State Fair Beef Barn – The new Beef Barn is almost ready to serve Cattlemen’s Ribeye Steak Sandwiches and Hot Beef Sundaes beginning  October 3rd. A few more volunteers are needed to fill out several days at the State Fair when we don’t have a full crew so if you would like to help, call Teri at 601-354-8951 or joinmca@bellsouth.net

Scholarship Applications Online – Forms for convention scholarships are now available online at www.mscattlemen.org . At this year's convention, $48,000 in college scholarships was presented to the children and grandchildren of MCA members.  The Wax Company, Mississippi CattleWomen’s Association, and Mississippi Cattlemen’s Foundation each sponsor scholarships. 

Cattle Market Notes, Friday, September 21, 2007, Dr. John Anderson, Mississippi State University – Last week was another slow week in the fed cattle market.  The 5-Area average price last week was down about $2 from the week before. This week, light trade developed in the North on Thursday, though business was too light to establish a trend.  On Friday, active cash business developed in all regions.  Prices were steady to $1.50 higher, ranging from $91-$92 in Iowa Minnesota to $94-$94.50 in the Southern Plains. 
Calf prices were uniformly lower at auctions around the country this week.  At Oklahoma City, prices on feeder steers and heifers were $1 to $3 lower.  Stocker steer prices were steady to $1 lower; and stocker heifer prices were $2 to $5 lower.  At Georgia auctions this week, prices on feeder steers were $2 to $4 lower, and prices on feeder heifers were $1 to $3 lower. Prices on stocker steers and heifers were $2 to $3 lower.
At Mississippi auctions this week, feeder steer prices were $1 to $5 lower, and prices on heifers were $5 lower.  Steer prices at Mississippi auctions this week were reported as follows: 250-300 pounds, $140-$150; 300-400 pounds, $125-$140; 400-500 pounds, $118-$125; 500-600 pounds, $108-$118; 600-700 pounds, $100-$108; 700-800 pounds, $90-$100. Slaughter cow prices were $1 to $3 lower this week.  For the week: breakers, not reported; boners, $40-$47; lean (850-1,200 pounds), $38-$43.
Live Cattle futures started the week on a weak note after late last week slow cash trade and lower cash prices.  Live Cattle futures closing prices on Friday (with change from last Friday’s close in parentheses) were as follows: October $96.70 (+1.45); December $100.17 (+1.02); February $101.57 (+0.87); April $101.25 (+0.73); June $97.07 (+0.97).
Feeder Cattle futures closing prices on Friday (with change from last Friday’s close in parentheses): September $116.40 (-0.42); October $116.20 (-0.65); November $116.37 (-0.75); January $114.97 (-0.38).
The recent performance of corn futures has been impressive; particularly with the market now staring into the teeth of what will undoubtedly be the largest corn harvest in history.  This past week is reviving memories of last year’s demand-driven counter-seasonal price rally.
The December contract is now at its highest level since late June.  December Corn closed on Friday at $3.76 ¾, up 27 ¾ cents from last week’s close.  Soybean futures also moved up this week.  November beans closed on Friday at $9.79, up 24 ¼ cents from last Friday’s close. Dr. Anderson’s complete report can be accessed from www.mscattlemen.org

Johanns Announces Resignation - U.S. Agriculture Secretary Mike Johanns resigned his position September 19th.  He will return to Nebraska where he is expected to launch a Senate bid in the coming days. 
NCBA President John Queen said, “Mike Johanns has been a great friend to NCBA and to the cattle industry, as well as to production agriculture as a whole.  We hate to lose a friend like that.  But we’re hopeful that he will continue to be a friend to cattlemen, no matter where his life of public service takes him.”
For cattlemen, Johanns’ most revered accomplishment was his steadfast attention to restoring and expanding beef export markets.  “Mike Johanns has properly insisted on establishing trade policies based on sound science and in accordance with international standards,” said Queen.  “Thanks to his responsiveness and aggressiveness in this area, U.S. cattlemen are now providing more international consumers with the best and safest beef in the world.”

New Study Says Ethanol Industry Doesn't Need Federal Support - The ethanol industry is booming and does not need large federal supports, according to a new study by Thomas Elam, agricultural economist and president of consulting firm FarmEcon.com.
"Ethanol is one of the most profitable enterprises in the United States today, but unfortunately a high percentage of those current profits come not from the marketplace, but from the federal treasury," Elam said in a news release. "Increased energy prices make it possible for the ethanol industry to thrive on its own."
According to Elam's study, federal supports, when fully implemented, will drive up the cost of corn and other grains by $34 billion per year. The ethanol boom is driving up the cost of food production, and could eventually cost a family of four about $460 a year in higher food costs, he said.
Federal supports are severely distorting crop prices while adding little, if anything, to the stated goals of the renewable energy program, Elam said. The ethanol program is also increasing the federal outlays and has very little impact on U.S. dependence on foreign oil, he wrote.
The 51 cents per gallon tax credit given to fuel blenders who add ethanol to gasoline has caused significant increases in food costs and distorting farmer planting incentives, Elam said.
"Ethanol producers can easily afford to compete with U.S. livestock and poultry producers for corn," Elam said. "Even without subsidies, ethanol production would be expanding at a significant rate due to high gasoline prices and the improvements in ethanol production technology in recent years." from meatingplace.com

Tyson, Cargill Cut Back Hours At Beef Plants - Tyson Fresh Meats beef plants in Texas, Kansas, Nebraska, Iowa and Illinois did not operate last Saturday nor will they this Saturday.
Tyson spokeswoman Libby Lawson blamed the shutdowns on poor margins, which also forced the processor to scale back production earlier this month.
Cargill Meat Solutions also reduced beef production hours starting last week due to margin conditions. from meatingplace.com

USDA Rule Will Expand Canadian Beef and Cattle Trade - USDA released its final rule to amend the BSE minimal risk region rule (Minimal Risk Rule II, or MRRII).  This rule normalizes the trade of cattle and beef products from Canada into the United States.  The final rule was published in the September 18th edition of the Federal Register and will take effect on November 19, 2007.
This rule expands upon the Canadian Minimal Risk Rule I released by USDA’s Animal and Plant Health Inspection Service (APHIS) in January 2005 that allowed the importation of certain live ruminants and ruminant products, including cattle under 30 months of age for slaughter from countries recognized as minimal risk for BSE. Currently, Canada is the only minimal-risk country designated by the United States.
This final rule allows for the importation of the following:
- Live cattle and other bovines (i.e., bison) for any use (including breeding) born on or after March 1, 1999, which APHIS has determined to be the date of effective enforcement of Canada's ruminant-to-ruminant feed ban;
- Blood and blood products derived from bovines, collected under certain conditions;
- Casings and part of the small intestine derived from bovines; and
- Beef and beef products from Canadian cattle of any age (This was allowed as part of the first MRR rule, but USDA delayed the applicability of those provisions that dealt with beef and beef products from animals 30 months of age or older).  
In its economic analysis, USDA adjusted the annual estimate of older live cattle imports pertaining to this rule from 657,000 head to only 75,000 beginning in 2008. “Once this rule enters into effect, the primary result is expected to be additional imports of Canadian non-fed beef - rather than live cattle - which will replace lean beef imports from other countries such as New Zealand and Australia,” said Gregg Doud, NCBA chief economist.   
Doud and other industry economists do not expect this rule to vastly impact the U.S. cattle market, for the following reasons: 
- The age requirement in this rule will disqualify most Canadian beef cows from importation for lack of proper age documentation;    
- Transportation costs, the strength of the Canadian dollar, and a surplus of packing capacity in Canada are additional disincentives to live cattle imports;
- The extra Canadian packing capacity boosted Canadian cull cow and bull slaughter by 50 percent between 2004 and 2006 and has greatly reduced any backlog of cull cows in Canada;  
- Although the price of cull cows in Canada is currently about 20 percent less than it is in the United States, annual Canadian cull cow slaughter is only 13 percent of that in the United States. As a result, it is widely expected that Canadian cull cow prices will appreciate to U.S. levels almost immediately after this rule goes into effect; and  
- In the short term, analysts expect U.S. cull cow prices to dip slightly but still stay above 2006 levels.
NCBA is still reviewing the details of the rule but says it appears to represent a move toward normalized trade with Canada based on scientific standards, which NCBA supports. 
“Over the long term, this will have a positive impact for U.S. cattlemen.  For example, we are now able to have discussions with Canada and Mexico – our two most lucrative export markets – about taking U.S. feeder cattle and breeding stock,” says Doud.  “Our international trading partners are watching how we handle the resumption of trade with Canada and will likely apply some of the same standards to resuming trade with us.”

Chuck Conner Named Acting Secretary of Agriculture - In the wake of Johanns’ resignation, President Bush has asked Chuck Conner, USDA’s Deputy Secretary, to serve as the Acting Secretary.  Conner grew up on his family's farm in Benton County, Indiana, where he worked with his father and brother raising corn, soybeans, and cattle. He holds a Bachelor of Science degree in Agricultural Economics from Purdue University.
“Chuck Conner knows the ins and outs and technical aspects of U.S. farm policy about as well as anyone in this country,” said NCBA Vice President of Government Affairs Jay Truitt.  “This will be a great opportunity for him to shine as Congress and the Administration work to iron out the 2007 Farm Bill.”

ITC Releases Economic Analysis of Korean FTA - As part of the process toward ratifying the U.S.-Korea Free Trade Agreement (FTA), the International Trade Commission issued a report last week indicating the economic impacts of this agreement on the U.S. economy. 
“We’ve said all along that U.S. beef producers could be one of the biggest beneficiaries of the U.S.-Korean FTA, and this analysis confirms it,” says NCBA Chief Economist Gregg Doud.  Doud points to South Korea's 40 percent tariff on beef as one of the biggest barriers U.S. beef producers face in the international marketplace. The study says "the long-term effects of tariff and TRQ liberalization estimates that U.S. beef exports to Korea could increase by $0.6-1.8 billion (58-165 percent)." The report assumes a full reopening of the Korean market to U.S. beef and is based upon 2003 (pre-BSE) levels of trade.
"The key assumption in this report is the return of full and unfettered U.S. access to the Korean beef market," says Doud.  "It bears repeating that any reduction in tariffs is meaningless if we don't have access to the market in the first place."
In 2003, U.S. beef and beef variety meat exports to Korea were $815 million, making it our third largest market. Doud believes that upon regaining full access, the weaker U.S. dollar against the Korean won makes U.S. beef approximately 23 percent cheaper to the Korean consumer than it was back in 2003. Adding in Korea's average economic growth rate of nearly 5 percent per year during the past five years suggests unrestricted access to the Korean market could quickly push U.S. beef sales to Korea over $1 billion.

Peru Trade - At press time, the Senate Finance Committee is reviewing and making recommendations on proposed legislation implementing the U.S.-Peru Trade Promotion Agreement (PTPA).
For U.S. cattlemen, the PTPA is one of the best negotiated free trade agreements to date providing for immediate duty-free access for U.S. prime and choice beef, as well as other beef products.  In addition, all tariff rate quotas will be eliminated within 12 years. 
Last week, the committee held a hearing to review the Peru agreement which is one of many up for consideration by Congress this fall.  NCBA submitted a written statement in support.  NCBA is working with more than 40 other food and agriculture groups as part of an Ag Trade Coalition in support of the Peru, Panama and Colombia Trade Promotion Agreements.  Passage of these agreements is one of the listed priorities outlined in NCBA’s Beef Export Access Five Point Plan.
In 2003, Peru was a $6 million export market for U.S. beef, beef variety meats and beef products. This improved access could amount to roughly $15 million a year, about half the value of Peru's current total beef imports.

Conservation Easement Legislation - Also at press time, it is expected the Senate Finance Committee will consider legislation that would permanently extend a beneficial tax incentive for donations of conservation easements. 
NCBA, along with 45 other livestock, wildlife and environmental groups sent a letter to the Senate Finance Committee on September 17th in support of this bill which will amend the Internal Revenue Code of 1986 to make permanent the special rule for contributions of qualified conservation easements.  The bill was originally introduced by Senate Finance Committee Chairman Max Baucus (D-Mont.) on January 31st and currently has 21 cosponsors. 
“This legislation works hand-in-glove with the Farm Bill's conservation programs to help farmers, ranchers and other landowners enhance long-term conservation of our natural resources,” the letter says.  “This provision has immense potential to help private landowners keep agricultural lands in productive use, protect important fish and wildlife habitats, and conserve our scenic and historic heritage in your state and across America.”

Death Tax - NCBA attended a Death Tax Summit on Capitol Hill last week.  The Summit, held September 19th, was coordinated by a coalition of Washington-based industry groups to bring attention to the need to fully and permanently repeal the Death Tax. 
Members of Congress including Senators Blanche Lincoln (D-Ark.) and Jon Kyl (R-Ariz.) and Reps. Harry Mitchell (D-Ariz.) and Kenny Hulshof (R-Mo.) spoke to summit attendees about how the Death Tax hurts America’s farmers, ranchers and small businesses.  With rates ranging from 37 to 55 percent, the Death Tax is a leading cause of the break-up of U.S. family farms.  Too often ranches and farms must be sold to pay the tax bill, and the land is often purchased by developers. 
NCBA is supporting efforts in Congress to alleviate the burden of this devastating tax on America’s farming and ranching families.  H.R. 2380 was introduced by Rep. Hulshof on May 17th, and now has 152 cosponsors.  Currently, a 10-year phase-out of the Death Tax ending in full repeal is scheduled to take effect by 2010.  But the tax is then scheduled to be re-instated in 2011, back to 2001 levels. H.R. 2380 makes the repeal permanent.  Similar legislation, H.R. 1586, was introduced by Rep. Mac Thornberry (R-Texas) on March 20th. That bill currently has 85 co-sponsors.  NCBA continues to urge all cattle producers to contact their members of Congress about this important issue. Download our full-color fact sheet on this issue at www.beefusa.org.

Sept 25                  Nutrition Shortcourse, Distance Ed Sites
Sept 27                  Lauderdale CCA
Sept 27                  Jeff Davis CCA
Oct 1                     Angus Dispersal, Glenwild Stockyard
Oct 3-14                 Mississippi State Fair
Oct 11                    Neshoba CCA
Oct 13                    Marshall CCA Field Day

Mississippi Cattlemen's Association
680 Monroe Street, Suite A
Jackson, MS 39202
(601) 354-8951
missca1@bellsouth.net