-way package — a cow with heifer calf at side and bred back to have another good heifer calf.

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August 15, 2012

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n various school districts across the country, administrators remain unsure about the optimal policy regarding school transitions from elementary to middle school. Some are increasingly moving toward separate K-5 and 6-8 schools, while others embrace a K-8 system that sidesteps the middle school transition altogether, say Martin West, an assistant professor of education at the Harvard Graduate School of Education, and Guido Schwerdt, a researcher at the Ifo Institute for Economic Research in Munich, Germany. Studies on this subject attempt to compare the various systems — transitions from elementary school to middle school are typically marked by a slump in student achievement, but less attention has been paid to these students’ progress in later years, specifically in transitioning to high school. To this end, West and Schwerdt recently tracked the progress of students in Flori-


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da and found that the middle school transition is substantial. ■ Math achievement falls by 0.12 standard deviations and reading achievement falls by 0.09 standard deviations for transitions at grade 6. ■ This equates to a drop between 3.5 and 7 months of expected learning over the course of a 10 month school year. ■ Furthermore, this drop persists for all three years of middle school with students who entered in sixth grade scoring 0.23 standard deviations in math and 0.14 standard deviations in reading worse than would have been expected had they attended a K-8 school. ■ Additionally, these students do not perform significantly better than their K-8 peers upon entering high school, undermining the argument that making the middle school transition better prepares them for the high school transition. ■ Finally, entering a middle

school in sixth grade was found to increase the probability of early dropout by 1.4 percentage points (or 18 percent). These results held true both for urban and rural school comparisons. In attempting to identify factors that contribute to this disparity, researchers analyzed data regarding school policies, funding and grade sizes, but found that none of these variables were significant. They did, however, identify that the general school “atmosphere” differed significantly between traditional middle schools and K-8 schools. Specifically, students benefitted from being the oldest students in a school that included very young children, as this presented them with leadership opportunities that contributed to student achievement. Source: Martin West and Guido Schwerdt, “The Middle School Plunge,” Education Next, Spring 2012.

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Get Dense nherent in the growth of the world’s population is the need to produce more staple food items and energy. However, restrictions imposed by the need to preserve the natural environment require further efforts in this area to focus on producing more with marginally less space. This lends credence to the expansion of energy density. The lessons of density can be seen in farmland acreage, says Robert Bryce, a senior fellow at the Center for Energy Policy and the Environment at the Manhattan Institute. ■ Across the entire world, there are currently 3.7 billion acres under cultivation. ■ Indur Goklany, a policy analyst for the U.S. Department of the Interior, estimates that if agriculture had remained at its early-1960s level of productivity, feeding the world’s population in 1998 would have required nearly 8 billion acres of farmland. ■ This additional 4.3 billion acres is only slightly smaller than South America, which underlines the point that without technological advances augmenting farm density, much of the natural environment would have to have been developed to produce more food. The need to improve food and energy density, especially with growing demand from developing countries such as China and India, undermines the arguments of many environmentalists, who impose substantial burdens on producers. ■ Organic farming, which has been advocated by the Green Left as an alternative to mass production farming, produces substantially less food per acre. ■ Various recent studies have found that land devoted to organic farming produces 50 percent less wheat, 55 percent less asparagus and lettuce, and 23 percent less corn than conventionally farmed land of the same acreage does. ■ Sales of organic products, which more than doubled to some $51 billion between 2003 and 2008, further constrain food production, contributing to 2011’s higher prices that, according to the Food Price Index, are 60 percent higher than 2007. The lessons of density are also instructional in the production of energy. President Obama stated in his recent State of the Union speech that America can end its dependence on foreign oil through the use of biofuels. However, this energy source consumes enormous amounts of edible foods — 15 percent of global corn production and 5 percent of all the grain grown in the world. Meanwhile, traditional natural gas and nuclear energy have far greater energy densities that interfere comparably little with the environment.


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“America’s Favorite Livestock Newspaper”

August 15, 2012

Advantages of Using Crossbred and Composite Bulls by HEATHER SMITH THOMAS

eterosis (hybrid vigor) has proven its value in many agricultural sectors — whether production of hybrid corn, hogs or beef. There are three (3) kinds of heterosis; individual (the calf), maternal, and paternal. Of the three, paternal heterosis has had the least attention.


Research studies have reported up to 25 percent improvement in pounds of calf weaned per cow exposed to a bull, when crossbred cows produce crossbred calves. Crossbred calves demonstrate increased weaning weights and yearling weights when compared with calves of a

which are mostly half bloods, some hybrid vigor can be introduced into the herd. By keeping those replacement heifers, some maternal heterosis can be added, in a relatively simple and practical fashion, without having wide fluctuations in breed composition from one generation to the

Hybrid bulls are thought to have a little more enthusiasm to go out and breed a lot of cows. single breed. Maternal heterosis, seen in the crossbred cow, increases her performance and that of her calves. She reaches puberty earlier, rebreeds quicker after calving, has greater survival rate in her calves, stays in the herd longer, and produces more pounds of calf during her lifetime. Now some producers are looking at the possible advantages of utilizing paternal heterosis, and benefiting from improvement in reproductive characteristics of the bull. Scott Greiner, Extension Beef Cattle Specialist, Virginia Tech, says there has probably been less research done on paternal heterosis than on individual and maternal heterosis. “The studies that have been done have shown some advantages, namely in terms of fertility, and possibly a little improvement in number of cows settled, and pregnancy rate — and cows settled earlier in the breeding season,” he says. Anecdotally, hybrid bulls are thought to have a little more enthusiasm to go out and cover a lot of territory and breed a lot of cows. “This can be seen as an advantage when a producer is running cattle in large pastures with more cows per bull, in the larger range operations — as opposed to smaller cow-calf herds in our part of the country,” he says. “As I visit with producers here, and we look at the research, the hybrid bull allows for some practical crossbreeding (and heterosis) to occur in small herds. It simplifies a crossbreeding system. The traditional rotational system or terminal sire system is not applicable for a lot of our small herds,” says Greiner. A small producer may have only one breeding pasture and one bull. It becomes impossible or too complicated to facilitate the traditional crossbreeding system. “By using a hybrid bull, such as Sim-Angus or Balancers,

next.” The producer can keep the desired breed mix the same. “From a practical standpoint in our area of the country, this is the most applicable reason for use of a hybrid bull, as opposed to just the fertility — though this can certainly be an added bonus,” says Greiner. “Observing and measuring the difference between hybrid and purebred bulls in terms of fertility in a real world setting would be pretty hard to measure in our type of production system. Some

we’ve now put purebred and hybrids on the same playing field when it comes to selection,” he says. We’ve taken some of the guesswork out of it, for selecting a good hybrid bull. This in itself has helped generate more interest in using hybrid bulls than what we’ve seen before. People are now considering them seedstock; this term no longer refers only to purebreds. “Just as importantly, seedstock breeders have embraced that concept, as well. They often produce hybrids for some of their customers. I think the quality and the genetic merit of the average hybrid bull today is quite a lot better than it was a few years ago.” Early on, about the best you could get was a crossbred bull that was not necessarily from a planned mating. Seedstock producers were generally not producing crossbreds. In some programs, it might have been the late calvers or the cows that weren’t producing the best calves that got mated to the Gelbvieh or the Simmental. But this isn’t true anymore. Breeders today are flushing their best cows to make hybrids, and bull buyers can have faith in the quality of bulls they are getting. This has opened the door to a lot of new interest. Commercial cattlemen are taking a look at what these hybrids can offer their own breeding programs. There are many options to choose from, in

We now have the tools and the science to do accurate genetic selection with hybrid bulls of these things will vary from individual to individual bull as well. The basic fundamentals of proper care and nutrition, utilizing a breeding soundness exam, along with putting a bull with the right number of cows, should apply to hybrids as well as purebreds. If all this is done properly, in most of our production settings, it would be pretty hard to measure the advantage of a hybrid bull — when it comes to reproductive capacity. The much more widely recognized advantage is the ability to introduce some hybrid vigor and heterosis in a simple and practical fashion — in one generation,” he says. “Today in our industry there is unquestionably renewed interest in hybrid vigor and crossbreeding, particularly on the maternal side. I think that from an industry standpoint, the last several years has seen an evolution that’s come to fruition, in that we now have the tools and the science to do accurate genetic selection with hybrid bulls. We didn’t have this capability before. Basically

the various types of hybrids and composites being created today — with various percentages of continental and British breeding. “What I stress with our producers is that it still boils down to having a plan. You need to select the right genetics in those hybrid bulls — to move your herd forward and contribute to your overall genetic plan. If you use the tools available to help you do this, it can be beneficial. Crossbreeding must be done correctly. There are advantages, and you can capture heterosis and use it to your advantage, but at the same time we need to do that in a planned fashion, with some goals and some selection pressure,” he says. Why do something half way when you can maximize it? “One thought that comes up a lot is that crossbreds are better than purebreds. But not all crossbreds are better. You still have to select the parents! But the interest and use of hybrids has grown astronomically here in Virginia.”

Page 13

4-Hers more likely to contribute to communities ecent findings from “The 4-H Study of Positive Youth Development” from the Institute of Applied Research at Tufts University indicate that young people in 4-H are three times more likely to contribute to their communities than youth not participating in 4-H. Notably, the Tufts research discovered that the structured learning, encouragement and adult mentoring that young people receive through their participation in 4-H plays a vital role in helping them actively contribute to their communities. In fact, 4-Hers all across the nation are empowered to take on the leading issues of their towns, counties and states and make a lasting difference with their peers. 4-H prepares young people to step up to the challenges in their community and the world. Using research-based programming, that infuses highquality positive youth development principles, 4-H youth get the hands-on, real-world experience they need to become leaders and to make


positive differences in their communities. The research from the Tufts University study also indicated that youth in 4-H thrive through the health and science education and career preparation experiences they receive through 4-H programming. Compared to non-4-H youth, 4-Hers are more likely to spend more hours exercising or being physically active. 4-H youth also have higher educational achievement and higher motivation for future education — reporting better grades, higher levels of academic competence, and an elevated level of engagement at school. The 4-H Study of Positive Youth Development is a longitudinal study that began in 2001, through the support of National 4-H Council. Youth are measured in “waves” across time which compared those that participate in 4-H to those that do not. The study is currently in wave seven. The 6,885 adolescents surveyed are racially and geodiverse graphically representing 45 states across the nation.

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f you have livestock, a product or service that stockmen and their families need, they will find out about it quickly if you advertise in the Digest. Digest readers know value when they see it and they respond rapidly to a good offer. Before you plan your advertising budget, think hard about how to stretch your dollars and where they are spent the most efficiently. Are you paying more to reach fewer qualified potential customers than you would receive in the Digest? The Digest’s circulation is concentrated in the most important livestock producing states: Nebraska, Colorado, Wyoming, Montana, Utah, Idaho, California, Oregon, Washington and Texas. The Digest caters to the most active readers in the livestock world — who ARE the buyers and sellers of livestock, the ones who show up and speak up. It is the ONLY place to get Lee Pitts’ perspective on the world and how we are going to thrive into the future.

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August 15, 2012

SCS Expands GHG Offset Verifications to Include Landfills, Livestock and Ozone Depleting Substances New Services Synced to Impending California Cap and Trade Program cientific Certification Systems (SCS), a leading verifier of forest carbon offsets, has expanded the scope of its carbon offset verification services in response to escalating demand created by the launch of California’s Cap and Trade program. The company is now accredited to verify landfill gas offsets under the Climate Action Reserve protocol and the Verified Carbon Standard (VCS), and is pursuing accreditation related to the verification of projects that destroy ozone depleting substances (ODS) and livestock methane. “We are committed to serving the burgeoning compliance offset market in California,” said Dr. Robert J. Hrubes, Senior


Vice President of SCS. “This expansion of scope will allow SCS to verify and validate projects immediately.” SCS recently verified the Berkeley County Landfill offset project in South Carolina and the Morehead Landfill project in Kentucky, both of which capture and destroy the powerful greenhouse gas methane. These projects will generate Climate Reserve Tonnes (CRTs), the official carbon credit used by the Climate Action Reserve, which represent metric tons of carbon dioxide emissions prevented from entering the atmosphere. SCS has verified all of the currently registered forest carbon offset projects under the Climate Action Reserve Protocol and is a

leading verifier of voluntary offsets under the Verified Carbon Standard and American Carbon Registry. Upon completing the accreditation process for livestock projects and ozone depleting substances, SCS will offer verification for the the California Air Resources Board’s Compliance Offset Program. Livestock offsets involve the capture of methane emitted from the breakdown of manure, while offsets related to ODS involve disposal of refrigerants, which are among the most powerful greenhouse gases. SCS program staffing is undergoing expansion to meet the increased demand for carbon offset verification services, in the

US and around the world. Scientific Certification Systems (SCS) has been a global leader in third-party environmental and sustainability certification, auditing, testing and standards development for more than 25 years. SCS programs span a wide cross-section of sectors, recognizing exemplary performance in natural resource management, green building, product manufacturing, food and agriculture, retailing and more. SCS is a Certified B Corporation(TM), reflecting its commitment to socially and environmentally responsible business practices. SCS is currently accredited to ISO 14065 for GHG Validation and Verification by the American

National Standards Institute (ANSI) and offers verification under the Verified Carbon Standard (VCS) and the Climate Action Reserve (CAR). SCS also offers validation and verification services for the Climate, Community and Biodiversity (CCB) standards. To date, SCS has verified over 42,000 acres of forest under the Climate Action Reserve Forest Project Protocols.

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■ NEW LISTING, 327 ACRES: Cattle/horse ranch. Over 225 acres in grass. 3/4 mile State Hwy. frontage. Live water, 60x80 multi-function barn. 2-bedroom, 1-bath rock home. Priced to sell at $1,620 per acre. MLS #1204641 ■ 483 Ac., Hunter Mania: Nature at her best. Don’t miss out on this one. Live water (two creeks). 70+ acres open in bottom hayfields and upland grazing. Lots of timber (marketable and young) for the best hunting and fishing (Table Rock, Taney Como and Bull Shoals Lake) Really cute 3-bd., 1-ba stone home. Secluded yes, but easy access to Forsyth-Branson, Ozark and Springfield. Property joins National Forest. MLS#1108090

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TEXAS & OKLA. FARMS & RANCHES • 735 acres Paris, Texas, excellent pasture, paved road frontage, huge lake, mansion home. $2,750,000. • 274 acres in the shadow of Dallas. Secluded lakes, trees, excellent grass. Hunting & fishing, dream home sites. $3,550/ac. Can add 300 more acres, only 30 miles out of Dallas. • 1,700-acre classic NE TX cattle & hunting ranch. $2,750/ac. Some mineral production. • 256 Acre Texas Jewel – Deep sandy soil, highrolling hills, scattered good quality trees, & excellent improved grasses. Water line on 2 sides rd., frontage on 2 sides, fenced into 5 pastures, 5 spring fed tanks and lakes, deer, hogs & ducks. Near Tyler & Athens. Price $1,920,000. Make us an offer! • 146 horse, hunting cattle ranch N. of Clarksville, TX. Red River Co. nice brick home, 2 barns, pipe fences, good deer, hogs, ducks, hunting. PRICE REDUCED to $375,000. • 535 ac. Limestone, Fallas, & Robertson counties, fronts on Hwy. 14 and has rail frontage water line, to ranch, fenced into 5 pastures, 2 sets, cattle pens, loamy soil, good quality trees, hogs, and deer hunting. Priced reduced to $1,750 per ac. • 10 Wooded Acres with a 6-bedroom, 3.5 bath and a 2-car garage and shop for $185,000, owner financed with 10% cash down. • 134 acres Wortham, Texas, $1,750/ac. Hunting and cattle. Fronts FM Hwy.


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August 15, 2012

“America’s Favorite Livestock Newspaper”

Page 15

The grass IS greener for backgrounders courtesy of CERTIFIED ANGUS BEEF

inch up that seatbelt. This cattle market madness is only going to get more dramatic. You may think you’ve been on a rollercoaster ride, but Derrell Peel, Oklahoma State University (OSU) ag economist, shared data at a recent field day that could wow the most seasoned thrill seeker. “We have record level prices pretty much anywhere you look in this industry and they’re going to get higher,” Peel said, addressing nearly 75 stocker operators earlier this month. The “Backgrounding for Quality” seminar at White Brothers Cattle Co., near Chickasha, Okla., was co-sponsored by OSU, Pfizer Animal Health and Certified Angus Beef LLC (CAB). Peel said being a market analyst used to be much easier. “Beef demand wasn’t changing much, international trade wasn’t all that important and corn was always $2 a bushel, so all you had to do was figure out the cat-


tle inventory and you had a pretty good bet on what was going to happen in cattle markets.” Not anymore. “What’s driving prices today is not something that’s happened overnight,” he said. The industry has liquidated cattle 14 of the last 16 years. In January, USDA numbers showed fewer than 91 million head of U.S. cattle, the lowest inventory since 1952. That makes supply a key driver, not just in 2012, but for the next four to six years, he said. Replacement heifer retention has increased since 2009. “But it hasn’t translated into net growth in the herd because we’ve had very large cow slaughter,” he said. Drought drove that last year and still remains a wild card moving forward. Perhaps surprisingly, these lower animal numbers have not shown up in the form of significantly smaller beef production, until now. “You’re eating your way into smaller inventories,” Peel said, noting that liquidation means more harvested animals. “That

Red tape rising: Obama-era regulation after three years he first three years of the Obama presidency have seen a marked increase in regulation of the economy. These new rules, which largely burden employers, threaten job growth in an already-anemic economy, and they have continued despite President Obama’s recognition in January 2011 that regulations had gotten out of hand, say JamesGattuso and Diane Katz of the Heritage Foundation. In assessing regulatory patterns and burdens, Gattuso and Katz focus on “major” regulations — those estimated to have an economic impact of $100 million or more. ■ Despite the president's promise of restraint for 2011, the torrent of new rules and regulations from Washington continued throughout the year with 32 new major regulations. ■ These new rules increase regulatory costs by almost $10 billion annually along with another $6.6 billion in onetime implementation costs. ■ Many of these regulations are associated with gradual implementation of the Patient Protection and Affordable Care Act and the new Dodd-Frank financial regulation law. President Obama in his recent State of the Union Speech stated that he had


approved fewer regulations in his first three years than President Bush had in his. This deceptive statement takes advantage of a large number of small regulations under President Bush to make it appear that his regulatory burden was greater than President Obama’s. ■ To support this façade, President Obama cites the number of rulemaking proceedings during Bush’s first three years (10,674), which was in fact less than his own (10,215). ■ However, during the three years of the Obama administration, a total of 106 new major regulations have been imposed at a cost of more than $46 billion annually, and nearly $11 billion in one-time implementation costs. ■ This dwarfs President Bush’s major regulations during his first three years, which amounted to a mere 28 new major regulations costing only $8.1 billion annually. Reliance on the total number of regulations disguises the fact that President Obama’s regulatory regime has significantly burdened the economy. Source: James Gattuso and Diane Katz, “Red Tape Rising: Obama-Era Regulation at the Three-Year Mark,” Heritage Foundation, March 13, 2012.

supports production in the short run, but at some point you simply can’t maintain that. We have reached that point.” Beef production was already declining during the last quarter of 2011, and the 2012 projection

(lb.), but in recent months it’s gotten close (see chart). What’s a thorn to purchasers is a bright spot for any producers marketing on a value-based grid. “For the last three years, we’ve had a pretty weak Choice-

Record prices can't prop up profits are on the same sky-high track. cuts that an additional 3 percent to 4 percent. “We certainly have more concerns about what that’s going to do on the demand side,” he said, noting fears about how high prices can go before that turns away consumers. “We’re at record-level prices and they’re only going to go higher,” Peel said. As heifers are retained, supplies will get tighter, putting a squeeze on through 2013 and maybe even 2014. “That’s going to be very important from a beef demand standpoint in terms of how [consumers] will be able to respond with this additional pressure we’ll see on prices,” he said. USDA Choice boxed beef has never traded above $2 per pound

Select spread,” Peel said. “This year it’s returning to a bit more normal spread.” Hamburger purchases are partially to blame, as consumers have shifted away from pricier steaks, or middle meats, to end meats. “For the most part they didn’t stop eating beef,” he said. Exports are picking up any slack, and setting records. Japan, Mexico, Canada and Korea are the major players, taking nearly equal shares of U.S. beef. But even record prices can’t prop up profits when input prices are also on the same skyhigh track. “Most of the beef industry we know and think about was built on cheap feed, cheap corn,” Peel

said. “We don’t have that right now.” Or any time soon, he added, thanks to increased competition. “The beauty of the market is that it never says you can’t have something. It just prices it so you can decide that you can get by without it,” he says. That’s why the beef industry is better poised to deal with record-high corn prices. “I don’t see a big future for stocker chickens,” he joked. “There are some folks promoting pasture poultry, and all that does is make the coyotes smile.” For 40 years, the industry built up the idea of cheap gains on grain. “Now it’s not the cheapest game in town so we need to think about how to do things differently,” Peel said. That, combined with high demand for forage, equals unparalleled opportunity for backgrounders. “Pretty much anything you have to sell today sells pretty well,” he said. Marketing has gotten easier. Quality management is now the primary concern. “You need to spend more of your attention than ever before on managing production,” he said. “Manage health, manage nutrition and manage cost to benefit from this market environment we’re in.”

Sweden’s reputation as a welfare state is in trouble weden has a reputation as the prototypical cradle-tograve socialist European nation, and the political left has long yearned for America to be more like the Scandinavian nation. But it now seems that this depiction of the European nation is unfair and misleading, as the country has implemented a series of reforms that have moved it significantly toward the right, says Investor’s Business Daily. The turnaround has been driven in no small part by the election of Fredrik Reinfeldt as prime minister in 2006. ■ Reinfeldt took office in October 2006, and by January of 2007 his government had begun tax-cutting. ■ It also began cuts in welfare spending as part of a general move toward austerity, attempting to make cuts in its extensive government debt. ■ Finally, it has made a concerted effort to deregulate the economy in order to encourage entrepreneurialism and business investment. This move to the right has yielded significant benefits for a country that was once the quintessentially Left nation of Europe. ■ Sweden fell into recession in 2008 and 2009, but it’s pulled strongly out of the decline, posting gross domestic product (GDP) gains of 6.1 percent in 2010 and 3.9 percent last year, when it ranked at the top in Europe’s list of fastest-growing economies. ■ This compares to America’s anemic growth over that same


period — 3 percent in 2010 and 1.7 percent in 2011. ■ Additionally, while the United States continues to struggle with its jobs problem (unemployment currently sits at 8.1 percent), Sweden’s jobless rate has fallen to 7.5 percent. ■ Though still higher than the government would like, 7.5 percent is far below the euro zone average of 10.2 percent and significantly lower than the rates in Spain (21.7 percent), Portugal (12.9 percent) and the United Kingdom (8 percent). ■ Furthermore, Sweden’s gov-

ernment debt as a share of GDP has dipped below 45 percent for the first time in decades and now is situated at a much-preferable 38.4 percent. Sweden’s Finance Minister Anders Borg has emphasized that all of this was accomplished without the massive stimulus spending that was instituted in other countries. Rather, it was through measures of austerity that Sweden weathered much of the recessionary storm. Source: “Sweden’s Reputation as A Welfare State Is In Trouble,” Investor’s Business Daily, May 11, 2012.

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August 15, 2012

Appeals court tosses out Hage judgment by MATEUSZ PERKOWSKI, Capital Press

federal appeals court has thrown out a $4.4 million legal judgment that deceased rancher and Sagebrush Rebellion icon Wayne Hage had previously won from the federal government. The U.S. Court of Appeals for the Federal Circuit has reversed an earlier court decision that ordered the U.S. Forest Service to compensate Hage for infringing on his property rights.


The descendants of Hage won a legal victory in the case in 2008, two years after his death and 17 years after the lawsuit was initially filed. The judge ruled that the agency deprived Hage of his water rights by building fences that prevented him from accessing streams in the Toiyabe National Forest in Nevada. Hage owned easements that allowed him to transport the water over federal land through ditches, which he claimed the Forest Service prevented him

from maintaining. The lawsuit also sought compensation for the fences, roads and improvements to water sources that Hage built on federal land before his grazing permit was revoked. After years of litigation, a federal judge agreed with the complaint’s arguments and awarded Hage’s estate roughly $2.9 million for his water rights and $1.5 million for the value of improvements. The government challenged that ruling, which a three-judge

63rd Annual


appellate panel has now reversed on several grounds. Hage could have applied for a special permit to maintain the ditches that conveyed his water, so the claim that the government prevented him from doing so isn’t “ripe” for federal court, the most recent ruling said. Building fences around streams also isn’t a physical taking of property, because Hage hasn’t demonstrated that he could put the stream water to beneficial use, the appeals court said. Water rights only allow the owner to use water that he can put to beneficial use, but the Hage family hasn’t shown “there was insufficient water for their cattle on the allotments or that they could have put more water to use,” the ruling said. The appellate court also overturned the award for rangeland improvements, ruling that Hage could have sought compensation directly from the agency instead of in federal court. Aside from vacating the financial award to Hage’s family, the most recent ruling has caused uncertainty about legal principles in such conflicts, said Brian Hodges, an attorney for the

Water Worries


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water needs for over 40 percent of Texans. “If you want your business to be here 15 to 20 years from now, you need to be proactive,” Klaveness said. Projects with farmers can range from planting of grasses with deeper root systems that hold water and reduce erosion to installing high-tech monitoring stations in pastures.

Farmers, ranchers changing techniques Farmers are being asked to change irrigation techniques and equipment and plant a mix of different crops. Ranchers are asked to alter the ways they rotate their cattle grazing. MillerCoors is also working with 800 barley farmers in Idaho to alter their irrigation practices in ways that use less water. MillerCoors will not disclose how much it is spending, but Marotta said the effort was a high priority. The company has worked with Trinity Waters and groups like the Sand County Foundation, a Wisconsinbased non-profit that works with landholders to improve natural habitats. Though he has long worked on ways to preserve water on his ranch, Price says creating a 40-acre wetland and planting more native grasses in recent years with the outside funding has helped make him better pre-

Pacific Legal Foundation property rights group who monitored the case. “The decision raises more questions than it answers,” Hodges said. For example, the appellate judges did not resolve the key issue of whether the government even had the right to regulate Hage’s ditches, he said. Hage claimed the Forest Service did not because his water rights predated the agency’s authority over the land. “It’s unsatisfying the court assumed the federal regulations were valid without first determining whether water rights holders like Hage have a right that is superior to the regulations,” Hodges said. The Hage estate can still ask for reconsideration from a broader “en banc” panel of appellate judges, or request the U.S. Supreme Court to review the case, he said. Hage's battle with the Forest Service is one of the sparks that started the “Sagebrush Rebellion” of popular resistance to changes in federal land policy, Hodges said. “This case exemplifies the abuses the Western ranchers and natural resource industries suffered at the hands of the federal government,” he said

continued from page eleven

pared for the Texas droughts. Three of Price’s pastures now sport large metal contraptions containing computers that monitor rainfall and runoff through varying types of grass. Though results are not yet in, the hope is that scientists monitoring the results will be able to determine which grasses are most effective and approximately how much water they help prevent from running off. Price also has new fencing and a showcase variety of the water-trapping native prairie grasses. The grasses grow so thick and lush even with scarce rainfall that his pastures have a marked distinction from those of his nearby neighbors who have cultivated more typical bermuda grasses. By preventing erosion and runoff when it does rain, and holding more moisture in the soil, Price is improving his ability to feed his cattle without costly supplemental hay. He is also reducing sediment contamination of nearby streams. Klaveness said many other landowners are moving to make similar improvements on their lands, including more than 100 who have applied for government grants for the work. “We have over 200,000 acres of landowner interest we are getting ready to mobilize,” he said. “The water we have is finite. We can’t make more.”

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