December 20, 2013 - Texas Cattle Feeders Association

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TCFA
Volume 47, Number 51
December 20, 2013
ABC News Asks Court to Dismiss LFTB Suit
ABC News lawyers asked a South Dakota circuit court judge on Tuesday to dismiss a $1.2 billion defamation
lawsuit over its coverage of lean finely textured beef (LFTB), as it stood by its reports and cited free speech
protections, according to Reuters. Attorneys of Beef Products Inc (BPI), makers of LFTB, argued the case
should go before a jury, since ABC News knowingly defamed the company’s product, damaging its business.
Judge Cheryle Gering took under advisement oral arguments from both sides and will issue a written ruling
to the parties involved. She did not offer a timetable for her decision. BPI closed three of its four plants last
year, laid off more than 650 employees and saw annual revenue plunge roughly 80 percent to $130 million
from more than $650 million, Reuters reports. Read more at http://tinyurl.com/abc-bpi-suit.
New Study Cites Livestock Efficiency in GHG Emissions
Yet another detailed analysis of greenhouse gas (GHG) emissions related to global livestock systems,
published this week in the Proceedings of the National Academy of Science, shows vast differences in animal
diets and emissions. The resources required to raise livestock and the impacts of farm animals on
environments vary dramatically depending on the animal, the type of food it provides, the kind of feed it
consumes and where it lives, according to the study, Feedstuffs reports. The study is the newest inclusive
assessment assembled of what cows, sheep, pigs, poultry and other farm animals are eating in different parts
of the world; how efficiently they convert that feed food product; and the amount of greenhouse gases they
produce. Find more at http://tinyurl.com/ghgefficiency.
China Sees Progress on U.S. Beef Talks
China and the U.S. are making progress this week toward a deal on American beef exports, but an agreement
on technical issues must be made before final approval. American beef was restricted by China in 2003, after
the first reported U.S. case of BSE. An agreement and final approval on the deal is hoped to be made by next
July. “The United States industry looks forward to receiving more details about today’s discussions between
our two governments,” said Michael Pareles, U.S. Meat Export Federation’s spokesman at the Beijing office.
Court Opens Door to Horse Slaughter
Last Friday, a federal appeals court in Denver removed a temporary ban on domestic horse slaughter, clearing
the way for companies in New Mexico, Missouri and Iowa to open while an appeal of a lawsuit by animal rights
groups proceeds. The 10th U.S. Circuit Court of Appeals in Denver said the groups had “failed to meet their
burden for an injunction pending appeal.” Read more at http://tinyurl.com/court-opens-door-to-horse-slau.
Meanwhile, New Mexico Attorney General Gary King Filed Suit Thursday to again halt Valley Meat Co.
in Roswell from opening. Blair Dunn, the company’s attorney, called King's lawsuit frivolous and a waste of
taxpayer money. Under state law, if a judge issues a restraining order or preliminary injunction, a security bond
would have to be posted by the state while the legal challenge winds its way through the court. Dunn said that
could cost New Mexico as much as $435,000 a month. Valley Meat Co. plans to open for business on Jan. 1.
Find more at http://tinyurl.com/nm-ag-sues.
Consumers’ Willingness to Pay Slides in December
December witnessed a decreased willingness to pay (WTP) for all meat products except hamburger, according
to the latest results from the FooDS Food Demand Survey conducted by Oklahoma State University. WTP for
chicken breast and chicken wings fell to the lowest level recorded since the survey began in May, and although
WTP for steak fell only 4.3 percent from November to December, it too fell to the lowest level since the survey
began. For the first two weeks in December, food-grocery expenditures were $91.40, down 2.76 percent from
November, while $43.95 was spent on food away from home, according to survey results. Consumers expect
to spend slightly more money on food purchased for use at home and less on food purchased away from
home. Consumers also indicated a preference to buy beef and pork, saying they expected higher chicken
prices. To read the full report, go to http://tinyurl.com/consumer-wtp.
Mexican Feeder Cattle Imports
Imports of Mexican feeder cattle for 2012 were just below 1.5 million head. The five-year average is just above
1 million head. Year-to-date imports in 2013 are 920,000 head, a 36 percent reduction from last year and 13
percent reduction from the five-year average. This reduction in Mexican feeder supplies was a major driver in
the shortfall in U.S. cattle placements during the summer months, according to the Daily Livestock Report.
Lower feed costs in North America may encourage Mexican producers to reduce the number of female
calves they send to feedlots in the coming months. Imports of feeder heifers are down 58 percent, while
imports of feeder steers are down 31 percent. The bottom line is that a shrinking calf crop in Mexico, lower
feed costs and less intense drought conditions will tend to limit the supply of Mexican feeder cattle coming into
the U.S. next year. This will further exacerbate the expected shortage of feeders in the U.S. market.
Feeder Cattle Prices Hit Record High in November
Feeder cattle prices in November were record-high at $162.95/cwt. (basis 750-800 lbs. steer, Med. and Lg. #1,
Oklahoma City), say analysts with the USDA Economic Research Service (ERS) in this month’s Livestock,
Dairy and Poultry Outlook. According to Cattle Current, ERS analysts say, “Monthly average feeder cattle
prices had increased from 7 percent (750-800 lbs. steers) to 10 percent (500-550 lbs. steers) during the August
through November period, partly as a result of scarcity, but also in response to the positive effect that declining
corn prices are having on the potential improvement in cattle feeding margins.”
Declining feed costs and improving pastures are allowing more options for producers who graze livestock,
the ERS reports. “As of early December, monthly average corn prices had dropped by almost a third from
August’s monthly average price. The corn price decline is due to good corn yields, abundant supplies and
developments toward relaxing the Renewable Fuels Standard. Further, thanks to some timely precipitation, the
majority of the winter wheat crop in Texas, Oklahoma, and Kansas – particularly the grazing areas – appears
to be in mostly fair to excellent condition. Precipitation now and through the winter will also benefit pastures
next spring, enhancing the outlook for summer grazing in 2014.”
Those factors set the stage for prices to stay in the nose-bleed section next year. “We’ve transitioned
into this tighter supply situation that we’ve been looking at for quite a while. Both cattle slaughter and feed
production are falling sharply here at the end of the year and that really sets the tone for the markets, I think,
as we move into next year,” Oklahoma State University Livestock Market Economist Dr. Derrell Peel told the
Oklahoma Farm Report. Find more on Peel’s thoughts at http://tinyurl.com/high-cattle-prices-stage-2014.
U.S. and Brazil Close to Trade Agreement
“The U.S. and Brazil are two of the world’s largest agricultural producers and exporters. Over the last 20 years,
USDA and Brazil’s Ministry of Agriculture, Livestock and Food Supply (MAPA) have collaborated on many ag
issues and currently have some 100 agricultural cooperative activities,” says Michael T. Scuse, undersecretary
for Farm and Foreign Agricultural Services. “As global leaders in the use of innovative agricultural production
technologies, both countries share a keen interest in exploring further agricultural cooperation.”
As such, Scuse says both Brazil and the U.S. maintain a strong commitment to science-based rulemaking.
“USDA and MAPA recently agreed to a path forward to amend rules that currently limit bilateral beef trade.
Bilateral trade of all beef and beef products could occur once each exporting country meets the importing
country’s equivalence and technical requirements for animal health and food safety,” Scuse says.
Despite Missing 2013 Target, TPP Moves Forward
The latest round of negotiations on the Trans-Pacific Partnership ended earlier this week without a final deal,
but the heads of each country’s delegation, in a media statement, say significant progress was made during
the four-day discussions in Singapore.
“We have decided to continue our intensive work in the coming weeks toward such an agreement,” said
U.S. Trade Representative Michael Froman, reading the joint statement. “We will also further our consultations
with stakeholders and engage in our respective political processes. Following additional work by negotiators,
we intend to meet again next month.”
The TPP is being negotiated by the United States, Australia, Brunei Darussalam, Canada, Chile, Japan,
Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. South Korea has recently expressed interest in
becoming part of the TPP, which is a set of trade negotiations aimed at eliminating tariffs and non-tariff barriers
to trade, opening markets and establishing rules on a wide range of trade-related issues, according to DroversCattle Network. For more, go to http://tinyurl.com/tpp-moves-forward.
Mexico Poised to Become Major Beef Exporter
The Mexican government is close to completing a major investment in a beef feeding and slaughter operation
that will put the country squarely into the world beef trade, the North American Meat Association reports.
Dubbed “Lucero,” the integrated livestock project (feedlots and processing plant) will be on 475 hectares in
the state of Durango. The feedlots will have a capacity for up to 250,000 animals. There will also be an
industrial unit for cattle feed and a Federal Inspection Establishment for Slaughter and a meat processor.
It is estimated that production will be 800,000 cattle per year, with 60 percent of production being exported.
This project will use the highway infrastructure from Durango to Mazatlán to reach ports for shipping meat cuts
to Asia-Pacific and Europe. The estimated investment is 8 billion pesos, which will be provided by the federal
and state government and by the industry. It is planned to be completed by January 2014.
Texas Animal Health Commission (TAHC) Conducts National Veterinary Stockpile (NVS) Exercise
As a part of ongoing efforts to prepare for large-scale foreign or emerging animal disease emergencies, the
TAHC and the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service partnered with
personnel from other state and local agencies to conduct the NVS Logistics Exercise recently in San Antonio.
The full-scale exercise focused on logistical requirements for delivering and managing all of the supplies
responders would need during the initial stages of a damaging animal disease outbreak. The NVS is the
national repository of critical veterinary supplies, equipment, vaccines and services that can be deployed to the
site of a damaging animal disease outbreak. Find more at http://tinyurl.com/em-mgt-response.
Feeders and Feedyards in the News
Tom Portillo, DVM is the new Manager of Animal Health at Friona Industries, L.P. Dr. Portillo has been an
independent veterinary consultant for 14 years at several cattle feeding operations prior to this move.
Cactus Feeders has hired Jess Turner as the new General Manager at Hale Center Feedyard. Former
Manager Kevin Kuriyama is relocating to Cactus' Amarillo office and will lead the Feedyard Services division.
TCFA bids farewell to Shirley Garrison, long-time TCFA member, former board member and founder of
Bar-G Feedyard. He passed away Dec. 13 in Lubbock where his services were held on Dec. 18. Shirley was a
well-respected leader in cattle feeding, banking, the Methodist church and many other endeavors. View his
obituary at http://tinyurl.com/shirley-garrison.
TCFA Wishes You a Merry Christmas
As the world pauses next week to celebrate Christ’s birth, TCFA will pause as well, to wish all members a very
Merry Christmas. TCFA offices will be closed Dec. 24 and 25 next week, and there will be no Newsletter.
However, watch your inbox for a weekly market wrap up on Monday, Dec. 30.
Sponsor Spotlight
TCFA is proud to recognize its top sponsors whose efforts help deliver top-notch service.
This week’s spotlight shines on
Zoetis (formerly Pfizer Animal Health) is a world leader in the discovery, development and manufacture of
vaccines and medicines for companion animals and livestock species. The Zoetis portfolio encompasses a full
range of products including: DRAXXIN® (tulathromycin) Injectable Solution, Bovi-Shield GOLD®, INFORCE™ 3
Respiratory Vaccine, DECTOMAX®, EXCEDE® (ceftiofur crystalline free acid) Sterile Suspension, MGA®,
SYNOVEX®, E. Coli Bacterial Extract vaccine with SRP® technology, the newly acquired feed additives
Aureomycin®, Aureo S 700®, Bovatec®, Deccox®, and others. For more information about how Zoetis works to
ensure a safe, sustainable global food supply from healthy livestock, visit www.zoetis.com.
Please note: All links are available at www.tcfa.org under This Week’s Newsletter links.
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part, without the prior written consent of TCFA. The information contained in this material is believed to be reliable and correct, and the views expressed reflect judgments at this time
and are subject to change without notice. TCFA does not warrant or guarantee that the information is complete, comprehensive or accurate and it should not be relied upon as such.
Texas Cattle Feeders Association
December 20, 2013