Beef Market Advisor

Wednesday, March 16, 2005

Economic Impact Of Drop In Beef Exports


North Dakota State University: Since the discovery of Bovine Spongiform Encephalopathy (BSE) in
the United States in December 2003, U.S. beef exports have declined approximately 85 percent. A number of countries, including Japan and Korea (the top export markets for U.S. beef), have banned imports of beef from the United States, while U.S. exports to other important markets, such as Mexico and Canada, have been well below previous levels.

Domestic demand in the United States was not significantly affected by the BSE discovery, but the effect of decreased beef exports on U.S. price is significant. This study examines the effect of exports and other supply and demand factors on U.S. meat prices, and estimates the effect of the drop in exports on U.S. beef and cattle prices.

Results indicate that if all other factors remain the same, the drop in exports results in a $0.22 per pound reduction in retail beef prices and a $0.04 per pound reduction in the slaughter steer price. Prices in 2004 remained relatively high, however, possibly due to a decline in U.S. production and strong domestic demand.

Website: http://agecon.lib.umn.edu/cgi-bin/detailview.pl?paperid=15925

posted by Dr. Harlan Hughes 2:36 PM [edit]

Tuesday, March 15, 2005

Japanese Officials Tell R-CALF Actions Will Delay Re-opening Border

R-CALF placed a half-page lobby-type ad in today's Washington Post, thanking the U.S. Senate for passing a resolution (52-46) that would, if it passed the House and was signed into law by President Bush (both unlikely events) do what a district court judge in Billings, Montana (Judge Richard Cebull) has already helped R-CALF accomplish: maintain the closure of the U.S.-Canadian border to live cattle under 30 months of age.

The ad urges the House of Representatives to support the resolution of disapproval "against USDA's weakening of U.S. import standards." The ad was paid for by the Ranchers Cattlemen Action Legal Fund United Stockgrowers of America (www.r-calfusa.com).It includes R-CALF friendly quotes

What the ad does not say is what some Japanese officials reportedly told R-CALF in a recent meeting with them -- that R-CALF's actions have helped delay the time that it will take Japan to resume imports of American beef. Japanese sources told me that, "R-CALF officials were perplexed when we told them they are part of the problem."

A Japanese official told me the following:

"R-CALF's actions will actually delay the re-opening of the Japanese border. Current actions by [U.S.] Senators and House members have stimulated the Japanese media and Japanese consumer associations to start an opposition campaign. This will delay the internal Japanese review process, especially the risk-communications process for consumers.

"In addition, your (R-CALF) actions are increasing [the U.S.] Congress's frustration and their elevated political pressure on Japan is only complicating the issue opening the Japanese border. Political pressure or interference is not assisting in the normalization of beef products between our two countries.

"When R-CALF points to the risk of Canadian beef, you are increasing Japanese consumers' anxiety for U.S. beef, because we believe the risk of beef from both countries is similar. And if you point to the risk of Canadian cattle, you are ignoring the function of removing SRMs (Specified Risk Materials) as the internationally accepted food safety measure and area also increasing Japanese consumers' anxiety for U.S. beef."


To recap, several Japanese officials told me last week that...

-- Japan views the U.S. and Canada as an integrated market and as Japan nears resuming American beef buys, it will be hard to communicate to the Japanese public and definitely Japanese consumer groups if the U.S.-Canadian border is still closed.

-- It will be July or August before Japan makes a final decision to resume U.S. beef imports -- and that is assuming "no more litigation delays."

-- Regulatory comment periods ahead: There are two four-week comment periods coming up via the Japanese regulatory process on this topic.And there is a likely one-month timeline for revision of ministerial ordinances regarding domestic BSE measure. That's nine weeks and does not include the time it will take to issue a final report on the consultations to resume beef trade.

-- Powerful Japanese consumer groups must be dealt with: U.S. officials, farm-state lawmakers. and farm group representatives continue to underestimate the sensitivity of BSE issues among powerful Japanese consumer groups.

-- Political pressure on Japanese officials and agencies is a negative in getting a timeline established regarding resuming American beef shipments.This includes the talk President Bush had last week with Japanese Prime Minister.

-- Japanese domestic producers do not benefit from the Japanese import prohibition. Japanese calf prices are at a record high. This has reduced profits for feeders in Japan. If feeders lose economic power, Japanese calf producers will lose their markets. Numerous BBQ restaurants in Japan have closed and that has reduced potential demand for beef in Japan. "Keeping the border closed to U.S. beef is not in the interest of Japanese beef interests," the Japanese officials concluded.




posted by Dr. Harlan Hughes 6:42 PM [edit]

Wyoming Rancher Produces & Markets Mini Hay Bales

From EHay Weekly 15 March 2005 Coverning second annual Hay Business Conference and Expo in Sioux Falls, SD

Ron Richner, Alcova, WY, brought samples of his Lone Tree Mini Bales to the conference. The 2.5-lb bales of certified weed-free alfalfa fit into saddle bags and can be taken into state parks and on trail rides to feed horses. He has also found a market for the bales with outfitters. Richner sells the bales for $2 wholesale. His feed-store customers sell them for around $3.75 to horse clients. Richner also produces mini barley straw bales, which can be used in water tanks or ponds for algae control. He makes mini bales of orchardgrass and timothy for sale to rabbit breeders. He feeds 16 x 18" bales into a small, stationary baler to produce the mini bales. "Making the mini bales is a good project to keep me busy in the winter," he laughs.

Richner raises alfalfa and orchardgrass hay on his farm 22 miles south of Casper, WY. He says it has been a very dry winter in his area. "We have been having a five-year drought," he explains. Richner sells 16 x 18" bales of horse hay to ranchers and the horse market. "Demand has been very good this winter," he notes. He's on the advisory board for the Wyoming Business Council. He encourages other producers to get their hay tested and make the most of hay marketing opportunities.

Contact Ron and Stacey Richner at 307-234-9661.


posted by Dr. Harlan Hughes 9:01 AM [edit]


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