Thoughts from the Middle of Nowhere

I find stories like this one so blatantly obvious that I lack the ability to respond to them.

Ethanol, cattle prices linked by corn

As the price of corn rises - largely due to increased ethanol production - the price of feeder cattle falls, said Ron Torell, Cooperative Extension livestock specialist.

Cattlemen who want to learn how to combat this problem should attend the annual Cattlemen's Update program Jan. 7-11 in various Nevada communities and by video conference.

What really blows my mind is the article is aimed at cattlemen. If cattlemen don't know that higher corn prices lead to lower calf prices, they have a bigger problems. Like a non functioning brain. Don't get me wrong, we as cow-calf producers need to figure out how to weather this storm but by putting it the way they did makes us look like idiots.

It pisses me off, people are idiots, but what are you going to do? The world is full of idiots. That's why we'll never have flying cars. People don't know how to drive. Dustin Diamond

I didn't comment on the USDA's OTM rule yesterday allowing older Canadian Cattle to be imported into the US. It's one of those situations that I have mixed feelings about.

The people opposed to the OTM rule say that they oppose it because it is a food safety issue. We could possibly be importing BSE into the US from Canada and have additional BSE problems here. There is a very slim chance this is true. I don't quite buy that this is the true reason for their opposition. It's to protect our market is the true reason, at least that is the way I see it and I don't have a problem with that.

The people supporting the OTM rule, besides Canadian Cattlemen, say that it is a matter of market fairness. Both the US and Canada are considered "minimal risk" areas for BSE and their should be minimal trade restrictions. We in the US want the Asian markets to open up to more of our beef product under this "minimal risk" rule. If we believe in the "minimal risk" rule and want other countries to respect it, shouldn't we allow in cattle to the US under the same "minimal risk" rule that we want other countries to respect for us? Seems awful hypocritical if we don't allow the cattle in. We can't have it both ways here.

Either we as a country believe in the "minimal risk" rule or we don't. If we want Asian countries to follow the "minimal risk" rule then we should. That's why I am torn on this issue. I hate hypocrisy and fighting this OTM rule strikes me as hypocrisy. I did see where the Farm Bureau is calling for increased testing of Canadian cattle for BSE as a possible compromise to groups that oppose the OTM rule on food safety grounds. This seems to make sense and might be just the right compromise to make this work.

In the meantime we will have to see what comes of R-Calf's lawsuit to stop this trade. It's really truly no surprise that they are doing this. The courts are their favorite battle ground and that is where they are fighting this.

I hope you see why I am conflicted on this issue. We want other people to respect a rule but we don't want to? That's not right. Mutual respect is something I learned a long time ago and I have to live to my code.

An once of hypocrisy is worth a pound of ambition. Michael Korda

The US and South Korea are still talking about beef.

South Korea, US Open Beef Trade Talks

South Korea and the United States opened beef trade talks Thursday on Washington's demand for greater access to the Asian nation, which is maintaining stringent quarantine regulations citing concerns over mad cow disease.

The two days of meetings in Seoul come one week after inspectors found a recent U.S. beef shipment contained bone that is banned, and South Korea suspended further American beef imports.

It seems like all we do is talk to South Korea about this situation. I sometimes get frustrated with what seems like all talk and no action but these things take time I know. There might even be movement on bone in beef.

South Korean officials declined to comment on the prospect of this week's negotiations. But Yonhap news agency said Seoul is expected to agree to import rib bones while maintaining a ban on imports of "special risk material" such as spinal columns, skulls and eyes, as well as intestinal parts — believed at risk of carrying mad cow disease.

I've said before I believe this to be coming with the price of beef coming out of Australia going so high. I'm just tired of waiting is all.

The only problem is time. Seth MacFarlane

It appears that the Bush Administration is taking to heart the noise from Congress about no Free Trade Agreement with South Korea until beef trade is normalized.

Rep. Denny Rehberg, R-Mont., said Wednesday that U.S. Trade Representative Susan Schwab has assured him that the Bush administration will not push a free-trade agreement with South Korea until the country opens its market to U.S. beef.

In a meeting with Schwab, Rehberg told her he would not vote in favor of a trade agreement unless South Korea has started importing all U.S. beef products again.

"She looked me in the eye and said, 'I will not bring forward a Korean package for a vote in the Congress until the beef issue is solved,' " Rehberg said. "The good news is, she made the commitment and I take her at her word. And that's the strongest statement I've heard so far" from the Bush administration.

This is really good news for the beef industry. I think normalization would happen anyway since the Australian beef market is collapsing so South Korea will have to open up to the USA for beef since the weakness of our dollar makes our beef more attractive. Sen. Baucus and Rep. Rehberg are really working hard for cattlemen on this one. Being as cattle are such a large p[art of Montana's economy it makes sense. They are up for re-election.

The goal is to normalize trade relations based on sound science and consumer protection. Mike Johanns

The Australian cattle industry appears to be in meltdown because of drought and grain prices down under.

Record high grain prices have thrown Australia's A$4 billion ($3.5 billion) beef cattle industry into disarray, emptying feedlots, cutting cattle saleyard prices and triggering price rises for domestic and exported beef.
The world's biggest beef exporter by value and the second-biggest exporter by volume, parts of Australia's beef industry have begun to shut down after feed grain prices doubled since June because of the decimation of crops by drought.

Reading the article it sounds like US beef's biggest competitor for the Asian markets is in a little trouble and American producers might benefit. Drought has really caused problems down there and they are not producing the grain to feed people let alone cattle.

Looming imports of grain -- only the second time Australia has been forced to import wheat since colonial times -- will not assist the cattle industry.

Drought is always the shits and really hurts producers. I feel for these guys but I have to see how I might be helped by this just like I can see how drought in this country can help me. Like always I don't wish problems on anybody but I can look on the bright side as how I might benefit. Maybe it's the wrong way to see things.

Everything has beauty, but not everyone sees it. Confucius

For all the trouble I hear about getting beef into the South Korean market, it appears US beef has increased 10 times in the last couple of months so progress is being made. Then check this out.

With the country set to discuss new standards for the beef imports with the United States as early as next month, the agony of local stockbreeders is expected to deepen further when the full-scale imports including bone-in beef such as ribs resume.

So it looks like we might increase our exports to South Korea with some bone in products. This is great news. Glad to see it. I know the drop in the dollars value has something to do with beef's strength overseas. That's the way it works and I'm not complaining. Keep that demand for beef up and ranchers should do okay for awile.

Eat Beef. It's good food that's good for you.

All journeys have secret destinations of which the traveler is unaware. Martin Buber

I know I am a little behind on this one but life sometimes gets in the way of things. The USDA has approved the import of Canadian cattle over 30 months of age into the US. This is, to say the least, a very controversial decision in Cattle producer circles which is why I say I should have commented on this sooner.

Why is this so controversial? It has to do with BSE and trade issues. The Internationally accepted age of cattle where you don't have to worry about BSE, is 30 months of age. As long as a critter is under 30 months of age you don't have to worry about BSE and over 30 months of age, you worry about it. This USDA rule recognizes Canada as a "minimal risk" country which is eligible to import cattle into the US over 30 months of age since they are at "minimal risk" of having BSE.

That's the basis of the controversy in producer circles. According to the NCBA and the meat packers, Canada is at "minimal risk" and should be allowed to import cattle and groups such as R-Calf and USCA think that Canada has a higher risk for BSE than "minimal" and don't want them importing cattle over 30 months of age into the country.

Some more information. (I lost the rest of this the first time around so I am trying to recreate it) As I said, this whole thing has to do with BSE. It is generally accepted that BSE is spread form cow to cow via feed. Use of cattle by products in the slaughter process being fed back to other cows starts and spreads BSE. Both Canad and the US instituted a feed ban a number of years ago that does not allow cattle to be fed back to cattle to prevent the start and spread of BSE, we won't go into my personal theory that there is a naturally occurring form of BSE. The US has had two domestic cases of BSE and Canada has had approximately 10 cases of BSE. Both cases in the US were in cows that were born after the feed ban was instituted. This is not the case with some of the Canadian cases. Some of these cattle were born after the feed ban was put in place. This leads producers in the US to question the effectiveness of the Canadian feed ban and question whether Canada is actually a "minimal risk" country or not.

This is the whole situation that has led USCA to ask the USDA to change the rule calling Canada a "minimal risk" country for BSE and allow them to import cattle into the US. They claim that the importation of Canadian cattle will hurt our export markets since other countries don't want Canadian cattle.

So far I have just laid out the facts. Let me give you my take on the situation. Most people in the greater world stage aren't going to understand or want to know all the facts I have laid out here. They are going to see two things that don't make sense to them. They are going to see that the US wants countries around the world to accept beef from cattle that are over 30 months of age even though they have had BSE found in the country while stopping Canada from importing cattle over 30 months of age into the US because they have had cases of BSE in Canada. This appears to be sheer hypocrisy. They aren't going to care about when the feed ban was instituted and when the cattle were born in which country. They are just going to see the hypocrisy of the US position if the USCA were to prevail and Canada was not allowed to ship cattle over 30 months of age into the US.

Anybody that has read this site very long knows that I almost never defend the governments position on things and NEVER agree with the USDA on things. This time though I am going to have to give the USDA credit, I won't go so far as to defend them but give them credit. I truly believe they have done this with the thought in mind that if we want other countries to take our beef from cattle over 30 months of age, we have to bite the bullet and accept cattle from Canada and show the world that this is the right thing to do.

This is the thought I have had in mind all along with this situation and why you have never heard me ranting about this rule when it was proposed. We can try to explain away the differences in the US and Canadian BSE situation all we want, the perception of the situation is going to rule the day though. If we don't allow Canadian beef in over 30 months of age we will be seen as hypocritical when we try to get other countries to accept US beef over 30 months of age. Perception in this case trumps facts and we have to suck it up. Sorry if you don't like to hear that but that's the way it goes sometimes. We have to do things we don't like to move forward in life and this is one of those cases.

The adjustment of reality to the masses and of the masses to reality is a process of unlimited scope, as much for thinking as for perception. Walter Benjamin

Beef herd expansion in the US is still on hold so the outlook for beef prices holding up is good. That's good news to me the producer, we won't talk about you the consumers. The funny thing is that weather is still the driving force here just like it is on fires recently. Everybody keeps trying to blame the fires on a lot of different things but in truth, the weather is driving it as it's driving the cattle herd. The ability for producers to expand has been hampered by the continuing drought conditions in the US.

There are places where there has been years of drought affecting production but severe hits seem to move around the country in waves causing people to sell mother cows stifling any increase in the beef herd expansion. Combined with continued good demand for beef this is all good news for me but nothing surprising. The writings been on the wall for a while now but it's good to see the numbers.

It would have been nicer to see a little higher prices for calves this fall. Some people would say they are high enough but with the cost of energy and feed I'm not so sure. I think the reason they stayed at last year levels and didn't go up any was that feed prices are so high due to the drive to turn our food into fuel. Everybody knows my opinion of that so I won't go into it but I don't like it.

This news is sure to make a lot of cattle producers happy. I don't blame them, good news is always nice.

We are all primary numbers divisible only by ourselves. Jean Guitton