NEW "KID" on the BLOCK!

"Roses" has a new baby bull calf. She is an outstanding Mom!

MEATPACKERS OPPOSITION to GIPSA RULE SHUTS OUT SMALL LIVESTOCK PRODUCERS

Fair, open and transparent markets are essential to rural economic recovery.  We need strong rules to curb corporate control over livestock and poultry markets and to foster a livestock industry in which small and mid-sized farmers and ranchers can thrive. - Sustainable Agriculture Coalition




House blocks GIPSA* rule, defeats income limit
Friday, June 17, 2011 

The U.S. House on Thursday knocked down proposals to set new income limits for farm program recipients and slash funds for an important export promotion program.... The House scrapped Rep. Jeff Flake’s (R-Ariz.) proposal to set an $250,000 annual adjusted gross income (AGI) limit for farm program eligibility. The current limit is $500,000 in AGI from off-farm sources or $750,000 in on-farm income...Flake also lost a bid to eliminate funding for the popular Market Access Program, which helps producer groups promote products overseas.
 (Read the Article here)

THREE YEARS AGO, Candidate Barack Obama promised to stand up for open andfair markets for family farm livestock producers.

THREE YEARS AGO, Congress passed a farm bill directing USDA to write rules to end price discrimination against small and mid-sized farmers by corporate meatpackers and processors and to ensure fair production contracts for poultry and hog producers.

ONE YEAR AGO, USDA issued a proposed rule that would reign in some of the worst abuses of giant meat packers and poultry companies

THREE WEEKS AGO, Our congress caved in to large special interests (Meatpackers and Integrators) and stripped any meaningful legislation out of the Proposal that could help the small farmer and rancher.

The proposal to set a lower annual AGI (Adjusted Gross Income) would have channeled more money to the small agricultural producer. Instead, by "stripping" the lower AGI proposal, the majority of subsidy dollars will continue to go to large corporate agricultural operations.

The Market Access Program that was also scrapped would have opened up avenues for small livestock producers and groups to overseas markets...these markets are currently almost impossible to enter without the clout of large enterprise. 

The following best explains what this means to livestock producers:

The Case for Competition

By: 

 John Crabtree

Livestock markets don't work. I should say they don't work for family farmers and ranchers - meatpackers don't have any complaints.

If you raise cattle, hogs or sheep then you sell into a largely dysfunctional market where packers hold all the cards and routinely discriminate against smaller producers by offering massive, volume-based premiums to large, industrial producers (and deep discounts to smaller farmers and ranchers).

How massive? Take a small hog farmer with a 150 sow farrow-to-finish operation that receives a small-volume discount of 6 cents per pound for his market hogs - a conservative estimate for volume discounts. At 250 pounds for each of 3,500 hogs marketed, that would mean an annual loss of $52,500 for that producer, simply for being small.

USDA is poised to propose a new rule under the Packers and Stockyards Act that will, hopefully, help address this price discrimination against smaller producers. The rule will define the term "unreasonable preference," the granting of which is prohibited under the Act but has not been well enforced absent a definition of what constitutes an "unreasonable preference."

The packers will hate whatever they come up with. But, honestly, USDA has given the packers a pass on competition laws for decades, so why should we listen to them on this one? Family farmers and ranchers want, need and deserve competitive markets in which to sell their livestock. Agriculture Secretary Tom Vilsack should end the volume-based discrimination against small volume producers and breathe some life into their livestock markets. - Center for Rural Affairs

What does this mean to the average consumer? Higher prices, fewer choices, and the continued decline of an American Icon...the Family Farm








*Grain Inspection and Packers and Stockyards Administration - Part of the U.S.D.A

TEXAS DROUGHT THREATENS NATIONAL BEEF SUPPLY

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.


Beef is the No.1 selling protein in the United States. Last year, consumer spending on beef totaled $74.3 billion. Per capita consumption of beef in 2010 was 59.6 pounds while per capita spending for beef was $240, according to industry research firm CattleFax.

 In the state that gave birth to the cowboy and spawned the culture of cattle drives, modern-day ranchers are fighting for survival. Severe drought (the worst in 44 years) and several million charred acres from wildfires have delivered a devastating "gut" punch, forcing ranchers to take drastic measures to save ranches across Texas. The state's livestock industry has lost $1.2 billion under withering conditions, according to the Texas Agrilife Extension Service, a service branch of Texas A&M University.

In Texas and other states with large cattle herds, the beef supply chain starts at the ranch. Ranchers own a herd of beef cows, each of which gives birth to a calf once a year. The mother nurses the calf and the pair graze on grass through the summer and into the fall, whereupon the fattened calf is sent to market.

This year, ranchers should be reaping the benefits of high prices, low supplies and high demand for their beef. The demand for calves from feedlots, where cattle add hundreds of pounds before slaughter, seems insatiable. Without rangelands full of nutritional forage, cows will struggle for nutrients. The herd will lose interest in breeding and cows may not provide enough milk for their calves, bringing the critical first step of America's beef cycle to a halt.

Among all meat production, beef producers typically incur some of the highest production costs. For example, costs for raising cattle are much higher than for poultry farming. Cattle producers pay more for each animal, grazing lands, fertilizers, feed and processing systems versus poultry farmers. Also the time it takes to prepare cattle for sale is much longer compared to other meats. It takes just 46 days for chicken to be market ready, but can take up to two years for beef.

Exacerbating the situation further is the shrinking number of cattle available for consumption. As beef producers struggle with the escalating drought, rising business costs, and mounting debt, more of them are selling their heifers for meat production, instead of breeding them to expand the herd. In Texas, the largest producer of cattle in the U.S., the "state herd" is down nearly 18% since 2008. In fact, ranchers and farmers across the country are shrinking their herd sizes bringing the nation's cattle herd count to it's lowest since 1958.


ADDING SALT TO THE WOUND:

The outlook for more rain looks grim. The National Weather Service's Climate Prediction Center forecast below-normal rainfall for Texas over the next month at least.

A Mother and Her Son

      

                                                             A "Hug" for Mom                 

                                     

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

MERRY CHRISTMAS!

I'll be back the first week of January...2011!

CATTLE BARONS - TODAY

PART 2.2 of The Series: A LIVING WAGE FROM COMMERCIAL CATTLE

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.

A cattle baron is a man who possesses great power or influence in the activity of herding/caring/selling of cattle. - Unknown

 The Civil War devastated economies in the South and in particular Texas. However, Texas had a distinctly singular and bountiful resource. Millions of longhorn cattle roamed wild across the state. Due to the ravages of the war and the steady stream of immigrants, beef was in heavy but short supply across the nation. To complicate matters further, Texas had plentiful supplies of beef but, no distribution system (railroads)...Kansas (three states and hundreds of miles away) had the rail heads to get the beef to market. 

In the late 1800's, some daring and intrepid cattlemen rounded up longhorns by the millions and herded them north across Texas, Oklahoma, and into Kansas. In doing so they gave rise to two, distinctly American, icons: the Cowboy and the Cattle Drive.

"Driving Cattle circa 1887
(John Grabill)

In less than two decades, following the Civil War, great herds of these longhorn cattle were rounded up and driven north to the rail heads in Kansas. These wild and unpredictable bovines were only worth about a dollar a head in Texas, but upon arrival to the shipping points in Abilene, Dodge City and Wichita, a single longhorn could fetch as much as forty dollars. More than six million longhorns made the three-month trek north. Often referred to as the greatest migration of livestock in the history of the world, cattle drives and the cowboy became living legend. 

Ranch Brands on Marker
 Doan's Crossing, Texas
Learn More

The moving of several thousand wild head of cattle, at one time, over five hundred miles of rugged prairies, encounters with murderous outlaws, and hostile indians brought fame and fortune to a select few. Men such as Charles Goodnight, Oliver Loving, John T. Lytle, the Blocker brothers, and a host of others took enormous financial as well as personal risk (Loving was killed in an Indian attack while leading a cattle drive) to reap the considerable rewards. 


Legendary ranches were born as well. 

The Y.O., XIT, JA, King Ranch, 6666, Waggoner, and Matador Land and Cattle were among the largest providers of cattle at that time (Side Note: With the exception of the Matador, all of the above named are still active cattle ranches today). These men were literally "Barons of the U.S. Cattle Market" and wielded considerable influence in the pricing of beef.

That was then...This is now.  

The open range became fenced pasture land. Cattle are now "driven" to market in eighteen wheelers via a modern highway system. Charles Goodnight, Oliver Loving, the XIT, and 6666 no longer influence the pricing of beef. In fact they are now merely characters and entities of a romantic and colorful past...just "history"as they say.

"Driving Cattle" - Modern Day

Today there are only four "cattle barons". Their decidedly unromantic names are Swift, Cargill, National Beef, and Tyson. These conglomerates are well financed, ruthless buyers of beef "on-the-hoof". Together they control and process 69% of the beef produced in the United States. In doing so, these "Big Four" heavily influence the price of live cattle.

"The farmer is the only man in our economy who buys everything at retail, sells everything at wholesale, and pays the freight both ways." - President John F. Kennedy

LITTLE KNOWN FACT:

Many of the cattle drives were "staffed" by cowboys between the ages of 15 to 20. There was such a shortage of labor that many of the "cowboys" were actually...cowGIRLS. Many of whom cut their hair and made themselves appear as boys to get a job that was dirty, physically exhausting, and paid about a $1.00 per day. 

To learn more about the considerable influence and heroism of women in the American West visit the National Cowgirl Museum and Hall of Fame in Fort Worth.  Learn More Here

PART 3: A Living Wage From Commercial Cattle: What Goes Up...

LIFE AT THE "CRAPS TABLE"

PART 2.1 - of The Series: A LIVING WAGE FROM COMMERCIAL CATTLE

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.

"When you are ranching and farming, you have to take what the buyer offers." (John Hodges)

Few people are formally trained in the study of economics, but everyone makes economic decisions.
Any attempt by an individual to earn or spend money involves economic decision making. Earning and
spending or buying and selling influence the way our economy functions. It is this economic influence that also makes the cattle market move each day by establishing prices for cattle and putting beef on the consumers’ table.

Economics is also thought to be a mathematical science by many people since economists are
constantly working with numbers trying to predict the outcome of some economic event. Actually, economics is the study of human behavior. Economists try to relate how people will react to changes in supply and demand, to higher or lower interest rates or to increases in the cost of production.

Beef cattle marketing is also a study of human behavior. Cattle prices are determined by how much beef people choose to buy and sell in the market place. If people want to buy more beef than is available in the marketing channel, then the price of beef is bid up rationing the beef among buyers. If producers need to sell more beef than people are willing to buy, then the price of beef will be forced downward to move the excess supply.

Cattle producers often say that to make money in this industry you must buy low and sell high, but that only works when the individual who is selling has some way of influencing the price. Since the overwhelming majority of beef is sold via auction, the price the individual producer receives is thus dictated by commission agents (Buyers) representing the interests of large feedlots and/or beef processors. Which means they will try to buy at the lowest price possible....

We learned (above) that economics is based on human behavior and the supply/demand function of pricing. So, a producer could just hold his/her cattle until demand is high and thus improve the price...simple, right? Uh...no. The cattle being sold today will not be available to the consumer for 6-12 months. The price received today is based on a "best guess" of what consumer demand will be at a future date...which means the "buyer" will hedge the price against unknown factors...thus, no matter what the individual producer does, the selling of cattle in the auction process is nothing more than a "roll of the dice".

PART 2.2: A Living Wage From Commercial Cattle: Cattle Barons - Today

Sometimes, life just seems to make sure you are doing the things that you should be doing...

These past few months have been spent tending to "family"


New postings 
coming SOON!