Cattlemen's Capitol Concerns Archive
Cattlemen's Capitol Concerns
January 10, 2008
The Cattlemen’s Capitol Concerns (CCC) is a weekly report from Washington, D.C., giving an up-to-date summary of top policy initiatives concerning the cattle industry; direct from the National Cattlemen’s Beef Association (NCBA). Please feel free to reprint in full or in part. If you’d like to include NCBA’s logo, contact us at 202-347-0228.
Trade Exports Update: NCBA’s Chief Economist Gregg Doud says U.S. beef exports to our NAFTA trading partners continue to expand and should set new records for both Mexico and Canada for 2007. Year-end trade data won’t be finalized for quite some time, but Doud offers a quick overview of where things currently stand:
Without full access to Japan and Korea, Mexico remains the top destination for U.S. beef and beef variety meat exports. It is likely that 2007 will exceed last year’s record of $1.2 billion in sales. Through October, exports to Mexico were down two percent in volume, but they were up four percent in value. Another key feature is that the per pound value of U.S. beef exports to Mexico continues to grow from about $1.40/lb in 2003 to more than $1.70/lb today.
Year-to-date exports to Canada are up 33 percent in volume and 36 percent in value. Driven by the decline in the value of the U.S. dollar, the record pace of U.S. beef exports to Canada should end up very near $600 million in 2007, easily making Canada our second largest customer. This would exceed any previous year by roughly $150 million.
The forecast for U.S. beef outside the “Big 4” (NAFTA plus Japan and Korea) markets predicts an increase of 22 percent based upon trade data through October. Vietnam is up 276 percent with ASEAN (Vietnam, Philippines, Singapore Thailand, Malaysia and Indonesia) up 210 percent. Exports to the EU are up 144 percent; Central/South America is up 58 percent; and the Caribbean is up 15 percent.
Through October, we exported 80,530 metric tons to the Middle East, up 7 percent on the year. This is mostly variety meat trade, with the United States now sending more variety meats (mostly livers) to Egypt (72,000 mt year to date) than we ever sent to Russia (60,000 mt in 2003). Angola is the third largest market for U.S. variety meats at 8,000 mt, and Mexico is consistently our top destination for beef variety meats at 139,000 mt.
U.S. beef producers remain flat out angry that South Korea and China still won’t buy U.S. beef, and that access to Japan is running at a pace about one-fifth below where it should be due to BSE-related trade restrictions. Sales to the rest of the world will likely set new records again in 2008. However, this will be overshadowed by the $6-8/cwt still missing in fed cattle prices due to the lack of access to South Korea and Japan. Also, the fact that U.S. beef may not be available for travelers to this summer’s Olympic Games in China strikes an offensive tone among U.S. cattlemen.
We already have over 15,000 mt on the books in the first week of this year to Mexico because of a change in Mexico’s tax law in 2007. In the coming year, industry analysts see continued (4-5 percent) growth in business to Mexico and another huge year for exports into Canada. Growth in exports to the EU is certainly a hot topic at the moment, and the big wild card is Russia where exporters are seeing interest in U.S. beef (rounds) begin to open up rather than the traditional beef variety meat (liver) exports.
On Implementation of NAFTA, Conner Urges Continued Trade Expansion: Now that the North America Free Trade Agreement (NAFTA) is fully implemented (effective January 1, 2008), Acting Agriculture Secretary Chuck Conner touted the Administration’s pro-trade agenda with an eye toward continuing that success with Colombia and Panama.
The U.S.-Colombia Trade Promotion Agreement and the Panama Trade Promotion Agreement are trade deals that still await Congressional approval. The Peru Trade Promotion Agreement was passed by Congress and signed by President Bush in December.
“In this hemisphere, the positive lessons from NAFTA have helped facilitate the move toward the free flow of agricultural products between an ever expanding number of countries,” said Conner. “Our recently concluded trade agreements with Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua and Peru, and, pending Congressional approval, Colombia and Panama, will strengthen democratic institutions, strip away barriers to trade, eliminate tariffs, open markets, and promote investment, economic growth and opportunity.”
NCBA is urging for passage of the Colombia and Panama free trade agreements. These extremely well negotiated agreements reduce – and eventually eliminate – all tariffs for U.S. beef, giving U.S. producers the ability to compete aggressively against Argentinean and Brazilian beef in these markets.
“Since its inception in 1994, NAFTA has been a remarkable success story for all three partners,” said Conner. “It has contributed to significant increases in agricultural trade and investment between the United States, Canada and Mexico and has benefited farmers, ranchers and consumers throughout North America.”
Economic Strain Could Impact Beef Demand: In remarks today, Federal Reserve Chairman Ben Bernanke said he will consider further interest rate cuts to counter any adverse dynamics that might threaten U.S. economic or financial stability.
The Fed is scheduled to meet on January 29-30, and economists believe a decision to lower interest rates is inevitable. The Fed lowered its key rate three times last year. A housing slump, weaker home values, harder-to-get credit and high energy prices all "seem likely to weigh on consumer spending as we move into 2008," Bernanke said.
NCBA says this trend could spell trouble for beef sales in the future. “Currently we are seeing a record amount of pork production,” says NCBA Chief Economist Gregg Doud. “More affordable competing proteins in the meat case, combined with concerns about the U.S. economy, could have an effect on beef demand in the coming months.”
Texas Ag Contributes $100 Billion in Economic Impact: According to the Texas Department of Agriculture, forecasts predict that Texas’s vital ag sector will achieve a record $100 billion in economic impact for the state. This will surpass even the highest previous level of $85 billion in 2004.
"All Texans should be proud of the dedicated men and women who put food on our tables and clothes on our backs,” said Texas Ag Commissioner Todd Staples in remarks this week at the Texas A&M AgriLife Conference.
The Texas agriculture industry employs nearly 2 million, contributing approximately 9 percent of the gross state product. Not only is Texas the top state in the nation in number of cattle, but the state is currently leading the nation in biodiesel production, and some of the largest increases this year are from crops used to produce biofuels.
More information on the conference is available at http://tti.tamu.edu/conferences/2008agrilife.
Southeast Producers Feel the Hurt of Record Drought: Without adequate rain to maintain pastures and grow hay and forage, the worst drought on record in the Southeast is continuing to hammer the area’s cattle producers. Some producers are reporting that feed costs have more than doubled, leaving many struggling to keep up with the rising cost of inputs.
Many producers have been forced to liquidate their herds because they can no longer afford to feed them. Drinking water for cattle is also in short supply as ponds and creeks dry up, forcing producers to purchase water for cattle, along with feed. In addition, producers are reporting that in many instances cattle are as much as 100 pounds lighter than normal.
It is estimated that up to one quarter of the United States’ calf production is in the Southeast, the area comprised by Virginia, North Carolina, South Carolina, Georgia, Alabama and Florida. The USDA says cattle processing is up 19 percent in this region compared to the same timeframe in 2006.
For NCBA, disaster assistance for cattle producers is always a top priority. NCBA worked with Congress to make available $600 million in disaster assistance payments as part of last summer’s Emergency Supplemental Bill. Subsequently, NCBA worked to extend the eligibility date for assistance to include producers, such as those in the Southeast, who were hurt by natural disasters in 2007. In the Senate version of the Farm Bill, NCBA is supporting legislative language calling for a permanent disaster assistance program. This Permanent Disaster Relief Trust Fund (PDRTF) would end the current ad hoc nature of agriculture disaster assistance programs, and instead have one permanent program that could provide aide to producers when they need it most.
Congressional Schedule: Both houses of Congress remain out on recess for the holidays. The House of Representatives is scheduled to reconvene next week, on January 15th. The Senate is scheduled to reconvene on January 22nd.
International Livestock Congress: The 2008 International Livestock Congress takes place next week, on January 15th in Denver. Jay Truitt, NCBA’s vice president of government affairs, and John Lundeen, NCBA’s executive director of market research are among the scheduled speakers.
The International Stockmen’s Educational Foundation sponsors the International Livestock Congress each year in Denver, Colorado. The objective of the Congress this year will be to focus on global beef opportunities and the key international issues that impact the cattle and beef industries. For more information, visit www.theisef.com.
Louisiana Cattlemen’s Convention: The Louisiana Cattlemen will host its 11th Annual Beef Industry Symposium and 2008 Convention & Trade Show on January 11-13 in Baton Rouge. Among the scheduled speakers are John Queen, NCBA president, Bill Donald, NCBA’s policy division vice chairman, and Jay Truitt, NCBA’s vice president of government affairs. More information is posted at www.labeef.org.
Check Out Our Offerings for NCBA’s PAC/PEF All-Breed Bull and Horse Auction! Held in conjunction with the 2008 Cattle Industry Convention & Trade Show, our 3rd annual NCBA-PAC/PEF All-Breed Bull and Horse Auction offers convention attendees a chance to purchase some of the best genetics and seed stock in the nation, and support NCBA-PAC at the same time!
The auction is scheduled for 6:30 pm on Wednesday, February 6, 2008, at Booth 101 in the trade show at the Reno Sparks Convention Center.
Thank you to the outstanding operations that have contributed to this exciting event so far, including:
- Bieber Red Angus Ranch of Leola, South Dakota
- Coldwater Cattle Company of Holly Springs, Mississippi
- Dalebanks Angus Ranch of Eureka, Kansas
- Errer Hill Farms of Friedens, Pennsylvania
- Fink Beef Genetics of Randolph, Kansas
- Gardiner Angus Ranch of Ashland, Kansas
- Genex Cooperative of Shawano, Wisconsin
- Leland Red Angus Ranch of Sidney, Montana
- Marshall Cattle Company of Burlington, Colorado
- Nichols Farms North Carolina Division of Clinton, North Carolina
- Pollard Farms of Enid, Oklahoma
- One Penny Ranch of Foley, Minnesota
- Ridgefield Farm, LLC of Dahlonega, Georgia
- Seven L Ranch of Devers, Texas
- Steele Land and Livestock of Anita, Iowa
- TC Ranch of Franklin, Nebraska
- Thomas Angus Ranch of Baker City, Oregon
- Wulf Limousin Farms of Morris, Minnesota
- Yon Family Farms of Ridge Spring, South Carolina
Donators receive national marketing for their operation through the National Cattlemen's Magazine, pre- and post-convention exposure to all NCBA members in a sale catalog distributed at convention, their name displayed prominently at convention events, a ribbon badge signifying their donation, and also VIP passes to the NCBA-PAC event featuring Tracy Lawrence on Friday evening!
It isn't too late to join this exceptional group! Contribute to the 3rd Annual NCBA-PAC/PEF All-Breed Bull and Horse Auction by contacting Lindsay Bowman at 202-347-0228 or lbowman@beef.org by January 11, 2008!
Pre-registration Closes THIS WEEK for Cattle Industry Convention: The 2008 Cattle Industry Annual Convention and Trade Show will be held February 6-9 in Reno, Nevada. The meeting will feature joint and individual meetings by NCBA, Cattlemen's Beef Promotion & Research Board, American National CattleWomen, Inc., Cattle-Fax and the National Cattlemen's Foundation.
Pre-registration and housing for the 2008 Cattle Industry Convention closes THIS WEEK on January 11th. Register NOW to receive significant discounts off of the onsite registration fees. If you miss our pre-registration deadline, you can still attend. Registration will be open on-site in Reno starting on Wednesday, February 6th.
This is the time of year when NCBA’s producer-members gather to discuss our industry’s priorities at issue forums and committee meetings. On February 9th, members will vote on policy for the coming year at NCBA’s Board of Directors Meeting. Also, don’t miss the opening general session “Accelerating Growth” featuring keynote speaker Daniel Burrus,
one of the world’s leading technology forecasters and business strategists. For more information and for a complete schedule of events visit our website at www.beefusa.org.
NCBA to Hold 2nd Annual Career Fair at 2008 Annual Convention & Tradeshow: After last year’s success of the first-ever career fair, NCBA is proud to host the event again at this year’s convention in Reno.
The Cattle Industry Convention and Trade Show is one of our largest cattle industry events, creating an opportunity for the industry to develop recruiting partnerships, and we’re expecting a number of college students and future business leaders to attend! Employers of all types with open positions are encouraged to participate. Whether you want to target a handful of college students or you want to conduct a nationwide search, the 2008 Career Fair will simplify your recruiting efforts and help you find and hire the right people—fast!
NCBA’s Human Resources Department and AgCareers will host the Career Fair on Thursday, February 7th, 11:00am - 2:00pm, in the Trade Show Lounge. Employers interested in participating simply need to send a representative to staff a FREE table! If you are interested in being a part of this unique opportunity, please contact Erica Miller at 202-347-0228 or emiller@beef.org for more details.
Don't Miss NCBA’s Cattlemen to Cattlemen: On this week’s edition of NCBA’s Cattlemen to Cattlemen airing January 8-12, we look back at some of our favorite stories from our first season on the air. We’ll return to Nashville and the 2007 Cattle Industry Annual Convention where we follow a first time attendee. Then, join us as we travel cross country with the 2007 class of the Young Cattlemen’s Conference. We’ll also remember cattle industry legend W.D. Farr and learn more about a scholarship offered in his honor. Finally, we visit the state of Maine to learn more about the IRM Red Books and how they’re produced (The 2008 IRM Red Books are available now. To order yours, call 1-800-525-3085).
On next week’s episode airing January 15-19, we’ll take a look at the history of the Beef Improvement Federation to learn more about the important role it plays in our industry. The BIF works to standardize programs and methodology in the Beef Industry. To learn more visit: http://www.beefimprovement.org.
NCBA’s Cattlemen to Cattlemen on RFD-TV provides weekly news and features for cattle producers across the country. The show airs Tuesdays at 8:30 p.m. and is rebroadcast Wednesdays at 4:30 a.m. and 12:30 p.m., and Saturdays at 10 a.m. All times are Eastern. Make sure YOU tune into NCBA’s Cattlemen to Cattlemen on channel RFD-TV. For more information or to check out past episodes, visit www.cattlementocattlemen.org.
Media Contact: Karen Batra at 202-347-0228 or kbatra@beef.org.
This publication is funded by cattle producers and other industry supporters through their voluntary membership contributions to NCBA. To join the tens of thousands of cattle producers from across the U.S. in working to preserve our legacy, contact NCBA Member Services at 1-866-BEEF-USA or Membership@beef.org.