March 2007
A view from the National Cattlemen’s Beef Association convention
Brian Sterling, MCPA District 1 Director
The 2007 Cattle Industry Annual Convention and National Cattlemen’s Beef Association (NCBA) Trade Show were held in Nashville, Tennessee from January 31 to February 3. Represented were the NCBA, the Cattlemen’s Beef Promotion and Research Board, American National CattleWomen, CattleFax, the National Cattlemen’s Foundation, and the Canadian Cattlemen’s Association. Over six thousand people were registered for the recordbreaking attendance at this beef industry event. Billed as the industry’s biggest and best, the trade show with over 250 exhibitors covered acres of the convention space.
The mood was upbeat with Cattle-Fax reporting that this year was the most profitable after four solid years of record profits in the American cattle industry.
“Git-‘er Done” was the theme of the event where NCBA policy is established with representation from all state and local levels and speakers from all facets of the cattle industry.
One industry goal conveyed was to increase US beef exports by 10% within three years and to do this, there seems to be a realization that a national ID program will be essential. What they are in fact proposing would be even more regulated than the Canadian standards.
The US government appears to be wiling to commit the funds needed to increase beef exports. The reasoning of the US beef industry is that they can greatly increase beef consumption in Japan where declining fish stocks will affect the normal diet. In countries such as Mexico and Japan, the US already as the market share of beef export but they are working to increase the beef consumption in these countries.
In the past four years, the US has moved to third place in world beef exports and Canada has fallen from third to ninth place. The American government seems to be very willing to be involved in the beef industry.
Tennessee is similar to Manitoba in that our cow herd numbers are comparable and they face many of the same issues confronting Canadian cattlemen such as environment regulations, export problems related to BSE, and national ID and the traceability debate.
Generating much discussion was the lack of success in gaining full access to the Japanese and South Korean markets – not unlike Canadian concerns about the lack of success in gaining full access to the American market. Repeatedly addressed were concerns that Japan and Korea must use science-based information to allow American beef imports.
At the same time, little emphasis was given to the fact that Canadian beef is restricted from entering the US.
SINCE 1998
A pre-convention agriculture tour hosted by the Tennessee Cattlemen and Beef Industry Council demonstrated the rolling countryside, impeccable fences and sturdy cow herds. Land prices are exorbitant with an acre commanding $30,000 where the demand is high for hobby farms and the cows used as “pasture ornaments.”
One comment heard was that they’re growing more houses than farm with urban sprawl takin over much of the arable land. Mike Johanns, US Secretary of Agriculture was one of the keynote speakers and reiterated, “Our beef is safe should be in Korea. Our beef is the safest in the world. Decisions should be based on science in beef imports and exports.”
There was no mention of the restrictions on Canadian beef. Johanns reinforced his government’s strong support for a national ID and traceability system, stating that this would be a key requirement to increasing exports and beef consumption to Europe, Japan, and South Korea. However, despite the evident optimism in the American cattle industry, there seemed to be a real and legitimate concern about the rapid expansion of the ethanol industry and the effect that is having and will have on the cattle industry. This was repeated many times at many different discussions during the course of the convention.
One of the significant points was that US government subsidies to the ethanol industry do not go directly to the producers of ethanol. The Blenders’ Tax Credit of 51 cents per gallon goes to companies that blend ethanol with gasoline. There is no requirement for the blenders to pass this subsidy on to ethanol producers who then could reward the corn producers. The blenders would be less aggressive bidders for ethanol as I becomes more plentiful and less likely to make the subsidy money part of the bidding price for ethanol. Many cattlemen who were also corn producers were worried that the run-up in corn prices could be short lived because of this. The attitude of the workshops was that the ethanol industry is very complex and that no assumptions about it should be made.
Another concern is that the transportation system will be required to see a 65% increase in rail and 74% in truck traffic to handle the increased movement of grain, ethanol, and the by-products of the expanded ethanol industry, and that this would be an impossibility.
Because ethanol producers will have difficulty in transporting their dry distillers grain, it could, and would, be used for biodiesel production, rather than its present use as cattle feed that is reasonably priced and available. This circumstance, in their view, would be devastating to the cattle industry.
And even if dried distillers grain (DDG) from corn is used as a cattle feed, it generates its own set of problems – higher concentrations of nitrogen and phosphorus in the manure at the same time as environmental regulations are becoming more onerous; and, marbling problems in cattle finished on higher inclusion rates of DDG. And, would DDGs be cheap enough to offset the higher prices of feed grains? Quietly, the ethanol industry was being referred to as the “E” word by convention delegates and the optimistic mood of the convention was tempered quite dramatically by the end.