HUNTIN' DAYLIGHT -- THE STORIES IN 2010

by: Wes Ishmael

Forgive Father Time for looking so haggard and bewildered as he limped from the party welcoming the new year. But, he had a time of it: global economic recession, federal government running roughshod over capitalism, populism run amok and all of the rest.

Pardon, too, the infant 2010 for looking so reluctant; there's so much to be done and undone. These are just a few likely key issues that will shape the fortunes of the cattle business this year.

Economy — Depending on which prognosticator you listen to, the nation's economy has bottomed out and begun the slow, long road to recovery. Or the worst is just fixing to happen.

Ben Bernanke, Federal Reserve Chairman explained in a November speech to the Economics Club of New York, though financial conditions have improved considerably in recent months, significant challenges remain.

“On the one hand, those who see further weakness or even a relapse into recession next year point out that some of the sources of the recent pickup—including a reduced pace of inventory liquidation and limited-time policies such as the ‘cash for clunkers' program—are likely to provide only temporary support to the economy,” Bernanke said. “On the other hand, those who are more optimistic point to indications of more fundamental improvements, including strengthening consumer spending outside of autos, a nascent recovery in home construction, continued stabilization in financial conditions, and stronger growth abroad.

“My own view is that the recent pickup reflects more than purely temporary factors and that continued growth next year is likely. However, some important headwinds—in particular, constrained bank lending and a weak job market—likely will prevent the expansion from being as robust as we would hope.”

Consumer Beef Demand — In the past two years the beef industry has lost all of the domestic demand it had increased for the previous eight years or so. Based on the domestic beef demand index, 2009 ended about where it was in 1998 when it was finally beginning to reverse the trend of the previous two decades.

At this fall's annual meeting of the Texas Cattle Feeders Association, Randy Blach, CattleFax Executive Vice President said, “We've averaged $83 to $84 on fed cattle this year. If we had the same demand we had a year ago, our market would be averaging $94 to $95 per hundredweight.”

Globally, U.S. beef exports still lag behind levels before the 2003 discovery of bovine spongiform encephalopathy.

“We still aren't back to the same levels of beef exports that we were pre-BSE. We were exporting 2.5 billion lbs. in 2003. We're going to be lucky to be at 1.8 to 1.9 billion lbs. this year,” Blach said. If U.S. beef was operating under the same trade protocols with Japan as it is with South Korea, he adds, “it would be worth another $60 to $70 per head across our fed cattle market.”

Deciding the Ethanol Blend — As expected, the Environmental Protection Agency (EPA) avoided its December 1 deadline for deciding whether or not to allow increased ethanol content in fuel by delaying the decision until mid-2010. Last March, the Growth Energy organization requested a waiver to allow up to 15 percent ethanol content from the current 10 percent. EPA says it will make a final determination by mid-2010. Increasing the limit threatens to add to the price misery and volatility already caused by government-mandated ethanol-from-grain production. Especially this year, though the corn crop is estimated to be the second largest on record, there are all kinds of questions about the quality due to the late harvest.

Food Safety—This is how ludicrous it all has become:

“Food producers must be obligated to produce food that is free of pathogens. It is the responsibility of the food producer, not the consumer, to make sure our food is safe to eat,” said Senator Dianne Feinstein (D-CA) as she introduced a bill (S. 2819) in December that would prohibit the sale of any food not certified to be pathogen-free.

Among other things, the legislation would:

• Amend the Poultry Products Inspection Act, the Meat Inspection Act and the Food, Drug, and Cosmetic Act to prohibit the sale of any processed poultry, meat and FDA-regulated food that has not either undergone a pathogen reduction treatment, or been certified to contain no verifiable traces of pathogens.

• Require that labels on ground beef, or any other ground meat product, specifically name every cut of meat that is contained in the product…

According to Feinstein's press statement, “By enacting these simple changes, the Processed Food Safety Act will drastically reduce the presence of pathogens in our food and improve the ability of the consumer to make informed choices about the products they wish to eat.”

While we're at it, since it's so easy, let's just legislate away the common cold, flu and any other pathogen we don't want.

Climate legislation — You'd think that in a profession presumably guided by fact and reason that it would have occurred to the global warming crowd that mankind can't do much about Mom Nature one way or the other. In light of the hacked e-mails revealing the deliberate efforts of some to skew the evidence in favor of their global warming position (Climategate), you'd think the media and society would have at least some second thoughts. But there they were in Denmark at the United Nation's Climate Change Conference, U.S. government officials included, working to legislate that which can't be legislated.

“Climate change poses significant threats and challenges for farmers, ranchers, and those who make a living off the land, which will have a serious impact on our ability to feed the people of the United States and the world,” said Agriculture Secretary Tom Vilsack. “President Obama has made climate change one of his top domestic priorities and under his Administration, the United States has done more to reduce greenhouse gas emissions than at any other time in history, both by supporting domestic policies that advance clean energy, climate security, and economic recovery; and by vigorously engaging in international climate negotiations.”

That came on the heels of the Environmental protection agency declaring Greenhouse Gases (GHGs) an endangerment to public health and the environment.

“It's premature to issue this kind of finding, especially given the recent controversy surrounding the scientific validity of alleged human contributions to climate change,” said Tamara Thies, chief environmental counsel for the National Cattlemen's Beef Association (NCBA). “Regulation of greenhouse gases should be based on science, and it should be thoughtfully considered and voted on by Congress through a democratic process, not dictated by the EPA.”

According to NCBA, ultimate regulation of GHGs under the Clean Air Act could impose massive regulatory compliance costs on producers, which could force many operations out of business.

Elections — No matter your political leanings, you've got to look at the outcome of legislative carte blanche this past year and wonder how much more the nation can afford. Next November's elections can interject balance, or at least some barriers to the runaway usurpation of private rights. Or, the elections can further the current administration's flavor-of-the-week policy making.

(The opinions expressed in this article are those of the author and do not necessarily reflect the views of CATTLE TODAY).







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