LMD April 2016

Page 1

Riding Herd

“The greatest homage we can pay to truth is to use it.”

by LEE PITTS

– JAMES RUSSELL LOWELL

April 15, 2016 • www.aaalivestock.com

Volume 58 • No. 4

Spoiled Rotten

Getting Spoofed T By Lee Pitts

Don’t worry about biting off more than you can chew. Your mouth is probably a lot bigger than you think.

F

NEWSPAPER PRIORITY HANDLING

or over 20 years I had the pleasure of being the announcer for Western Video Market, at the time the second largest video auction in the country. As such I had the best seat in the house, on the auction block, where I was witness to the selling of over 400,000 cattle per year. I got to see who was short of cattle and needed to buy, who was off the market, what type of cattle were wanted, whose purebred bulls were popular, what breeds weren’t, what ranchers were trusted to give a fair weigh up and the ones that weren’t. Suffice it to say, I learned a great deal. I also got a great lesson in how healthy markets work. I remember the night before one of our big sales in Reno right after it was announced that a mad cow had been found in the U.S. We were expecting a wreck the next day. The first ten or eleven lots we sold, or should I say tried to sell, were passed out and we had tens of thousands left to try and market that day and it was obvious the buyers had the upper hand. Then a very interesting thing happened. A consignment of the best cattle we had the opportunity to sell every year came up on the television screens. They were the Murrer cattle from Nevada, and they are as good as any that walk the earth. The buyers tried to sit on their hands but a funny thing

happened: an auction broke out and the cattle sold for more than what the market had been before the Mad Cow made her ugly appearance. The next 20 lots were the heart of our offering and they not only sold, but sold extremely well. One consignment had turned the entire market around and we ended up having a good sale. It was a great example of a competitive and transparent market. Anyone who sends their cattle to their favorite auction market benefits from the same type of competition we enjoyed

that day in Reno. So we expect that is how the rest of the system works. Sadly, it does not. As transparent, fair and competitive the sale of calves and yearlings is in this country the sale of fat cattle is 180 degrees opposite. It’s a dysfunctional market that gives the packers and retailers the clear upper hand.

Light and Late Ranchers and feeders have been concerned since 1964 when the Chicago Mercantile Exchange first started selling Live Cattle Futures that the

market was rigged against them and is based on faulty formulas. Especially in certain parts of the country and at certain points in tine. The last quarter of 2015 was one of those points in the cycle where the extreme volatility could not simply be explained by the supply and demand of beef. Observers once again pointed their fingers at the CME for contributing to the crash in the cattle market. Here’s an example of the volatility of which we speak. Randy Blach of Cattle Fax says, “We went from $175 to $120 in a very, very brief period of time. Markets got very violent and they moved rapidly. In 2013 through 2014 markets went up $28 per hundredweight in one year. Only eight dollars of that came from supply. A year ago, fundamentals put the impact at $12 of the increase resulting from leverage,” says Blach. What was responsible for the

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Major regulatory expansion of ESA listing & critical habitat designations BY KAREN BUDD-FALEN, CHEYENNE, WYOMING

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hile private property owners were vehemently protesting the EPA’s expansion of jurisdiction under the Clean Water Act, the U.S. Fish & Wildlife Service and NOAA-Fisheries (collectively FWS) were bit-by-bit expanding the federal government’s overreach on private property rights and federal grazing permits through the Endangered Species Act (ESA). This expansion is embodied in the release of four separate final rules and two final policies that the FWS admits will result in listing more species and expanding designated critical habitat. In order to understand the expansiveness of the new policies and regulations, a short discussion of the previous regulations may help. Prior to the Obama Administration changes, a species was listed as threatened or endangered based upon the “best scientific and commercial data available.” With regard to species that are potentially threatened or endangered “throughout a significant portion of its range” but not ALL of the species’ 1

range, only those species within that “significant portion of the range” are listed, not all species throughout the entire range. Once the listing was completed, the FWS is mandated to designate critical habitat. Critical habitat is generally habitat upon which the species depends for survival. Importantly critical habitat can include both private and/ or federal land and water. Critical habitat is to be based upon the “best scientific and commercial data available” and is to include the “primary constituent elements” (PCEs) for the species. PCEs are the elements the species needs for breeding, feeding and sheltering. Final critical habitat designations are to be published with legal descriptions so that private landowners would know whether their private property or water was within or outside designated boundaries. Critical habitat designations are also made with consideration of the economic impacts. Under the ESA, although the FWS cannot consider the economic impacts of listing a species, all other economic impacts are to be considered when designating critical habitat, and if the continued on page four

o hear Mr. and Mrs. Urban Airhead talk, you’d think farming and ranching are activities we engage in for our own foolish pleasure. They talk about how much water we waste as if we are filling our Olympic-size swimming pools with it. I know I wake up every morning and the first thing I think of is, “How much water I can waste today?” Why can’t city slickers get it through their thick skulls that we aren’t wasting water but are using it to produce food so they can eat? Is it that hard to grasp that food comes from thirsty plants and animals? I hear this nonsense all the time from urban friends. They think we lead a fairy tale existence and have such an idyllic lifestyle not having to punch a clock, as we ride our gentle horses, dismounting only to pick wildflowers. They know nothing about the evil equine who bucked me off in a rock pile and kicked me in the chest before running back to the house leaving me to limp four miles in pointy toe cowboy boots with an undershot heel, thinking, “I haven’t had this much fun since my last colonoscopy. I hope I get to do this again real soon.” It’s true, we may not have to punch clocks, but we punch cows. This means we have to get up every three hours at night for three months in order to venture into the freezing cold just to strip to the waist and stick an arm up the rear end of a heifer. And whoopee, we get to repeat the chore three hours later. Now that’s my idea of fun, fun, fun! Because the most dangerous thing most city folks encounter in their daily lives is the kill-or-be-killed possibility of slipping on an organic peanut at Whole Foods, they have no idea of the dangerous things we do so they can feed their faces. They think our lives are one great big Mountain Oyster Festival with a rodeo and a Reba concert. Urbanites think we’re continued on page four

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