Livestock Digest Livestock “The greatest homage we can pay to truth is to use it.” – JAMES RUSSELL LOWELL NEWSPAPER PRIORITY HANDLING by LEE PITTS MARKET Digest Riding Herd by Lee Pitts O n April 23, the Dow Jones Industrial Average dropped 145 points in the blink of an eye, erasing $200 billion worth of investor’s wealth. What caused the mini- crash? Was it a negative report about the slow growth of our economy, another European country going broke or, did War- ren Buffett die? The answers are nope, no and we certainly hope not. The event that caused IRA’s to fall faster than President Obama’s approval ratings was a “tweet” on Twitter. If you’re like me and the only tweet you are aware of is made by a robin in the spring, a tweet these days occurs when some- one makes a comment via an online social networking service known as Twitter. In this case, a group known as the Syrian Elec- tronic Army hacked into the Associated Press and “reported” that the White House had been rocked by two explosions and Barack Obama had been injured. That “tweet” sent the Dow Jones tumbling 145 points. A few minutes later the Asso- ciated Press said the tweet was not true, the White House con- firmed there were no explosions, and the market made up all of its losses and closed higher on the day. Welcome to the world of something called “High Fre- quency Trading” where traders on Wall Street use complex price you get for your cattle, no matter how you sell them, could very well be determined by a bunch of computers talking to each other. In The Wired World Even veteran traders on Wall Street were startled by the Twit- ter crash. “It’s frustrating and scary that a tweet can erase hun- dreds of billions from the market in a short time, but that’s the world we live in,” said R.J. Grant, a Wall Street equity trad- er. “We haven’t seen anything like this before” said Giovanni Vigna, chief technology officer of the security firm Lastline. It may not be right, moral, or helpful, but you’d better get used to it because High-Fre- quency Trading (HFT) is legal and made up for half of all stock trades last year! Here’s how it works, or in some cases, doesn’t work. Sophisticated computer programs and models are con- structed that are owned by trad- ing firms. They then use com- puter programs to trade securities, bonds and commodi- ties on a screamingly-fast basis. Their goal is to make just a frac- tion of a cent per share, or pound of beef, on every trade. But make no mistake, these pen- nies do mount up. Although you may hold stocks in your portfolio for years, an HFT trader’s position may be held for only milliseconds. The mathematical formulas to buy and sell shares of stock, com- modities and bonds. In this case, computers picked up the news of the fake White House bomb- ing and immediately signaled other computers to start selling stock, with nary a human doing anything. Why are we telling you about all this about a stock market that doesn’t have anything to do with the stock you have to feed? Because this is what passes for a “market” these days and the Fat Thumbs And Black Boxes Lawyers, bankers, and hoot owls sleep with one eye open. continued on page four www.LeePittsbooks.com Create-A-Crises R ealizing that most people don’t under- stand the role that cattle and sheep play in sequestering carbon, fer- tilizing the ground, breaking the surface crust to prevent runoff, reducing fuel loads to prevent catastrophic fires, and creating high quality protein from grass, I recently made a phone call to 1-800- GOT-RICH. “Hello, you have reached the main office of Create-A- Crises Corporation. With offices in all 50 states and 100 countries around the world we can specifically design and create a crises just for you. We have a proven track record and are the go-to experts if you want to to shut down a business, farm, ranch or tie up a pri- vate citizen in court and make he or she go broke by paying lawyer bills. All of our lawyers are currently out creating crises and emergen- cies at the moment so please listen carefully and select from the following menu options. “If you would like for us to create a crises for you to stop someone from building on their own land or improv- ing their home, press 1. “We have an answer for everything and can be very creative. If you have a spe- cific complaint about an oil company, or other corporate criminal, and would like for us to create a crises to stop them from producing energy to run your car and heat your home, press 2. “If you have witnessed someone mistreating an ani- mal by tugging on its leash too hard, press 3 and our animal rights lawyers will put them in Leavenworth or San Quentin faster than PETA can strip the clothes off another fruitcake model or Hollywood actress. “If, while trespassing on a farmer or rancher’s private property you think you saw what should be an endan- gered species, press 4. If you would be willing to trespass on private property and plant an endangered species, please press 5. We are always looking for volun- teers. “If you, a member of your family, or anyone you know continued on page two T he second annual U.S. Beef Academy is focused on providing the next generation of beef producers a unique, applied beef cattle management experience on the his- toric Baca Ranch location, now a national pre- serve, in the high country of northern New Mexico. The USBA, hosted at the Valles Caldera National Preserve, is the second tier of the New Mexico Youth Ranch Management Program. New Mexico State University’s Cooperative Extension Service, Zoetis animal health prod- ucts, New Mexico Beef Council and other members of the beef cattle industry sponsor the youth ranch management program. The beef academy, scheduled for July 13-18, is tailored as an advanced, applied educational experience for youth between the ages of 16-19 with a sincere desire to be the next generation of beef industry producers and leaders. NMYRM was developed in 2011 to promote applied learning opportunities for youth from family ranches. The NMYRM program, now in its third year, initially started with a single, week-long ranch camp experience in June for U.S. Beef Academy offers young producers a unique, advanced learning experience youth from New Mexico. The ranch camp, now open to youth from across the United States, covers multiple aspects of ranch management, including beef production, range management, wildlife management, marketing and econom- ics. “During the ranch camp, we have one day to cover all aspects of producing safe and quality beef, which is a sizable task in a hands-on for- mat,” said Manny Encinias, NMSU Extension beef cattle specialist and member of the ranch camp organizing committee. By design, the curriculum at the academy is to build off the foundation developed at the ranch camp experience. “Instead of one or two hours per topic, we spend an entire day,” Encinias said. The hands-on, USBA curriculum is devel- oped by beef industry experts and professionals from across the United States. Faculty from Cooperative Extension Service affiliates at NMSU, Texas A&M University, University of Wisconsin-River Falls, South Dakota State Uni- continued on page four MAY 15, 2013 • www. aaalivestock . com Volume 55 • No. 5
Transcript
LivestockDigest
Livestock“The greatest homage we
can pay to truth is to use it.”– JAMES RUSSELL LOWELL
NEWSPAPER
PRIO
RIT
Y H
AN
DLI
NG
by LEE PITTS
MARKET
DigestRiding Herd
by Lee Pitts
On April 23, the Dow JonesIndustrial Averagedropped 145 points in theblink of an eye, erasing
$200 billion worth of investor’swealth. What caused the mini-crash? Was it a negative reportabout the slow growth of oureconomy, another Europeancountry going broke or, did War-ren Buffett die?The answers are nope, no and
we certainly hope not. The eventthat caused IRA’s to fall fasterthan President Obama’sapproval ratings was a “tweet”on Twitter.If you’re like me and the only
tweet you are aware of is madeby a robin in the spring, a tweetthese days occurs when some-one makes a comment via anonline social networking serviceknown as Twitter. In this case, agroup known as the Syrian Elec-tronic Army hacked into theAssociated Press and “reported”that the White House had beenrocked by two explosions andBarack Obama had beeninjured. That “tweet” sent theDow Jones tumbling 145 points.A few minutes later the Asso-
ciated Press said the tweet wasnot true, the White House con-firmed there were no explosions,and the market made up all ofits losses and closed higher onthe day. Welcome to the worldof something called “High Fre-quency Trading” where traderson Wall Street use complex
price you get for your cattle, nomatter how you sell them, couldvery well be determined by abunch of computers talking toeach other.
In The Wired WorldEven veteran traders on Wall
Street were startled by the Twit-ter crash. “It’s frustrating andscary that a tweet can erase hun-dreds of billions from the marketin a short time, but that’s theworld we live in,” said R.J.Grant, a Wall Street equity trad-
er.“We haven’t seen anything
like this before” said GiovanniVigna, chief technology officerof the security firm Lastline.It may not be right, moral, or
helpful, but you’d better getused to it because High-Fre-quency Trading (HFT) is legaland made up for half of all stocktrades last year! Here’s how itworks, or in some cases, doesn’twork. Sophisticated computerprograms and models are con-structed that are owned by trad-ing firms. They then use com-puter programs to tradesecurities, bonds and commodi-ties on a screamingly-fast basis.Their goal is to make just a frac-tion of a cent per share, orpound of beef, on every trade.But make no mistake, these pen-nies do mount up.Although you may hold
stocks in your portfolio for years,an HFT trader’s position may beheld for only milliseconds. The
mathematical formulas to buyand sell shares of stock, com-modities and bonds. In this case,computers picked up the newsof the fake White House bomb-ing and immediately signaledother computers to start sellingstock, with nary a human doinganything.Why are we telling you about
all this about a stock market thatdoesn’t have anything to do withthe stock you have to feed?Because this is what passes for a“market” these days and the
Fat Thumbs And Black BoxesLawyers, bankers,
and hoot owls sleep with
one eye open.
continued on page four
www.LeePittsbooks.com
Create-A-Crises
Realizing that mostpeople don’t under-stand the role thatcattle and sheep play
in sequestering carbon, fer-tilizing the ground, breakingthe surface crust to preventrunoff, reducing fuel loadsto prevent catastrophic fires,and creating high qualityprotein from grass, I recentlymade a phone call to 1-800-GOT-RICH.“Hello, you have reached
the main office of Create-A-Crises Corporation. Withoffices in all 50 states and100 countries around theworld we can specificallydesign and create a crisesjust for you. We have aproven track record and arethe go-to experts if you wantto to shut down a business,farm, ranch or tie up a pri-vate citizen in court andmake he or she go broke bypaying lawyer bills. All of ourlawyers are currently outcreating crises and emergen-cies at the moment so pleaselisten carefully and selectfrom the following menuoptions.“If you would like for us
to create a crises for you tostop someone from buildingon their own land or improv-ing their home, press 1.“We have an answer for
everything and can be verycreative. If you have a spe-cific complaint about an oilcompany, or other corporatecriminal, and would like forus to create a crises to stopthem from producing energyto run your car and heatyour home, press 2.“If you have witnessed
someone mistreating an ani-mal by tugging on its leashtoo hard, press 3 and ouranimal rights lawyers willput them in Leavenworth orSan Quentin faster thanPETA can strip the clothesoff another fruitcake modelor Hollywood actress.“If, while trespassing on a
farmer or rancher’s privateproperty you think you sawwhat should be an endan-gered species, press 4. If youwould be willing to trespasson private property andplant an endangered species,please press 5. We arealways looking for volun-teers.“If you, a member of your
family, or anyone you know
continued on page two
The second annual U.S. Beef Academy isfocused on providing the next generationof beef producers a unique, applied beefcattle management experience on the his-
toric Baca Ranch location, now a national pre-serve, in the high country of northern NewMexico.The USBA, hosted at the Valles Caldera
National Preserve, is the second tier of the NewMexico Youth Ranch Management Program.New Mexico State University’s CooperativeExtension Service, Zoetis animal health prod-ucts, New Mexico Beef Council and othermembers of the beef cattle industry sponsor theyouth ranch management program.The beef academy, scheduled for July 13-18,
is tailored as an advanced, applied educationalexperience for youth between the ages of 16-19with a sincere desire to be the next generationof beef industry producers and leaders. NMYRM was developed in 2011 to promote
applied learning opportunities for youth fromfamily ranches. The NMYRM program, now inits third year, initially started with a single,week-long ranch camp experience in June for
U.S. Beef Academy offersyoung producers a unique,advanced learning experience
youth from New Mexico. The ranch camp, nowopen to youth from across the United States,covers multiple aspects of ranch management,including beef production, range management,wildlife management, marketing and econom-ics.“During the ranch camp, we have one day to
cover all aspects of producing safe and qualitybeef, which is a sizable task in a hands-on for-mat,” said Manny Encinias, NMSU Extensionbeef cattle specialist and member of the ranchcamp organizing committee. By design, the curriculum at the academy is
to build off the foundation developed at theranch camp experience.“Instead of one or two hours per topic, we
spend an entire day,” Encinias said.The hands-on, USBA curriculum is devel-
oped by beef industry experts and professionalsfrom across the United States. Faculty fromCooperative Extension Service affiliates atNMSU, Texas A&M University, University ofWisconsin-River Falls, South Dakota State Uni-
continued on page four
MAY 15, 2013 • www. aaalivestock . com Volume 55 • No. 5
Page 2 Livestock Market Digest May 15, 2013
computer may trade in and outof the same commodity or stocktens of thousands of times in thesame day! At this point we canonly speculate as to how muchmoney was made in those fewminutes of the Twitter crash,with short sellers riding it all theway down, and then becomingbullish and riding it all the wayback up, right back to wherethey started from.It’s ironic that in a business
where information is the key,how little information we haveabout these high frequencytraders. The regulators are lightyears behind the traders and justlast year the CommodityFutures Trading Commissiondecided to form a special work-ing group that included academ-ics and industry experts toadvise the CFTC on how best to“define” HFT. These sort of minicrashes are occurring and theCFTC is worried about defini-tions and semantics? Heavenhelp us!
The Information EdgeThe success of the HFT
traders depends on how wellconstructed the computer pro-gram, or algorithm, is and howfast their computers can respondto new information. Those utiliz-ing high-frequency trading plat-forms lobby for their continueduse, saying that they provide liq-uidity and price discovery to themarkets. But how can anyonedefend a tool that allows billionsof dollars of equity to be erasedbecause someone hacked into acomputer and tweeted about afake bomb, seemingly reportedby a trusted news source such asAP.In the computer age, infor-
mation is gold and how well youmine it determines profit. In theTwitter crash the computers ofthe high frequency traders werescanning Twitter tweets for anynews leads. When they read thewords “bombing”, “WhiteHouse”, and “injured President”,the computers put in sell ordersbefore any human read the faketweet. Later, when those samecomputers came across thewords “fake”, “hacking” and“Syrian Electronic Army” theysurmised it was all a hoax andstarted issuing “buy” orders. Allwithout any human input.If one of the Baldwin broth-
ers in Hollywood said of some-one, “She’s crazy as a mad cow,”can’t you just imagine thosesame computers seeing thewords “mad cow” and “crazy”and interpreting that as anothermad cow scare? The price of cat-tle would crash. Even moreabsurd, the Securities andExchange Commission has giv-en their approval for companiesto release important informationthrough venues such as Twitter.So, in addition to futures mar-kets acting erratically when cat-tle on feed reports are issued,now we have to worry about“news” on Twitter and Face-book. What’s next, will the trad-er’s computers scan the NationalEnquirer for stock tips?
High-frequency trading is notas new as you’d expect. It hastaken place ever since the SECauthorized electronic exchangesin 1998. But you hardly everheard of it because in the year2000 the time it took for thecomputers to execute a tradewas several seconds. Then, outof nowhere, high frequency trad-ing volume grew by 164 percentbetween 2005 and 2009. That’sbecause the time it took to exe-cute a trade had been reducedfrom several seconds tomicroseconds, which made iteasy for traders to get out aheadof the market. Although high-frequency trading firms todaycomprise just 2 percent of theapproximately 20,000 tradingfirms in operation, in the pastfew years they have accountedfor as high as 73 percent of allequity orders! Who knows howmany commodities they’ve trad-ed.
The PlayersLet’s meet the players in the
high frequency trading game.The Twitter crash was a good
example of algorithmic, or“algo”, trading. In both theAmerican and European mar-kets algorithmic traders in 2008were responsible for 80 percentof the trades in some markets,including commodities. Algo-rithmic trading is also referredto as automated trading orblack-box trading and orders tobuy and sell are based on vari-ables and instructions thathumans program into the for-mula, or algorithm. Once theyare up and running there is littlehuman intervention. These days,algorithmic trading is widelyused by investment banks, pen-sion funds, mutual funds, andcommodities traders. So, whilethe humans are out to a threemartini lunch, the computersback at the office are directingthe flow of billions of your mon-ey.Flash trading is a sub catego-
ry of high frequency traders andthis is where the line betweenright and wrong gets a littlefuzzy, in our book. For a fee,flash traders are allowed to seeincoming buy and sell orders forstocks and commodities aheadof everyone else. And eventhough the head start can be aslittle as 30 milliseconds, it’senough to make a quick buck.I’m no Martha Stewart fan, buthow is what she did and wasincarcerated for, insider trading,any different than flash trading?And it’s not just s bunch of Cis-co servers and Dell computerswho should be doing hard time.We don’t have to go too far
back in history to see the effectthat flash trading can have. InMay of 2010 we had what isnow called “The Flash Crash,”when the Dow lost 600 points ina matter of minutes. Initially,some said the flash crash wascaused by a person with fatthumbs who hit the wrong keyon his keyboard, but after five
Black Boxes continued from page one
continued on page three
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months of investigations, theSEC and the CommodityFutures Trading Commissionissued a joint report concludingthat high-frequency tradingfirms were to blame.The report found that a single
sale of $4.1 billion in futurescontracts by a mutual fund, inan aggressive attempt to hedgeits investment position, startedthe Flash Crash. The jointreport also found that “high-fre-quency traders quickly magni-fied the impact of the mutualfund’s selling.” The report “por-trayed a market so fragmentedand fragile that a single largetrade could send prices into asudden spiral. HFTs began toquickly buy and then resell con-tracts to each other — generat-ing a ‘hot-potato’ volume effectas the same positions werepassed rapidly back and forth.”Then there are the Filter
Traders. These folks use algo-rithms to detect unusualchanges in price and volume.For example, if an unusual num-ber of company insiders are sell-ing their stock, the filter traderswould know this first and issuesell orders. They are similar inkind to another subspecies, theevent arbitrageurs. These folksprogram their computers to lookfor announcements, reports, orunusual events in the news. Forexample, the computers of thehigh frequency traders might seethat Apple Computer won apatent fight, the White Housewas bombed, or JBS was closinga kill plant, and would then gen-erate buy or sell orders accord-ingly. Since all this informationwould eventually become public,the feds rationalize that suchtrades are legal.There is a subset of traders
who have struck it rich preyingon the mutual funds you proba-bly have in your 401K. Whetherin commodities or stocks, themost popular funds today areindex funds, which do notdepend on just one stock orcommodity, but reflect what themarket is doing. If the Dow goesup 4 percent for the year, theo-retically, so too will your IRA. Ifcommodities go up or down 15percent for the year, so too willyour commodity fund. But toreflect this average, or index, thefunds have to constantly rebal-ance themselves to account forcurrent prices. Traders know thisadjustment will be made at apreset time and their computersget advance information fromlarge institutional block ordersmade by the index funds. Theythen trade on this knowledge.Again, all perfectly legal.Momentum players live by
the principle that once some-thing is in motion, it will tend tostay in motion in the directionit’s going. I have a friend wholost his business but has to sup-port his wife’s luxurious lifestyleso, after reading one book onthe subject, he bought a com-puter program and decided tobecome a momentum player.There are thousands just likehim and cattlemen the past few
Black Boxes continued from page two
years have been the beneficiariesof these traders. When cattleprices looked like they weregoing higher due to a shortageof cattle, the folks in their slip-pers sitting in front of their com-puters went long in the futuresmarket, and you received morefor your cattle as a result. It’sgreat when things are lookingup, but watch out below whenthe computers decide that cattleare going down, for no otherreason than they are goingdown.Momentum investing might
explain the steady decline infeeder cattle prices since thebeginning of this year, eventhough supplies have tightened,on-feed inventory is down 5 per-cent from a year ago and retailchoice beef prices set a newrecord in March. These wouldseem to be positive signs, butthe computers see something wedon’t.Those who engage in statisti-
cal arbitrage crunch all the num-bers before issuing buy and sellorders to generate short termprofits. An example here wouldbe the reaction to cattle on-feedreports, crop reports, consump-tion reports, etc. Ranchers andfarmers give the USDA informa-tion which they dutifully report,and the computers of folks whowouldn’t know a Hereford froma heifer, know this news first andmake millions on information wegave them for free.No matter what they are
called, or what numbers theycrunch, in high frequency trad-ing all portfolio decisions aremade by computer models.Needless to say, they have ahuge advantage over humantraders. Except, of course, whenthe inputs are wrong and theyare dealing with false informa-tion, as in the Twitter crash.You probably won’t recognize
the names of the biggest high-frequency trading firms such asGetco LLC, Knight CapitalGroup, Jump Trading, Citadeland Louis Dreyfus. But lookpast the flashy names, and you’llfind that the 2.4 billion dollarLouis Dreyfus CommoditiesAlpha Fund is owned by the biggrain trader, and one calledBlack River Asset Management,is owned by the grain-trading-cattle-feeding behemoth,Cargill. You think their comput-ers might have information thatthe rest of us don’t?
Sequestering The CashIf your dander isn’t up yet,
there’s more. You rememberhow we bailed out the big banksin the name of “stimulating theeconomy? We gave them billionsthat they were, in turn, sup-posed to lend out. It turns outthat a large chunk of thatchange was used in high fre-quency trading. After all, youcan’t make big money loaningmoney when it’s not worth any-thing. Why not invest it in thecommodities market where thecomputers made profits “a surething”? The trouble is, the com-modities market wasn’t ready toabsorb all that cash and we hada runaway commodities market.That’s why in many banker’srecent quarterly reports it showsthey made their money tradingin bonds, currencies and com-modities, not making houseloans. Goldman Sachs recentquarterly report showed theyheaped huge rewards in theHFT market. And why not?They were all playing in the gov-ernment’s casino and were giventhe chips to play with. Welcometo the world of argos, fatthumbs, HFT’s and black boxes.But we wonder . . . what hap-
pens when the computers alldecide that the party is over?
The American ShorthornAssociation (ASA)Board of Directorsannounces Montie
Soules as the new ExecutiveSecretary/CEO of the Ameri-can Shorthorn Association inOmaha, Nebraska, effectiveApril 15, 2013. The Short-horn breed is excited to haveSoules on board in this lead-ership position and is lookingforward to the fresh and inno-vative ideas that he brings tomove Shorthorns ahead inthe commercial and purebredranks of the beef industry.“I am excited to be part of
the Shorthorn family,” Soulessays. “As a past producer Ican relate to the challengesthat the membership orbreeders may have; I canrelate because I have beenthere. Because of this I bringa unique perspective to thebreed and its breeders.”Soules brings a lifetime of
experience in the purebredbeef cattle industry. He wasthe General Manager for thepast 34 years of one of theleading registered beef cattleoperations in the world, StarLake Cattle Ranch, Skiatook,Okla. During his tenure atStar Lake, they showed 13consecutive Champion Here-ford Carloads in Denver atthe National Western StockShow. The ranch was named12-time Junior National Pre-mier Adult Breeder. UnderSoules management, StarLake had seven sales grossingover $1 million and sold cat-tle to 12 foreign countries onfive continents.
Soules was instrumental instarting monthly internetsales five years ago. He madeit a priority to develop a com-mercial bull trade by reachingout with new and innovativemarketing strategies. He hasjudged cattle in North Amer-ica at Denver, Louisville,Canadian Agribition andToronto Royal Winter Fair inaddition to the Prado Nation-al Show in Montevideo,Uruguay.Soules is impressed with
the strong junior program atShorthorn and foresees big-ger and greater participationin the future. The Shorthornbreed registers nearly 15,000head and has 500 head at theJunior National show, whichreflects a high percentage ofparticipation compared toregistrations. He understandsthe future of any organizationis the young people who areits future leaders.While Shorthorns have a
long history of great contribu-tions that have been made tothe beef cattle industry,including being the first pure-bred beef breed brought tothe U.S.; Soules believes it isimportant in the modern beefcattle world to collect asmuch data as possible.“This documentation will
give our product the atten-tion and value it deserves,helping Shorthorns USA earntheir rightful place in theindustry,” Soules says. “Thegoal is to reposition the breedin this area while building onthe strengths of the breed-ers.”
Montie Soules hired asShorthorn Executive
Page 4 Livestock Market Digest May 15, 2013
is suffering from a heat rash, hotflashes, or sunburn, all caused byglobal warming, press 6 and wewill connect you to our whollyowned subsidiary, LawsuitsIncorporated. Or you can alwaysvisit us on the web at Profitably-SuingEveryoneOnEarth.com.“To buy our latest book by Al
Gore, You Too Can Create ACrises: 10 Simple Steps to Becomean Instant Expert, Become Fabu-lously Wealthy And Win A NobelPrize, press 7. Make just threesimple installment payments for$19.95 and we’ll throw in Al’sBest Selling cookbook, How ILost My Wife and Gained 200Pounds.“Want to tie up your land and
your offspring forever? Press 8and our real estate division willhelp broker a deal with theNature Conservancy. “If your fortune exceeds a bil-
lion bucks, you are older thandirt, aren’t feeling well and wantto make sure your money goesfor green causes, press 9. Yourcall will be immediately forward-ed to the President of Create-A-
Crises who is playing golf today,as he does every Wednesday,with the Secretary of the Interi-or. If your fortune is between amillion and a billion press 10 . Ifyou have good intentions but nomoney, press 11 to be put onhold forever.”I got tired of getting the run-
around so, even though I don’thave a billion dollars to give any-one, I pressed 8 to talk directlyto the President of Create-A-Crises.“What can I do for you?”
answered the President of CCC.“You have a lot of money youwant to give us, uh, er, I mean,give to a worthy cause?”“Not really. My name is Lee
Pitts and I just wanted to explainto you how cows could helpsolve a few of the crises you havecreated.”“Mr. Pitts, I’m afraid you
clearly do not understand theconcept. I assure you we are notin the business of fixing prob-lems. We create crises, we don’tfix them. What kind of businessmodel would that be?”
Riding Herd continued from page one
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versity and Colorado State Uni-versity, as well as allied industryspecialists and veterinarians,design each day to cover thespectrum of producing safe andquality beef.Daily highlights include: � Day 1: learning the process
of producing high quality beeffrom pasture to plate by fabricat-ing a beef carcass on-site, pre-dicting quality and yield gradesvisually and with real-time ultra-sound, and evaluating theimpacts of cooking methods andbeef quality on consumer prefer-ences.
� Day 2: promoting healthycattle management throughchute-side beef quality assurancepractices, discussion on basicimmunology and vaccinology, aswell as effective stockmanshipmethods to improve gathering,chute work and hauling of beefcattle.
� Day 3: improving reproduc-tive efficiency and genetic qualityof the cowherd by understandingreproductive function of the cowand bull to incorporate reproduc-tive technologies, such as estrussynchronization, artificial insemi-nation, embryo transfer andusing sexed semen.
� Day 4: understanding therole of nutritional managementin each segment of the beefindustry as it relates to growthand development of bulls andheifers, managing the maturecowherd, and growing and finish-ing cattle in the feedlot.
� Day 5: exploring consumerinsights, trends and perspectivesof the beef industry and beefproducts to develop successfulmarketing strategies for variousclasses of cattle.“It’s a challenging, yet fun
learning opportunity for theseyoung people,” Encinias said. “Inperspective, each hour of instruc-tion at the academy is equivalentto one semester of college.”
Youth spend 12 to 16 hoursper day immersed in a learn-by-doing format, which alsoincludes daily Top Hand quizbowl competitions. At the end ofthe week the daily Top Handscompete for the overall TopHand and the custom-madeUSBA spurs.Participating youth will leave
this unique experience with anexpanded toolbox of new con-cepts and ideas, advanced tech-nologies and applied skills thatare currently being usedthroughout the beef industry toimprove efficiency and prof-itability.The goals for youth who
attend the academy are two-fold:1) introduce them to subjectmatter they can take back totheir family ranch, and 2) exposeand provide direction on futureeducational and career opportu-nities across various sectors ofthe beef industry.“I strongly recommend
attending the USBA to anyyouth who has an interest in thecattle industry,” said Shea Esser,2012 academy attendee fromWisconsin. “I can honestly saythere was not an hour thatpassed that I did not learn some-thing. It afforded me the oppor-tunity to broaden my knowledgeand introduced me to industryprofessionals who I hope to beworking with when I graduatefrom college. If you are lookingfor an in-depth, fast-paced,hands-on beef production semi-nar, USBA is the place to go.”Application and enrollment to
the USBA is open to youth fromacross the United States. Onlineapplication and more informa-tion can be found athttp://nmbeef.nmsu.edu. Appli-cations for enrollment are dueby June 1. The top 35 applica-tions, as determined by theorganizing committee, will beinvited to this year’s academy.
The National JuniorAngus Show (NJAS) isthe highlight of the yearfor many involved in the
National Junior Angus Associ-ation (NJAA). This year, theevent is being held in KansasCity, Mo. “Aberdeen in Twen-ty-Thirteen” will take placeJuly 5 – 11 at the AmericanRoyal Complex. That’s about aweek earlier than last year’sNJAS. Pay special attention todeadlines, which have beenmoved forward on the calen-dar, to make sure documents
are completed in a timelymanner.
Wednesday, May 15� Ownership and entry
deadline for the 2013 NJAS.Requirements and rules can befound online. Information onthe NJAS showmanship con-test is posted, as well.
You decide. Each time youbuy a bull, keep a heiferor cull a cow, you choosea future for your herd
and, collectively, for a beefindustry that is either blessed orburdened with high prices.“I don’t want record prices
because of the lowest beef sup-plies in 50-some-odd years, saida University of Missouri live-stock economist. “I want thehighest price because demandis pulling us along.”Most everybody in the cattle
business would want what ScottBrown wants. There were cer-tainly nods of agreement at theMarch 12 Midwest Section,American Society of AnimalScientists meetings in DesMoines, Iowa.Brown said history, econom-
ic modeling and consumer-pref-erence studies point the way tomake that happen, speaking atthe Harlan Ritchie Beef Sym-posium during those meetings.Analysts are good at looking
into demand caused by price,income levels and available sub-stitutions, “but there are otherfactors we economists don’toften deal very well with: tasteand preferences,” he said.“Those can cause that
demand function to shift, eitherto the left—which is not goodnews for the industry—or to theright,” Brown said. “Shiftingthat demand curve to the rightis always important for us.”Marbling level is a clear indi-
cator of probable satisfaction,he noted.“If we’re at the low end of
the marbling side, the probabil-ity of a consumer having a goodexperience is not very high,”Brown said. “The last thing youwant to do is spend money onwhat is perhaps the mostexpensive meat product, andnot have a good experience.”But is there enough produc-
er incentive to target thesehigher marbling levels?“That Prime premium rela-
tive to Choice has been veryattractive as of late,” and duringa time of sluggish growth in theU.S. gross domestic product(GDP).Besides more dollars, a real
bonus for aiming that high is “alot less volatility,” Brown said.“Certain times of the year,
we probably have plenty ofChoice cattle and we’re notpaying much more for them rel-ative to Selects, and at othertimes we’re tight on Choicesupplies,” he said.To that seasonality, add
decisions by large-scale retailersand you have a recipe for varia-tion in the signals.“If I can target higher-end
quality, higher than Choice,there are some real rewards inthe marketplace,” Brown said,showing a chart. The Choiceboxed-beef cutout hasn’t madeit above $200 per hundred-weight (cwt.), while Primebroke through $240/cwt. lastyear.“Frankly, it takes that kind of
movement, if we’re going tohave an industry that can sur-vive on $7-plus corn,” he said. Overall U.S. beef demand
hit a bottom in 1997, followedby brief recovery before slidingagain since 2004.“Changing that is a huge
step in getting back to 100 mil-lion or 105 million head of cat-tle in this country,” Brown said.From 2004 to 2008, total
consumer expenditures onChoice beef was fairly constantat $25 billion.“But in 2010, 2011, 2012,
we’ve seen a nice increase,” hesaid. “At the same time, wehave not seen much recovery inSelect expenditures.”Prime trends are similar to
that of Choice.“We often talk about con-
sumers ‘buying down,’ going toMcDonald’s instead of thosesteakhouses,” Brown said.“When you look at the graphsthis way, you don’t get quitethat same picture.”While U.S. demand remains
uncertain, globally the picture isa little brighter.“In 2012, we were actually
down in terms of U.S. beefexport quantity, but if weinstead look at it on a valuebasis, we’re still growing,” hesaid. “That tells me we’re ship-ping more and more higher-val-ued products out of the UnitedStates, and that’s likely going tocontinue.”Half of the world’s popula-
tion will have 6 percent moredisposable income in the imme-diate future. Brown said they’regoing to demand higher-qualityproducts.Beef’s alternatives are sim-
ple: Either it plods along thesame path, or it breaks out andfollows a path like that of poul-try in the 1980s and ’90s, or therecent boom in the corn busi-ness.“You may not like it from a
policy standpoint,” he said, “butthey generated new demand fortheir products and, guess what?It’s not going to go away any-time soon.”The drought has given the
beef industry a clear way tochoose its destiny.“We have a chance to
rebuild that cowherd with bet-ter genetics,” Brown said. “AndI don’t want to undersell thatthose who jump early are theones who are going to get thebenefits of adopting.”
Genetic bootstrapsBY PAUL MULSHINE,
THE STAR LEDGER
Freeman Dyson is a physicistwho has been teaching at theInstitute for Advanced Studyin Princeton since Albert Ein-
stein was there. When Einsteindied in 1955, there was an openingfor the title of “most brilliant physi-cist on the planet.” Dyson has filledit.So when the global-warming
movement came along, a lot ofpeople wondered why he didn’tcome along with it. The reason he’sa skeptic is simple, the 89-year-oldDyson said when I phoned him.“I think any good scientist ought
to be a skeptic,” Dyson said.Dyson came to this country
from his native England at age 23and immediately made majorbreakthroughs in quantum theory.After that he worked on a nuclear-powered rocket. Then in the late1970s, he got involved with earlyresearch on climate change at theInstitute for Energy Analysis inOak Ridge, Tenn.“I just think they don’t under-
stand the climate,” he said of clima-tologists. “Their computer modelsare full of fudge factors.”That research, which involved
scientists from many disciplines,was based on experimentation. Thescientists studied such questions ashow atmospheric carbon dioxideinteracts with plant life and the roleof clouds in warming.But that approach lost out to
the computer-modeling approachfavored by climate scientists. Andthat approach was flawed from thebeginning, Dyson said.“I just think they don’t under-
stand the climate,” he said of clima-tologists. “Their computer modelsare full of fudge factors.”A major fudge factor concerns
the role of clouds. The greenhouseeffect of carbon dioxide on its ownis limited. To get to the apocalypticprojections trumpeted by Al Goreand company, the models have toinclude assumptions that CO2 willcause clouds to form in a way thatproduces more warming.“The models are extremely over-
simplified,” he said. “They don’trepresent the clouds in detail at all.They simply use a fudge factor torepresent the clouds.”Dyson said his skepticism about
those computer models was borneout by recent reports of a study byEd Hawkins of the University ofReading in Great Britain thatshowed global temperatures wereflat between 2000 and 2010 —even though we humans pouredrecord amounts of CO2 into theatmosphere during that decade.That was vindication for a man
who was termed “a civil heretic” ina New York Times Magazine articleon his contrarian views. Dysonembraces that label, with its impli-cation that what he opposes is areligious movement. So does hisfellow Princeton physicist and fel-low skeptic, William Happer.“There are people who just need
a cause that’s bigger than them-selves,” said Happer. “Then theycan feel virtuous and say other peo-ple are not virtuous.”To show how uncivil this crowd
can get, Happer e-mailed me anarticle about an Australian profes-sor who proposes — quite seriously— the death penalty for hereticssuch as Dyson. As did Galileo, theycan get a reprieve if they recant.I hope that guy never gets to
hear Dyson’s most heretical asser-tion: Atmospheric CO2 may actu-ally be improving the environment.“It’s certainly true that carbon
dioxide is good for vegetation,”Dyson said. “About 15 percent of
agricultural yields are due to CO2
we put in the atmosphere. Fromthat point of view, it’s a real plus toburn coal and oil.”In fact, there’s more solid evi-
dence for the beneficial effects ofCO2 than the negative effects, hesaid. So why does the public hearonly one side of this debate?Because the media do an awful jobof reporting it.“They’re absolutely lousy,” he
said of American journalists.“That’s true also in Europe. I don’tknow why they’ve been brain-washed.”I know why: They’re lazy.
Instead of digging into the details,most journalists are content torepeat that mantra about “consen-sus” among climate scientists.The problem, said Dyson, is
that the consensus is based onthose computer models. Comput-ers are great for analyzing whathappened in the past, he said, butnot so good at figuring out whatwill happen in the future. But a lotof scientists have built their careerson them. Hence the hatred for dis-senters.“It was similar in the Soviet
Union,” he said. “Who coulddoubt Marxist economics was thefuture? Everything else was in thedustbin.”There’s a lot of room left in that
bin for the ideas promulgated bypeople dumber than Dyson.Which is just about everyone.This quote from the great H.L.
Mencken captures perfectly thereligious nature of those in the cli-mate cult:“The essence of science is that
it is always willing to abandon agiven idea, however fundamental itmay seem to be, for a better one;the essence of theology is that itholds its truths to be eternal andimmutable.”
Climatologists are no Einsteins,says his successorBeef producers and the power of
selection to shape industry’s future
when asked about his longevity inrodeo, Everett said, “. . . oncesaw a rodeo and got the bug.Thirty years later — I still got thebug.” Shaw won most of his champi-
onships on a bay horse namedPeanuts who was Hancock bred.He had been hired to train thehorse by Fred Lowry (Everettwas well-known for his horsetraining abilities). However, hewas so impressed with Peanuts
that he bought the horse instead.He paid $2,000 for the horse, anamazing sum of money backthen. It was not money ill-spenthowever as Peanuts and Shawroped together for about sixteenyears and the duo won most ofShaw’s Steer Roping titlestogether. Peanuts is now hon-ored at the National Cowboyand Western Heritage Museumon the Trail of Great CowPonies.So how did Everett’s name
happen first on that historicstrike document from 1936? Washe the first to stand up, the mostvocal and passionate about whatit represented? Probably not.Was he arbitrarily picked by acci-dent because he was close athand once it was typed up?Maybe. There is only one manleft alive at the time of this writ-ing who was actually there whenit all happened. When askedwhat he remembered aboutEverett signing the document, hecouldn’t recall the exact details,but Louis Bowman did say,“Everett was one hell of a roperand horse trainer. He was quiet
and unassuming in his leadershiprole. He led by example and wasa great representative of rodeo.”While we may never know for
sure how he became first on thelist, what we do know is thatEverett Shaw was a solid sup-porter of rodeo and its fledglingorganization. He signed up withthe “Turtles” and was given cardnumber seven (indicating he wasthe seventh member of what isnow the PRCA). He also was the
very first calf roping direc-tor for the organizationand was on the executivecommittee. In all, Shawspent twenty years on theboard of the Turtles and itssuccessor, the Rodeo Cow-boys Association (RCA),which later became thePRCA. In fact, when theTurtles reorganized in1945 to become the RCA,it is said that Shaw playeda major part in the event.Later in life, he was in highdemand as a rodeo judgebecause of his honest ways.He even judged theNational Finals Rodeo(NFR) while it was in
Oklahoma City.Everett Shaw married Nell
Truitt on Feb 13, 1936. Thatact made him a brother in-lawto none other than Dick Truitt(1939 World Champion SteerRoper) who was a mentor toShaw on rodeo circuit in hisearly days. Eventually, theShaws had a daughter (MarySue Shaw) who married anoth-er rodeo cowboy (Sonny Wor-rell of Kansas) in 1957. Allthree men are now in theRodeo Hall of Fame at Oklaho-ma City. Shaw and his extend-ed family represent quite afamily of rodeo cowboys!In May 1979 the Oklahoma
State Senate passed a specialresolution commending Everettas one of Oklahoma’s greatestcowboys. He had become a liv-ing legend. Shaw was inductedinto the ProRodeo Hall ofFame in 1979, and the Nation-al Cowboy & Western HeritageMuseum Rodeo Hall of Famein 1980. On November 11,1979, the great Everett Shawpassed away due to complica-tions from heart surgery.
Page 6 Livestock Market Digest May 15, 2013
by Jim Olson
On October 30, 1936, sixty-one men signed a simplepiece of paper whichturned out to be a historic
document and a cornerstone inthe foundation of professionalrodeo. The document simplystates: “For the Boston Show, wethe undersigned demand that thePurses be doubled and theEntrance Fees added in each andevery event. Any Contestant fail-ing to sign the Petition will notbe permitted to contest, by orderof the undersigned.”After presenting the signed
petition to Col. William T. John-son (producer/stock contractorfor the Boston Garden Show), hetold them, “Strike and bedamned.” Those men did indeedstrike and refused to compete atthat night’s performance—hop-ing their demands be met. Whileit was a little shaky at times, thecowboys and Johnson finally gottogether on an agreement. Short-ly thereafter, the cowboys gath-ered round and formed the Cow-boy Turtles Association(predecessor to the ProfessionalRodeo Cowboy Association orPRCA). The rest, as they say, ishistory.The cowboys originally called
themselves “Turtles” becausethey had been slow to stick theirnecks out and get started. Some-one had to be first even to “sticktheir neck out” and sign the peti-tion, that fateful October day inBoston, before others would fol-
low. The man whose nameappears very first on that list isnone other than — Everett Shaw.Born June 7, 1908, in
Hogshooter Creek, Oklahoma,Shaw was known as one of thebest single steer roping competi-tors in rodeo history. He startedout however, as primarily a calfroper in 1926 at Nowata, Okla-homa (his first rodeo). His firstmajor win at the professional lev-el came in the calf roping eventat Tulsa, Oklahoma in 1932. Hewon Madison Square Garden(Considered the World Champi-onship rodeo of the day) in ’34,‘36 and ’39 as a calf roper. Throughout the late 1920s till
the early 1940s, he competed inboth calf roping and steer roping.Sometime in the early ‘40s how-ever, Shaw decided to focusmainly on single steer roping. Atan age when many professionalropers are winding down their
careers, Shaw who was in his latethirties, just hit full stride. Itbegan with the win of his firstworld title (the 1945 single steerroping title). He won six worldsteer roping world titles over aseventeen-year period thereafter
(1945, ‘46, ‘48, ‘51, ‘59 and ‘62)and during a period from 1945 to’65 he finished in the top five inthe world fifteen out of twenty-one seasons. From the time he entered his
first rodeo to the last world titlewas a whopping thirty-six years!He remained competitive at theprofessional level for over fortyyears! Shaw even competedactively until eventually winninghis last roping event in 1977 atthe age of sixty-nine! He thenretired to his ranch nearStonewall, Oklahoma.In an old newspaper interview,
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Everett Shaw First on the ListMy Cowboy Heroes
JERRY M. HAWKES, NEW MEXICO
STATE UNIVERSITY EXTENSION
RANGE LIVESTOCK ECONOMIST
One of the obvious effects of a severe droughtis that livestock must be liquidated in orderto save the range and forage resources forfuture rehabilitation and use. While the fact
that livestock must be sold under conditions thatare much worse than normal and at a rate muchhigher than the normal replacement rate wouldseem to be punishment enough, most U.S. taxpay-ers are now conditioned to at least ask the ques-tion about what are the tax consequences of thosesales. This question is always appropriate, becausemost of us now have come to understand, virtuallyevery dollar that we receive is taxable unless thetax code says otherwise, and no dollar spent isdeductible from taxable income unless the taxcode says otherwise. That is not common wisdom,it is not common sense, and it is the law! Thatprinciple is one of the first foundations uponwhich our income tax code is built.When ranchers are forced to sell livestock
because of drought conditions on their ranges, taxissues are not, and should not be, one of the majorconcerns. But, nevertheless, the question of theimplications should always be asked before theaction is taken, and a qualified tax advisor shouldbe consulted to determine whether there is some-thing you can do before the fact. Tax planningopportunities abound before an event; they sel-dom appear after the event.If livestock have been or will soon be sold due
to drought conditions, the tax code provides twooptions for tax treatment. Note right away, thereare two options for how the sale price of the forcedsales will be treated. There are no options foravoiding taxation altogether. The drought-relatedsale of livestock may be treated as an involuntaryconversion or the gain from the sale may be post-poned.
Involuntary ConversionTo qualify for treatment as an involuntary con-
version simply means that the income from thedroughtforced sale of livestock would be taxableon the tax return filed for the year 2012 tax yearfiled in the spring of 2013 (or the return filed forthe 2013 tax year filed in 2014) for sales of live-stock made in 2012. The following restrictionsapply:�� Only livestock held for breeding, dairy, or
draft purposes qualify. Any drought forced sales ofcalves or yearlings are taxable with the next taxreturn filed, regardless of the nature or intensity ofthe drought. If you have substantial drought-forced sales of market animals, choose the post-ponement alternative.�� Only livestock sold in excess of normal
culling rates are eligible. If in the absence ofdrought 25 cows are normally culled, but 45 cowsare culled in the drought year, only the gain from20 New Mexico State University Extension Ani-mal Sciences & Natural Resources DepartmentVolume 42 April 2013 cows could be deferred.Use Form 4797 numbers from previous years toestablish the normal culling rates.�� The livestock must be replaced by similar ani-
mals within the next two tax years. If replacementsare not purchased within that time period, anamended return must be filed for the year of thesale, the gain reported, and any additional taxespaid. If the drought continues, preventing replace-ment, an extension of time to replace must beobtained in writing from the District Director ofthe IRS. Older cows may be replaced by youngercows, but should not be replaced by race horses.�� If replacement animals are purchased at a
price below what was received from the droughtin-duced sales, the difference is taxed as a gain by fil-ing an amended return for the drought year. Thetax basis (the amount that will be depreciated) ofthe replacement animal is equal to the price paidfor that animal minus the gain on the drought-induced sale that was not taxed due to involuntaryconversion treatment. For example, if the pricereceived for a raised beef cow that was soldbecause of drought is $750 and a replacement ispurchased for $750 or less, the tax basis on thereplacement is zero. This means that there wouldbe no depreciation deductions generated by thereplacement.
Postpone Gain from SaleInstead of treating drought-induced sales as an
involuntary conversion, the gain may be deferredone year (gain will be reported on the 2012 taxreturn filed in 2013 for 2012 sales).�� Livestock held for breeding, dairy, or sport-
ing purposes qualify as livestock held for sale(whether raised or purchased) qualify for a one-year postponement.�� Producers must be able to show that the sale
would not have occurred under usual business cir-cumstances (i.e., the drought had not occurred).The rules for sales in excess of normal would suf-fice.�� Drought-affected area must be an area eligi-
ble for federal assistance. However, the forcedsales may have occurred before the area becameeligible for federal assistance. A letter from an FSArepresentative can help establish the assistancedeclaration for your county.
�� The tax basis for purchased replacementarrivals is not reduced by the amount of the post-poned gain. Thus, if a raised cow is sold for $750and a replacement is purchased for $750, the $750paid for the replacement is depreciable.
Making the ChoiceNo simple recommendation is possible about
which of the two choices will be to any individual’sadvantage; except for such situations as if a largenumber of market animals are involved. Relative toa one-year postponement, opting for the involun-tary conversion has the potential advantage ofmore than a one-year tax deferral on the gain andthe disadvantage of limiting the tax basis (anddepreciation deductions) to the excess (if any) ofthe replacement animal’s purchase price over theprice received for the animal sold due to drought.Generally, a qualified tax preparer should work outboth avenues and given the length of the drought,whether the drought continues next spring,whether the tax bill can be paid earlier, and thetime value of money should all come into theanalysis.
May 15, 2013 “America’s Favorite Livestock Newspaper” Page 7
The Arizona National Live-stock Show is thrilled toannounce the launch of theirnew website www.anls.org.
The new site has a fresh new lookto it with easy navigation for boththe exhibitor and general public.Some of the new features include:
�Optimized for mobile devices� Frequently Asked Question
section� More photos of the various
events� Online ordering system for
the Pioneer Ranch Histories�Capability to join as a mem-
ber of the Arizona National Live-stock Show online
� Capability to sort events bylivestock show, special events, auc-
tions and more� History of the Arizona
National Livestock Show�And much more!New features will continue to
be added to the site and excitingupdates so you will want to makesure you bookmark this site andvisit often. Arizona National Live-stock Show also has a social mediapresence through Facebook, Twit-ter, and Pinterest.The Steer Nomination Book is
also now available on the new sitewith rules and regulations for theSteer Nomination Process. Thedeadline for the steer nominationsis August 31. DNA Kits will beavailable to purchase the beginningof June.
New and used tractors, equipment, andparts. Salvage yard, combines, tractors, hayequipment and all types of equipment parts.
ORDER PARTS ONLINE.
Income Tax Effects of Drought –Forced Sales of Livestock
Arizona National LivestockShow Launches New Website
Farm Credit Bank of Texas, acooperatively owned wholesalefunding bank, has named Car-olyn Owen senior vice president
of corporate affairs, general counseland corporate secretary, effectiveApril 6. Previously, Owen was vicepresident and deputy general counselof the $15.4-billion Austin-basedbank.She succeeds Kyle Pankonien,
who has announced his retirementafter a 35-year legal career with theFarm Credit System.“Farm Credit Bank is extremely
grateful for Kyle’s wise counsel andleadership over the years, and we wel-come Carolyn to the role of generalcounsel. We are fortunate to havehad such a deep bench of legal expe-rience and knowledge of the FarmCredit System for so many years,”
said Larry Doyle, FCBT chief execu-tive officer.A 30-year Farm Credit veteran,
Owen joined the legal department ofthe Federal Intermediate CreditBank of Texas in 1983. She has heldvarious positions within the bank’slegal department, including attorney,senior attorney, associate generalcounsel and assistant general counsel.At the national level, Owen has
Farm Credit Bank of Texas Appoints New General Counselserved on the Farm Credit SystemWorkgroup on Mission-RelatedInvestments. She is currently a mem-ber of the System’s Capital Work-group, which is providing input to theFarm Credit Administration in thedevelopment of new capital adequacy
regulations based on the Basel IIIAccord.Owen graduated from the Univer-
sity of New Mexico and received herDoctor of Jurisprudence from theUniversity of Texas. She is a memberof the State Bar of Texas.
Many of us were fortunateenough to receive someof the spotty rains andover this hard dry time
and have been able to preserve aherd. Others that trimmed thesize of their herds early startedsaving most of their heifers in2011. Lastly, there were thosethat were unable to save any oftheir herd. We got a little wintermoisture and it appears that thedry time is beginning to break.USDA thinks that the droughtcycle will see some improvementin the second half of 2013. Theyalso expect the corn crop will bea “bumper” and bring pricesdown to about $5.00 - $6.00 forcorn. This added with high cattleprices and the improved grazingand management techniquesthat have been forced upon us allby the drought, has created theright combination of elements totrigger a rebuilding of the nation-al herd in the United States andparticularly the Southwest.
Each of us operates within aunique environment. We arerestricted by the altitudes, for-age, weather and surface wateronly to name a few of the confin-ing conditions that determinethat make up; the nature of theland that we graze. As we thinkabout rebuilding our own cattleherds we need to develop a“PLAN” that will bring us out ofthis drought with some advan-tage. Like deer musk, in our“hunt bag” there needs to besomething in our plan that willgive us an “edge” over our com-petitors when we market the ani-mals we have produced. In 2007 the USDA survey of
Midwest Packers identified theRed Angus breed as having ahigher percentage of choice andbetter graded carcasses than allother breeds. This along with thescientific data base that producesthe most reliable EPDs in theindustry can give relevance to theconsideration of maintenance
requirements, body fat, birthweights, yield grade and morewhen we select seed stock andreplacements.Your plan to recover may
need to include basic businessstrategies. Cash flow and profitmargins that allow for therebuilding of not only your herdbut the cash reserves you deplet-ed during the drought. Yourunique circumstances also mustcarry heavy weighting in yourconsiderations.In all business the first factor
is Product, the second factor isProduct, and third factor is Prod-uct. Without it we have nothingto sell. It would serve each of youwell, as you go through the plan-ning process, to think about howyou can give yourself an “edge”while you rebuild.
Not So Pretty!Some improvements of the
water and fences on your ranchcan give you a big advantage. If
you graze BLM or USFS landsyou don’t need to be told thatthe restriction of your use ofleased land prohibits manyimprovements that you mightalready have made under othercircumstances. These restrictionsand how they fit into yourunique operation have to be tak-en into consideration beforegoing out and looking atprospective herd bulls or otherseed stock. The wide variety ofchoices can be bewildering. It ishard to know which way to go.Don’t give up or give in, try tothink out what you need basedon the traits that best work foryou. If you have big pastures andlong distances to water you maynot want that “pretty” bull thatshows himself off. Look at hislegs, hooves, overall body condi-tion, NOT FAT. That fat bullmay melt away when placed onrough country if he isn’t used tothe marginal deserts of theSouthwest. The terrain we graze every day
is pristine and beautiful, but veryhard and unforgiving. They say“Western Land is Hard onHorse”, but it is hard on bullstoo. We have each learned todeal with all that in variations ofour management that wouldseem absurd to “Eastern” cattleraisers. About 1999 my wife and I
began to introduce Red Anguscattle into our operation. Thealtitude here is 4,500 feet andour vegetation tends to be ofmarginal dessert plant varieties,many of which are mildly toxic.In our operation all dams andcalves are on native pasture 10months a year as a minimum.We utilize a fence line weaningthat gives the dams and calves10-14 days prior to the place-ment of the dams with a“cleanup bull” and the weaned
calves either with the “openheifers” or in the “bull grow outpasture”. In the “grow out” pasture the
young bulls are on native grassand are supplemented only twiceeach week with 3 pounds of a 20percent range cube. We selectthe top ½ of the body conditionand low birth weight performersafter they have been on the pro-gram at least 90 days. When ranchers come and look
at our animals, often they seeanimals with burrs in their hairand all the assorted superficialflaws that one might see in theirown calves. What these ranchersdo see in addition, are animalsthat know how to walk long dis-tances for water, feed themselvesfrom native forage, survive,adapt, and procreate. The aim ofour program is to produce highlyeffective bulls and females thatcan live on the land and producea high quality seed stock animalfor the Commercial Cattle Rais-er.My wife and I are not the only
producers that have this endresult incorporated into theirraising programs. The aim of theSouthwest Red Angus Assoc., isto produce high quality heartyand adaptable breeding stocktargeted to the needs of Com-mercial Cattle Raisers. We areeach driven by our own circum-stance. Some of our bulls will notbe so “pretty”, but they are ableto adapt to your rough countryjust like they have adapted tomine. In the “mean time, back atthe ranch” they just might giveyou a big selling price advantagein your calf crop. Good Luck. We are really pleased that you
survived the drought, and are stillin the cattle business . . .– Tim Head, President, South-
RANDY SUMMERS at call 505/243-9515, ext. 30, or email [email protected].
�� �� ���������
Spring & Yearlings For Sale
CECIL FELKINS • 209/274-43385500 BUENA VISTA RD. • IONE, CA 95640
Every Cattleman Needs An Edge
MARKET
To place your ad, contact Randy at505/243-9515 or at [email protected]
May 15, 2013 “America’s Favorite Livestock Newspaper” Page 9
When I’m asked where Iget ideas for this col-umn, I explain that inmy travels among the
agricultural masses, everyone hasa story to tell . . . and they tellme! Almost always they includegetting bucked off, run over orhumiliated in some form, bylarge domestic mammals. How-ever, there are some subjectsthat are just not suitable for acolumn with such integrity, likemine. Even if I intend to be edu-cational I am somehow lead tothe whacko side . . . like Martinand his colonoscopy saga.I admit I could write a serious
column about the necessity of50-year-olds to include this examon their bucket list . . . whoops.See what I mean? I’m alreadyspeaking in the double entendre;bucket list, chamber pot, honeywagon.It would also be acceptable
for me to discuss the procedureusing proper medical terminolo-gy with words like preparation,fasting, administration, evacua-tion, but I begin to drift intowind velocity, high tide, floodwarning, and the Seismic scalewhich make me sound more likea first responder than a seriousmedical person!Martin’s version is more col-
orful, probably TMI . . . toomuch information, for our seri-ous readers. For instance, hewarns about scheduling the fast-ing stage over the holiday andnot being able to eat Mom’s
turkey, pumpkin pie or eggnog.She would be grievously worriedabout his health because he hasalways been known for his castiron stomach, able to eat roadkill, metal bottle caps, and hisbrother’s science project growingin the refrigerator!He also cautioned me against
overdosing. I could best translatehis admonition as “a little bitgoes a long way!” The distance tothe doctor’s office is also critical.As Martin described the two-hour trip from Bruneau toHomedale, it was like a leakyboat racing to shore and havingto make frequent stops to light-en the load.But, in the end . . . pardon
me, Martin got a clean bill ofhealth and he thought by sharinghis story with our readers hecould benefit us all, Butt . . . see,it just keeps on punning . . . hisattempt to make humor about aserious subject isn’t always prop-er, especially in my column.There are just too many tempta-tions to use questionable analo-gies like, preg checking, bull’seye, slicker than a whistle, sight-ing in, Roto Rooter, the longrun, a tapeworm’s eye view, asnake charmer, an emissionscheck, Hazmat suit, shrapnelprotection . . .Sorry Martin, as you can see I
have a responsibility to my read-ers. Call me when you want totalk about something less sensi-tive . . . like infertility of Sagehens in Colorado.
Unsuitable Topics for Column
BY JAMIE ROSS,
COURTHOUSENEWS.COM
An Arizona cattle ranchercan sue the U.S. ForestService for seizing andselling nearly 400 of his
herd, the Court of FederalClaims ruled.Though Daniel Gabino Mar-
tinez’s land sits in the Apache-Sitgreaves National Forest, herefused to get federal permitsso that his cattle could grazebecause he claimed that hiswater and forage rights entitledsuch use.The Forest Service issued a
notice of trespass in February2005, but Gabino Martinezrefused to remove the cattle.Agents ultimately seized 354
of his cattle in November2004, but Gabino Martinezwaited until November 2011 tofile suit. The governmentclaimed that the complaintfailed under the six-year statuteof limitations, but Judge Eric
Bruggink disagreed.“If impoundment of the cat-
tle were grounds for asserting ataking, then presumably thoseimpoundments which tookplace more than six years priorto the filing of the complaintcould be dismissed as stale,”Bruggink wrote.During oral arguments, how-
ever, the government’s counselargued the Forest Service’sactions should be analyzed asthe exercise of a police power,not as a taking.“If we agree with counsel
that impoundment by the gov-ernment would not create lia-bility for a taking, then it is dif-ficult to understand howplaintiff forfeited its takingclaim by not suing beforeNovember 8, 2011,” Brugginkwrote.Gabino Martinez maintains
that since his cattle were notsold until December 2005, hewas within the six-year statuto-ry period when he filed suit in
November 2011. The govern-ment claimed, however, thatthe clock started when it tookpossession of the cattle onNov. 8, 2005.“We are reluctant to dismiss
the action at this early stage,when plaintiff’s theory is that
the sale of the cattle constitut-ed the taking, when it is thegovernment’s real position thatneither the impoundment northe sale would ever trigger ataking, when the governmentconduct was pursuant to a reg-ulatory scheme, and when
defendant’s counsel venturedat oral argument that, if theclaim was brought before thesale and viewed as a regulatorytaking, ‘then the governmentwould have an argument thathis claim is not ripe,’” Brugginkwrote.
Rancher Who Lost 354 Cows to Feds Can Sue
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Six legendary cattle veterinarianshave been nominated for the2013 Cattle Production Veteri-narian Hall of Fame, which cel-
ebrates the rich traditions of produc-tion veterinary medicine by honoringexceptional individuals who havemade lasting contributions to the vet-erinary profession. From the develop-ment of herd health protocols andmanagement strategies to maintain-ing leadership roles in teaching andresearch, these nominees havehelped shape the industry through-out their distinguished careers.The Cattle Production Veterinari-
an Hall of Fame is sponsored by theAmerican Association of BovinePractitioners (AABP), the Academyof Veterinary Consultants (AVC),Bovine Veterinarian, Merck AnimalHealth and Osborn Barr, an agricul-tural marketing and communicationscompany.“Selected by their peers, each of
the nominees represents a legacy ofexcellence, dedication and accom-plishment that make them truly wor-thy of Hall of Fame recognition,”
says Mark Spire, D.V.M., technicalservices manager for Merck AnimalHealth. “During their extraordinarycareers, they have played key roles inestablishing standards of cattle careand developing health protocols thathave had a remarkable impact on ourindustry.”Voting is currently underway and
concludes Aug. 5. AVC and AABPmembers may vote for one beef andone dairy nominee. AVC membersmay vote during the organization’sspring and summer conferences oronline at www.avc-beef.org/hallof-fame. AABP members may voteonline at www.aabp.org/halloffame.The third annual Hall of Fame
inductees will be honored Saturday,Sept. 21, at the AABP Annual Con-ference in Milwaukee, Wis.
2013 Beef NomineesRobert Bohlender, D.V.M.,
has practiced for more than 50 yearsin North Platte, Neb., and is consid-ered a pioneer in the beef cattleindustry. He developed the BeefQuality Assurance (BQA) Programand also is recognized for having
Cattle Production Veterinarian Hall ofFame Nominees Announced
BY PEGGY COFFEEN DAIRY / LIVESTOCK EDITOR
AGRI-VIEW ,
Based on the emergence of forums,alliances, and Facebook pages on the top-ic of antibiotic and antimicrobial resist-ance, it is clear that there are questions
and concerns among both the public and thelivestock sector over so-called “super bugs” and“killer bacteria.”As a livestock producer, you may be experi-
encing the same curiosity and confusion. Howdoes resistance occur and what threat does itreally pose to human health? Further, is thehealth concern greater for people who handlelivestock and administer antibiotic treatmentsto cattle? Are there practices that are part ofyour daily protocol that feed into this problem?Dr. Reynold Bergen with the Canadian Cat-
tle Association addresses these questionsthrough the Beef Research School informationalvideo series. Bergen provides scientific andindustry expertise to Canada’s Beef CattleResearch Council (BCRC).Gaining a better understanding of the poten-
tial for resistance begins with defining twoterms often tossed around in the conversation:antibiotics and antimicrobials. As Bergenexplains, the two are related but not quite inter-changeable.“An antibiotic is a substance produced by a
microbe that will kill another microbe, and anantimicrobial is just any compound that will killa microbe,” he says. The category of antimicro-bials actually includes antibiotics, along withanti-protozoas, alcohol, soap and bleach.Antimicrobial resistance (AMR) occurs in
much the same way herbicide resistance hap-pens in crops. If the same herbicide is used con-tinually – over and over again – it will be effec-tive at killing most of the weeds in the field.However, a few will continue to survive andgrow, and these are the ones that become aproblem. “It is the same thing with antimicro-bials,” he adds.This concept creates fear that AMR resist-
ance will cross over to people. “The reason weare concerned about antimicrobial use in beefcattle and all livestock industries is that there isa perception that antimicrobial use and resist-ance is related to and causes a problem inhuman health,” Bergen says, which is why thebeef industry has taken a proactive approach instudying the possible correlation.A Canadian study in the late 1990s and early
2000s looked at drug use and resistance amongfeedlot cattle, as well as drug resistance in feed-
lot workers who were exposed to sick cattle andhandled treatments. They did not find anyantimicrobial resistance among this sample ofpeople. In fact, they had lower resistance levelsthan the population of human patients who vis-ited the same Alberta clinic.“That suggests there is really not a strong link
– if any,” Bergen notes.He believes that the beef cattle industry has
a good story to tell when it comes to AMR.Extremely prudent drug use is reflected by suchlow levels of resistance, he affirms. The drugsthat are of very high importance in humanhealth may be used for cattle, however, they areused sparingly, making up less than 1 percent ofdrugs administered. That is why we see very lowlevels of resistance, around 1 percent. In fact,that is lowest among all livestock sectors andvery close to the baseline that occurs in cattleraised without any antibiotics at all.“Some of that resistance is naturally occur-
ring, and the fact that we are using drugs pru-dently means that resistance isn’t getting select-ed for,” he says, adding that using an antibioticdoes not necessarily cause the resistance. Some-times the resistance is there already. Using theantibiotic can give a “competitive advantage” tothe bugs that already have some resistance,thus, promoting their growth.When it comes to antimicrobials, they are
categorized into four main classes, dependingupon their importance in human medicine.Those classified as “very high importance” areused to treat very serious human infections.These are the “drugs of last resort,” he says.“High importance” are drugs of intermediateimportance to human health, while “mediumimportance” drugs are not generally used totreat serious illness but may be prescribed fortreatment of something like acne.Those antimicrobials that are not used in
human health at all are labeled as “low impor-tance,” such as ionophores and growth pro-motants. This class makes up the majority ofantimicrobials used by the beef cattle industry.Dr. Calvin Booker, DVM, Feedlot Health
Management Services, promotes the responsi-ble use of antimicrobials in beef cattle produc-tion among cattle producers through theBCRC. That includes consulting with a veteri-narian to be sure antimicrobials are being usedto treat diseases that are of bacterial originbecause antimicrobials are not effective againstviral diseases. Producers should also follow thelabel or directions for use prescribed by a veteri-narian for directions, dosage and route ofadministration of any drug.
Killer bacteria and the cattleindustry: what is the threat?
Angus cattle play a role inevery aspect of LaurenAdcock’s life. From thefarm to the showring,
and the classroom and into theworking world, the Moweaqua,Ill., native is a prime exampleof how National Junior AngusAssociation (NJAA) membersare using their talents to pro-mote the breed.And, this year more than
ever, the Angus business is thecenter of her attention.Adcock is the first-ever AngusAmbassador and has travelledacross the country in the pastyear representing the Angusbreed at major beef industryconferences.“It is a year of unforgettable
experiences,” Adcock says. “Igained a wealth of knowledgefrom an industry and personalstandpoint; information Icould not have learned in aclassroom.”Her year of travel allowed
her to step out of her comfortzone, especially when minglingwith Angus members twice herage. “The Ambassador program
is designed to allow our youngAngus leaders a chance to getinvolved early in higher levelsof the cattle business,” saysRobin Ruff, American AngusAssociation®’s director of jun-ior activities. “This is a greatopportunity for youth to gettheir foot in the door and cre-ate a network in the industrythey are passionate about.”
Selecting the next Angus AmbassadorOn July 25, the Associa-
tion will select a new AngusAmbassador to serve for aone-year term. During thattime, the Ambassador willtravel to the Associationheadquaters for an orienta-tion in Saint Joseph, Mo.;the National Angus Confer-ence and Tour in New York;a Certified Angus Beef®Building Blocks Seminar inWooster, Ohio; the NationalCattlemen’s Beef Associa-tion Cattle Industry AnnualConvention in Nashville,Tenn.; the Beef Improve-ment Federation AnnualResearch Symposium andConvention; and the GuidingOutstanding Angus LeadersConference in Canada.Additonal travel options varyon the selected ambassador’slocation, schedule and avail-ability.Ambassador applicants
must be American AngusAssociation members, ages17-20 as of Jan. 1, of goodstanding and who own pure-bred cattle. To apply, send acover letter, resume and twoessay responses. More infor-mation on the applicationprocess can be found online.All applications must be
postmarked by June 15 andsent to the Association’s Jun-ior Activities Department,3201 Frederick Ave., SaintJoseph, MO 64506.
Angus Seeks Applicants for theNext Junior Breed AmbassadorSubmit an application by June 15 to be considered for this distinct position.
developed numerous health manage-ment strategies that have benefitedthe cow-calf and feedyard industries.
Robert Pierson, D.V.M.,devel-oped the Colorado State UniversityStudent Feedlot Program, which isfocused on the study of feedlothealth, and encouraged the develop-ment of vaccination programs usedby feedlot owners to treat and controlbovine respiratory disease. He isretired and lives in Ft. Collins, Colo.,
Don Williams, D.V.M., devel-oped the first national precondition-ing program and was instrumental indeveloping large-scale cattle healthprograms, training initiatives for feed-
yard personnel and science-basedanimal health management proto-cols. He is retired and lives in Guy-mon, Okla.
2013 Dairy NomineesDavid Morrow III, D.V.M.,
Ph.D., spent a lifetime committed todairy cattle health and reproductivephysiology, and earned numerousaccolades for his teaching andresearch at Michigan State Universi-ty. He was honored as the WorldDairy Expo Industry Person of theYear in 1997. Dr. Morrow passedaway in 2005.
H. Fred Troutt, D.V.M.,Ph.D., established herd health pro-
grams for cattle and swine at the Uni-versity of Georgia College of Veteri-nary Medicine, where he taughtlarge-animal medicine and patholo-gy. He also was founder of the Amer-ican Board of Veterinary Practition-ers. Dr. Trout passed away in 2010.
Elmer Woelffer, D.V.M., isconsidered by many to be thefather of bovine reproductiveprograms. He received numer-ous awards, including the AABPAward for Excellence in DairyPreventive Medicine. Dr. Woelf-fer remained a private practition-er in Oconomowoc, Wis., untilhis death in 1995.
May 15, 2013 “America’s Favorite Livestock Newspaper” Page 11
Domesticated animalsdeserve respect and care.That’s animal welfare—and a priority of the
National Institute for AnimalAgriculture, an organizationcomprised of livestock, equine,poultry and aquaculture produc-ers, producer organizations, vet-erinarians, extension personnel,academicians, scientists, Federaland state regulatory agenciesand allied industry.Jim Fraley, Livestock Pro-
gram Director for Illinois FarmBureau and co-chair of NIAA’sAnimal Care Council, stressesthat animal welfare and animalrights, however, are not thesame. Significant discussion wasdevoted to this topic duringNIAA’s annual conference inLouisville, Ky., April 15-17. Inthe end, NIAA’s membershipagreed on two key items: 1)NIAA believes in animal welfareand does not believe in animalrights; and 2) Today’s childrenand future generations shouldunderstand the importance ofanimal welfare and not confuseanimal welfare with animalrights.“We believe in, and support,
animal welfare as these practicesfocus on the prevention of suf-fering and cruelty to animals,”Fraley explains. “NIAA does notbelieve in animal rights as theanimal rights philosophy advo-cates an end to all ‘human use ofanimals.’“NIAA members believe
human societies require andaccept the use of animals assources of food and fiber, as wellas for scientific research, sport,companionship, entertainmentand clothing. It is the obligationof animal caretakers to providethe best care possible of animalsthroughout their lifetime, andNIAA’s membership takes thisobligation very seriously.”During its annual conference,
NIAA members adopted a posi-tion that public schools should
not stir confusion regarding thedifference between animal wel-fare and animal rights by allow-ing extremist animal rightsgroups to present their viewswhich can be erroneously per-ceived as facts.Concern about what public
schools should or should notallow regarding animal welfareand animal rights educationarose when NIAA memberslearned about a Californiaschool system that allowed amovie involving animals to beshown and followed up themovie with a discussion focusingon how cruel it is to eat fish.“Those of us in animal agri-
culture do not believe thatextremist animal rights groupsshould be allowed to dictateinformation children are exposedto—or will be exposed to—at ourpublic schools regarding animal
welfare,” Fraley states. “Animalrights groups led by the HumaneSociety of the United States(HSUS), PETA and the Instituteof Humane Education (IHE) donot reflect balanced views andare campaigning across theUnited States to implementwhat they refer to as ‘humaneeducation,’ a program ofextreme ideological materialthey aspire to teach in our schoolsystems.“They have been successful in
a few cities, but up to now havenot been successful at the stateor federal levels, despite repeat-ed efforts to introduce legisla-tion.”Fraley emphasizes that emo-
tional, subliminal vegan mes-sages replacing animal carebased on accepted, proven ani-mal husbandry practices is “noteducation, but indoctrination.”
BY DOUG POWELL /
HTTP://BARFBLOG.COM /
FROM BEEF
Recent reports indicatedthat feeding distillers’grains (DG) to cattleincreased fecal shedding
and prevalence of E. coliO157. In Minnesota, feedingDG with solubles (DGS) tolivestock became widespreadwithin the last 10 years, butthere is no report about theprevalence of E. coli O157 inbeef cattle in this state. Thisstudy was undertaken to surveythe fecal prevalence of E. coliO157 in cattle fed diets con-
taining DG and its associationwith environmental conditionsand management practices.Fecal samples were collect-
ed from three feedlots during a1-year period. All animals inthose feedlots were fed differ-ent DGS levels. E. coli O157presence was determined usinga combination of enrichment,immunomagnetic separation,plating onto sorbitol Mac-Conkey agar, and confirmationof isolates by immunoassayand multiplex virulence genespolymerase chain reactionanalysis. Overall, E. coli O157was confirmed in 9.7 percentof samples. Prevalence duringsummer was 30 percent and
declined to less than 10 per-cent the rest of the year. In ani-mals grouped by dietary DGSconcentration, no significantdifference in prevalence (12.0and 5.5 percent) was detectedbetween the low and the highaverage groups (less and morethan 20 percent). Previousfeeding of DGS before arrivingto the feedlot also had no influ-ence on fecal prevalence.The presence of several
interacting variables, uncon-trolled in a real-life feedlotenvironment, was the likelyreason for our observation andsuggested that at the levelsstudied, DGS had no effect onthe STEC O157 prevalence in
Impact of management practices and distillers’ grains feeding on the prevalenceof E. coli O157 in feedlot cattle in Minnesota
The Arizona National Live-stock Show recently award-ed $49,500 in scholarshipsfor the 2013 academic
school year. The ArizonaNational Livestock Show Schol-arship Program has awarded$741,759 in scholarships to 726recipients over the past 22 years.The scholarship recipients willbe honored at the 66th ArizonaNational Livestock Show Dedi-cation on December 27, 2013 atthe Arizona State Fairgrounds.Congratulations to the fol-
Rojas – Phoenix, AZ; HelenaSchlegel – Tucson, AZ; SylvalynSimpson – Benson, AZ; AmyVan Rijn – Mesa, AZ; BreannaWatkins – McNeal, AZ; JessicaZamudio – Elfrida, AZScholarships are available to
students attending pursing abachelor degree at an accrediteduniversity or college for the cur-rent academic year. Otherrequirements include: HighSchool graduation; completionof at least 12 semester hourspost High School graduationbefore applying; currently takingat least 12 credit hours; a mini-mum grade point average of 2.5(A=4); and prior participation inthe Arizona National LivestockShow.Scholarships are funded
through donations to the showwith the help from the ArizonaHorse Lovers Foundation, FarmCredit Services Southwest, BobBoice Memorial and EverettBowman Memorial. Applica-tions are available online anddue March 15. For more infor-mation visit www.anls.org or call602/258-8568.
Arizona National LivestockShow Awards Over $49,000in Scholarships
Cost of production for cow-calf producers has risendrastically over the lastdecade. Because of the
widespread drought of 2012 andhigh cash crop prices, forageprices remain at record highsand supplies are very tight. Cou-ple that with the fact that avail-able grazing land is also gettingharder to find and beef produc-ers can have challenges in keep-ing their costs of production atprofitable levels. Grain pricesremain high and so will the com-petition for these acres. It’simportant that cowcalf produc-ers utilize available land as effi-ciently as possible, to keep feedcosts at a reasonable level.Improving grazing manage-
ment on pastures and utilizingcrop residues will be very impor-tant for the survival of the cow-calf industry. Now is a greattime to come up with a plan forthe 2013 grazing season becausewaiting until the grass is readyfor turn out makes it extremelychallenging for having success atgrazing season extension. Overgrazing in the spring growingseason because of a lack ofstored or stockpiled forages willalso create a disadvantage forthe rest of the year and couldlead to potential forage short-ages for the next winter. Goalsfor profitable grazing manage-ment should include:
� Meeting the nutritionalneeds of the livestock fromstanding forage as many days aspossible.
� Harvest forage with animalsas efficiently as possible. Winterfeed cost is the greatest expenseof a cow-calf operation. Accord-ing to data from the NorthDakota Farm Business Manage-ment Program, total annual costper cow was $574 in 2011, ofthat total cost, 54 percent or$309.96 could be attributed towinter feed costs. Data from
North Dakota also indicates thatpasture costs are estimated at$0.85 per cow per day, whilefeeding harvested, stored foragescan increase that number to$2.33 per head per day. Thestored forage costs were derivedfrom using $150 per ton costs onhay and a daily intake of 31pounds of dry matter. This costcould be much higher if you takeinto account the cost to pur-chase hay has since gone overthe $150 per ton price. The Weekly Hay Market
Demand Report from the Uni-versity of Wisconsin has largeround bale hay prices rangingfrom $154-$268 per ton,depending upon quality. Giventhe difference in the cost of graz-ing versus feeding stored forage,it becomes very evident whyextending the grazing season isbeneficial in keeping productioncosts as low as possible. Howthose grazing acres are managedwill also have an impact on thelevel of cost reduction that isattainable. Utilization rates willvary greatly, depending upon thefrequency of the moves; in acontinuous paddock situation,the utilization rate would be 30-40 percent. Increasing the fre-quency that the animals aremoved, will increase the percentutilization. In a four-year grazingstudy at the University of Mis-souri Forage Systems ResearchCenter, researchers found thatmoving the fence every threedays compared to every twoweeks resulted in 40 percentmore grazing days per acre.Improving grazing yield willallow producers to better meetforage requirements of the herdduring summer slump and intothe fall months. The same typesof improved efficiency can befound in the grazing of stock-piled forages, crop residues, andcover crops. The more frequentlycattle are moved to a new pad-dock, or strip of forage, the high-er the utilization rate will be. Tocontact an expert in your area,visit http://expert.msue.msu.edu,or call 888-MSUE4MI (888-678-3464)
Grazing seasonextension for the beefcow-calf producer
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LivestockMarketDigest
The Environmental Protection Agency (EPA)continues to illegally release information on cat-tle operations to the activist groups Earth Justice,the Pew Charitable Trust and the Natural
Resources Defense Council, According to theNational Cattlemen’s Beef Association (NCBA).In the latest action, the agency again admitted it
had released too much information on livestock pro-ducers, specifically producers from Montana andNebraska. This action happened less a month afterthe agency found it had released too much informa-tion on livestock producers in 10 states.NCBA Past President J.D. Alexander, a cattle
feeder from Pilger, Nebraska, and whose informationwas released to the activists groups in the initial EPAaction, said it is clear “someone at EPA is either com-pletely incompetent or intentionally violating federallaw. Either way, this action shows EPA cannot betrusted with sensitive information and should not havethe authority to procure or disseminate it. NCBA iscalling for an investigation by the Office of InspectorGeneral into this matter.”The records released in February by EPA include
names of producers and operations, locations and insome cases even personal phone numbers for farmersand ranchers who own beef, swine or poultry opera-tions. Most of the 80,000 facilities listed are not regu-lated under the Clean Water Act (CWA), some hav-ing as few as 12 head of livestock. After NCBA andother livestock groups expressed outrage over the ini-tial release of information, EPA conducted a review ofthe records and admitted it released too much person-al information for 10 of the 29 states included in thedocuments. After a second review, the agency onceagain said too much information was released foroperations located in Nebraska and Montana.“These actions by EPA once again prove that the
agency is incapable of properly doing its job. Nowherein law is EPA required to obtain and display such per-sonal information on all these livestock operations. Onthe contrary, the federal government should be pro-tecting its citizens from unwarranted attacks,” Alexan-der said. “Instead, EPA has once again threatened thehealth and safety of America’s farmers and their fami-
lies, as well as decreased the security of our food sys-tem. Now they have politely asked these activistgroups twice to return those documents with extreme-ly sensitive information on them. What makes EPAthink that these groups will listen and act appropriatelyin order to protect hardworking farming and ranchingfamilies, those families that environmental activistgroups want out of business?”He added that NCBA continues to pursue legisla-
tive action that would prevent the agency from beingable to make these devastating mistakes.Nebraska Sens. Mike Johanns and Deb Fischer
said the fact that EPA disregarded the privacy of cattleproducers in their home state of Nebraska and acrossthe country shows the agency continues to act as if it isabove the law.“EPA’s disclosure of personal and confidential
information of private citizens and business owners –including 3,500 Nebraskans – demonstrates a com-plete disregard for their privacy and safety. Now, wehave learned that, in the agency’s mismanagedattempt to recover the information, the EPA failed torequest the return of hundreds of Nebraskans’ person-al data that should not have been released,” said Fisch-er. “This whole episode is more than a mere comedyof errors; it represents a pattern of disturbing disregardfor the rights of our citizens. I believe Nebraskans –and Congress – deserve a thorough, independent andspeedy review of the EPA’s handling of the deliberatedisclosure and botched recovery process.”Johanns agreed with Fischer, stating that “EPA’s
ongoing assault on America’s agriculture producers isnothing short of alarming.”“EPA’s disregard for the privacy of farmers and
ranchers in Nebraska and across the country is, atbest, woeful negligence, and at worst, a flagrant effortto aid organizations seeking to radically dismantle agri-culture practices, with no regard for what it takes tofeed the world. I certainly hope EPA’s release of sensi-tive personal data was not part of a larger agenda tojeopardize American agriculture operations, but itstrack record does not help its case. EPA must nowexplain how it will ensure private information is notabused.”
EPA continues to release producers’ personal information
Thanks to a membership val-ue program partnershipbetween Case IH, theAmerican Farm Bureau
Federation (AFBF) and Ameri-can Farm Bureau, Inc. (AFBI),Farm Bureau members can nowtake advantage of farm equip-ment discounts. Eligible FarmBureau members will receive anincentive discount – from $300to $500 – when purchasing qual-ifying Case IH products andequipment from participatingdealerships.“We selected Case IH as a
member benefit program partnerbecause they offer productexpertise and field support, aswell as the resources of a leadingtractor manufacturer,” says RonGaskill, Executive Director ofAFBI. “The program’s goal is toprovide Farm Bureau memberswith greater value when theypurchase or lease eligible equip-ment.”“Case IH is proud to support
the American Farm Bureau andits mission of building strong,prosperous agricultural commu-nities,” says Zach Hetterick,
Case IH Livestock MarketingManager. “The organization uni-fies farmers to make farmingmore sustainable and the com-munity a better place to live in away that could not be accom-plished on an individual level.”
How it worksFarm Bureau members from
participating states can receivethe manufacturer’s incentive dis-count when an eligible tractor orimplement is acquired.“There is no limit to the num-
ber of incentive discounts that aFarm Bureau member may useas long as it is no more than oneper unit and the equipmentincluded provides opportunitiesfor small landowners to larger,professional producers,” saysHetterick. “This discount is alsostackable, meaning it can beused with other discounts, pro-motions, rebates or offers thatmay be provided by Case IH or aCase IH dealership.”A current Farm Bureau mem-
bership verification certificatemust be presented to the CaseIH dealer in advance of product
delivery to receive the incentivediscount. Certificates may beobtained by visiting fbadvan-tage.com and selecting the CaseIH offer.Eligible individuals, family or
business members will receivethe following discounts on pur-chases of these qualifying prod-ucts:
� Case IH Farmall® Com-pact Tractors (A & B) – $300per unit
� Case IH Farmall® UtilityTractors (C, U, J Series) – $500per unit
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� Case IH round balers –$300 per unit
� Case IH disc mower condi-tioners – $300 per unit
� Case IH sickle mower con-ditioners – $300 per unit
� Case IH Scout™ utilityvehicles – $300 per unit
Case IH & American Farm Bureau announcetractor & equipment incentive program
May 15, 2013 “America’s Favorite Livestock Newspaper” Page 13
Farmwalk is back and betterthan ever. The 21st annualPierce College event offers anopen house on its 225-acre
farm for the public to experience itsAgriculture Department’s Teach-ing Farm, and to expose childrento the experience so that they maybecome future students in theAgriculture Department’s pro-grams and at Pierce College,Woodland, Hills, CA.“This year’s events are perhaps
the most vital in the college’s 65-year history,” said Dr. LelandShapiro, Agriculture DepartmentChair and Pre-Veterinary ScienceProgram Director at Pierce Col-lege. “We’re thrilled to have thesupport of Alex Warren and Losingthe West, a film whose message isdirectly inline with that of our pro-gram. It promotes not only theconservation of fertile land for agri-cultural use but also encouragespeople all over the world to taketheir lives and health into their ownhands and get to know where thefood they put on their tables comefrom and the importance of farm-ing worldwide.”
About the Pierce CollegeFarm – According to Dr.Leland ShapiroDr. Shapiro, who has spear-
headed Pierce’s Agricultural andPre-Veterinary Science programsfor nearly 40 years, is set to retirewithin the next two years. Accord-ing to Shapiro, upon his retire-ment, if funds are not raised to helpsupport the farm and the educa-
tional programs connected with it,Shapiro’s position will be in jeop-ardy and some of the highestranked agricultural and pre-veteri-nary science programs in the coun-try along with it.“Paradise could literally be
paved to make a parking lot,” saidactor, activist and publicist for Los-ing the West Lon Haber.The Pierce College Agricultural
Foundation was formed to revital-ize the Farm at Pierce College. AnAgriculture Endowment has beenestablished to raise the moneyneeded and rebuild programs thatcan continually generate cash flow.This will enable Pierce to hire andmaintain two full-time facultymembers (one of whom must be afood animal veterinarian able tocare for the college’s animals andteach its students), and four classi-fied employees (two to care for thepastures and fields, and two for theanimals). One of these four willalso assist in managing the equinefacility in preparing its lab for itsdaily equine courses. All moneyraised will be utilized to maintain,improve and expand the animal sci-ence programs – pre-veterinary,general animal science and equine.
Losing the West“Our society is trying too hard
to sustain an unsustainable way oflife,” said Losing the West’sdirector/producer and 2013Farmwalk sponsor Alex Warren.“It’s time to come together to pro-tect the land that needs to be pro-tected, the fertile land and the
open spaces that preserve the habi-tat and migration patterns ofwildlife. The Pierce College farm isa prime example of what’s happen-ing all over the world and we havethe ability to make a difference inour own backyard. If we can’t startat home then where can we start?”Losing the West is a quintessen-
tially American documentaryexamining the transformation ofthe iconic old west that was, for solong, a rugged, thriving naturalhabitat. It is the significant story ofa sacred society threatened withextinction and an essential industryon which we all rely put in mortalperil due to the disappearance ofnatural resources. The film is a vitalaudit of America’s values andaddresses some of the most impor-tant issues of our time. In the faceof increasingly turbulent economictimes, why would farmers andranchers continue their gruelinglifestyles when the monumentalrise in the value of their propertiesmakes cashing out their bestprospect? Who will be left to growthe nation’s food as populationcontinues to soar? And who will fillthe roles as stewards of the land asconcrete paves over the fertileground?Dr. Shapiro and Jose Luis Fer-
nandez, Dean of Academic Affairsand Farm Manager at Pierce Col-lege, among many other notablepersonalities are featured in Losingthe West.
Save the Farm!Losing the West has just been
completed and special screeningswill take place in the Old Feed Millduring Farmwalk. A star-studdedbenefit to help save the Pierce Col-lege Farm, Agricultural and Pre-Veterinary programs with a pre-release screening of Losing the Westis tentatively set for early June inPierce College’s Grand Hall. Spon-sors for the event include Losingthe West, LLC and Kathy Eldon &Creative Visions. The Host Com-mittee includes Zev Yaroslavsky,Los Angeles County Supervisor(3rd District), MichaelAntonovich, Los Angeles CountySupervisor (5th District), AndyLipkis & Tree People and JeffMichael FoxNews – Los Angeles.More information will be releasedas it becomes available.
The Bottom LineBoth the Foundation and Losing
the West demonstrate how eachperson has the power to positivelyaffect the environment and com-munity, and to take a hands-onapproach to making land and foodsustainability a reality.
About FarmwalkFarmwalk activities include A
Petting Zoo, Live Music, Tons ofanimals, Hay Wagon Rides, SheepShearing, Wool Spinning, WoolDyeing, Multiple Horse Activities& Shows, Face Painting, CowMilking with the Dairy Council,Losing the West Movie Screening,Nature Canyon walks overlookingour city, the band Simply Marie,Greater LA Vector ControlDepartment, Pierce College Choir,
Firefighter Station 72 with theirFire Engine, California CattleWoman, Mountain Lion Founda-tion, Agriculture & Animal Classinformation, Horticulture Displays,Cooked to Order HamburgersVeggie Burgers and Hotdogs,Community Information Displays,Presentation by City CouncilmanDennis Zine and much more!Farmwalk is open to the entire
community and all ages are wel-come to attend. A $5 donation isrequested and children under 12are admitted free.The Pierce College Farmwalk
takes place on west side of campusat 6201 Winnetka Ave., WoodlandHills, CA 91371Enter off Victory Blvd. at
Mason Avenue and enjoy freeparking.The 21st Annual Pierce College
Farmwalk is sponsored by thePierce College Agriculture Depart-ment & the Foundation for PierceCollege& Losing the West.
This Land Is Our Land . . . But For How Long?
BY RON ARNOLD, WASHINGTON
EXAMINER COLUMNIST
Among the standout names ofoutfits recently whacking theDonors Trust is the nonprof-it investigative journalism
organization known as the Centerfor Public Integrity. To many, thegroup’s name seems presumptuousand agenda-laden, despite its insis-tence that it is “nonpartisan anddoes no advocacy work.”Because most of CPI’s funding
comes from wealthy foundations,it’s possible to investigate the inves-tigators through the IRS Form 990reports of its donors. Those handydocuments publicly reveal every-thing about every grant to CPI,including the grant description —what the money is for.The bulk of those descriptions
reinforce CPI’s assertion with suchpurposes as “general support” and“operating support,” meaning topay the crew, pay the rent, keepthe lights and heat on, and feed theoffice cat. In other words, no agen-da there.Then there is the $75,000 from
President Obama’s old board ofdirectors home, Chicago’s JoyceFoundation, which was given toCPI to “fund a series of investiga-tive reports on the gun industrylobby in America.” Among SecondAmendment defenders, the JoyceFoundation is known as the GunControl National Bank ($12 mil-
lion to anti-gun groups since2003). That sounds like an agenda.There’s also $150,000 from the
Public Welfare Foundation (basedon the fortune of the late Texasnewspaper owner and Democraticactivist Charles E. Marsh) for “reg-ulating worker exposure to chemi-cals” — which, when you thinkabout it, sounds like advocacy foran anti-industry agenda.I found 19 specific-purpose
grants that sounded agenda-laden,ranging from funds for land use cri-tiques, to anti-mining, anti-coal,anti-fishing and anti-telecommuni-cations company stories. I foundmore than three times that manyelection reform grants out of 317total grants. Not big in numbers,but possibly big as regards thequestion of “advocacy” and “agen-da.”The key question here isn’t
whether you like what CPI does(they have a ton of awards), orwhether it’s lopsided toward theleft (even the progressive mediacriticism organization Fairness &Accuracy in Reporting called CPI“progressive”). The real question is,who’s running the show? There’ssupposed to be "an absolute fire-wall” between a nonprofit’sfundraising officers and the pro-gram officers (the news section inCPI’s case). In philanthrospeak, isCPI taking “prescriptive grants”that demand specific performance?That would be a journalistic
showstopper. And some of thefoundations that fund CPI arenotorious for making prescriptivegrants. Does CPI have thatabsolute firewall between all itsmoney and all its news?I asked CPI Executive Direc-
tor Bill Buzenberg that exactquestion. At first he gave me theanswer to a number of otherquestions. After realizing Ihadn’t made myself clear, Iasked, “Who initiated the trans-action? You or the donor?” Hisanswer was emphatic and con-siderably more detailed than Iexpected.Buzenberg told me, “Our
development officer (chieffundraiser) talks to donors, visitsdonors, has donors visit us, andshe familiarizes them with ourinvestigations. I go with her andI talk to the donors, too. If theyfind things we target that theylike, the money side makes allthe grant arrangements and thenews side does what it would do,grant or no grant. Some founda-tions have offered us money thatwe refused because we don’twork on what they wanted. Weare not investigators for hire.”I asked, “What don’t you work
on? That would reveal your agen-da.”Buzenberg said, “Look at the
topics we work on. If it’s notthere, we don’t work on it.”Do the folks at CPI have an
agenda? Buzenberg insists theydon’t. I think they do, but atleast it’s theirs and not some ide-ological philanthropist’s.But they are indeed taking
money. Of CPI’s total $63 mil-lion revenue between 1998 and2011, $42.2 million, or morethan two-thirds, came fromfoundation grants.
Examiner Columnist Ron Arnold is executive vicepresident of the Center for the Defense of FreeEnterprise.
A journalism nonprofit’s nonagenda agenda
Page 14 Livestock Market Digest May 15, 2013
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BY MIRANDA REIMAN,
WWW.PROVISIONERONLINE.COM
Eleven to one — those werethe odds the beef industrywas up against for twodecades. “We got $10 in
new spending over that 20 years,meanwhile our pork and poultrycompetitors got $110,” saidNevil Speer, an animal scientistat Western Kentucky University.“You can’t grow an industrywithout new revenue coming in,and we basically worked in astagnant industry for 20 years.”Speer presented as part of
the Harlan Ritchie Beef Sympo-sium during Midwest AmericanSociety of Animal Science meet-ings in Des Moines, Iowa inMarch.Beef struggled with health
perception issues, conveniencewoes and the challenge of beingthe most expensive protein inthe meat case, he said.Then, the independent sector
orientation began to adjust formutual good.“We began to understand
that we need to work together inthis industry,” Speer said.That lent itself to more
branded programs and supply-chain alliances.“Today we’re averaging some-
where around 12 percent to 15percent branded sales on aweekly basis,” he said. “Thispush will probably continue inthe years ahead.”As a result, grid and other
negotiated sales make up 75percent of all fed-cattle market-ings today.Part of that also comes from
increased competition for feedercattle, and the need to recouppremiums paid on cattle cominginto the feedyards.“They’ve begun to implement
more and more supply manage-ment over the last 10 years, andthose are strategic businessdecision,” Speer said. “If we canfind cattle that meet some end-user specification and then
match our inputs and do thatsecurely, we begin to kind of dis-tance ourselves from the rivalryof fighting it out in a commoditymarket.”That’s not only happening on
the cattle side of the business,but once it’s processed intobeef, too.An estimated two-thirds of
retail marketings are “out frontsales,” Speer said. “They’re notspot sales.”“What’s happening is that we
are continuing to have moreneed for efficiency of move-ment, precision, to meet con-sumer needs,” he said. “We needthe right cattle, the right prod-ucts, at the right time and theright place, and that’s ultimatelybecause we want to offer high-quality, highly competitive prod-ucts with consistent, predictableturnover.” That’s especially important as
beef looks to compete withmuch cheaper alternatives. Beefis running at 240 percent theprice of chicken and 140 per-cent that of pork.“We’re on the upper edge of
where we’ve ever been,” Speersaid. “At what point do con-sumers begin to push back? Idon’t know; they’ve shownamazing resilience and continueto do so, but this is a concern.”“Certainly, higher price
equals higher expectations,” hesaid.The apparent solution is
more teamwork.“If we can supply high-quality
product on a consistent basis,then we create demand,” Speersaid. “Then the demand feedsback into the supply and it’sreally a network-type of perspec-tive where we create an entireecosystem around a business,and ultimately we get new valuecreation.” To those who say at some
point the industry will have toomuch Prime or Choice beef,Speer counters, “If we can over-deliver that in an efficient way,
How beef can competeHigher prices bring higher expectations
BY BURT RUTHERFORD, BEEF
Back in the late ’90s, as cat-tle feeders in Texas andOklahoma looked attrends and dynamics in
the fed cattle market, it wasincreasingly evident that formu-las and forward contracts, andlater grids, would forever changethe way cattle would be market-ed.So, as the world left the 20th
century behind and steppedbravely into the 21st, a group ofindependent cattle feeders joinedtogether to form ConsolidatedBeef Producers (CBP).Designed as a marketing organi-zation, the idea was to consoli-date groups of fed cattle into vol-ume lots, giving independentcattle feeders the negotiatingleverage with packers to maxi-mize price on the cash market.Since it was formed in 2000,CBP has grown to include nearly200 cattle feeders in 15 states,with a total combined capacity ofmore than 4 million head.In the ensuing 13 years, not
only have those market dynamicscontinued, but other forces havecome to the fore to affect the fedcattle market – ethanol, highervolatility, a shrinking cowherdand production technologies likebeta agonists that shorten themarketing window.To adapt to an ever-changing
marketing environment, CBPleaders and staff recently devel-oped a six-point strategic initia-tive, which they rolled out tomembers during their recentannual meeting. Those six pointsare:1. A customer needs assess-
ment and communications plan.No business can be successful ifit talks more than it listens, saysBruce Cobb, CBP general man-ager. “You have a lot of chal-lenges and our goal is to help ourgroup understand those chal-lenges, then put together servicesand programs that address thoseneeds and address those chal-lenges to help you better com-pete in the marketplace,” he says.A big part of that is open and
aggressive communicationbetween the CBP office inCanyon, TX, and its members,says Shelby Horn, with GreatPlains Cattle Feeders in Here-ford and incoming CBP chair-man. While CBP does a good jobalready in communicating mar-ket information to its members,more can be done.
“We feel that trades happenwithin our membership thataren’t widely known,” Horn says.“We may make a basis trade atGreat Plains, but everybody elsemay not know about that trade.We feel we need to do a betterjob communicating those thingsamong our membership.”2. Develop new, innovative
cattle marketing options. “Com-petition in the spot market isbecoming less and less,” Cobbsays. “So we have to find ways togo back to the initial concept ofCBP creating competition in themarketplace and find new waysto do it.”However, CBP doesn’t plan
on turning any cattle over to apacker that are unpriced at timeof sale. “If we’re determined tosell cash at all costs on the spotmarket, I think we’re in a formulato not succeed,” Horn says. “Soour strategy is to try to createcompetition from a packer at anearlier day (out-front sales) butmake sure the cattle are pricedand negotiated.”3. Develop a comprehensive
risk management system. “Oneof the things CBP has identifiedis a comprehensive risk manage-ment system to go along withsome of the other systems wehave,” Horn says. “That systemwill be designed to help memberstract hedging and evaluate risk.”However, CBP doesn’t intend
to get into the futures brokeragebusiness, he says. The system willsimply allow members to keeptrack of their risk managementpositions and help them quantifytheir market risk.“It’s pretty difficult to separate
cash marketing and risk manage-ment. Whether any of us like it ornot, the futures market basicallyprices our cattle,” Horn says.And, adds Cobb, with the veloci-ty and volatility that characterizesfutures markets, being able tobetter understand risk is essen-tial.4. Develop a comprehensive
plan for CBP story beef. “Proba-bly one of the least-capitalizedadvantages we have as independ-ent cattle producers is telling ourstory,” Horn says. “Research con-tinues to show that consumerswant to know who is producingtheir food. And as independentcattle producers, we have a greatadvantage in that effort.”Cobb agrees. “Consumers
have a natural trust with produc-ers. It’s the greatest unutilizedand unleveraged asset in our
industry today and has been foryears. And I believe there’s anopportunity for us to begin tap-ping into that asset and leverag-ing it.”Several years ago, CBP
explored the possibility of devel-oping its own “story beef” – thatis, beef products with a back-ground story to them. “We hadan obstacle that we just couldn’tget through, so we set it on theshelf and waited for another day.I think that day is here,” Cobbsays.5. Explore opportunities to
expand into eastern Nebraskaand Iowa. While CBP has mem-bers in 15 states, it is strongest inthe High Plains. “The area we’relacking in is eastern Nebraskaand Iowa,” Horn says.Expanding CBP’s member-
ship base into that region wouldbenefit everyone, he says,because of the market intelli-gence it would create. “One ofthe key benefits I see with CBPis the coverage we have in thecattle market in all areas. Weknow what’s going on in westernNebraska; we know what’s goingon in Kansas; we know what’sgoing on in Texas. And to be ableto have one entity to assimilatethat market intelligence for us asproducers, having a presence ineastern Nebraska and Iowa Ithink would enhance that.”6. Aggressively market feeder-
cattlelistings.com. As cow num-bers shrink, sourcing feeder cattleis becoming a greater challengefor cattle feeders. To help itsmembers, CBP launched feeder-cattlelistings.com earlier thisyear.It’s a lot like Carmax.com,
Cobb says. A member can put inthe various criteria it wants infeeder cattle, then the sitesearches its database and deliverslistings that match. “So we’re inthe process of setting up somerelationships to get it populatedwith cattle,” Cobb says.CBP staff and leadership will
now go to its membership tohear their opinions and ideas onthe strategic plan. Horn is hope-ful the independent cattle feed-ers who constitute CBP’s basewill see its value. “I think CBPneeds to make a big step,” hesays. “I think we’re at a point inour marketing where it’s impor-tant for us to look at all ouropportunities. I think it’s going torequire us to do that if we’regoing to remain viable as inde-pendent cattle producers.”
Feeding Group Looks To CattleMarketing Alternatives
and be more price-competitivewith a quality product, I say let’sgo. That means more opportuni-ties in the beef industry.”The National Beef Quality
Audits, along with numerousother studies, show thatmeeting consumer demandsets the industry up for suc-cess. “We have pretty good
evidence that as we increasecooperation and responsiveto consumers, we do a muchbetter job in this industry,”he said.
May 15, 2013 “America’s Favorite Livestock Newspaper” Page 15
SOUTH DAKOTA
AG CONNECTION 05/02/2013
Cattle producers can use Live-stock Risk Protection (LRP)to guard against lower calfprices this fall, says Matthew
Diersen, SDSU ExtensionRisk/Business Management spe-cialist.“LRP for calves works well for
cattle producers because a specificnumber of head can be insured,”Diersen said. “In addition, there isa fixed basis adjustment for calvesthat offers better protection thanwhen using futures or options con-tracts.”Given the risk in the market
and it’s relatively low cost to man-age has Diersen encouraging live-stock producers to consider thecoverage.“The cost to transfer the volatil-
ity is less than at any time in thepast five years,” he said. “The trendis for volatility to increase in thecoming months before declining inlate summer. Ideally, producerswould time the purchase of LRP to
when cattle prices are seasonallyhigh and before volatility increas-es.”In mid-April LRP was available
with end dates that stretched intoJanuary of 2014. Although thefloor prices available right now arenot as good as in recent years,Diersen explains that LRP leavesthe upside open.“Thus, a producer can still ben-
efit if calf prices are higher this fallthan currently expected,” he said.“The risk covered by LRP has beensignificant in recent years. Evenwith deductibles, LRP had a lossratio above 1.0 in 2008, 2009 and2012. Thus, producers receivedback more in indemnity paymentsthan the cost of the premiums.”As of mid-April, South Dakota
producers had insured 31,821head of feeder cattle through thefiscal year that ends in June. Thatcompares to the nationwide totalof 106,370-head insured. “SouthDakota has more insured than anyother state - a position held onfeeder cattle annually since fiscalyear 2008,” Diersen said.
Livestock Risk Protection for Calves
Local food system plan-ners and business devel-opers can now easilyestimate unmet market
demand for local food in theirregion. Business advisory firmNew Venture Advisors LLChas created the Local FoodMarketSizer™, a Web-basedapplication which estimatesthe gap between local foodsupply and demand in mar-kets across the nation. Thetool was developed to helpcommunities and entrepre-neurs in the growing localfood arena determine the sizeof the business opportunitiesin their region.“Despite the growing size
and importance of locally-pro-duced food in the UnitedStates, food industry analystsare not yet vigorously measur-ing local food sales,” saysKathy Nyquist, the company’sfounder and principal. “It isdifficult to convince aninvestor that you have asound business case without areliable estimate of marketsize.”The Local Food Market-
Sizer™ was used successfullyby Blue Ridge Produce LLC,a pioneering local food hub inElkwood, Virgina, New Ven-ture Advisors helped launchin 2011.“Uncovering a multi-bil-
lion-dollar business opportu-nity in Washington, DC andthe surrounding region wasincredibly motivating for us,”says Jim Epstein, the compa-ny’s co-founder and chairman.“Not only did it give us confi-
dence to build this business, itgave our investors confidenceas well.”The Local Food Market-
Sizer™ uses data from publicand private sources to calcu-late unmet demand for localfood at the state, metropoli-tan area and county level.With a few clicks, the toolestimates market potential forlocal meat, dairy, poultry &eggs and fruits & vegetables.The methodology performsdozens of calculations access-ing more than 70 data tablesfrom the U.S. Department ofAgriculture, U.S. Bureau ofLabor Statistics, U.S. Censusand private surveys. The appli-cation displays the estimatedvalue of local food demandand supply in wholesale dol-lars, and the gap betweenthem as a measure of theunmet market for local food.New Venture Advisors
developed the methodologyto provide robust analytics forfeasibility studies and busi-ness plans for local food start-ups, particularly food hubswhich aggregate, process anddistribute farm products forlocal customers. After con-ducting the painstaking analy-sis for a number of clients, thecompany created the LocalFood MarketSizer™ to auto-mate the process and make itwidely available.The Local Food Market-
Sizer™ by New Venture Advi-sors can be accessed free ofcharge on the company’s web-site http://newventureadvi-sors.net.
Web Application to Support Local Food Business Startups
Senator Sherrod Brown of Ohioand Representative ChelliePingree of Maine introducedthe Local Farms, Food, and
Jobs Act of 2013 in the Senate andthe House of Representatives in ear-ly April. The two identical billsexpand business and marketingopportunities for farmers and ranch-ers while increasing consumer accessto healthy foods. The legislationaddresses production, aggregation,processing, marketing, and distribu-tion barriers that limit growth inlocal and regional food markets. Thebill also makes targeted investmentsin programs that create jobs andspur economic growth through foodand farms. “This bill will improve the eco-
nomics of farming in Maine andacross the country,” commentedMaine organic farmer Sarah Smith,who joined Representative Pingree,Senator Brown, and Chef Tom Col-icchio on Capitol Hill for today’sreintroduction of the bill. “Passageof the Local Farms, Food, and JobsAct will mean more jobs and incomefor farming communities nationwideand greater availability of high quali-ty locally and regionally producedfood for consumers.”The Local Farms, Food, and
Jobs Act includes provisions in sevendifferent titles of the Farm Bill,including proposals that addresscrop insurance, credit, nutrition,rural development, research andextension, horticulture, and live-stock. Many of the bill’s provisionswere included in either or both theSenate-passed and House Agricul-ture Committee-passed farm bills in2012.The bill also invests in several sus-
tainable agriculture programs thatwere left stranded and without fund-ing by the 2008 Farm Bill extensionpassed earlier this year, including theFarmers Market Promotion Pro-gram, National Organic Certifica-tion Cost Share Program, and Val-
ue-Added Producer Grants.Some of the specific proposals
within the bill include:Whole Farm Revenue Insurance for
Diversified Operations – The billwould direct USDA’s Risk Manage-ment Agency to develop a WholeFarm Diversified Risk Managementinsurance product that is available inall states and all counties. The prod-uct is relevant to all diversified oper-ations, including, but not limited to,specialty crops and mixed grain-live-stock or dairy operations, contractproducers, and organic and conven-tional farms. The new insuranceproduct would be offered at thesame buy-up coverage levels as otherpolicies, include a strong crop diver-sification bonus, and account for allthe normal costs involved in movingthe crop off the farm and into mar-keting channels.School Meals – The bill will
improve institutional access to localand regional foods through a seriesof provisions regarding school mealprocurement. For example, the billwould create USDA pilot projectsthrough which school systems couldexperiment with local food procure-ment and would allow small schooldistricts to make their own food pur-chases on an ongoing basis if doingso creates administrative savings. Rural Development – The bill
boosts rural investment by restoringfunding for the Value-Added Pro-ducer Grant program to $20 milliona year and improving its delivery,with an emphasis on regional mar-ket and supply chains. The bill alsostrengthens the Business & IndustryLoan funding set-aside for local andregionally produced agricultureproducts and food enterprises, andprovides authority for local andregional food system funding underRural Business Opportunity Grants,Rural Business Enterprise Grants,and Community Facility Grants andLoans.Farmers Markets and Local Food –
The legislation will establish $20 mil-lion a year in mandatory farm billdirect funding for the Farmers Mar-ket and Local Food Promotion Pro-gram. The expanded program willsupport direct farmer-to-consumermarketing but also will providegrants to scale up local and regionalfood enterprises, including process-ing, distribution, aggregation, stor-age, and marketing. Fifty percent offunding will go to direct marketing,with the remaining 50 percent tolocal and regional food system devel-opment beyond direct marketing,including institutional and retail val-ue chains and markets. The bill also increases funding for
the Seniors Farmers Market Nutri-tion Program and provides fundingfor incentives through the SNAPprogram to encourage low-incomeconsumers to purchase healthy localfood directly from local farmers.Specialty Crop Block Grant Pro-
gram – The bill would expand thepurpose of the Specialty Crop BlockGrant program to include the con-sumption and availability oflocal/regional specialty crops, theprofitability and ecological sustain-ability of specialty crops, and theaffordability of specialty crops forlow-income consumers.National Organic Certification
Cost Share Program – The legislationincludes a provision to streamlineand renew funding for nationalorganic certification cost share toassist organic producers with theannual regulatory costs of producingcertified organic products. Assistance to Small and Very Small
Meat and Poultry Processors – The billimproves market access for local andregional livestock and poultry pro-ducers by enhancing USDA’s tech-nical assistance and guidance tosuch facilities. It also helps farmers,ranchers, and small local processorsby providing greater public informa-tion from USDA on approved meatlabels.
Lawmakers Reintroduce Bill to Boost EconomicGrowth, Create Jobs, and Provide Healthy Food
BY SAMUEL T. SMALLIDGE, PHD.,
NEW MEXICO STATE UNIVERSITY
The North American modelof wildlife management andconservation is unique inthe world and to many rep-
resents an important parallel tothe challenges and individualfreedoms we enjoy as citizens ofthis great nation. Our nation wasforged from the fires of discon-tent in Europe, and as withEuropean institutions, the modelof private ownership of wildlifewas rejected by our youngnation. Two competing uses ofwildlife occurring during themid-19th century set the stagefor development of this uniquemodel. Market hunting focusedon exploitation of wildlife forprofit, was unregulated andresulted in a profound loss inabundance of wildlife. Sporthunting was evolving from new-found wealth and leisure of anurban class that focused on fairchase, self-restraint in pursuit,woodcraft skills and promotionof personal health. Habitatdestruction near areas of anexpanding human populationfurther influenced people’s per-ceptions. The Wildlife Society’s 2007
position statement on the sub-ject states, “Conflicts betweensport hunters and market
hunters lead to advocacy by theformer for elimination of mar-kets for game, allocation ofwildlife by law rather than privi-lege, and restraint on the killingof wildlife for anything otherthan legitimate purposes, condi-tions that eventually prevailed.”Abundant wildlife, open land-scapes, and freedom to roamwere common through most ofthe formative years of our youngnation. Most people lived inrural areas and relied on wildlifefor survival. These conditionsand an 1842 U.S. SupremeCourt case (Martin v. Waddell)set the foundation in commonlaw that wildlife resources wereowned by no one individual andwere to be held in trust by thestate. The federal governmenthas established trust responsibil-ities for international migratoryspecies, marine mammals andendangered wildlife. The publictrust doctrine has roots inRoman law and had beenapplied primarily to navigablewaters and seashores to protectnavigation, commercial enter-prise and fishing rights. The pub-lic trust doctrine is the principlethat certain natural resourcesbelong to the public for their useand that the government is tomanage those resources for thebenefit of the public.Through the traditions estab-
lished by the settlers, foundingfathers, and common law, thepublic owns wildlife, which isheld in trust by each state for thebenefit of its citizens. Wildlife asa public resource and access towildlife has raised concernsregarding property rights. By lawand tradition, sportsmen recog-nize property rights and gainpermission from the landownerto hunt their property. In his1962 book Our Wildlife Legacy(p. 311), Durward Allen states,“The conception of wildlife as apublic asset stems from days offew people and little competitionfor game and fish. No one hasadvocated strongly that the legalownership of wild things shouldbe changed — we have enoughinherited conviction to keep thatas it is. But such proprietorshipnever has carried with it the priv-ilege of entry other than by con-sent of the landowner. Manytroubles have grown out of thetendency of hunters to contestthe basic and legal right of onewho owns a piece of land todetermine who will use that landand what will be taken from it.”It remains today that ethicalsportsmen seek permission fromlandowners to hunt their proper-ty. It is an unethical hunter thatbreaks the law by trespassing onprivate property to hunt and bysuch actions only creates greaterproblems for all sportsmen. Bytradition and law it is establishedthat the public trust doctrine, asrelated to wildlife, does not over-take individual property rights.However, the public trust
doctrine is also established incommon and legislative lawinvolving resources such as waterand air. A 1970 article by JosephSax in the Michigan Law Reviewoutlined how the public trustdoctrine may be used to influ-ence environmental advocacy bysuing the government on behalfof the public interest. This con-cept was already being put intopractice as Professor Sax wrotehis manuscript. Several articleshave been written further explor-ing the idea of legal environmen-tal advocacy. The end result is anapproach to test the limits of thepublic trust doctrine with regardto environmental advocacy onpublic and private lands usingthe judicial system to transformcommon law.It is now common for individ-
uals or non-governmental organ-izations to sue state or federalgovernments to expand thescope and influence of publictrust common law by settinglegal precedence in management
of natural resources on publicand private land. A U.S.Supreme Court decision in 1992(Lucas v. South Carolina CoastalCouncil) reversed a lower courtand found a clear regulatory tak-ing against Mr. Lucas’ beach-front property. Professor MartinBelsky (1994, Albany Law Jour-nal of Science and Technology)states that the Lucas case, andothers, represents an evolution inregulatory takings principles andsuggests that the, “public trustdoctrine is one of those “com-mon law property doctrines” thatcan justify regulations withoutthe paying of compensation.”Based on Belsky’s interpretation,the majority opinion written byJustice Scalia establishes that ifthe government can identify pre-existing principles that prohibit-ed the intended use then noneed to pay compensation exists.This is not an established legalprinciple, however, ProfessorBelsky states that the publictrust doctrine could be usedwherever and whenever steward-ship of natural resources is atissue; but would require aggres-sive lawyering to assure success.The potential consequences ofsuch lawsuits, over time, maygreatly influence how naturalresources on public and even pri-vate lands are managed.How might an expanded
interpretation and application ofthe public trust doctrine impactwildlife? We have already seen animpact with regards to endan-gered species management.Non-governmental advocacygroups regularly sue the federalgovernment, often on proceduralgrounds, with the claimed pur-pose of protecting the publictrust with regards to habitat orendangered wildlife. If publictrust doctrine were interpretedto transform property rights in amanner to limit a private citizensability to manage their land,impacts to wildlife might be sub-stantial. One possibility wouldbe for landowners to activelymanage lands to limit ecologicalattributes (wildlife and habitat).A worse case scenario would bean interpretation allowing gov-ernment policy to dictate naturalresources management activitieson private lands. At present,much of this discussion has beenspeculative and has yet to bedefined in the courts. However,there are numerous non-govern-mental advocacy organizationstesting legal mechanisms such asthe public trust doctrine to influ-ence management of public andprivate lands. Because of the
importance of private propertyto wildlife in North America, theunknown consequences towildlife of public trust doctrineexpansion is unsettling.Private property provides the
majority of habitat for wildlife inNorth America, making upabout 75 percent of landscape inthe U.S. Privately owned landsgenerate or support greater than75 percent of wildlife at somepoint during their biologicalyear, often during critical breed-ing or birthing seasons. Whilestate law dictates that wildlife areheld in trust by the state for itscitizens, private lands often pro-vide the best habitat and securitynecessary for a species popula-tion to thrive. Farms, ranchesand suburban landscaping allcontribute to the mosaic of habi-tats beneficial for wildlife. Agri-cultural lands often provide thenecessary shelter, water, foodand space that comprise impor-tant wildlife habitat. Ranchessupport wildlife by planning forwildlife and their habitat in nor-mal operations, actively manag-ing for wildlife, and managingwildlife damage. While the pub-lic is regularly informed ofwildlife benefits found on feder-ally managed lands, far fewerknow that private lands con-tribute substantially more towildlife in America. Even instates largely under federal landmanagement, wildlife often ben-efit from private land manage-ment disproportionately to itsoccurrence.In summary, the public trust
doctrine is an important princi-ple that defined the public’sownership of wildlife in America.Because of this common owner-ship, it celebrates America’sdevotion to individual rights andthe law over a tradition of ances-tral inheritance as was commonin Europe. By law and tradition,sportsmen ask for permissionfrom landowners to hunt theirproperty. Private property isimportant to the well being ofwildlife habitats and populationsnationwide. We are entering thefifth decade of efforts by specialinterests to expand the scope ofthe public trust doctrine in influ-encing natural resources man-agement on public and privatelands. While consequences ofthese expansion efforts towildlife are poorly understood, itis unsettling to consider thepotential impacts to wildlife.Moreover, it is unsettling to con-sider the corresponding transfor-mation of property rights inAmerica.
Page 16 Livestock Market Digest May 15, 2013
The North American Model of Wildlife Management,Public Trust Doctrine & Property Rights
The Livestock Market Digest
FALL MARKETING EDITION including the 2013 DIGEST 25
