Thoughts from the Middle of Nowhere

It is amazing how quick the cows can gain condition after weaning. I only weaned a week and a half ago and the cows are all over the trauma and look so much better it isn't even funny. They are fuller and not as shelly and they look like they are putting on weight. This is the real advantage of weaning at the end of September. The cows pick up so well afterwords.

One of the largest costs to cattle production in Montana is winter feeding costs. If you can get the cows to gain weight before winter starts your feeding costs will be lower so your cost of production. A lot of guys worry about weaning weights of calves and there whole goal is to wean the heaviest calves so they wean later. I hate to tell them, but the ultimate goal in this business is money made per cow. Early weaning, which cuts feed costs, means more money per cow, not weaning weights.

Does all this have anything of relevance for most of you? No. Just talking.

Talking isn't doing It is a kind of good deed to say well; and yet words are not deeds. William Shakespeare

Everybody’s herd has a bottom end. I like that. I've never heard it put that way but I really like that. Otherwise, this article is like reading my mind and past actions. I really liked this part here:

Some culling thoughts would be to early wean calves and cull in this order: open cows, unsound cows, dry cows, cows in poor condition, those cows that calved last, older cows (10 years or more) and poor-performing cows. Send this truck to the nearest livestock exchange and utilize the cash accordingly.

You couldn't quote better the measures I have taken to manage my herd through the drought years we have been having. Every one of these things I've done and in about the order they list. Just like the article talks about, it improved the bottom line.

I guess great minds think alike, and in my case it don't take a College degree to see what makes sense.

Information's pretty thin stuff unless mixed with experience. Clarence Day

Gov. Brian Schweitzer has been running around all over the place trying to get some company interested in coal to fuel plant on the Otter Creek coal tracts and he hasn't found any traction for his idea yet. I've pointed out time and time again that with no infrastructure at Otter Creek, no company was going to be interested.

Now I see an interesting announcement today.

Companies team up on Colstrip coal-to-liquids project

Peabody Energy, the largest private coal producer in the world, and Rentech, Inc. Tuesday announced that they have entered into a joint development agreement to evaluate sites in the Midwest and Montana for coal-to-liquids projects that would transform coal into diesel and jet fuel.

Peabody had a mine near Colstrip, which is now being reclaimed, and owns coal reserves nearby. The projects would be sited where Peabody has large reserves and would be designed using Rentech's proprietary Fischer-Tropsch coal-to-liquids process.

So, some companies are interested in doing this and the Governor isn't even mentioned anywhere. Private companies are just doing business and they are trying to do it without interference by the Governor. Notice where they are interested in doing this too, a developed coal mine that has the industrial infrastructure to support such a project. Not some place like Otter Creek that doesn't even have a mine yet. The Governor needs to get his ducks in a row. Instead of trying to get a coal to fuel plant as the first thing at Otter Creek, maybe he needs to think about mining some coal first and building up some infrastructure to support such a thing. Any reasonable businessman can see little details like this are important, which just shows you how much of a politician Gov. Brian Schweitzer is and not the man of the people he pretends to be.

On a personal level I am happy to see such a development and hope the comapnies involved can get it off the ground. Trying to convince people to allow such a plant, like the NPRC, is going to be very tough. But then the important things are never easy.

Details create the big picture. Sanford I. Weill

Japanese steer suspected of BSE tests negative

Tests of a 20-month-old Japanese steer for bovine spongiform encephalopathy have come back negative. The steer was slaughtered last week and initially tested positive for BSE, but according to wire reports, further tests showed that the young Holstein did not have BSE.

I will repeat, the 20 month old steer did not have BSE. The implications if it did would have been staggering but since it didn't we don't have to worry about it.

This is the reason that the USDA doesn't want to test every cow that is slaughtered in the US for BSE. They are afraid they would be overwhelmed with false positives worrying consumers. They claim it is the cost stopping them but testing would be cheaper than the NAIS plan they are pursuing. The only difference is the cost of testing would be borne by the meat packers where the cost of NAIS is borne by the producers of cattle, the ranchers. Guess which side the USDA came down on. No surprise there.

Worry is interest paid on trouble before it falls due. W.R. Inge

I find this interesting piece out of Australia this morning but I can find no verification anywhere else on what it says.

US reaches agreement with Japan to reopen beef market

US Department of Agriculture (USDA) officials says they have reached an agreement with Japan on steps to reopen that country's beef market.

Imports of US beef were suspended in January after a shipment of veal was found to include bone material prohibited by the Japanese.

USDA acting under-secretary Chuck Lambert told a Senate panel his team has answered Tokyo's remaining questions about January's foul-up at a New York veal plant and set in motion steps to resume beef trade, starting with a plant safety checklist.

"Once that takes place, we will have people in the plants and do those verification audits, just as fast as we can," he said.

I haven't really seen anything else about this but if it's true it will be good news. How much it will help is a lot more questionable. All the flipping and flopping on US beef has made the Japanese consumer wary of US beef so it will take a long time to rebuild their trust in buying US beef. I think it will happen but we can't push it. Let it take it's time and the cattle industry will win back the market. Push to hard and we will lose it forever.

First, I will have to see it open again to worry about the rest though. Let's keep hoping.

Men talk of killing time, while time quietly kills them. Dion Boucicault

I always love articles like this one.

Cattle Cycles: Where Are We & Where Are We Headed?

If you are in the business and keep minimal track of what is going on you know where we are and what is happening with out some "expert" telling you. I could see this article if it was targeted to people not in the business but this site is designed for cattle producers.

I guess us uneducated, stupid hicks out on the ranch are too ignorant to know these things so they have to tell us. To hell with them. I guess the reporters and "experts" have to do something to justify what they make.

There's no point in going on living unless we make the assumption that the situation of life is optimal. Alan Watts

Japanese shun U.S. beef, eat Australian

Kenji Miyoda, savoring a bowl of rice topped with beef from Australia, raw egg and spicy sauce, believes Australian beef is far safer than American beef.

"It tastes OK, it's cheap, and it fills me up," the 27-year-old banker said gobbling down his 450 yen ($4) meal at Sukiya, a nationwide chain that placed a full-page newspaper ad to declare it's opposed to serving U.S. beef because of safety concerns.

Miyoda's view is typical among many Japanese. Australian beef was once viewed as tough and tasteless compared to its U.S. counterpart, but that stereotype is vanishing on quality upgrades by switching feed to grain, instead of just grass, to cater to the Japanese palate.

No surprise here. Australia is taking advantage of the situation and you can't blame them. We had opened this market back up until the USDA screwed up and let banned meat get shipped over to Japan. I wonder if the USDA's screw-up could be considered a "taking" and beef producers will get just compensation for the governments screw-up? Yea, if you believe that I have some ocean front property near Billings MT for you. Take it and smile is about all you can do.

On the bright side got almost .75 inches of rain yesterday. Spring is looking good with some moisture and the grass growing and calves running all over the place. Looking pretty promising for this year, if the market holds up and the USDA quits "helping us" by destroying our markets or driving us out of business with their burdensome NAIS program. With friends like the USDA, who needs enemies?

The most terrifying words in the English language are: I'm from the government and I'm here to help. Ronald Reagan

Boy, don't disagree with our Governor. He gets a might testy.

Schweitzer pans professors' business ideas

Gov. Brian Schweitzer has criticized two University of Montana professors for suggesting that Montanans debate some controversial changes in law to make the state more attractive to business.

Among the issues raised by business professors Jack Morton and Michael Harrington are whether Montana ought to enact a right-to-work law and weaken its strong constitutional guarantee of a clean environment. They also questioned Montana's high workers' compensation premiums and the lack of an at-will employment law, making it harder to fire an employee.

Without naming the professors, Schweitzer last week blasted them for trotting out "the same worn-out, tired" solutions Montanans heard when their economy lagged in the 1990s.

Try to bring some points out for discussion and Schweitzer can't stand it. I am not saying I agree with what these guys are saying but what is so wrong with bringing the point up that they did?

"Whenever we compare Montana's business sector to surrounding states, we are envious," the professors wrote. "We often wonder why Montana hasn't grown more of the types of firms that we see in our neighboring states of Idaho and South Dakota."

They cited the presence of Hewlett-Packard, Micron Technology and J.R. Simplot, among others, in Idaho. South Dakota attracted Citibank and grew Daktronics and Gateway Computers.

"We'd love to have our students get jobs in Montana instead of going to Boise, Idaho," Morton said in an interview.

Wanting Montanans to get jobs in Montana, seems like an idea to me.

In an article in the booklet distributed at the seminar, the UM professors suggest Montana's business climate suffers compared to that of Idaho and South Dakota. They suggest Montanans at least ought to debate whether to change their laws and constitution to make them more business friendly.

"Montanans at least ought to debate whether to change their laws and constitution to make them more business friendly." This seems reasonable to me, a "friendly" debate on the issue would air the issues out. I don't see anything that was said that needs such a virulent attack. Name calling, "pointy headed people and not listening to the issues brought forward is a sign that the Governor is being a little close minded on the issues.

One other thing to bring to the front here on business in Montana. The Governor has been busy flying all over creation looking to woo some company to build a coal to fuel plant to Montana to expand our business opportunities. Instead of flying all over at government expense trying g to woo them look what Wyoming is doing.

Breaks for coal plants considered

With some of the nation's largest energy companies already eyeing Wyoming as a possible site for construction of coal gasification and liquefaction plants, some people question the need for proposed legislation that would give firms massive tax breaks on plant construction.

No such plants have been built in Wyoming, but the state is competing with Montana and other states in the effort to lure some here.

Now I've never been a big fan of tax breaks to bring businesses in but if Wyoming does this the chance that Montana will be able to compete for a coal to fuel plant is slim to none. Companies just love these tax breaks, I can't blame them, and will go where the best deal can be offered. A sweet talking Governor in Montana is not going to trump these kinds of deals found in Wyoming. Discussing how to make Montana more business friendly might be the right thing to look at.

Do I want Montana to follow Wyoming's lead when it comes to energy development? No. I feel the damage they are doing to the environment is too great for Montana but to debate business issues in Montana might be the right thing to do at this point. Relying on the same old formula we've used for years isn't bringing in the boom of business that other states are seeing so looking things over is a wise idea. A debate on the issues never hurt anyone, unless they are afraid they are going to lose the debate.

You win some, lose some, and wreck some. Dale Earnhardt

Is the beef industry sure getting mixed signals from Japan now.

Japanese impressed with U.S. meat processors

Japanese officials think the U.S. processes beef perfectly, according to a story from the Dow Jones Newswire. Leaders from Tokyo traveled to Kansas for a first-hand look at processing plants and American slaughter procedures.

Sounds real good to me, maybe we can get this market open again. Then I see this.

Most U.S. beef processors safe: LDP team

Most U.S. beef processing facilities looking to export beef to Japan are taking sufficient measures to satisfy the criteria agreed upon between the United States and Japan, an inspection team of the ruling Liberal Democratic Party said Tuesday

"Most facilities are doing enough," Matsuoka told a news conference. "The irresponsible system of the agricultural department has caused a great deal of trouble for diligent factories."

Now all of a sudden I am hearing "most processors" are doing okay with this. Sounds like things are changing a little. It is interesting to note, they blame the USDA for the problems we are experiencing. They are part of the problem in my mind but can be the solution if they wish to rouse themselves to it.

Then finally I hear this.

Japan won't lower safety standards for US beef imports

Japan will resist lowering its safety standards for U.S. beef imports, even if an international animal health organization says Tokyo's rules are too strict, the agriculture minister said Tuesday.

Translated that means if the US takes all scientifically reasonable precautions, Japan still won't let the beef in. Real simple, no matter what we do they are going to block beef imports from the US into Japan. I guess that explains the mixed signals. they don't want to get the US mad so they play like things are looking good even though they plan on keeping the status quo, their border shut.

I guess I just don't understand what their problem is here. It's not like they raise a lot of beef in Japan. The majority of their imports come from Australia now. What's it going to hurt to open it up to the US too. I guess the enjoy their whale meat too much.

Protectionism is the use of scare tactics, the use of unsound scientific information in an attempt to protect our market. In this case I believe that sound science dictates that it is time to open the border. Christopher Bond

Cattle herd expansion continues.

All cattle and calves came out at 97.102 million head or 102% of a year ago. Analysts had been expecting 101% to 101.5%, with an average guess of 101%. Total cows were at 42.311 million head, up 1% from a year ago, in line with estimates. Beef and milk cows came out at 101%, as expected.

Important part for me there is total cows are up 1% from last year. It's not surprising since with the high cattle prices producers are keeping back more heifers to grow their herds to take advantage of the prices. The real trick is to realize when prices are likely to start going down because of overproduction. I don't see that for at least a couple of years yet so I like everybody else, is trying to expand their herds. Boom or bust cycle. Ride the high of the boom and hope you survive the bust.

A little hint, proper planning keeps the bust from hurting you, you don't have to hope, you've got things well in hand and make your moves to take advantage of the situation. That's the key, not hope, planning.

It's much more effective to build a company quietly and soundly during a down market than it is to, say, try and ride a boom-and-bust cycle during a high-flying market. Jim Rogers

The "dumb cowboy" phenomenon rears its head again.

Workshops teach about herd issues

"Cattle producers have experienced strong prices in the last few years due to short beef supplies and strong consumer demand," says Duane Griffith, Montana State University Extension economist. "Now, when the drought may be easing, ranchers are wondering about increasing herd sizes even though there is still uncertainty about future feed resources and whether the drought is really over."

Griffith said expanding now comes at the cost of paying high prices for breeding animals or forgoing sales of high-priced heifer calves.

[sarcasm]Wow, I didn't know prices were strong, and you mean to tell me it would cost me money to buy cows or that I wouldn't make as much money, in economic terms its called an opportunity cost, if I didn't sell as many heifers? A dumb cowboy like me just wouldn't recognize these facts without a little help from those college educated type people. What would I do without them.[/sarcasm]

Don't get me wrong, I know these people are trying to help but it always strikes me as a little condescending like us dumb cowboys don't know any better.

There is perhaps no phenomenon which contains so much destructive feeling as moral indignation, which permits envy or to be acted out under the guise of virtue. Erich Fromm

USDA faked anti-competition investigations, audit says

The Agriculture Department has pretended to investigate anti-competitive behavior among stockyards and meat companies since 1999, but in hundreds of cases it hasn't actually filed complaints, says an audit released Wednesday.

Senior officials blocked investigations from being referred to department lawyers, who can file complaints or refer cases to the Justice Department, according to the audit by the agency's inspector general.

In the meantime, employees were told to create the appearance of a high rate of enforcement by logging routine letters and reviews of public data as investigations, the inspector general said.

Iowa Sen. Tom Harkin, who sought the audit, said top officials were blocking investigations "and then cooking the books to cover up the agency's lack of enforcement."

"America's producers have faced an increasingly integrated and consolidated market, but in the past five years, USDA has made virtually no attempt to investigate or take action against unfair and anticompetitive market behavior," said Harkin, senior Democrat on the Senate Agriculture Committee.

Any body that stops by here regular knows I have a beef with the USDA and it's policies that are pro big meat packer and anti consumer/small producer and here again is more proof of my wild allegations. The big meat packers have bought and paid for the USDA, a government agency, and run it for their benefit. By keeping the USDA from enforcing the Packers and Stockyards Act effectively they control the cattle industry and the prices they pay for cattle. Don't get me wrong, the meat packers bought and paid for the USDA/NCBA and they are getting what they paid for. I just wonder when the Legislative and Judicial branches of our government are going to catch on to what is going on and get control of the situation. This might be a start but I doubt it. I'm sure the USDA will bury the report somehow.

The real laugh line in the article is at the end.

With about 150 employees and a budget last year of $19.5 million, the Packers and Stockyards Program regulates a livestock industry worth about $120 billion.

"Regulates a livestock industry?" The whole story is about how they don't regulate the industry. I guess the meat packers are laughing all the way to the bank.

Corruption is worse than prostitution. The latter might endanger the morals of an individual, the former invariably endangers the morals of the entire country. Karl Kraus

UPDATE: 1/20/2006 I see the article I linked about this situation changed while I was gone. The quotes you see above are accurate to the article I originally read and commented on. The changed article claims the USDA head is going to fix the problem. Yea, and pigs can fly.

Reports detail financial costs of CBM restrictions

Separate federal and state reports on a proposed crackdown on coalbed methane pollution say the rule could slow development, potentially costing the industry and state coffers hundreds of millions of dollars.

....

The industry could lose as little as 6 percent of expected profits, or as much as 74 percent, depending upon a number of variables such as natural gas price, the report concluded.

Do you realize that if they lose 6-74% of the profit, they will still profit from this venture? Just not as much as before and they help the environment out. Is this a bad thing? I think not. I am always for a business making a profit but they need to do it in a reasonable, ethical way and polluting our water sheds and removing all our scarce drinking water isn't very ethical.

Remind people that profit is the difference between revenue and expense. This makes you look smart. Scott Adams