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BEEF Cattle questions may be directed to the OSU Extension BEEF Team through Stephen Boyles or Stan Smith, Editor
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Previous issues of the BEEF Cattle letter
Issue # 612
November 26, 2008
$175 per cow gas tax - Jim Dickrell, Editor, Dairy Today
The internet lit up last week about a possible Environmental Protection Agency (EPA) green house gas (GHG) tax on dairy cows that would amount to a $175 per cow annual fee simply for ruminating.
The urgency of the proposal, which was flitting around the web at byte speed, was fueled by the fact that comments on the proposal are due this Friday, November 28. The proposal, issued in an "Advanced Notice of Proposed Rulemaking," is a mere 168 pages in the Federal Register.
EPA acknowledges that regulating GHG under the Clean Air Act is controversial: "The implications of a decision to regulate GHGs under the [Clean Air] Act are so far reaching that a number of other federal agencies have offered critical comments and raised serious questions during interagency review of EPA's ANPR.
"Rather than attempt to forge a consensus on matters of great complexity, controversy, and active legislative debate, the Administrator has decided to publish the views of other agencies and to seek comment on the full range of issues that they raise."
The problem, of course, is that EPA published the proposed rulemaking on July 30th - yep, four months ago - and few in the ag community seemed to take notice. Yet comments are due Friday - this Friday.
But before we all get our undies in a bundle, there is a bit of political gamesmanship going on here, suggests Andrew Walmsley, environmental services coordinator with the Florida Farm Bureau Federation.
"[President-elect] Obama is calling on Congress to enact global warming, cap-and-trade legislation within the next 18 months. If Congress doesn't act, he would then let EPA move forward with the Clean Air Act regulating greenhouse gases," he says.
If that happens, pain will follow. Title V of the Act requires any entity that will potentially emit more than 100 tons of green-house gas to obtain a permit. USDA estimates that any dairy farm with more than 25 cows or any beef operation with more than 50 cattle would be potential emitters of that 100-ton magnitude.
In 2008-2009, the "presumptive minimum fee" for the emissions permit is $43.75/ton/year of emitted GHG, which translates into $175 for each dairy cow, $87.50 for each head of beef cattle and $20 for hog. Can you say ouch?
The average U.S. dairy farm, which now milks 155 cows, would be facing a $27,000 annual GHG permitting fee.
Such onerous penalties are insane. What it would amount to, for the mere privilege of inhalation, exhalation, and flatulency, would be 87.5¢ fee on each hundredweight of milk produced. And that doesn't include the higher feed prices driven by the permitting fees on crop farmers. (Farms with more than 500 acres of corn or 250 acres of soybeans would also be required to obtain - and pay for - emissions permits.) And for what?
Agriculture, and the dairy industry in particular, has done an incredible job of reducing methane emissions over the past 85 years. Over that period, milk production has doubled while cow numbers have dropped nearly 60%. Click here to read the stories from Dairy Today and the University of Minnesota. As a result, each gallon of milk produced today results in just a third of the methane emitted compared to 1924. The dairy industry should be applauded for that achievement, not penalized with put-you-out-of-business taxes.
Congress must get its clean air act together to enact cap-and-trade legislation. The alternative - an emissions tax on food production - stinks.
2009 Great Lakes Professional Cattle Feeding and Marketing Shortcourse
The 2009 edition of the Great Lakes Professional Cattle Feeding and Marketing Shortcourse is set for January 28 and February 11 in the Wood County Junior Fair Building at Bowling Green, Ohio. This short course is a joint effort of Ohio State University Extension, Michigan State University, and the Ontario Ministry of Agriculture to enhance the cattle industry in the Eastern Corn Belt. This short course is designed specifically to update the cattle feeding industry on current feeding, management, and marketing practices to improve profitability. Small margins available to cattle feeders will magnify the need to capitalize on all opportunities to improve profitability. Cattle feeders that stay abreast of these issues will be better positioned for the 21st century.
The first session of the shortcourse will focus on management and nutritional strategies to improve production efficiency. It will also highlight recent advances in feeding cattle.
The second session will focus on the current issues of marketing, risk management and harvesting the optimal value from the cattle produced in your feedlot.
Both sessions will be held at the Wood County Junior Fair Building in Bowling Green. Registration and refreshments will be provided beginning at 6 pm each evening.
Participants may enroll by sending a check made payable (US Funds) to Michigan State University ($30 for 1st person and $20 for each additional family/farm member; FFA/4-H students can register for $10 each) and mailed to Steven Rust, Dept. Animal Science, Michigan State Univ., 2265B Anthony Hall, E. Lansing, MI 48824-1225. Please mail before January 22, 2007. If not mailed by January 22, contact Steve Boyles (boyles.4@osu.edu, 614-292-7669) or Dan Frobose (frobose.1@osu.edu, 419-354-6916) if you desire to attend the program or if you have any questions about the program.
The Heart of America Grazing Conference
The five-state Heart of America Grazing Conference will offer producers an opportunity to gain information on the advantages of improved grazing systems. Purdue Extension and other Indiana organizations will join with Illinois, Kentucky, Missouri, and Ohio organizations to sponsor the event. The conference will be held at the Holiday Inn Conference Center in Columbus, IN on January 21and 22, 2009.
Registration and a tradeshow will start at 4 p.m. EST on Jan. 21st. A 6:30 p.m. banquet will be followed by the conference's keynote speaker, Joel Salatin of Polyface, Inc. Salatin will discuss his farm operation which includes the raising and marketing of "Salad Bar Beef, Pigaerator Pork, Pastured Poultry (eggs, broilers, turkeys), Forage-Based Rabbits, and Forestry Products.
The second day of the conference starts at 8:30 a.m. Topics offered include forage growth and development, ultra-high stock density grazing, getting started in management-intensive grazing, and improving the existing management-intensive grazing system. Following lunch there will be breakout sessions discussing marketing of farm-raised products, utilizing sheep and goats in the grazing environment, economic flexibility in grazing stocker calves or replacement heifers, and alternative forages.
There also will be exhibitor booths on display throughout the two-day event showcasing fencing and livestock watering supplies, pasture irrigation, seed, minerals, and livestock medications.
Individuals may register by December 19 for a reduced price of $65 for both days or $40 for one day. Regular costs (after Dec 19) for the event are $75 for both days or $50 for one day. This fee covers all program materials and meals. Lodging is available at the Holiday Inn for $79 per night per room plus tax. Hotel reservations can be made by calling 812-372-1541 and participants should indicate that they are with the Heart of America Grazing Conference. For more information contact Brad Shelton of Purdue Extension - Washington Co., 806 Martinsburg Rd, Suite 104 Salem, IN 47167; (812) 883-4601 or sheltonb@purdue.edu. A registration brochure is available at www.agry.purdue.edu/ext/forages.
Weekly Roberts Agricultural Commodity Market Report - Mike Roberts, Commodity Marketing Agent, Virginia Tech
Quote of the week, "Outlooks for row-crop prices are meaningless in this broader investment environment, and even long-term market bulls are likely to avoid these markets until they are convinced the downside volatility from outside markets' influence has run its course."
DTN Snapshot Staff release, November 24, 2008
All I can say is, "Amen."
CORN futures on the Chicago Board of Trade (CBOT) finished up after a shaky start on Monday. The DEC'08 contract closed at $3.544/bu; up 16.0¢/bu from Friday but 29.0¢/bu lower than two weeks ago. MAR'09 corn futures closed at $3.710/bu; also up 16.75¢/bu but 30.5¢/bu lower than Monday before last. Gains in crude oil and stock markets, oversold corn market chart signals, and poor near-term demand for corn had traders thinking this corn market is due for an uptick. Exports were supportive as USDA put corn-inspected-for-export at 28.7 mi bu vs. expectations between 24-28 mi bu while a major U.S. hog feeder imported wheat from Britain and Brazil due to the high cost of corn. Brazil offered significant corn discounts to slow overflow of local silos ahead of the new-crop harvest which will begin in January. Weather forecasts were favorable for wrapping up the U.S. corn harvest. Late Monday USDA placed the U.S. corn harvest at 89% complete as the market traded 84-88% completion. Ethanol profits in the U.S. looked grim but were seen as looking up on lower corn prices. Funds remained in net-short positions amid buying activity of over 7,000 lots supporting corn/wheat spreading in nearby months. Cash corn bids in the U.S. Midwest were steady early Monday amid slow farmer selling. Cash corn in the U.S. Mid-Atlantic States was stronger with bids ranging from 16.0¢/bu - 21.0¢/bu higher. Be wary of the downside to this market in these troubled times while trying to catch an uptick to price any un-sold corn. A put option is not out of the question.
LIVE CATTLE futures on the Chicago Mercantile Exchange (CME) were up Monday ranging from $1.30/cwt - $2.425/cwt higher The DEC'08LC contract closed at $86.650/cwt up $1.750/cwt but $6.000/cwt lower than Monday before last. FEB'09LC futures closed up $2.100/cwt at $87.600/cwt; $6.550/cwt lower than two weeks ago. The same outside markets supporting other commodities, Friday's Cattle on Feed report, and buying on a technically oversold market helped the livestock sector. USDA reported a six-year low on November 1 in the on-feed supply with October placements below the average. Feedlot supplies were reported at 93% of a year ago compared to estimates of 93.9% of a year ago. October placements were placed at 89% of a year ago while marketings came in at 97% of last year at this time. The market traded estimates of 91.5% October placements and 95.5% marketings. USDA on Monday put Choice Boxed Beef at $155.62/cwt, down $4.48/cwt but $4.83/cwt higher than week before last. USDA put the 5-area price at $87.26/cwt, off $2.83/cwt from Monday before last. Packer demand was light on Monday while processors are seen as picking up buying to fill Tuesday and Wednesday lines. According to HedgersEdge.com, the average packer margin was raised $4.90/head over week before last to a positive $10.20/head based on the average buy of $90.69/cwt vs. the average breakeven of $91.49/cwt. The U.S. economic instability will contribute to volatile feed prices. Consider corn gluten as an alternative or buying out-of-the-money corn call options.
FEEDER CATTLE at the CME followed live cattle and the other commodity markets higher on Monday. JAN'09FC futures finished at $91.400/cwt, up $2.00/cwt from Friday but $7.375/cwt lower than two weeks ago. The MAR'09FC contract settled at $92.250/cwt, up $2.10/cwt. A technically oversold market featuring short covering, buy-stops along with last Friday's USDA Cattle on Feed report and a discount to the CME Feeder Cattle Index fueled higher feeder prices. The latest CME Feeder Cattle Index settled at $94.46/cwt, off $1.05/cwt from last posting and $1.99/cwt lower than Monday before last. It might be a good idea to price short-term feed needs on downticks in feed prices amid these volatile economic times.
Breadbasket Landscape - Baxter Black, DVM
Every artist has to paint a landscape now and then.
Fall in the heartland is a season of ripening. As I negotiate my way across the canvas there is a feeling that the air is heavier. No breeze, a clear light blue sky and nothing to stop the atmosphere from pressing down on the dark musky soil.
Elderberry bushes hang their purple fruit over fence wire. Giant hardwood trees thick with shadows cast black shade in creek bottoms. Kudzu covers corpses of trees, its smothering vines turning them into ominous figures wearing dark hoods and capes.
A raccoon dead on the highway, a wary whitetail, a skein of geese crossing my trajectory, all appear at the edge of my vision as I roll by. Ponds still as molten lead, algae claiming the fringes. The occasional tractor putts along as if farmers were sending players onto the field before the game starts. Grape-shaped political faces ripening on signs remind us of the season.
Then you pass through a tunnel of shady creek bottom and run up against an army of cornstalks en mass, a wall that towers over you. On top you continue alongside mile after mile of battalions, divisions, plateaus of corn stalks, shoulder to shoulder, in tight formation. They stand at attention up against the road as precipitous as Manhattan skyscrapers at the edge of the water.
The landscape becomes patched with huge tracts of corn stubble as even as a boot camp haircut. Interspersed are fields of the quiet elephant of the food chain, soybeans. Lush and penetrating green when growing, they do not age attractively. The yellow comes. Not the pretty yellow of aspen trees but a more sickly, banana-peel yellow. In this season of harvest they look like weeds. Yet one only has to peel the pod to see the small perfect light gold round seeds. Joined together by the trillions these seeds form the foundation for America's and much of the world's daily bread.
The rolling hills often limit the vast agricultural horizon until you pass through a glacial valley or river bottom, and the distance opens up and you see fields and trees, hazy through the heavy air. It could be the day before D Day. As soon as tomorrow the game will begin. Then the roar of trucks, combines, machinery, the buzz of activity, and a sense of urgency will replace the gestational quietude. The smell of dust, chaff, rubber tires, diesel, oil and gas, even ethanol, will fill the air that zephyrs the roadside as grain bearing semis fly by!
Everything seems to be in anticipation of the moment the farmer strips the corn cob, bites a kernel, looks at the sky, kicks the soil and says, "It's time."
If you ever wonder where food comes from, one trip through the heart of the country when it's ripening will paint you a picture of America's pregnant horn of plenty. Think of us when you eat . . . we think of you when we farm.
Visit the OSU Beef Team calendar of meetings and upcoming events
BEEF Cattle is a weekly publication of Ohio State University Extension in Fairfield County and the OSU Beef Team. Contributors include members of the Beef Team and other beef cattle specialists and economists from across the U.S.
All educational programs conducted by Ohio State University Extension are available to clientele on a nondiscriminatory basis without regard to race, color, creed, religion, sexual orientation, national origin, gender, age, disability or Vietnam-era veteran status. Keith L. Smith, Associate Vice President for Ag. Admin. and Director, OSU Extension. TDD No. 800-589-8292 (Ohio only) or 614-292-1868
Fairfield County Agriculture and Natural Resources
