"The "COW" DAYS OF SUMMER

A mid-day Siesta (Spanish for resting) in 100+ degree weather. 

Texas is now in the grip of the worst drought on record...

USDA GETS IT RIGHT WITH "KNOW YOUR FARMER" PROGRAM

"Today, there is too much distance between the average American and their farmer and we are marshaling resources from across USDA to help create the link between local production and local consumption" - Know Your Farmer, Know Your Food


The USDA is getting this one right. The Know Your Farmer, Know Your Food initiative emphasizes the need to create a "reconnection" of U.S. farmers to the consumer. Some 50+ years back, the majority of our food came from farms within a days driving distance. Today, most of the grocery market offerings have traveled from California to New York, Florida to Texas...not to mention the fruits, vegetables, and meats that are imported from Mexico and South America in the "off season". Now, under the auspices of the 2008 Farm Bill, the USDA has launched a program to promote local farmers to the consumer.


 The following, from the "Know Your Farmer" web page, actually states the program mission very clearly:

_Know Your Farmer, Know Your Food (KYF2) is a USDA-wide effort to carry out President Obama's commitment to strengthening local and regional food systems. 
_We know that demand for local and regional foods is strong, as consumers across the country are looking to connect with their food and the people who grow and raise it:

_The number of farmers markets has more than tripled in the past 15 years and there are now more than 6,100 around the country;

_In 1986 there were two community supported agriculture operations, today there are over 4,000;

_There are farm to school programs in 48 states, totaling more than 2,200 and up from two in 1996;

_All 50 states in the U.S. have agricultural branding programs, such as "Jersey Fresh" or "Simply Kansas;"

_And the National Restaurant Association declared "locally sourced meats and seafood" and "locally grown produce" as the top two trends for 2011.

Local and regional markets often provide farmers with a higher share of the food dollar, and money spent at a local business often continues to circulate within community, creating a multiplier effect and providing greater economic benefits to the area.

An Economic Research Service Study (May 2010) identified barriers to local food market entry and expansion, including capacity constraints for farms, a lack of infrastructure for moving local food into mainstream markets, and regulatory uncertainties. This is the work of the Initiative.

Our mission is to strengthen the critical connection between farmers and consumers and supports local and regional food systems. Through this initiative, USDA integrates programs and policies that:

_Stimulate food- and agriculturally-based community economic development;

_Foster new opportunities for farmers and ranchers;

_Promote locally and regionally produced and processed foods;

_Cultivate healthy eating habits and educated, empowered consumers;

_Expand access to affordable fresh and local food; and

_Demonstrate the connection between food, agriculture, community and the environment.

Know Your Farmer, Know Your Food also leads a national conversation about food and agriculture to strengthen the connection between consumers and farmers.

"The largest 12.4 percent of farms in terms of gross receipts received 62.4 percent of all government payments in 2008." - Farm Commodity Policy 

I heartily applaud the USDA for this initiative and have high hopes that this is a "turning point" in government recognition of the plight of the family farm in America.




 

The WACKY WORLD OF CATTLE and COMMODITY PRICES

AUTHOR'S NOTE - All of the premises presented in this series of posts are solely based on personal experience as a livestock producer and strictly as a cattleman (I have a basic understanding of farm commodities markets, but no real experience with such, and cannot speak with much authority from the farm side of things; Though I would think there are going to be some similarities). The information represents my opinion and is based on personal experiences. Any factual information may or may not be referenced, but be aware, the majority of the content is personal conjecture. Dialogue and comment are welcome.


Well...several months of research and data down the drain! 


Here I was, all set to show you how the retail price to the customer was going to sky rocket this summer, how the price of corn and feed grains were too high for cattle producers to profit and, in general complain about how the cattle producer was being squeezed. 


Then, last week (June 30, to be exact), The USDA released "The Crop Report". 


Let me set this up...
In a nutshell, I was going to show:


1. Based on the late spring flooding of hundreds of thousands of acres of corn through the Midwest to Arkansas and Louisiana, the persistent cool weather and rains across the farm belt that have delayed annual plantings, and the devastating effects of storms and tornados across the mid-section of our country as well as through the South would drive the prices of corn and grains to all time highs. 


2. Because these commodities were the back bone of "grain fed" beef, the price of consumer prices for beef would rise, while the cattle producer would struggle to make a profit DUE to the higher costs associated with feeding cattle grain. 


AND, I was right (ever so briefly) ...corn and soybean prices were soaring and cattle producers, who are currently reaping very high prices for their cattle, were having their profit squeezed by the high cost of feeding corn...


Which brings me back to "The Crop Report"......

Turns out, the expected 2011 corn harvest will be much higher than expected and the harvest of other important food grains are also going to be well above average......This caused both corn and soybeans to back off of their "highs" by more than 10%. Grain commodities will continue to trend down over the next few weeks to very manageable cost levels for the beef industry.

GRAINS-U.S. corn extends losses after USDA report
                                                                                        Reuters News Service

So, what we have, currently, is the most rare of events in the cattle markets. The producer is actually receiving record prices for cattle while also enjoying "cheap feed"!! In other words, cattle producers are in a position to maximize profits not only through "lower input costs", but also while receiving historically high prices for their livestock.

"

Compared to last week’s sharply higher market, yearling feeder cattle 

continued their momentum and sold firm to 5.00 higher.  Steer and heifer calf 

demand improved on the heels of last week’s gains and traded from steady to 

6.00 higher with instances as much as 10.00 higher.  The most impressive 

signal of this week’s higher trade was the fact that it took place on fairly 

heavy receipts for this time of year with no help from the CME futures or fed 

cattle trade until the tail-end of the week." - USDA CATTLE AUCTION REPORT, JULY 1, 2011

Meanwhile, consumer prices for retail beef are still going up due to the inverse relationship with the above financial factors...the record high prices paid to producers are being "passed along" to the consumer.


"...higher corn costs—all higher costs—ultimately wend their way through the system and wind up in the retail price of the product..."  Burt Rutherford, Senior Editor, Beef Magazine