Friday March 24 Cattle on Feed + Ag News

NEBRASKA CATTLE ON FEED UP 1 PERCENT

Nebraska feedlots, with capacities of 1,000 or more head, contained 2.44 million cattle on feed on March 1, according to the USDA’s National Agricultural Statistics Service. This inventory was up 1 percent from last year. Placements during February totaled 425,000 head, up 8 percent from 2016. Fed cattle marketings for the month of February totaled 420,000 head, unchanged from last year. Other disappearance during February totaled 15,000 head, unchanged from last year.



IOWA CATTLE ON FEED UP 3%

Cattle and calves on feed for the slaughter market in Iowa feedlots with a capacity of 1,000 or more head totaled 650,000 head on March 1, 2017, according to the latest USDA, National Agricultural Statistics Service – Cattle on Feed report. This was up 2 percent from February 1, 2017, and up 3 percent from March 1, 2016. Iowa feedlots with a capacity of less than 1,000 head had 600,000 head on feed, up 3 percent from last month but down 6 percent from last year. Cattle and calves on feed for the slaughter market in all Iowa feedlots totaled 1,250,000 head, up 2 percent from last month but down 2 percent from last year.

Placements of cattle and calves in Iowa feedlots with a capacity of 1,000 or more head during February totaled 102,000 head, a decrease of 20 percent from last month but up 11 percent from last year. Feedlots with a capacity of less than 1,000 head placed 59,000 head, down 27 percent from last month and down 20 percent from last year. Placements for all feedlots in Iowa totaled 161,000 head, down 23 percent from last month and down 3 percent from last year.

Marketings of fed cattle from Iowa feedlots with a capacity of 1,000 or more head during February totaled 89,000 head, up 3 percent from last month and up 14 percent from last year. Feedlots with a capacity of less than 1,000 head marketed 42,000 head, down 19 percent from last month and last year. Marketings for all feedlots in Iowa were 131,000 head, down 5 percent from last month but up 1 percent from last year. Other disappearance from all feedlots in Iowa totaled 5,000 head.



United States Cattle on Feed Up Slightly
   
Cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 10.8 million head on March 1, 2017. The inventory was slightly above March 1, 2016.

By State   (1,000 hd - % of March 1 '16
Colorado .......:      910          102         
Iowa .............:       650          103         
Kansas ..........:      2,210        102      
Nebraska ......:      2,440        101      
Texas ............:      2,440        100       

Placements in feedlots during February totaled 1.69 million head, 1 percent below 2016. Net placements were 1.64 million head. During February, placements of cattle and calves weighing less than 600 pounds were 315,000 head, 600-699 pounds were 330,000 head, 700-799 pounds were 490,000 head, 800-899 pounds were 395,000, 900-999 pounds were 124,000, and 1,000 pounds and greater were 40,000 head.

By State  (1,000 hd - % Feb '16)   
Colorado .......:     180           106       
Iowa .............:      102           111       
Kansas ..........:      380           101     
Nebraska ......:      425           108      
Texas ............:      320            93      

Marketings of fed cattle during February totaled 1.65 million head, 4 percent above 2016.  Other disappearance totaled 56,000 head during February, 3 percent below 2016.

By State  (1,000 hd - % Feb '16)   
Colorado .......:      165           106        
Iowa .............:        89           114        
Kansas ..........:      370           107         
Nebraska ......:      420           100         
Texas ............:      320           102        



Additional Land to be Enrolled in CRP Program

New additions to the USDA’s Conservation Reserve Program (CRP) were announced in December 2016 by former United States Secretary of Agriculture Tom Vilsack.

“The CRP program has benefits for both landowners and the environment and is one of the most important initiatives for wildlife habitat on privately owned land in Iowa,” said Adam Janke, assistant professor and extension wildlife specialist with Iowa State University.

These new initiatives are known as Clean Lakes, Estuaries and Rivers (CLEAR), designed to combat water quality challenges in places like the Mississippi River and Great Lakes Basin, and State Acres for Wildlife Enhancement (SAFE), which sets aside 300,000 acres for wetland restoration and 100,000 acres for pollinator habitat across the country.

Filter strip (CP21) and riparian buffer (CP22) practices that are already enrolled in CRP or in areas with a need to reduce nitrate loading to surface water from subsurface drain tile outlets are being targeted through CLEAR. Iowa State University research has shown the potential positive water quality impacts of bioreactors and saturated buffers in Iowa and this new program will help landowners install these practices on their properties.

Iowa is slated to enroll 115,000 new acres in SAFE programs that target high-profile wildlife habitat needs. The goal for 2017 additions are 40,000 acres of habitat for the northern bobwhite quail and an additional 75,000 acres in grassland and wetland habitat targeting ring-necked pheasants, meadowlarks, pollinators and other grassland-dependent wildlife.

“This project is a creative approach to creating wildlife habitat within the Conservation Reserve Program,” Janke said. “It addresses an important need in our state as the northern bobwhite quail has been a declining farmland bird for several years. The program is unique in that it focuses on producing the habitat that bobwhites need to raise their young and find food throughout the winter.”

Additionally, the USDA will now offer an early termination opportunity for certain CRP contracts to socially disadvantaged or beginning farmer or military veterans, including family members. Normally there is a financial penalty for terminating a CRP contract early.

Additional details about CRP acres and the additional acres of land that can be enrolled can be found in the article “UDSA announces CRP changes to help improve water quality, wildlife habitat, and land transfers to beginning farmers.” The article was written by Janke and Wendong Zhang, assistant professor and extension economist with Iowa State, and can be found in the March issue of Ag Decision Maker.

Options for landowners with expiring CRP acres is also covered in the article.



ISU's Lawrence Testifies Before U.S. House of Representatives Subcommittee

John Lawrence, associate dean for Extension Programs and Outreach and director of Agriculture and Natural Resources Extension at Iowa State University, spent Thursday on Capitol Hill in Washington, D.C. talking about the future of family farms.

Lawrence testified before the U.S. House of Representatives Small Business Committee, speaking about the link between family farms, local communities and global markets, as well as the challenges facing family farms and the role of land-grant universities in addressing them. Lawrence also used the opportunity to highlight Iowa State University Extension and Outreach programming for farm succession planning and beginning farmers.

“Iowa’s landscape gives the impression of homogenous farms,” Lawrence told the House’s Subcommittee on Agriculture, Energy and Trade. “Crop rotations, tillage methods, machinery, facilities and farmsteads often look similar. However, the number of acres farmed, financial conditions and reliance on off-farm income are difficult to see from the road.”

Currently farmers are being forced to use more working capital and short-term borrowing to meet their cash flow obligations as market prices have fallen sharply over the last two years. If commodity prices continue to remain low, the financial conditions of most farmers will slowly deteriorate, Lawrence said, but added economists are not expecting a crisis as was experienced in the 1980s.

“Farmers have working capital challenges, not a debt crisis,” Lawrence said. “Most farmers have the assets to refinance short-term debt to a longer term loan with more manageable annual payments and continue to operate.”

The impact of these financial conditions differ with the age of the farmer. Older farmers have less debt and more current assets than younger farmers. An increase in interest rates as indicated by the Federal Reserve will have a greater impact on younger, higher leveraged farmers as opposed to older farmers.

Family farms are also facing significant challenges managing a global marketplace while also communicating and planning for the future of the business. Sustaining family farms, and ISU Extension and Outreach’s efforts through the Beginning Farmer Center, was a focus of Lawrence’s testimony.

Lawrence highlighted two specific programs from the Beginning Farmer Center:
-    The Returning to Farm seminar is a pair of two-day workshops for farm owner/operators and their known business successors. The focus is on starting the communication and planning that may continue over multiple years.
-    The Ag Link program links beginning farmers with established farmers desiring to transition their farm business to a new generation and who have not identified a family member as their successor.

Lawrence also informed the subcommittee on the efforts of Iowa State’s Women in Agriculture program, Start-to-Farm groups and partnerships with Iowa Veterans in Agriculture to address the needs of veterans returning to the farm, working in agribusiness or interested in starting a farm business.

To continue to make these kinds of programs available, Lawrence emphasized to the Congressional committee the importance of federal investment in agricultural research and extension programs.

“Federal competitive funds and capacity-building funds help assure innovative research and attention to local challenges,” he said. “State funds leverage federal resources and assure integration between research and practical extension education to address state and regional needs. Local resources help address a broad range of family farm issues from youth, to family nutrition and finance to agriculture. They also relay emerging questions back to land-grant researchers.”



Top 10 Best Burgers in Iowa Announced

Iowans have submitted more than 9200 nominations between February 13 – March 13 and the votes are tallied. The Iowa Beef Industry Council and the Iowa Cattlemen’s Association counted the nominations that were received via the website, texting and paper ballots.

The number of votes each restaurant received determined the 2017 Top Ten restaurants and their burgers. Those restaurants making the Top Ten list (in alphabetical order) include:
- Ankeny Diner, Ankeny                               - Elm’s Club, Creston
- BeerBurger, North Liberty                          - Saucy Focaccia, Cedar Rapids
- BW’s Burgers, West Des Moines               - Smokin’ Hereford, Storm Lake
- Doc’s Stadium Bar & Grill, Jefferson        - The Irish Shanti, Elgin
- Down Right Delicious, Clarinda                - Vaughn’s Café and Bakery, Clarinda

"Celebrating Iowa's best burgers is a subtle way to say 'thank you' to our hardworking cattlemen and women across the state," says Katie Olthoff, Director of Communications for the Iowa Cattlemen’s Association.

Nearly 500 Iowa restaurants were represented in the total nominations, which is a new record for the contest. “The previous record for the number of restaurants nominated was set in 2014, so we are thrilled that we were able to break that record this year with 487 restaurants represented,” comments Brooke German, Director of Marketing for the Iowa Beef Industry Council. “This proves that there are a lot of great tasting burgers all across the state of Iowa.”

New restaurants to the Top 10 list include: BeerBurger, North Liberty; Doc’s Stadium Bar & Grill, Jefferson; Smokin’ Hereford, Storm Lake; and The Irish Shanti, Elgin.

The quest for the winner of the Iowa’s Best Burger will now begin. All Top Ten restaurants will be visited by a panel of anonymous judges who will evaluate the burgers based on taste, appearance, and proper doneness (160 degrees). The judges’ scores and comments will be accumulated and the winner will be crowned on May 1.

“We encourage everyone to visit the Top Ten restaurants,” says German. “These are only a few of the many restaurants in Iowa that do an outstanding job of promoting and serving our beef product to their customers on behalf of Iowa’s beef farmers.”

To learn more about the Top Ten restaurants and the contest, visit www.iabeef.org.



Aptimmune Biologics Receives Iowa Biotech Innovation Showcase's Top Company Award

Aptimmune Biologics was awarded this year’s Biotech Innovation Showcase’s Top Company Award at the 2017 Partnering for Growth Biotech Innovation Showcase & Forum that took place this week in Ankeny, Iowa.

At the Showcase, 12 emerging companies in four categories (agricultural technology, animal health, human health and bio materials) made formal presentations to a panel of eight business leaders from the fields of agricultural biotechnology, intellectual property, human health and small business development. Steve Berger, Aptimmune Biologic’s development director, made the award-winning presentation to the judges.

“We are pleased Aptimmune has been recognized as a bioscience leader by the Iowa Biotechnology Association. This award will only continue to inspire our employees to reach new levels of innovation in the animal health industry,” said Aaron Gilbertie, CEO of Aptimmune Biologics. “Being chosen as Top Company from this group of outstanding innovators says a great deal about the quality of work being done by Aptimmune. The Showcase was an excellent opportunity for our employees to network with other innovators and industry leaders and to highlight some of Aptimmune’s best and brightest ideas.”

The Iowa Biotech Association’s Partnering for Growth Showcase features an investor conference and industry forum that joins innovators, investors and biotech leaders together over the course of a day and a half. It is a premier event for learning, investing and networking with various sectors of the biotech industry.  Start-up presentations focused around the development of biofuels and biomaterials; advances in food, ag and plant genetics; progress in animal health; as well as human health and medical technology. The Innovation Showcase winner received a $5,000 cash prize from the Association.

Aptimmune Biologics, based in Champaign, Ill., specializes in developing and marketing a portfolio of revolutionary mucosal vaccines that provide answers for the most costly viral diseases impacting the swine industry. Aptimmune’s first vaccines are focused on addressing two major viral respiratory pathogens, Porcine Reproductive and Respiratory Virus (PRRSV) and influenza.



Cattlemen Call on USDA to Withdraw Damaging GIPSA Rules

Today, the National Cattlemen’s Beef Association called on USDA to withdraw the Grain Inspection, Packers and Stockyards Act interim final and proposed rules, collectively labeled with the misleading title, Farmer Fair Practices Rules. Craig Uden, NCBA president, said the rules stand to threaten market incentives, the quality of American beef the industry is known for, and will ultimately cost $954 million to the cattle industry.

“These rules are just as troubling as they were when USDA initially proposed them in 2010, after which Congress immediately stepped in to defund the rules, recognizing them as a flawed concept that limits producers’ ability to market their cattle and adding layers of crippling bureaucracy,” said Uden.

Two proposed rules and one interim final rule came out on December 20, 2016, one month before the end of the Obama Administration. The interim final rule regarding the scope of the Packers and Stockyards Act and the proposed rule regarding undue preference and unjust treatment have a direct negative impact on the cattle industry. 

Alternative Marketing Arrangements reward cattle producers for producing the quality beef consumers demand. Under the interim final rule, USDA or a producer no longer needs to prove true economic harm but rather one only needs to say that he or she was treated "unfairly" to sue a packer or processor.

“This approach is counter to the decisions of seven federal courts of appeals and it is this change that ultimately makes the interim final rule a trial attorney’s dream and jeopardizes the Alternative Marketing Arrangements cattle producers utilize,” said Uden. “What incentive would a packer have to pay for superior cattle when they may be sued for rewarding quality? The industry will be forced back to treating all beef as commodity beef under a one-size-fits-all approach.” 

Much like the interim final rule, this proposed rule introduces more litigation into the cattle marketing system. The unfair practices and undue preferences provisions in the proposed rule are extremely vague and so ambiguous that broad interpretation is expected and compliance will be difficult.

“Vague and ambiguous rules typically result in producers and each segment of the beef supply chain unable to determine which practices are prohibited or permissible,” said Uden. “The resulting uncertainty will simply lead producers to incur litigation costs to protect their respective marketing arrangements. Conversely, it provides other producers an opportunity to file a lawsuit to challenge such arrangements.”

Furthermore, GIPSA admits it is “unable to quantify the benefits” of these proposals.

 “This is concerning since issuing rules with no discernable benefits should alone be grounds to withdraw the interim final rule and the proposed rule,” said Uden.



NPPC Asks USDA To Abandon GIPSA Rules

Citing grave concerns that they would “cause serious harm to the pork industry,” the National Pork Producers Council in comments submitted today said the U.S. Department of Agriculture should not finalize – or at least exempt pork producers from – regulations related to the buying and selling of livestock.

According to NPPC, the so-called Farmer Fair Practices Rules – an interim final rule and a proposed regulation – would “enable a torrent of lawsuits against members of the pork industry,” replace carefully negotiated contracts with standard terms that are unworkable, ignore crucial differences among the various sectors of the meat industry and raise serious constitutional concerns under the First Amendment.” The regulations were issued in the last weeks of the Obama administration by USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA).

“GIPSA’s one-size-fits-all approach would restrict livestock transactions, lead to consolidation of the livestock industry – putting farmers out of business – and increase consumer prices for meat,” said NPPC President Ken Maschhoff, a pork producer from Carlyle, Ill. “These regulations could impose staggering costs on the pork industry. The only people who would benefit from this heavy-handed government intrusion in the hog market are trial lawyers.”

NPPC is most concerned with the interim final rule, set to take effect next month, which would broaden the scope of the Packers and Stockyards Act (PSA) on the use of “unfair, unjustly discriminatory or deceptive practices” and “undue or unreasonable preferences or advantages.” Specifically, the regulation would deem such actions per se violations of federal law even if they didn’t harm competition or cause competitive injury, prerequisites for winning PSA cases.

USDA in 2010 proposed several PSA provisions – collectively known as the GIPSA Rule – that Congress mandated in the 2008 Farm Bill; eliminating the need to prove a competitive injury to win a PSA lawsuit was not one of them. In fact, Congress rejected such a “no competitive injury” provision during debate on the Farm Bill. Additionally, eight federal appeals courts have held that harm to competition must be an element of a PSA case.

The Farmer Fair Practices Rules, NPPC pointed out in its comments, “invites the courts to regulate the meat industry in ways that courts have repeatedly refused to do. This judicial regulation threatens to replace the innovative practices that have arisen over time out of specific market conditions and based on the needs of the industry as a whole.”

“Eliminating the need to prove injury to competition would prompt an explosion in PSA lawsuits by turning every contract dispute into a federal case subject to triple damages,” Maschhoff said. “The inevitable costs associated with that and the legal uncertainty it would create could lead to further vertical integration of our industry and reduce competition.”

An Informa Economics study found that the 2010 GIPSA Rule coupled with the interim final rule would cost the U.S. pork industry more than $420 million annually, with most of the costs related to the interim final rule’s “no competitive injury” provision.



Discussions Begin Heating up for the 2018 Farm Bill: What Does it Mean for the Cattle Industry?
Brian R. Williams, Asst Extension Professor, Dept of Ag Econ, Mississippi State University

The 2016 elections are now a distant memory and the transition into a new presidential administration is nearly complete. Only three cabinet picks have yet to be confirmed, one of which is the Secretary of Agriculture whose confirmation hearing is set to begin Thursday. Now that the dust has settled a bit and most of the cabinet picks have been confirmed, talk about the 2018 Farm Bill has begun to heat up. Which programs will be cut, which will be changed, how will the new programs look, and will any funding be cut? These are just a few of the questions being asked regarding the next farm bill. Much of the focus has been on traditional row crops, with cotton and STAX gathering attention here in the South while potential changes to ARC and PLC dominating discussions in other parts of the country.

With all the discussion surrounding row crops, where does that leave livestock producers? On the dairy side of things, perhaps the item gathering the most attention is the Margin Protection Program (MPP). Under the MPP portion of the current farm bill, dairy producers receive payments based upon a "margin" that is calculated using a predetermined formula and current feed and milk prices. Any time the two-month calculated margin falls below the producer selected coverage level, a payment is received. At the time the farm bill was written, this seemed to be a great program that would provide a safety net for dairy producers. This did not turn out to be the case, as feed prices have fallen substantially and producer payments have been limited over the life of the farm bill. Current discussions regarding changes to the MPP include the possibility of altering the formula, using regional prices rather than national prices, and scrapping the program completely in favor of a new program similar to the revenue-based programs in past farm bills.

For beef cattle producers, there are two program areas that are being discussed. First, there is a discussion surrounding animal disease. Much of this discussion concerns the response to a potential foot and mouth disease (FMD) outbreak. The most recent case of FMD in the U.S. was several decades ago, however there has been a push to develop more robust preventative measures and a better response plan if an outbreak were to occur in the future. The current plan is based upon a "stamping out" philosophy that involves euthanizing any infected or susceptible animals. However, this approach is dated and was developed in an environment entirely different than current conditions. We are living in a much more mobile world today, and cattle are being shipped across state lines much more frequently. As a result, discussions surrounding a multi-faceted approach of euthanasia and vaccination are becoming more frequent. The next farm bill could offer a few solutions in the form of funds to support the creation of a vaccination supply, indemnity programs if depopulation were necessary to stop an epidemic, or authorizing new FMD vaccine manufacturing facilities in the U.S.

Second, what changes are coming to the livestock insurance programs? There are currently two primary insurance products for cattle producers: Livestock Gross Margin (LGM) insurance and Livestock Risk Protection (LRP) insurance. Although these insurance products are readily available, the adoption rate remains very low. Rather, most in the cattle industry elect to "self-insure" in the form of working capital. One proposed solution to increase enrollment and make the insurance programs more appealing to producers is to increase the premium subsidies. However, it is going to be quite difficult to find additional funding for the new farm bill, so any subsidies offered to cattle producers would likely have to come at the expense of reduced funding for other commodities.



NPPC TRADE TEAM VISITS COLOMBIA, PERU

The National Pork Producers Council's trade team this week completed a series of meetings in Peru and Colombia to explore promising opportunities for U.S. pork producers. Peru is a small but growing market where current consumption of U.S. pork has considerable potential to expand. Colombia is an important and rapidly growing pork market where strong cooperation has expanded market opportunities in mutually beneficial ways.

In partnership with U.S. pork producers and the National Pork Board, domestic producers have worked aggressively to expand consumption of pork in Colombia. The meetings included a gathering of NPPC’s Trade Policy Committee in Lima to discuss trade policy issues and to meet with Peruvian pork producers, U.S. Embassy officials and Peruvian government officials. Nick Giordano, NPPC counsel and vice president of global government affairs, traveled to Colombia where he explored trade opportunities with staff for Colombia’s national pork producers group, government officials, including the Colombian Minister of Trade, and importers.



ASA Supports National Biodiesel Board Anti-Dumping Petition

The American Soybean Association (ASA) has signaled its support for an anti-dumping and countervailing duty petition filed yesterday by the National Biodiesel Board (NBB). The petition alleges that Argentine and Indonesian companies are flooding the U.S. market with dumped biodiesel—biodiesel sold at less than the cost of production—and subsidized biodiesel in violation of America’s trade laws. Soybean oil remains the primary biodiesel feedstock in the U.S., and the biodiesel industry provides a significant market for surplus soybean oil that is a co-product of protein meal production. ASA President Ron Moore, a soybean farmer from Roseville, Ill., confirmed ASA’s support for the NBB petition in a statement:

"Biodiesel imports from Argentina and Indonesia have flooded the U.S. market in recent years and these imports receive trade and market distorting subsidies in their home countries that provide an unfair advantage over U.S. biodiesel. Soybean farmers have a vested interest in the biodiesel industry, having made substantial investments over the past several decades to established and build a domestic biodiesel industry and market. We believe an investigation by the Department of Commerce and the International Trade Commission will show that unfair subsidies provided by Argentina and Indonesia are resulting in imports being unlawfully dumped on the U.S. market. We look forward to the appropriate anti-dumping and countervailing duties being imposed to remedy these unfair and unlawful practices.”



IDFA Urges Congress to Address Dairy Risk Management

Michael Dykes, D.V.M., president and CEO of the International Dairy Foods Association (IDFA), testified before the House Committee on Agriculture about dairy policy and its impact on potential provisions in the 2018 Farm Bill. Dykes said that IDFA's top priority is to enhance demand for U.S. dairy products--both at home and in the global market.

"First and foremost, the dairy industry needs better mechanisms for risk management -- and that's on both the farm and processor side," Dykes said. Dykes pointed out that processors could also benefit from better tools to protect against the negative impact of price volatility on the U.S. dairy industry.

"Just as farmers are now looking to improve the Margin Protection Program and the Livestock Gross Margin insurance program, dairy manufactures also need access to effective risk management tools in this farm bill," said Dykes. "Forward contracting has provided an important mechanism for manufacturers to directly contract with individual farmers or their cooperatives at a fixed price to reduce price volatility. This program should now be expanded to include all classes of milk and be made permanent."

Dykes said that IDFA will work collaboratively with National Milk Producers Federation to improve risk management for both farmers and processors.

The global marketplace is critical, Dykes noted, as that is where the U.S. dairy industry can expect the most potential growth.

"Exports are driving growth in demand for U.S. farm milk," said Dykes.

Dykes testified that Mexico is the number one export market for U.S. dairy, accounting for one-fourth of total dairy exports. "We need to ensure that a renegotiation of NAFTA preserves our important Mexico market and gains increased access to the Canadian market," said Dykes.

Dykes also said that the Asia-Pacific region, already the world's largest market for food and agriculture, is expected to double by 2050. "Reducing and eliminating tariffs and other restrictive agricultural policies in this region will allow our dairy industry to compete," said Dykes.

On the domestic side, Dykes noted that only 1 out of every 10 Americans consumes the recommended 3 servings of dairy a day as recommended by the 2015 Dietary Guidelines. To address this shortfall and encourage more dairy consumption, Dykes advocated for voluntary incentives under the Supplemental Nutrition Assistance Program (SNAP) and more school milk options.