www.BeefUSA.org NATIONAL CATTLEMEN 1

THE OFFICIAL PUBLICATION OF NCBA November2011•Vol.28,No.2•BeefUSA.org

The trusted leader and definitive voice of the beef industry

N A T I O N A LCATTLEMEN

SOUTH CENTRAL LIVE FED CHOICE OMAHA CASH 500-600 LB. STEERS STEERS BOXED BEEF CORN $146.00 $120.78 $186.98 $6.52

24% 21% 20% 20%

$118.04 $99.69 $161.54 $5.45

IN THIS ISSUELeadership Comments 3Senator Jim Risch 4Ag Lending Perspectives 8Cattle Markets 9Cow-Calf Assessments 11

FTAsYieldBigBenefitsforUSCattleThe U.S. beef industry

stands to notch big gains in the years ahead as a result of the passage of three key free trade agreements (FTAs)

with South Korea, Panama and Colombia. The long-pending agreements will level the playing field for U.S. beef by relaxing stiff tariffs, which make imports into those three nations more expensive and less attractive to consumers there. When fully implemented, the South Korean FTA could expand sales of U.S. beef to Korea by as much as $1.8 billion, according to the U.S. International Trade Commission (ITC). In the first year alone, beef sales could benefit by as much as $15 million in this key market.

Members of both the House and Senate, that passed the FTAs by wide margins Oct. 12, 2011, were praised by NCBA leadership, who fought hard to move the agreements ahead for several years. NCBA President Bill Donald noted that the FTAs will reduce the 40 percent tariff placed on U.S. beef in Korea over a period of 15 years. Likewise, they will phase out the 30 percent tariff in Panama and the 80 percent tariff on U.S. beef in Colombia, the highest beef tariff in the world, over the next 15 years.

“For several years, NCBA has been a leader in advocating for immediate passage and implementation of these three job-generating trade agreements. Although

politics, unfortunately, prevented immediate implementation, NCBA members rallied together, contacting members of Congress from both sides of the aisle to stress the importance of free trade to their family farms and ranches,” said Donald, who was present in Washington, D.C., for the critical votes. He noted that CattleFax already estimates exports are adding approximately $200 per head to live cattle prices thus far in 2011.

Continued on page 2

UsingYourMembership BenefitsTips for Online Roper and Stetson Shopping:

The Roper and Stetson website (www.roperatrentonww.com) is currently under construction and will be running smoothly soon! In the meantime, here are some tips to help you navigate the site when redeeming your Exclusive NCBA Member Coupon.• All Roper items are categorized

on the left side of the page.• Stetson items can be found

under the Stetson tab in the gray bar towards the top of the page.

• If you see an item similar to what you are looking for, click on it and the site will generate related items below the item you selected.

• For questions regarding the site, contact their Customer Service at 1-888-273-7039.

Be looking for your next coupon in the December 2011

National Cattlemen!

EAJAReformLegislation ReceivesHearing

The U.S. House Committee on the Judiciary’s Subcommittee on Courts, Commercial and Administrative Law held a hearing on H.R. 1966, the Government Savings Litigation Act in early October. The Public Lands Council (PLC), NCBA, the American Sheep Industry Association, the Association of National Grasslands and 35 organizations representing livestock producers said the legislation will bring transparency and accountability to the Equal Access to Justice Act (EAJA).

EAJA allows plaintiffs to recover attorney fees and other expenses from the federal government when they prevail in a case against the government. According to Dustin Van Liew, PLC executive director and NCBA director of federal lands, environmental extremist groups have made a hobby of suing the federal government on minor process-related decisions. He said the government often settles cases and pays the plaintiffs through EAJA instead of devoting time, staff and resources to a trial. Pointing to Wyoming attorney Karen Budd Falen’s estimates, Van Liew said over the past decade, 12 environmental groups alone have filed more than 3,300 lawsuits, recovering more than $37 million in EAJA funds.

“EAJA has become a means for wealthy radical environmental groups to obtain federal funding to target ranchers by challenging federal land management agencies in court primarily on minor process decisions, all to curtail natural resource uses such as livestock grazing,” the groups penned in a letter to Subcommittee Chairman Howard Coble (R-N.C.) and Ranking Member Steve Cohen (D-Tenn.). “As a result, our members are forced to pay multiple times over to defend themselves: on the one hand, they pay attorney fees as interveners in defense of the federal government; on the other hand, as hard working citizens, their tax dollars go toward agency operations budgets, and toward lining the pockets of these vastly wealthy environmental groups with EAJA funds.”

MARKET SNAPSHOT WEEK ENDING OCT. 29, 2011 (prices vs. year ago)

NCBASupportsTyingEthanol MandatetoCornSupplies

A bipartisan coalition of members of Congress, led by U.S. Representatives Bob Goodlatte (R-Va.) and Jim Costa (D-Calif.), heeded concerns of livestock producers that current U.S. renewable fuels policies are artificially manipulating corn prices and putting a strain on corn supplies. The lawmakers, on Oct. 5, 2011, introduced the Renewable Fuels Standard (RFS) Flexibility Act of 2011, which will tie the amount of corn ethanol production required under the RFS to U.S. corn supplies.

“The federal government’s creation of

an artificial market for the ethanol industry has quite frankly created a domino effect that is hurting consumers. It is expected that this year about 40 percent of the U.S. corn crop will be used for ethanol production,” penned Reps. Goodlatte and Costa in a letter to their colleagues in the U.S. House of Representatives. “Our legislation will alter the RFS to give

relief to our livestock and food producers and consumers of these products. This is a common sense solution to make sure that we have enough corn supplies to meet all of our demands.”

During a recent hearing of the House Subcommittee on Livestock, Dairy and Poultry, Dr. Steve Meyer, president of Paragon Economics, said on behalf of NCBA, that corn used for ethanol production increased from nearly 1.4 billion bushels before RFS was implemented in 2004, to an estimated 5 billion bushels in 2010-2011, a 382 percent increase. However, he noted corn production has only

Continued on page 2

Cattlemen are not opposed to ethanol. We simply want to get the federal government out of the marketplace. Cattlemen support this commonsense legislation to bring relief to livestock producers in times of tight corn supplies.

2 NATIONAL CATTLEMEN www.BeefUSA.org

NCBA and the Public Lands Council (PLC) welcomed news in mid-October from Environmental Protection

Agency (EPA) Administrator Lisa Jackson that the decision has been made to retain the current coarse particulate matter (dust) standard. This decision is subsequent to the onslaught of pressure from NCBA, PLC and several members of Congress to convince EPA not to regulate farm dust at levels twice as stringent as the current standard. According to Bill Donald, NCBA president and Montana rancher, the groups maintain that no science-based evidence exists that would justify the burdensome, costly regulation that would have resulted in farmers and ranchers being fined for working in dusty environments in rural America. 

“This is refreshing news. The consequences of EPA regulating farm dust at levels twice as stringent as the current standard would have undoubtedly forced many farmers and ranchers into nonattainment, which would have resulted in enormous fines and would have jeopardized the future of many farms and ranches,” said Donald. “While we are pleased with Administrator Jackson’s decision to lean on common sense and science, this issue is far from resolved.” 

Donald said the fact that family farmers and ranchers are subject to a federal dust standard in the first place is unreasonable. NCBA and PLC are still concerned that EPA could consider imposing unmanageable dust regulations on farmers and ranchers in the future. This

is why NCBA and PLC continue to support the Farm Dust Regulation Prevention Act, proposed by Senator Mike Johanns (R-Neb.) and Congresswoman Kristi Noem (R-S.D.). NCBA and PLC were joined by 124 other organizations in a letter to the House Subcommittee on Energy and Power supporting H.R. 1633, the dust prevention bill. This legislation would essentially exempt farmers and ranchers from the federal regulation of dust as long as it is regulated at the state or local levels of government.  

John Falen, PLC president and Nevada rancher, said dust is a reality in rural America and a state approach makes

much more sense than the “one-size-fits-all approach” by the distant federal government.  

“The fact is there is no science showing that farm dust is a health risk at ambient levels. It’s amazing to think that one agency’s heavy hand could have such a wide-reaching and devastating impact on so many farming and ranching families across the country,” said Falen. “In the short-term, livestock producers have scored a victory but we all need to be aware that this issue could come back in the future. We must rally together and support legislative action to prevent the future threat of unreasonable dust regulation.” 

THE OFFICIAL PUBLICATION OF NCBA

N A T I O N A LCATTLEMEN

President Bill DonaldPresident-elect J.D. AlexanderVice President Scott GeorgeFederation Division Chair David DickFederation Division Vice-Chair Craig UdenPolicy Division Chair Bob McCanPolicy Division Vice-Chair Don PembertonImmediate Past President Steve Foglesong

Senior Editor John Robinson

Contributing Writers Walt Barnhart Jesse Bussard Lauren Chase Stephanie Darling Mike Deering Bill Donald Dr. Tom Field Mary Geiger Forrest Roberts

Creative Director Don Waite

Contact NCBA: P.O. Box 3469, Englewood, CO 80155 (303-694-0305); Washington D.C.: 1301 Pennsylvania Ave. N.W., Suite 300, Washington, D.C. 20004 (202-347-0228). National Cattlemen’s Beef Association reserves the right to refuse advertising in any of its publications. National Cattlemen’s Beef Association does not accept political advertising in any of its publications. National Cattlemen’s Beef Association does not accept any advertising promoting third-party lawsuits that have not been endorsed by the board of directors.

© 2011 National Cattlemen’s Beef Association. All rights reserved. The contents of this magazine may not be reproduced by any means, in whole or part, without the prior written consent of the National Cattlemen’s Beef Association.

Keep up with the latest newswww.BeefUSA.org

Like Us. Follow Us. Watch Us. Hear Us.

Beltway BeefAudio

Continued from page 1NCBA Manager of Legislative Affairs Kent Bacus noted the

three FTAs, once implemented, will allow U.S. beef producers to trade beef freely with approximately two-thirds of the population in the Western Hemisphere. The three agreements will also help President Barack Obama fulfill his goal of doubling exports and improving the unemployment picture. The ITC estimates the agreements will create 250,000 U.S. jobs once they are fully implemented.

The value of the three FTAs for U.S. producers and the wide margin of victory in the House and Senate prompted swift action by President Obama, who signed them into law Oct. 21. During the signing ceremony he noted the importance of the measures and the added trade value they would create. Donald praised the rapid action of Congress and the president last month, saying cattlemen welcome the opportunity to provide beef to meet the growing global demand for safe and nutritious U.S. beef raised by our farm and ranch families.

“When I think of sustainability, I think of my children. By signing these agreements, we not only benefit in the short-term but we afford future generations the opportunity to remain in the family business providing food for this country and abroad. That’s sustainability,” said Donald. “These agreements spell opportunity for small businesses like mine. This has been a long time coming and NCBA and its affiliates have remained firm in our support for these agreements throughout the years.”

FTAsWinbyWideMargin

WhyNCBA?

Mike Coggins - Blackwater Cattle Company: Lake Park, GA “I’m an NCBA member because I believe we need those folks lobbying for us in Washing-ton to keep people in touch with our way of life, with food production and with cattle in this country.”

We want to hear from you! Tell us why you’re an NCBA member. Submit your comments and a photo to MemberNews@beef.org. You can also mail your submission to: National Cattlemen Editor, 9110 East Nichols Ave., Suite 300, Centennial, CO 80112.

Continued from page 1increased by 5.4 percent over that same time period. Meyer said in his opinion, these differing growth rates and subsequent unprecedented low carryover stocks were primarily caused by ethanol subsidies and a guaranteed market.

Specifically, the legislation will set up a process to require the administrator of the Environmental Protection Agency to review twice yearly the USDA’s report on the current crop year’s ratio of U.S. corn stocks-to-use in making a determination on the RFS. In years with tight stocks-to-use ratios, a reduction to the RFS could be made. Kevin Kester, California cattleman and president of the California Cattlemen’s Association, an affiliate of NCBA, said this legislation will provide relief from tight corn supplies. He said it is important to note that, according to an analysis by Paragon Economics, had the RFS been in place since 1969, a reduction in the RFS would have only been triggered five times. 

“Cattlemen are not opposed to ethanol and we’re not looking for cheap corn. We simply want the federal government to get out of the marketplace and allow the market to work,” Kester said during a news conference. “USDA has projected this year’s corn crop will be more than 400 million bushels smaller than last year. Supplies are already tight due to drought, floods and rising demand, driven partially by the mandate. A smaller corn crop will put even further strain on corn stocks. It’s time to add a layer of commonsense to our nation’s renewable fuels policy. We commend Congressmen Goodlatte and Costa for their leadership on this issue and we urge all members of Congress to support this bill.”

EthanolMandate

NCBA,PLCWelcomeEPADecisiontoRetainCurrentDustStandardGroups Still Support Legislation to Prevent Future Threats  

WeatherWatch(Outlook current as of 10/28/11)

www.BeefUSA.org NATIONAL CATTLEMEN 3

A SAFE, WHOLESOME AND HEALTHY BEEF SUPPLY

The invaluable partnership between our state affiliates and your national organization yielded a monumental win on Oct. 12, 2011. The grassroots support for passage of the trade agreements (FTAs) with Colombia, Panama and South Korea was nothing shy of phenomenal. For several years, NCBA members and staff were relentless in their staunch support of these trade pacts. Despite the FTAs being used as political pawns in a partisan game, we did not waiver in our outspoken support.

We made very clear to President Obama, members of Congress, the agricultural community and the general public that these three FTAs would level the playing field for U.S. cattlemen and women in the global marketplace. Free and open trade has long been a priority in our grassroots-driven policy positions. The bottom line is the bottom line. Specifically, exports drive market price and add an additional $202 per head to the total value of our cattle.

Sales of beef to South Korea alone could increase by as much as $1.8 billion once the FTA is fully implemented. The Korea/U.S. (KORUS) FTA phases out the 40 percent tariff placed on imports of U.S. beef over a 15 year period. In the first year alone, tariffs will fall by $15 million and reach $325 million once the agreement is fully implemented. Going forward, with sales of U.S. beef already rising sharply in Korea, this one FTA represents one of the most significant bilateral agreements in the history of the U.S. beef industry.

We also pushed hard to pass the pending FTAs with Colombia and Panama. U.S. beef producers faced high tariffs of 80 percent and 30 percent respectively in those markets. Tariffs placed on U.S. beef make it more expensive for consumers overseas and put you at a competitive disadvantage. The agreement with Colombia will, for the first time ever, put you on level footing with cattlemen in Brazil and Argentina. Once the FTAs with Colombia and Panama are implemented, the U.S. will ultimately have free trade for U.S. beef with approximately

two-thirds of the population in the Western Hemisphere.

All three of these countries are important markets for beef and beef variety meats, which are not widely consumed in the United States. By shipping these products to countries where demand is strong, we’re supporting beef prices at home.

We’re proud of our work in Washington, D.C.,

and your frequent visits with your elected leaders undoubtedly made a difference. We’re proud of the October win on behalf of cattlemen and women. But, we don’t intend to stop there. We have a lot more work ahead and we’re not content with the gains we’ve made.

Foreign consumers are purchasing U.S. beef in record amounts in diverse markets around the world. Russia, the Middle East and the European Union are becoming strong markets for U.S. beef. Keep in mind; American cattlemen are competing with other major beef-producing countries for the same customers in emerging markets. If we rest on our victories now, we risk losing our hard-earned spot as the world’s largest beef exporter. We intend to press ahead with partnerships such as with U.S. Meat Export Federation, National Meat Association and American Meat Institute to expand our market presence and we’d like you to join us.

NCBA is advocating on behalf of the entire beef industry and we believe that the groundwork we’ve laid, particularly in South Korea, will pave the way for new trade agreements and relationships in other important markets. South Korea is a leader in the region and we expect the passage of the KORUS FTA will help make inroads which will liberalize beef trade with Japan and potentially open the door to China, a market where Australia is already negotiating a trade agreement. Relaxing restrictions on beef shipped to Japan and possibly opening the door for exports to China will directly benefit U.S. beef producers.

NCBA is committed to returning more dollars to your pockets by helping more international consumers enjoy more U.S. beef, more often.

AMajorWinforUSBeefByForrestRoberts,NCBACEO

Luck beats skill! That is certainly true in my case when the three Free Trade Agreements (FTAs) were passed through Congress while I am serving as president of NCBA. Previous NCBA presidents and the staff have worked tirelessly for five years to get that ball across the finish line, and I am the lucky guy standing there for the award ceremony. In a refreshing exhibition of bipartisan support the House and Senate both passed all three bills the same day by wide margins.

I was in Washington, D.C., to witness not only that historic event but also to help welcome South Korean President Lee Myung-bak to the U.S. President Lee has been a strong proponent of the Korean FTA and a great help in getting beef trade restored after the border closure. Witnessing the welcoming of a head of state to the White House was a very special event. Full of pomp and circumstance, the ceremony was designed to show respect for President Lee. Platoons from the Army, Marines, Navy and Air Force, the Army Band and Color Guard gave their support to the President and First Lady to welcome President Lee and his wife to the United States.

At a Chamber of Commerce luncheon, sponsored by the coalition that worked to pass the free trade agreements, President Lee’s description of his humble beginnings, the death of two of his siblings during the Korean War and his imprisonment

as a political dissident illustrated his passion for freedom, both economical and political. Growing up in a population with an average annual income of only $80U.S. and governed by a dictator, he recognized that both forms of freedom are necessary for the success of Korea. He has worked diligently to improve his country’s living standard, and one of the cornerstones of his

work has been more trade, and specifically more trade with the U.S. It is important to keep in mind that President Lee was the one who pushed to get U.S. beef back into South Korea after the BSE incident. He did that at great peril to his own administration.

People ask me if we got the best possible we could for U.S. beef in the South Korean FTA. My thought is this: our position nearly brought down the government of South Korea. So, yes, I think we got all we could.

I have great respect for President Lee and his support for free and fair trade. While I am the lucky person to be currently serving as NCBA president when these agreements were finally passed and signed, they have yet to be implemented. I am committed to getting these agreements enacted. Our work is not done. It is as important as ever to not take our eye off that ball. We have an excellent team in place. They are committed to the implementation of these important agreements which will benefit the entire U.S. beef industry.

LuckBeatsSkillByBillDonald,NCBAPresident

Join fellow cattleman and NCBA President-Elect J.D. Alexander. Become a member of the

National Cattlemen’s Beef Association today!

Join now and receive an exclusive 50% discount on your purchase of Roper and Stetson boots and apparel.

Existing NCBA members receive quarterly 25% off coupons for future purchases.

pantone 718 pantone 7503

c 0m 56 y 100k 8

c 20m 24 y 44k 6

Join today by calling 866-BEEF-USA or logging onto www.BeefUSA.org

STOckMANSHiP &

STEWArDSHiPcreating and

managing movement is the key to effective cattle handling

®

Sponsors

Funded by The Beef Checkoff

Endorsed by:

Call Grace Webb at 800.525.3085 or visit bqa.org/trainingevents.aspx to find a training near you!

4 NATIONAL CATTLEMEN www.BeefUSA.org

What happens when you put a rancher in the U.S. Senate? In the case of Senator Jim Risch, cattlemen get

a voice on the Senate floor. On weekdays, he dons a suit and tie.

He votes on legislation that could impact every American. Come Saturday morning, however, U.S. Senator Jim Risch (R-Idaho) trades the suit and tie for his jeans and boots to go work on his family’s cattle ranch, Sage Meadows Ranch, outside Boise, Idaho.

“I was born in the big city of Milwaukee, Wis., and bought a cow in 1971. The rest is history,” Risch said after explaining he’d spent the previous weekend weaning calves before returning to Washington, D.C.

It didn’t take Risch long to find his roots out West. After starting college at the University of Wisconsin-Milwaukee, he transferred to the University of Idaho to complete his undergraduate degree in forestry. He continued at the university, earning a law degree in 1968. He and his wife Vicki purchased land and raised three sons on the ranch. He took one step further with his cattle business by joining the National Cattlemen’s Association in 1987, which became the National Cattlemen’s Beef Association (NCBA) in 1996. He also joined the Idaho Cattle Association (ICA) in 1989. He is a member of both organizations today.

In addition to dedicating his life to raising cattle, Risch has dedicated his life to public service – holding posts within Idaho state government and his current seat in the U.S. Senate. He was first elected to the Idaho State Senate in 1974. Risch was also the lieutenant governor of Idaho in two separate terms in 2001 and 2007. He also served as the state’s governor in 2006, where he championed efforts to reduce property taxes.

“Government is complex and getting more complex every day. The more time you spend in it, the more you understand it and over time, there has been a lot of change,” Risch said. “My first year in the state senate, about 85 percent of the legislators were either directly or indirectly related to agriculture. Today’s that’s just about exactly reversed.”

Risch ran for the open seat in the U.S. Senate in 2008 and was one of just two new Republicans elected nationwide to the

Senate. Though changes have been made to the ranch, Risch said his family has made sacrifices to keep it going while he is away in Washington, D.C., each week.

“The whole family pitches in on the operation. On branding day, on weaning day, on moving day – everybody helps,” he said. “When I was first elected, we were running 500 pairs and now it’s down to just over 100. It is very helpful that I have three sons who are very active on the operation, but my wife and I make the major decisions. When it comes time to pick a vaccine, picking days to move cattle, when it comes to the big decisions on the ranch, Vicki and I are really involved.”

Risch’s priorities haven’t strayed far from the ranch during his first term in the U.S. Senate.

“I’m glad I get to go home every weekend and get my feet on the ground. It brings home why it’s important what we do here. For me, family is number one. I think that’s true for most everyone,” Risch said. “Having said that, the people who elected me to represent them in Washington are a top priority. I consider that to be a sacred obligation to know that I represent the majority of Idahoans when I cast a vote. Every time Sen. Mike Crapo (R-Idaho) and I cast our votes for Idaho, they are equal in number to the votes cast by states such as California, New York and Illinois. Our Founding Fathers set up an incredible system that allows the two of us to bring Idaho’s interests to the table on par with larger states. It is very humbling to realize that I am bringing Idaho’s voice into the affairs of our nation.”

Similar to cattlemen across the country, Sen. Risch was quick to point out that rules

and regulations coming from Washington, D.C., affect his ability to raise cattle in Idaho, impact the ability of all farmers and ranchers to do their jobs and, ultimately, impact all Americans.

“The rules and regulations are suffocating farming and ranching, businesses all over America and for that matter, our personal lives,” Risch said. “It seems like every time you turn around, you run into the federal government. We all want clean air and clean water. If the Environmental Protection Agency (EPA) wanted to keep air and water clean, I think they could go about it entirely differently. It is no wonder people love their country but are not really very red hot about their government.”

Despite the challenges, Risch said nothing else matters unless the federal government gets the nation’s fiscal affairs in order. However, the rancher side of Sen. Risch showed through in his resolve that our nation will pull through. 

“This government is borrowing 40 cents out of every dollar it spends. They borrow it from the Chinese and from other governments. This is real money that has

to be paid back. They’re borrowing $1.6 trillion this year alone. That can’t go on,” he said. “We’re Americans. We’ve been through some really tough times. I’m convinced the economic problems we’re in won’t be fixed by the federal government. We can do this but we’re all going to have to roll up our sleeves and get to work.”

Getting back to cattle business, Risch said the next generation of cattlemen and women has to look to generations before them to learn about the challenges this industry has overcome in order to know what it will take to feed the world. He also said it is important for cattlemen to get involved in organizations like NCBA and ICA to move the industry forward.

“The adage about ‘strength in numbers’ is true when it comes to being a member of NCBA and ICA. It is very important that we speak with one voice on the issues affecting our industry,” he said. “A unified voice is especially important when the industry is under assault by those who want to fundamentally alter what we do. Being a member allows us to help shape that unified message and join with many others in protecting our business.”

ALLIEDINDUSTRYDIRECTORYThese are companies that have teamed with NCBA as allied industry members, demonstrating

their commitment to the beef industry. Their involvement strengthens our future. NCBA members are urged to support these partners in turn by purchasing their products

and services. Those who would like to become allied industry partners with NCBA (securing a premium booth placement at the next annual convention and trade show),

please call the Association Marketing team at 303-694-0305.

gOLDLEVELSPONSORS(Minimum$100,000Investment)

ALLIEDINDUSTRYCOUNCIL

ALLIEDINDUSTRYPARTNERS

Bayerwww.bayer-ah.com

BoehringerIngelheimVetmedica,Inc.www.bi-vetmedica.com

DowAgroSciences,LLCwww.dowagro.com

JohnDeerewww.deere.com

MerckAnimalHealthwww.merck-animal-health.com

Merialwww.merial.com

MicroBeefTechnologieswww.microbeef.com

PfizerAnimalHealthwww.pfizer.com

PurinaMills,LLCwww.cattlenutrition.com

OneSenatorBringsCowboyLogictoCongress

AgriLabsAnimal Health International

BarenburgBASF Corporation

Central Life SciencesCME Group

Elanco Animal HealthLeo Burnett USA

Novartis Animal Health U.S., Inc.Novus International

Pioneer, A DuPont BusinessY-Tex

ADM Alliance Nutrition, Inc.Agriculture Engineering Associates

Alltech, Inc.AniPro/Xtraformance Feeds

Bank of America Merrill LynchBeef Magazine

BimedaCaterpillar

Certified Angus BeefCertified Hereford Beef

Croplan GeneticsDestron Fearing

DuPontFarm Credit

Greeley Hat WorksGrow Safe Systems, Ltd

Hartford Livestock InsuranceIMI Global, Inc.

Kent Nutrition Group, Inc.Kunafin “The Insectary”

Lallemand Animal NutritionMeat & Livestock Australia, Ltd.

Midwest PMS, Inc.Miraco/Gallagher

Moly ManufacturingMonsanto

New HollandNoble Foundation

Nova Microbial TechnologiesNutrition Physiology Co., LLC

Phibro Animal HealthPriefert Manufacturing Company

Quali Tech, Inc.Quality Liquid Feeds

Rabo AgriFinanceRidley Block Operations

Ritchie Industries Inc.Roper/Stetson

Roto-MixSFP

SmartLic Supplement Feed In A DrumStone Manufacturing

Temple Tag, Inc.Teva Animal Health

The Vit-E-Men Co. Inc./Life ProductsTru-Test

U.S. Premium BeefUS Bank

Varied Industries Corp.Vigortone Ag ProductsZ Tags North America

Zinpro Corporation

American Foods GroupCargill Meat Solutions

Darden RestaurantsGilroy Foods & Flavors

IEH LaboratoriesJBS

Lobel’s of New YorkMcDonald’s CorporationMorton’s The Steakhouse

National Beef PackingOutback SteakhousePreferred Beef Group

Sam Kane Beef ProcessorsSafewayTopco

Tyson Fresh MeatsWal-Mart Stores

Wendy’s International

www.BeefUSA.org NATIONAL CATTLEMEN 5

ByTomField,PhDBeef markets have

undergone significant transformation over the past several decades resulting in a variety of market niches and

opportunities based on associating breed, management practices, feeding practices and a host of other verifiable claims with beef products. The market has provided economic incentives at a variety of levels to encourage participation in supplying the needs of these various market niches. In some cases, these incentives have been significant and as a result cattle producers have shown increasing interest in learning about program requirements and the process associated with becoming certified for participation. This article is designed to serve as an informational source that provides an overview of the roles and responsibilities associated with certified programs. It is not comprehensive in scope nor does it provide endorsement of any program.Roles and responsibilities

StandardsCreatingBody – The creation of the standards typically lies in the hands of a market-oriented entity that desires to create a product differentiated by a specific attribute or set of attributes. The entities involved range from branded companies, retailers who desire that suppliers meet a specific set of production and processing standards, various participants in the supply chain, trade partners and even nonprofit organizations.

USDA-USDA’s Agricultural Marketing Service requires that a system be in place to verify or certify the authenticity of the attribute(s). To accomplish this mission, the USDA-AMS created a set of Process Verified Program (PVP) standards and a set of Quality System Assessment (QSA) standards to provide effective standardization with the marketing system.

Auditor–The auditor provides services under two basic categories – third party audits and second party audits. In the case of third party audits, the auditor determines whether the supplier has effectively met the requirements established by the standards.

In this case, the auditing firm has no influence over the creation or modification of the standards. In the case of second party audits, the auditing firm has the opportunity to help develop and refine the standards.

Producer – The decision about participating in a certification system rests entirely on the independent decision making process of an individual producer. It is absolutely critical that producers perform due diligence in determining which programs, if any, they chose to adopt. Even if a producer sees a quick market opportunity, they are advised to carefully and thoughtfully do their homework before participating in any program.

The following questions are a starting point for making the decision to participate in a certification program:• What are the standards and how

do they fit into existing and future operational needs of the producer?

• To what market(s) will the program provide access? Do those markets align with the producer’s philosophies, management system, and business goals?

• What are the philosophies and objectives of those who designed the

standards and are they in harmony with the producer’s business values?

• What costs will be associated with meeting the standards and are the returns sufficient to warrant incurring those costs?

• How will meeting the standards in terms of day-to-day management, record keeping and data analysis impact operations, employees, and management?

• What are the training requirements for employees and management?

• Do the requirements create new needs from my suppliers, partners, or customers?Producers are strongly advised to do

extensive homework about a program and its impacts on their business operations (both short and long term) before deciding to participate. Remember not all that glitters turns out to be gold!

Once a cattle producer has good information in hand, communicates with suppliers and customers, and carefully weighs the benefits and drawbacks of participating in a certification system, then a good decision can be made.

EvaluatingCertificationPrograms

HowtoFindInformationA good starting point is to visit the following websites:

• USDAApprovedPVPProgram- http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELPRD3320450

• USDAApprovedQSAPrograms- http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELPRD3107505

• USDA“NeverEver”Program– http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELPRDC5066028

• USDAOfficialListingApprovedCompaniestothe LivestockFeedingClaimsAuditProgram- http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELPRDC5075806

• USDAresourcelistconcerninganimalwell-beingprogramsandaudits- http://awic.nal.usda.gov/nal_display/index.php?info_center=3&topic_id= 1782&tax_level=2&tax_subject=170

NCBA,PLCWeighinonWaterActCase ReachofSuperfundLawtobeLimited

Senators Roy Blunt (R-Mo.) and Mike Crapo (R-Idaho) introduced the “Superfund Common-Sense Act of 2011” (S. 1729) in late October, which would prevent the Environmental Protection Agency (EPA) and the courts from imposing what the policymakers called another “needless and burdensome” regulation on U.S. agriculture.

NCBA Deputy Environmental Counsel Ashley Lyon said the legislation would restore the original intent of Congress under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), more commonly called the Superfund Law, and the Emergency Planning and Community Right-to-Know Act (EPCRA).

She said the Superfund Law was originally passed by Congress in 1980 to prevent toxic waste from polluting U.S. waters and was never intended to elevate extreme agendas by imposing liability on U.S. farmers and ranchers in the same fashion as toxic waste polluters. The legislation would exempt cattle manure from regulations under these laws.

This legislation is identical to a bill introduced Sept. 21, 2011, in the U.S. House of Representatives by Congressman Billy Long (R-Mo.).

NCBA and the Public Lands Council (PLC) recently filed an amicus brief to the U.S. Supreme Court in the Sackett v. Environmental

Protection Agency (EPA) case, which will likely be argued in January 2012. Dustin Van Liew, PLC executive director and NCBA director of federal lands, said Sackett v. EPA could set a dangerous precedent allowing EPA and other federal agencies to make jurisdictional determinations that are not judicially or administratively reviewable.

In 2005, Chantelle and Michael Sackett purchased a plot of land, less than one acre in size, to build a home. However, in 2007, after filling in half the lot with gravel in preparation for construction, EPA issued the Sacketts an “Administrative Compliance Order” (ACO), alleging the land was a wetland subject to Clean Water Act (CWA) jurisdiction and ordered the Sacketts to restore the land to its original condition or face nearly $50,000 in fines per day. The Sackett family appealed for a hearing on their alleged violation but were denied by EPA and the federal court. 

According to Van Liew, the court threw out the case because it determined that the CWA prevented judicial review of ACOs until the enforcement actions have been issued by federal agencies. He said the Sacketts could not challenge the compliance order until they refused to do what it instructed and consequently were fined tens

of thousands of dollars.“Like millions of Americans regularly

do, the Sacketts rightfully purchased land to build their dream home. Unfortunately, instead of building that home, they have spent the past four years battling EPA and the courts,” Van Liew said. “The Sacketts weren’t trying to cut corners. They followed the rules and now they just want a fair shake in the courts. The uncertainty surrounding the CWA permitting process and the time and financial costs associated with it has left them with abysmal options of submitting to the regulator’s demands and the costs associated with those demands, risking catastrophic fines for noncompliance or investing significant time and resources pursuing a permit. In this process, the only winner is the federal government. Private landowners lose.”

According to NCBA Deputy Environmental Counsel Ashley Lyon, this case could have far-reaching impacts on farmers and ranchers and all private landowners. She said the CWA has morphed from a statute to protect our nation’s waters into a tool for regulators to micromanage daily decisions of private landowners. She said the U.S. Supreme

Court will consider whether petitioners may seek pre-enforcement judicial review of ACOs and whether petitioners’ current inability to seek pre-enforcement judicial review of the ACO violates their rights under the Due Process Clause.

“The brief NCBA and PLC filed in this case pushes for a decision that affirms a landowner’s right to challenge a jurisdictional determination before they are required to either go through the costly and time-consuming permitting process or are fined thousands of dollars,” Lyon said. “Today it is private landowners who followed the rules, attempting to build a home, but private landowners, including farmers and ranchers, will no doubt face future challenges if EPA and other federal agencies’ decisions are not subject to judicial and administration review. We are hopeful the U.S. Supreme Court will consider the sweeping impact this case could have on all private landowners in this country.”

IssuesWatch

How do we continue to raise enough food to feed a growing world population? This was the question discussed during the “Feeding Future Generations: Supporting Sustainable Global Food Production” dialogue on October 13. To showcase cattlemen’s commitment to sustainably feeding a growing world population, the Issues Management Beef Checkoff program teamed up with the monthly magazine, The Atlantic, to host this discussion. Panelists included Steve Foglesong, cattle producer and past-president of National Cattlemen’s Beef Association and Suzy Friedman, Deputy Director, Working Lands, Environmental Defense. More than 200 people participated in the discussion.

Learn more or watch the video of the discussion at: www.explorebeef.org

CharlesPhelpsCharles Phelps, an Iowa cattle feeder

who served as president of the National Livestock Feeders (1967-1969) died in a one car accident on Tuesday, Oct. 25. The National Livestock Feeders, which existed from 1961-1976, merged with the American National Cattlemen’s Association to form the National Cattlemen’s Association (NCA) in 1977. Phelps also served on the NCA board of directors. His other business interests included area banks.

Phelps, 86, also was a charter member of the Iowa Cattlemen’s Association (ICA), and he served as Director and Chairman of the Iowa Beef Industry Council, and as a director on the National Livestock and Meat Board. ICA honored him for his leadership in the cattle industry in 1985 by inducting him into the ICA Hall of Fame.

He and his wife, Marlene had four children. Marlene and three of their children preceded him in death.

tune in to nashvillefor the 2012 Convention!

tune in to nashvillefor the 2012 Convention!

why should you attend? This is your invitation to be a part of something big. The 2012 convention & trade show is more than just

another convention. It is about industry business, doing some business and having a whole lot of fun! Not to

mention it is a great way to stay connected and learn what is happening in your industry today. From industry

best practices to the future of the industry and the latest innovations, this is the place to see it all!

EDUCATIONEDUCATION

OO FF

CattleFax Annual Outlook SeminarPlease join us as we discuss many important topics that will

shape the market landscape during the balance of this decade

such as: h Factors that will impact supply and demand h Cattle and beef price outlook h Ethanol production and grain prices h Industry contraction and consolidation h Long-term weather outlook, presented by Dr. Art Douglas

h Global beef market opportunities h Industryprofitoutlook h Issues that will shape the beef industry in the future

You won’t want to miss this session as these and other topics will be discussed.

The beef industry is changing at an ever quickening pace. Please join us as we discuss

what the future holds.

Randy Blach

19th Annual Cattlemen’s College

Register today for Cattlemen’s College for world class education featuring the most relevant topics affect your operation today. Session tracks to include topics on:

Reproductive Management

Grazing and Forage Management

Exploiting Genetic Potential

ProfitPathways

Creating World Class Beef

businessbusiness Keep up with the latest news from the NCBA Washington, D.C., office!

Make your voice heard and help form industry policies in committees!

Common

ground

with Bob Beckel

& Cal Thomas

Navy SEAL

Marcus Luttrell

author of

lonesurvivor

youth contestsYouth ContestsBring your whole family!

Beef Quiz Bowl

Cattle Judging

Team Marketing

Public Speaking

Cattle industry Conventionand nCBa trade showfeB. 1-4, 2012 nashville, tn

Cattle industry Conventionand nCBa trade showfeB. 1-4, 2012 nashville, tn

are you in the Cattle Business? Then you need to be in Nashville February 1-4, 2012

Beamongthefirsttoregisterfortheexciting2012CattleIndustryConvention& NCBA Trade Show. Registration and housing are open now at www.beefusa.org.

register today!For more information visit

www.beefusa.org or call 303-694-0305

Check out This EXciting

line-up of Events! Check out This EXciting

line-up of Events!

with

Mike Snider

Meeting in NAshville is music to my ears!

Scan to learn more about the convention or visit www.beefusa.org

fellowship & fun!fellowship & fun!

Experience the Nashville Nightlife with Three Live Music Stages!

Night at the Opry

Barn DanceAND

Montgomery Gentry

Charley Pride

Little Jimmy Dickens

Del McCoury Band

Eden's Edge

Henry Cho

NCBA Trade shoW

h Animal Health Productsh AnimalIdentificationh Breedersh Buildingsh Chutesh Consulting Servicesh Equipmenth Feed Additives & Accessoriesh Feedlots h Finance & Insurance h Furniture h Government Agenciesh Hay Equipment & Accessories h Herd Managementh Industry Associationsh Irrigation

h Marketersh Publicationsh Ranchesh Real Estateh Scalesh Seed Productsh Softwareh Trailersh Veterinary Servicesh Weed/Pest Controlh Western Art

For a complete list of exhibitors and to plan your trade show schedule, visit www.BeefUSA.org

NCBA Trade Show Exhibits will Include:

8 NATIONAL CATTLEMEN www.BeefUSA.org

YPCCattleCall–JoinUsinNashvilleByJesseBussardandLaurenChase

Are you interested in becoming more involved with the NCBA’s Young Producer’s Council (YPC)? Are you interested in attending the 2012 Cattle Industry Convention and NCBA Trade Show? Well, now is a great opportunity to do both of these things!

YPC’s mission statement states that YPC will be an active player in NCBA policy development and also will work to cultivate more peer members, as well as

serve as industry advocates.With this mission in mind, the YPC Leadership Board is awarding 10 travel fellowships

in the amount of $250 to NCBA YPC members to offset registration and travel expense to the 2012 Cattle Industry Convention and NCBA Trade Show Feb. 1-4, 2012 in Nashville, Tenn. YPC hopes many members will be able to attend this worthwhile experience.

YPC will be bringing in a speaker for Cattlemen’s College who will give a long-term outlook and leadership presentation to address market volatility and how to move forward in our changing economic climate. This speaker, Dr. Robert Milligan, is a senior consultant with an agricultural business, leadership and human resource consulting firm. Dr. Milligan is also a professor emeritus at Cornell University.

The YPC meeting at convention will be held Thursday, Feb. 2, 2012 from 2:00-5:00 p.m. followed by a Social from 6:30-8:00 p.m.

If you would like to apply for the YPC Travel Fellowship, please submit your application to NCBA, c/o Barb Wilkinson, 9110 East Nichols Ave., Suite 300, Centennial, CO 80112. Please provide your name, address, phone number, email, age, and state cattlemen’s affiliation (if applicable). You will also be required to answer the following questions. Please limit your response to two pages total:• What have you done within your local and/or state cattlemen’s associations?• What do you hope to gain from attending the 2012 Cattle Industry Convention and

NCBA Trade Show?• Have you been involved in NCBA or YPC in the past and if so, in what capacity? • If you receive the fellowship, how do you envision your background and talents to be

beneficial to future NCBA YPC participation and activities?For additional information contact YPC Chairman Ben Neale (bneale@

thebeefconnection.com) or YPC Live Cattle Marketing Chair Travis Hoffman (Travis.Hoffman@colostate.edu). The application can be found on YPC’s blog, Cattle Call: http://thecattlecall.wordpress.com/2011/10/13/young-producers’-council-2012-travel-fellowship-application/.

Application information can also be found on NCBA Young Producer’s Council Blog Facebook fan page: www.facebook.com/YPCCattleCall under the ‘Notes’ tab and the NCBA Young Producers Council group page: www.facebook.com/groups/ypcbeef/ under the ‘Documents’ tab. Applications must be postmarked by Dec. 1, 2011. Recipients will be notified the first week of December, in order to allow time for arranging travel. Be sure to get your application in soon! See you in Nashville!

ByDavidC.Nelson,globalStrategistwiththeRabobankFood&AgribusinessResearchandAdvisory(FAR)team

At Rabobank, my colleagues on our global FAR team are continually researching and analyzing the factors that drive success in beef production and every other major agricultural sector around the world. We look at global megatrends, then break that information down into insights farmers and ranchers can use in the daily decisions that affect their operations. We then make this information available to clients of Rabo AgriFinance, and clients of Rabobank, around the world.

We recently published a report on protein supply and price projections in 2012. The report, titled “Where’s the Beef?,” found that beef supplies will drop sharply in the second half of the year, causing prices to spike dramatically. Our research found that the key driver in rising feed costs is the greater global demand for meat protein, which, in turn, drives up the cost of raising beef altogether. Global meat production continues to significantly lag behind GDP growth, which is, of course, the key factor behind rising prices.

When looking at domestic and global consumption trends, we found per capita meat consumption in the U.S. appears to have peaked. However, a rising GDP in the developing world is contributing to an increasing global demand for meat protein.

The extreme drought in the Southern and Southwestern U.S. is a major contributor to the production decline. However, our report finds that global meat and poultry production is in the midst of a multi-year process of adjusting to higher and more volatile feed costs. Since the U.S. is a large and significant exporter of meat protein, the decline also will affect world markets—as well as demand for feed, notably for corn.

Given the long cattle-production cycle, as well as a relatively high feed conversion ratio, beef is the protein sector least able to cope with structurally higher and more volatile corn prices.

The drought conditions in the South and Southwest, specifically Texas, are resulting in significant herd liquidation. As a result, we anticipate U.S. beef supplies will be plentiful when the cattle currently in feedlots come to market;

but the long term impact will include a dramatic decline in beef production by mid-2012. Unfortunately, some long-term meteorologists believe that a drought of

this magnitude can be self-reinforcing and last several years. We do not

see herd rebuilding on the near or medium-term horizon.

We anticipate U.S. beef production could be running as much as 7 percent below comparable 2011 levels by the third quarter of 2012.

Given our belief that domestic consumption

will not fall as sharply as production but will continue its long-term decline trend, we expect

that the availability issue will be especially

pronounced for importers of U.S. beef. Continued declines in the U.S. dollar could make imports into the U.S. more expensive, adding further potential challenges to domestic supplies.

U.S. beef packers will face challenges to manage capacity in such a way as to cover fixed costs with reduced output, but the industry has been doing a good job of managing for margin rather than market share in recent years. Plants in Texas and Arizona will be the most challenged to maintain capacity utilization. The drought will both accelerate the need for more from the packing industry and cause further problems for the cattle feeding sector, which has even more excess capacity. We believe that excess capacity is about 10 percent in the packing industry and about 20 percent in the cattle-feeding sector.

We believe that beef available for export from the U.S. could be down at double-digit levels in the second half of 2012, which could be of concern to importers, but create opportunity for exporters from Brazil and Australia, both of which are in a herd rebuilding phase and which we expect to increase production in 2012.

The drastic decline in protein production will be felt in a number of industries, and we expect the decline will create concerns for everyone from foodservice operators to corn producers.

Rabobank FAR reports, such as “Where’s the Beef?,” are available early and exclusively to Rabobank and Rabo AgriFinance clients. If you’re interested in learning more about how our group’s research can give you insight into your daily business decisions, visit www.RaboAg.com.

“Where’stheBeef?”Rabo AgriFinance analysts anticipate sharp protein production declines later next year

70

75

80

85

90

95

100

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Poun

ds p

er C

apita

, Car

cass

Wei

ght

US Beef Consumption Per Capita

Source: Rabobank, USDA, 2011

CattlemenRallyTogethertoChange PoliticalClimateinDC

Kevin Kester, a rancher from Parkfield, Calif., and president of the California Cattlemen’s Association, knows all too well the consequences of electing the wrong individual to represent farmers and ranchers in Washington, D.C. That’s why Kester throws his weight behind the National Cattlemen’s Beef Association’s (NCBA) Political Action Committee (PAC). He said his money carries greater impact by lumping it into a pool than it would on its own.

“The overall point of the NCBA PAC is to elect individuals who realize the importance of a vibrant cattle industry. We also fully intend to send candidates who underestimate the importance of our industry back home,” said Kester. “By pooling our resources, cattlemen can and will impact the outcome of many elections across the country.”

For more than 20 years, NCBA-PAC has been the political arm of the largest national trade association representing U.S. cattlemen and women. PAC Director Anna Lee said NCBA-PAC raises funds from personal voluntary contributions from

NCBA members and pools those contributions together to support political candidates who support the U.S. beef cattle industry.

“The PAC gives cattle producers the access and visibility the industry needs in order to have their voice heard on Capitol Hill,” Lee said. “Individual PAC contributions enable NCBA to participate as a serious player in the competitive political environment in Washington, D.C., and in political races across the country.”

Kester is the first NCBA member to commit to a $2,500 annual contribution. NCBA-PAC has set a goal of raising $1 million per election cycle ($500,000 annually). Kester said if every NCBA member does his or her share by making a contribution, we will not only reach our goal, but we will surpass it.

Helpusacheiveourgoalof$1,000,000forthe 2012electioncycle!

Haveanimpactbyinvestinginthe futureofthecattleindustry!

www.beefusa.org/politicalaction.aspx

$1,000,000

$274,500

$0

www.BeefUSA.org NATIONAL CATTLEMEN 9

ByJamesRobb,LivestockMarketingInformationCenter

On a quarterly average basis, fed cattle prices will be record high this fall. But as cattle feeders know, record high prices do not

always translate into profits. High feedstuff and feeder cattle costs have squeezed feeder margins. In recent months, estimated feedlot closeouts in the Southern Plains have been deep in the red.

The Livestock Marketing Information Center (LMIC) has estimated monthly cattle feeding returns since the mid 1970s. Those returns are based on all production costs in a “custom feeding” situation, which includes paying a daily yardage fee to the feedlot and interest costs.

For September closeouts, LMIC estimated feeding return was about -$90.00 per steer. A year ago, those estimated losses were much smaller (-$16.00 per steer). When comparing this year to 2010, the red ink is mostly due to higher feedstuff costs. In September closeouts, the cost of feedstuffs for a steer placed at about 750 pounds was up 77 percent compared to a year ago. Estimated closeouts have been in the red for five consecutive months (through September) and average losses during that period exceeded $140.00 per steer. Red ink is expected to continue throughout the fall quarter and into early 2012.

Profits can be much better than LMIC estimated averages. For example, superior steers have brought better returns than average quality animals. Age and source verified cattle have received large premiums not included in the LMIC calculations (often $35.00 per steer or more). Sound risk management programs in terms of locking-in costs (feedstuffs and feeder animals) and slaughter cattle prices would have increased

profits this year.LMIC calculations assume feed is

purchased each month. But feedstuff costs have generally risen in 2011, sometimes dramatically. If feedstuff costs were locked-in when animals were placed into the feedlot, profits would have improved. Assuming the same number of steers sold every month from January through September of this year, losses averaged about $69.00 per head. However, if feedstuff costs were locked-in at the beginning of the feeding period the loss would have averaged only $6.00.

So, from January through September of this year, selling age verified steers and using locked-in feedstuffs would have resulted in an average profit of about $29.00 for each steer sold. Of course, such dramatic returns from locking-in feedstuff costs are unusual and in a declining cost environment, the results would be different.

In the high feedstuff cost environment we have today, animals that convert feed into beef better than average will often return a profit when calculated averages show losses. So, knowledge of how cattle will likely perform in the feedlot is a key to success. It takes a sharp pencil and lots of effort to beat the averages when feeding cattle, but it can be done. Still, even in the best of circumstances cattle feeding margins are tight for cattle placed this fall. The breakeven sale price for an average 750-pound steer placed into a Southern Plains feedlot in September and to be sold in early 2012 was about $129.00 per cwt.

Very tight feeding margins will likely cap increases in calf and yearling prices in the months ahead. That situation is expected to be at least partly relieved in the second quarter of 2012 as fed cattle prices strengthen and if weather conditions support normal grain crops and forage development.

HighCattlePricesDon’tMeanFeedlotProfits

ByBrettStuart,CattleFaxThe passage of Free

Trade Agreements (FTAs) for S. Korea, Colombia, and Panama offer excellent potential for U.S. beef

producers. However, this potential is often misunderstood. The structure of most FTAs cuts import duties over time. The theory is that longer tariff phase-outs allow domestic industries to adapt to the new trade environment. So while these agreements are considered enormous successes, the benefits will grow over time, and not be recognized immediately.

For example, Korea currently charges 40 percent import duties on U.S. beef. That means the cost, insurance, freight, handling fees, all accumulate to a total “landed-value” when the beef arrives at Korean customs. That beef is then charged 40 percent of the total value, paid by the importing company. Thus import duties are in reality, a sales tax on domestic consumers. Under the S. Korean FTA provisions this “sales tax” drops to zero in 15 years, or declines by 2.67 percent each year. That kind of tax break on U.S. beef will be significant.

While the S. Korean FTA benefits to beef are obvious, what about Colombia and Panama? Many appear to be less than enthusiastic about the prospects of sending beef to Colombia. However, consider a few facts. Colombia has 45 million people, nearly the same population as S. Korea. And per-capita beef consumption (in carcass weight equivalent) is 45 lbs in Colombia versus 30 lbs in S. Korea (Mexicans eat 36 lbs). While Colombia’s beef prices may not be as high as S. Korea’s, their imports are not starting with a 40 percent duty (or 80 percent -where Korea’s beef duties were just over a decade ago), they are starting now with zero duties. The Colombian FTA provides duty-free access for choice and prime cuts and also starts duty free with an expanding quota for select and standard cuts. It also provides for nearly 5,000 tons per year of duty-free variety meats, with the quota expanding at 5.5 percent growth. Bottom line on

Colombia: per-capita incomes are nearly US $10,000 (purchasing power parity basis), about where S. Korea’s were in 1992. And we have an agreement that provides for growing volumes of U.S. beef at zero duties. We know what S. Korea has done for our industry over the past 20 years. What will Colombia be in 20 years?

Panama’s FTA has similar beef provisions as Colombia’s. Zero-duty quotas expanding over time as other duties are eliminated over 15 years. Panama’s 3.5 million people will consume less than Colombia’s and S. Korea’s, but will be able to enjoy U.S. beef without excessive taxes.

So all in all, these three FTAs allow U.S. beef, the safest and most affordable grain-fed beef on the planet, to be purchased without excessive taxes by an additional 97 million people. These FTAs allow us to sow future benefits for the next generation of U.S. beef producers.

FreeTradeAgreementsMarketMatters

AVERAGE RETURNS TO CATTLE FEEDERSFeeding 725 Lb. Steers, S. Plains, Monthly

-250

-200

-150

-100

-50

0

50

100

150

2009 2010 2011

$ Per Head

Livestock Marketing Information CenterData Source: USDA-AMS & USDA-NASS, Compiled & Analysis by LMIC

Latest Data: September 2011

Consumers sample U.S. beef during a U.S. Meat Export Federation event held at a South Korean retailer. Free Trade Agreements, such as the recently finalized KORUS FTA, allow U.S. cattlemen and women to compete on a level playing field with other beef producing nations in important markets. South Korea is one of the largest importers of U.S. beef. — Photo courtesy of USMEF

BIL LBS,2010 CARCASSRANK COUNTRY WT.

1 United States 26.5

2 EU-27 17.9

3 Brazil 16.7

4 China 12.3

5 Russia 5.4

6 Argentina 5.1

7 Mexico 4.3

8 India 4.2

9 Pakistan 3.2

10 Japan 2.7

11 Canada 2.2

12 Colombia 1.9

13 Australia 1.7

14 South Africa 1.5

15 Iran 1.5

16 S. Korea 1.3

17 Egypt 1.3

18 Venezuela 1.2

19 Vietnam 1.1

20 Uzbekistan 1.0

10 NATIONAL CATTLEMEN www.BeefUSA.org

What’s a beef industry to do?If it’s smart, it examines its alternatives.

That’s how Beef Alternative Marketing – BAM – was born.

BAM creates smaller filets and roasts out of ribeyes, top loins and top sirloins. First introduced in Canada, the program was further researched for its nutritional benefits and made more retailer-friendly thanks to our country’s Beef Checkoff Program. Like the highly successful checkoff-funded Value Cuts program, BAM is slowly but surely capturing the attention of the industry – especially retailers who want to increase beef sales while improving their image with customers.

New cutting techniques identified in BAM give the industry and consumers numerous benefits. For instance, because of increased carcass sizes, steaks have sometimes been cut thinner by retailers to maintain targeted package weights. The new cuts help maintain steak thickness, which protects final product quality while giving consumers the portion sizes and nutritional choices they want.

In short, BAM capitalizes on the popularity and profitability of middle meats, creating more satisfying shopping and eating experiences for consumers. A

complete cutting and marketing program was created around the cuts, including retailer training materials, point-of-sale materials, recipes, cooking instructions, charts, photos and instructional cutting posters.

Slowly but surely, retailers are starting to embrace the new concept.

“Change is not something that’s readily accepted in channel marketing,” said Jim Henger, NCBA executive director of channel marketing. “But we’re finding that BAM is right on track to be one of our most successful programs.”

Henger said the program timing was perfect because of the struggling economy and increasing nutrition concerns of today’s consumers. Focus groups demonstrated that consumers liked the new shapes and

thickness of the cuts, and though they recognized there would be a higher price per pound, weren’t hesitant about purchasing them because of a lower cost per package.

Among the biggest benefits was the nutritional advantage to consumers. There was less fat and waste thanks to extra trimming, and therefore, a leaner fat profile and greater perceived value. A nutrient analysis of BAM cuts, partially funded by the national Beef Checkoff Program and the South Dakota Beef Council, showed that seven of the eight cuts meet government guidelines for lean. The information is helping USDA update its National Nutrient Database for Standard Reference, which is the gold standard of databases for nutrient composition, used by researchers and dietitians around the world.

Research showed sales increases took nothing from the sales of larger cuts. However, women who might have shied away from larger cuts for themselves or their children appreciated the new sizes. They recognized smaller cuts were ideal for both weekdays and weekends.

“BAM really helps that consumer identify those cuts that they might not have purchased otherwise,” according to Heather Buckmaster, executive director of

the Oklahoma Beef Council (OBC). “They were looking for smaller portions, and that is what this program does for them.”

Meanwhile, retailers in test markets liked BAM because the program increases sales and customer loyalty. Plus, they could roll out elements of the program and those cuts that would best work in their markets.

A pilot study conducted by the Homeland Grocery chain in Oklahoma suggested the program could find wide-ranging success with retailers. It experienced sales growth of nearly $34,000 during the 14-week trial, with some stores selling as many as 863 pounds of the BAM products throughout the pilot.

Buckmaster said the program is another demonstration of the value of the state and national partnership in developing successful national checkoff-funded retail programs. BAM required participation of a retailer “who is willing to try new things, so we (OBC) were able to come in and provide additional dollars to the program when it was first launched,” she said. “You have to have the right opportunity and the right retailer, and we had those ingredients in Oklahoma.”

For more information visit www.beefretail.org.

FederationSpotlightBiggerbeefcarcasses.Smallerportionpreferences.Higherprices.Lowermargins.

SkilletSteakswithSautéedWildMushroomsTotal Recipe Time: 25 to 30 minutes

1 to 1-1/4 pounds beef top sirloin cap steaks, cut 1 inch thick

2 teaspoons olive oil3 cups assorted wild mushrooms

(such as cremini, oyster, shiitake, enoki and morel)

2 cloves garlic, minced, divided2 teaspoons chopped fresh thyme Kosher salt and pepper

1. Heat oil in large nonstick skillet over medium heat until hot. Add mushrooms and one clove minced garlic; cook and stir two to four minutes or until mushrooms are tender and browned. Remove; keep warm.

2. Combine thyme and remaining garlic; press evenly onto beef steaks. Place steaks in same skillet over medium heat; cook 8 to 11 minutes for medium rare to medium doneness, turning occasionally. Remove to platter.

3. Carve steaks into slices. Season with salt and pepper, as desired. Top with mushrooms.

Makes 4 servings

Cook’s Tip: Three cups sliced button mushrooms can be substituted for assorted wild mushrooms.

The 29th annual Governor’s Charity Steer Show, a long-time cooperative effort between the Iowa Beef Industry Council (IBIC) and the Iowa Cattlemen’s Association (ICA), raised more than $100,000 for state Ronald McDonald Houses during an auction in August at the Iowa State Fair. To date, the show has raised more than $1.9 million and is on track to top the $2 million mark when it turns 30 next year.

Proceeds support Iowa’s three Ronald McDonald Houses, which provide a “home away from home” to families with very sick children who are hospitalized nearby.

Overall grand champion honors went to “Ferdinand,” who was shown by celebrity handler Gov. Terry Branstad and sold for $13,100 to several state McDonald’s outlets. The IBIC and ICA sponsored the steer, which was one of 23 auctioned and which fetched the fourth highest price in auction history. Hundreds of state businesses and organizations, including many ICA county affiliates, sponsor the steers that young 4-Hers raise to enter the auction.

This venerable event draws robust support from Iowa’s cattle industry – and rivers of celebratory tears from all

participants on auction day, according to Doug Bear, IBIC director of industry relations.

“Iowa producers are so dedicated to giving back to the community through this show. We always have a family who has benefitted from a Ronald McDonald House at the event and believe me, there’s not a dry in the house,” he said.

This year’s show even included an international dignitary – the governor of a Japanese province that received Iowa hog breeding stock and 100,000 bushels of grain through a relief effort following a devastating typhoon in 1959. The governor was at the fair to mark the 50th anniversary of Iowa’s famous “hog lift” and the cultural and economic exchange it created between the two states. He then joined the full house at the charity steer show.

Bear joined the beef council last summer, a few weeks prior to the show, and is looking forward to the challenge of organizing the 30th anniversary auction, set for Aug. 11, 2012.

“I had seen the auction as a spectator many times before but when you get to be a part of it, too – it’ll give you goose bumps,” he said.

IowaBeefIndustryCouncilRaisesMoreThan$100,000forCharity

Governor Shomei Yokouchi of Yamanashi Prefecture, Japan, demonstrates showmanship style as a celebrity handler for Swag, one of 23 steers auctioned during the 29th annual Governor’s Charity Steer Show held in August at the Iowa State Fair. Helping out is Nick Fitzsimmons, who raised Swag for the show.

Contact your state affiliate, Dow AgroSciences or NRCS representative for more information and assistance in submitting an application.

For more information on how to get started, contact esap@beef.org or check out the website at www.environmentalstewardship.org

Do you know a fellow cattleman who is an excellent steward of the land?

Has a neighbor put outstanding environmental practices into place to better their operation?

2012 Environmental Stewardship Award.

Nominations are due March 2, 2012

If so, nominate them for the

2012 Environmental Stewardship Award Nominate Your Neighbor

www.BeefUSA.org NATIONAL CATTLEMEN 11

It’s time to register for the 2012 Cattle Industry Convention and NCBA Trade Show in Nashville, Tenn. This year’s event promises to be better than ever with countless opportunities for cattlemen and women to learn, conduct business and network with their fellow producers. Of course there will be ample opportunity for fun at this year’s event. Whether it’s a night at the Grand Ole’ Opry listening to some of your favorite country musicians perform or an old fashioned barn dance at the Gaylord Opryland Resort, there’s entertainment for everyone. Attendees will also have the opportunity to view some of the newest innovations and products the livestock and agriculture industries have to offer at one of the largest trade shows in the business.

Early arrivals can experience Nashville hospitality with a pre-convention tour of some of the area’s finest agricultural operations.

The official conference events kick-off Feb. 1, 2012 with an opportunity for producers to follow one of multiple education tracks during Cattlemen’s College. The 2012 Cattle Industry Convention opening general session begins with keynote speaker Marcus Luttrell, former Navy SEAL and author of the #1 New York Times Best Seller, Lone Survivor. Following the opening session, conference participants are encouraged to join the fun at the official start of the NCBA Trade Show and Country Music Festival Welcome Reception. Organizers of this year’s event are bringing the energy and excitement of downtown Nashville to the trade show and a wide array of musicians will be performing on stages throughout the Gaylord Opryland Resort and Convention Center.

The events of Feb. 2 will begin early

with the Best of Beef Breakfast, where some of the industry’s brightest stars will be honored for their contributions to the cattle and beef business. Cattlemen and women in attendance will have an opportunity to hear the popular Fox and Friends commentators Cal Thomas and Bob Beckel. Following the second general session, attendees will have a chance to join their fellow cattlemen and women to make their voices heard as they get down to working on the business of the industry during a full schedule of meetings. But the work isn’t limited to adults. Younger attendees will have a chance to participate in a series of special youth events and contests to help build their skills for the future.

That evening, participants can come together again for an exclusive night at the Grand Old Opry to hear some of country music’s brightest stars perform, including rising stars Eden’s Edge and comedian Henry Cho along with legends Charlie Pride and Little Jimmy Dickens. The evening’s highlight is sure to be the headline act, country music superstars Montgomery Gentry. Afterward, you can return to the hotel and convention center for an old fashioned Barn Dance at the Gaylord Opryland Resort.

Friday kicks off with the always popular CattleFax Industry Outlook during the third general session. Participants have the opportunity to hear from analysts about the market factors that will shape the year ahead before returning the business of the cattle industry.

The 2012 Cattle Industry Annual Convention in Nashville holds something for everyone no matter your age or experience level. Join your fellow cattlemen, take part in the fun and make sure your voice is heard.

getYourTickettoRide

2012 IRM RedbooksAvailableGood recordkeeping is extremely important. For more 25

years, cattlemen have used the Redbook to enhance profitability by keeping better records and to track productivity of their cow-calf operation while in the field.

The Redbook contains BQA National Guidelines and provides more than 100 pages to record calving activity, herd health, pasture use, cattle inventory, body condition, scoring section, summary of death loss, calving and cattle treatment and AI breeding records.

The Redbooks can be customized with your company name or logo (minimum order of 100 books at a reduced price). Order forms for customized books are available now. Contact Grace at 800/525-3085.

IRM Redbooks are $6.25 each, plus shipping, and can be ordered online at www.beefusa.org.

Join NCBA’s Cattlemen to

Cattlemen Live!Host Kevin Ochsner sits down

with the experts to discuss policy issues affecting our industry,

including traceability.Call to get your question

answered on air!

December 13th

RFD-TV

Live at 8:30 p.m. eastern

www.CattlemenToCattlemen.org

Many ranchers have already been through a Beef Quality Assurance (BQA) program. Many have sent their hired help through the same training to ensure that their cattle are being handled properly. The benefits of BQA training have helped move herd and carcass quality ahead across the nation. So, what’s the next step in improving your management practices?

According to Ryan Ruppert, NCBA senior director of BQA, the next step is an assessment of cow-calf management practices and a written plan for all ranch personnel.

“Added regulation in this country is costing small businesses, including ranches, an estimated $11,000 annually. Through the beef checkoff-funded BQA program we’re trying hard to help ranchers get ahead of that right now,” he said. “With the recently released ‘Assessor’s Guide to a Beef Quality Assurance Cow-Calf Assessment,’ we’re trying to take the next step with ranchers who have already been BQA certified for a long time and help them move their management practices forward.”

The guide is designed to help farmers and ranchers document their full

management protocol so they can be sure that every member of the team is following the same proper practices on the ranch, every day.

“We’re taking a total quality management approach to the program to help people in the field make continuous improvement each day,” said Ruppert.

He also noted that the comprehensive guide is set up in an easy to implement style, with assessment grids for each management practice, from basic animal care guidelines, to weaning protocols, to proper handling practices. Each practice is scored individually and when complete, the guide provides a benchmark for improvement.

“Ranches may or may not pass every point. In fact, we wouldn’t expect perfection in most of these points, but it provides a starting point which will allow managers to build on in the future,” said Ruppert.

The Assessor’s Guide to a Beef Quality Assurance Cow-Calf Assessment walks through a full range of Best Management Practices, and allows each action to be scored. However, Ruppert noted that it doesn’t mandate specific practices.

“It doesn’t require that you wean your

cattle a certain way. You can wean them on the truck, you can wean them in a pen or you can fenceline wean them. All that matters is that you have a plan, that your personnel are all following the same plan and that it’s written down,” he said.

For those Best Management

Practices that aren’t documented, the guide provides an added benefit. It includes a full range of written protocols for practices such as biosecurity and antibiotic residue avoidance strategy which can be copied directly from the book into the operations guidelines for the ranch. “These templates are designed to be very user friendly,” said Ruppert. “If you don’t have a plan for a specific area, you can tear the page directly out of the guide, make some notes on the page and place it directly into your operating plan.”

The assessment guide will allow progressive operations to make continuous improvement by providing the next step in the BQA process. Once the initial assessment is complete, Ruppert said managers will have a solid foundation to continue the process of herd and management improvement.

To receive a copy of the Assessor’s Guide to a Beef Quality Assurance Cow-Calf Assessment, log on to www.BQA.org and download a free copy. Farmers and ranchers can also call 303-694-0305 to request a copy or email: qualityassurance@beef.org.

ThenextstepinBeefQualityAssuranceisnowavailable

BQAManagementMinuteProducers should be preg-checking

their cows soon. Because of the high cost of feed this year, carrying open cows through the winter will be expensive. To maximize returns cattle producers should look at all of the potential options. Some operations might be able to take some or all of their open cows and breed them to sell as bred cows in the spring, look for seasonality in the market for higher prices, or ship cows as soon as possible to reduce feed expenditures. With the herd reductions around the country and demand for beef in domestic and foreign markets, marketing decisions will be important to maximize profit.

Tips for marketing cull cows to maximize returns:• Market cows should have a minimum

body condition score (BCS) of 3 but prices will be better for cows greater than or equal to a BCS of 4. Thinner cows should be fed to this point before marketing.

• Do not ship cows which are excessively lame. Allow cows time to heal or humanely euthanize those which have injuries not likely to heal.

• Do not ship cows with signs of cancer eye or lump jaw.

• Be sure to follow all health care product withdrawals.

A SAFE, WHOLESOME ANDHEALTHY BEEF SUPPLY

ASSESSOR’S GUIDE TO ABEEF QUALITY ASSURANCE

COW-CALF ASSESSMENT

John Deere Ad6R SeRieS: 6170R – 170 engine hp | 6190R – 190 engine hp | 6210R - 210 engine hp

Don’t just seize the day.

Transform your workday with the 6R Series

Change the way you work with the new John Deere 6R Series ...

our most versatile tractors yet. Models up to 210 HP, with a full

41 GPM hydraulic flow and over 12,000 pounds of rear hitch capacity

give you the muscle to handle big planters and deep tillage

equipment. Need to move some materials? The all-new H360 and

H380 Loaders were built specifically with these tractors in mind,

giving you greater lift height and available single-point electrical and

hydraulic connection. And when the day’s done, you can get home

faster with transport speeds of up to up to 50 km/hr.

Don’t just seize the day...transform it, with the all-new 6R Series

Tractors from John Deere.

Witness the transformation ... JohnDeere.com/6R

50036.10_New6RSeries1pAd.indd 1 10/27/11 1:10 PM