Broadening and Deepening 2012 Drought is Taking its Toll on Cattle Markets- Feedlots Hit With Flood of Red Ink in Their Closeouts    

The drought of 2011 had a lot of impact on the cattle industry in Oklahoma, New Mexico and Texas. The 2012 drought is broader and is having its impact on the cattle industry as well says Jim Robb, executive director of the Livestock Market Information Center in Denver, Colorado.

"This is a drought that is very broad-based and it's really obviously impacting the corn market and pasture and range conditions to a much broader scope than what happened in last year's drought.

"So, it's a more difficult drought impact to figure out than a year ago, but is certainly especially pressuring calf prices. We actually raised our fed cattle prices forecast slightly, but still that industry suffers deep in the red ink."

The deepening drought threatening the corn crop in the Midwest has sent feed prices skyrocketing and that is pressuring segments of the cattle market, Robb says.

You can hear more from Jim Robb in part one of a two part Beef Buzz conversation on this with the LMIC.  Click here to go there. 

You can also jump over and check out Part Two of this series- which details how much red ink is flowing down the thru the alleyways of feedlots here in the heartland.  Robb details the June results of the Center's analysis of cattle feeding returns.  Robb says 2012 is shaping up to be a horrendous year for the cattle feeding segment of the beef cattle business- perhaps the worse ever from a financial point of view.    Click here for part two in our Beef Buzz series on these comments from Jim Robb, who talked at the beginning of this week with Eric Atkinson on Agriculture Today.

  

Retail Prices for Meats, Dairy and Eggs Decline Slightly 

Retail food prices at the supermarket declined slightly during the second quarter of 2012 with protein staples-meats, cheese, milk and eggs-showing the greatest drops in price, according to the latest American Farm Bureau Federation Marketbasket Survey.

The informal survey shows the total cost of 16 food items that can be used to prepare one or more meals was $50.91, down $1.56 or about 3 percent compared to the first quarter of 2012. Of the 16 items surveyed, 12 decreased and four increased in average price compared to the prior quarter. The cost for the overall basket of foods fell about one-half of 1 percent compared to one year ago.

Most of the quarter-to-quarter decrease in the marketbasket of foods was due to lower retail prices for sliced meats and dairy products.

Click here to read more.

Chairwoman Stabenow Calls for CFTC Rules to be Finalized, Highlights Importance of Protecting Consumers, Small Businesses

Senator Debbie Stabenow, Chairwoman of the U.S. Senate Committee on Agriculture Nutrition and Forestry, pressed the nation's chief financial regulators to implement the Wall Street Reform and Consumer Protection Act. At an oversight hearing, Chairwoman Stabenow said the recent failures of firms like Peregrine Financial Group and MF Global, as well as trading losses at JP Morgan and the ongoing LIBOR scandal, all underscore the need to implement the bill, which was passed by Congress more than two years ago.   

"Many derivatives are still trading in the dark and some financial institutions are still taking risks that threaten our economy," Chairwoman Stabenow said. "We need these markets to have integrity and market participants need certainty so they can plan for compliance and make business decisions for the coming months and years. Businesses, farmers and ranchers need to know these markets are safe for trading and hedging risk. And American families need to know their jobs aren't going to disappear - again - because of excessive risk-taking by a reckless few."

Chairwoman Stabenow continued, "If anyone is wondering why we need these rules, all you need to do is turn on the news," Chairwoman Stabenow said. "There's the LIBOR rate-setting scandal, the Eurozone crisis, the demise of Peregrine Financial Group, significant trading losses at JP Morgan, and the MF Global bankruptcy."  

You can read more of this story by clicking here.

USCA Disappointed in House Ag Committee Action Against COOL, GIPSA

The U.S. Cattlemen's Association (USCA) today expressed disappointment in the House Committee on Agriculture's move to undermine the nation's country of origin labeling (COOL) law and to prohibit the Department of Agriculture (USDA) from conducting any more work on the proposed GIPSA regulations.

During markup of the House Farm Bill on Wednesday, July 11, committee members passed by a voice vote an amendment introduced by Michael Conaway (R-TX) and Jim Costa (D-CA) to repeal rules GIPSA had already implemented dealing with market competition and manipulation and prohibiting the agency from any further work on the matter. During committee deliberations Costa and Conaway maintained that the GIPSA regulations went beyond congressional intent.

An amendment introduced by Randy Neugebauer (R-TX) would require the Secretary of Agriculture to submit a report within 90 days after passage of the farm bill detailing the steps USDA will take to comply with a WTO ruling on COOL. The amendment passed on a roll call vote of 34:12. Passage of the amendment could potentially leave the entire COOL law open to repeal during the farm bill conference between the Senate and House. 

You can read more about this story by clicking here for our web page.  Included in our report on the reaction from the USCA are links to our recent Beef Buzz shows that have audio from the debate on these two amendments that were adopted and are now part of the House Ag Committee Farm Bill proposal. 

NASCOE Comments on USDA Proposal to Alter County Committee Structure

The National Association of FSA County Office Employees (NASCOE) commends USDA and Secretary Vilsack for the recent proposal to initially appoint socially-disadvantaged farmers as voting members of the county committees to increase diversity on Farm Service Agency (FSA) committees.

NASCOE President John Lohr stated, "For far too long county committees have been unfairly criticized by some for not adequately representing their constituencies. The Secretary's proposal should help eliminate this criticism and allow county committees to focus on the delivery of programs to America's farmers and ranchers."

NASCOE is further suggesting that the Secretary consider including the following recommendation which has already been submitted as a comment on the proposed rule by the National Association of Farmer Elected Committees (NAFEC):

"NAFEC urges that beginning in 2013, at-large voting seats be established for the underrepresented groups and in 2014, nominations and elections be held so that all members of the county committees are elected by a majority of the eligible voters. NAFEC is very concerned about the proposed appointment process which would inject politics into the county committee system and we believe it would be a huge problem for the Secretary of Agriculture to identify and appoint numerous qualified committee members each year. NAFEC feels very strongly about maintaining local accountability the current elected system affords and encourages USDA to continue this process."

Click here for more on this story.

State Senator Calls on Governor to Reject Funding Transfer for Youth Expo

State Senator Patrick Anderson called upon the governor on Tuesday to intervene and stop the proposed transfer of $2 million from the budget of the state Department of Agriculture to the Oklahoma Youth Expo.

The budget proposal approved this year by the Legislature increased appropriations to the State Department of Agriculture by $2 million. Anderson said the funds apparently were not intended to be used by the Department of Agriculture, but instead were to be diverted to the private livestock show held annually in Oklahoma City.

"The budget bill passed by the Legislature contains no language about the funds being spent on the Oklahoma Youth Expo," said Anderson, R-Enid. "Therefore, the only way the funds can be spent on the Youth Expo is for the Department of Agriculture to be directed by the Governor to spend those funds on this project through the agency's Budget Work Program."

 Jonathan Small, fiscal policy director of the Oklahoma Council of Public Affairs, has questioned lawmakers and state agencies about the legality of such an expenditure. He details his exchange in a two-part blog post Part 1 and Part 2.  He contends there is no legal authority to transfer government dollars to a non-governmental organization in this manner.

Bob Funk, chairman of the board of directors of the Youth Expo in an article in the Tulsa World said the money is awarded to students to be used at state universities.

Anderson said the transfer of taxpayer dollars to a private charity, without the transparency demanded by the normal budgeting process, leaves state government open to the appearance of impropriety.

"The Oklahoma Youth Expo is a fine event, but it is not appropriate for the state to spend $2 million of the taxpayers' money to support it," Anderson said. "The Governor has the authority to direct that these funds be spent on the Youth Expo - but she also has the authority to stop this. I hope she chooses to do the latter."  

Genetically-Engineered Corn, Cotton, Soybean Varieties Dominant Choice of Farmers

Genetically engineered (GE) varieties of soybeans, cotton and corn are the preferred choice of U.S. farmers over their conventional and organic counterparts, according to newly released data from the U.S. Department of Agriculture (USDA).

In the USDA's Economic Research Service (ERS) report, Genetically engineered varieties of corn, upland cotton, and soybeans, by State and for the Unites States, 2000-12, key findings include:

Of all cotton grown in the United States, 94 percent is a genetically engineered variety in 2012 (up from 90 percent in 2011).

Of all soybeans grown in the United States, 93 percent is a genetically engineered variety in 2012 (down slightly from 94 percent in 2011; was at 93 percent in 2010).

Of all corn grown in the United States, 88 percent is a genetically engineered variety in 2012 (was 88 percent in 2011, and 86 percent in 2010). 

You'll find more on this story as well as a link to the full USDA study by clicking here.