LMD Jan 2016

Riding Herd

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

by LEE PITTS

– JAMES RUSSELL LOWELL

January 15, 2016 • www.aaalivestock.com

Playing

By Lee Pitts

T

he stars in this story are glow-in-the-dark kitty-cats, muscle-bound salmon, silk-spinning goats, hypo-allergenic-cows and featherless chickens. So why are we taking up your time talking about animals that would seem to belong more on some circus midway freak show more than they do the front page of a cattle newspaper?

Because in a few short years you may be creating your own customized cows using the same technology that created these freaks of non-nature.

A Game Changer

NEWSPAPER PRIORITY HANDLING

In 2004 there was a much-ignored American monster movie whose villain was a genetically engineered fish that lived in a Louisiana bayou. (Don’t feel bad, I never saw the film either.)

You may never have heard of the name of the non-Oscar award winning movie called Frankenfish, but you will in the future because critics of genetically modified organisms (GMO’s) have slapped the Frankenfish nickname on a quick-growing salmon created in 1989 by a Massachusetts company called AquaBounty. The firm took an Atlantic salmon and inserted genes from a Chinook salmon and an ocean “pout”. And no, we aren’t talking about what your kid does when he or she

Volume 58 • No. 1

T God?

If you’re ridin’ ahead of the herd, take a look back every now & then to make sure it’s still there. doesn’t get its way. A “pout” is a serpent-like fish with antifreeze proteins in its blood allowing it to live in freezing waters.

By mixing genes from the two strains of salmon with the pout scientists created a fish that can reach a marketable weight in a year-and-a-half instead of the usual three years with wild salmon.

After a 20-year battle with regulators, AquaBounty has now been given U.S. Food & Drug Administration (FDA) approval to sell its genetically altered AquAdvantage salmon

to American consumers. A closer look at AquaBounty reveals it is majority-owned by a firm that trades under the name of Intrexon Corporation. Think of it as the Monsanto of genetically modified (GM) fish.

As you can imagine, consumer, animal rights and green groups were not thrilled with the coming-out party of the superfish.

The AquAdvantage salmon was actually declared safe to eat by the FDA way back in 2010 but critics objected back then that the genetically engineered

fish might pee in the gene pool, so to speak, thereby creating mutant wild salmon. Only after AquaBounty was able to make their AquAdvantage fish sterile did FDA give their seal of approval. The FDA also demanded that for it to be sold in the United States AquAdvantage salmon must be raised only in land-based tanks in two facilities, one in Canada and the other in Panama.

Although, CostCo, Trader Joe’s, Whole Foods, Target, Safeway and Kroger’s say they won’t sell AquAdvantage salmon, there’s a good chance in the next few years you may unknowingly buy and eat some because as of now, just like with foreign beef, it doesn’t have to be labeled. That’s because the FDA says there are no material differences between an engineered and a normal salmon.

AquaBounty’s CEO Ronald continued on page two

Lettuce is ‘three times worse than bacon’ for emissions and vegetarian diets could be bad for environment

BY ADAM WITHNALL,

INDEPENDENT.CO.UK

C

ommon vegetables ‘require more resources per calorie’ than many people realize, according to a team of scientists at the prestigious Carnegie Mellon University based in Pittsburgh, Pennsylvania.

Eating a healthier diet rich in fruit and vegetables could actually be more harmful to the environment than consuming some meat, a US study has claimed.

Lettuce is “over three times worse in greenhouse gas emissions than eating bacon”, according to researchers from the Carnegie Mellon University who analysed the impact per calorie of different foods in terms of energy cost, water use and emissions.

Published in the Environment Systems and Decisions journal, the study goes against the grain of recent calls for humans to quit eating meat to curb climate change.

Researchers did not argue against the idea people should be eating less meat, or the fact that livestock contributes to an enormous proportion of global emissions – up to 51 per cent according to some studies.

But they found that eating only the recom-

Getting Hammered

mended “healthier” foods prescribed in recent advice from the US Department of Agriculture increased a person’s impact on the environment across all three factors – even when overall calorie intake was reduced.

The experts examined how growing, processing and transporting food; sales and service; and household storage and use all take a toll on the environment for different foods.

Paul Fischbeck, study co-author and CMU’s professor of social and decisions sciences, said: “Lots of common vegetables require more resources per calorie than you would think.

“Eggplant, celery and cucumbers look particularly bad when compared to pork or chicken.”

The initial findings of the study were “surprising”, according to senior research fellow Anthony Froggatt at Chatham House, an independent think-tank which is currently running a project looking at the link between meat consumption and greenhouse gas emissions.

Mr. Froggatt told the Independent it is “true lettuce can be incredibly water intensive and energy intensive to produce”, but such comparative exercises vary hugely depending on how the foods are raised or grown.

“We usually look at proteins rather than calcontinued on page fourteen

he soundtrack of my life has been the chant of an auctioneer.

In the past 43 years I have attended thousands of auctions and have seen auctions from every angle as a consignor, buyer, ring man, clerk, auctioneer, gate man and announcer of a video auction company for 20 years that sold nearly half a million head per year. I have helped sell everything from art to road graders and the only kind of auction I think I haven’t worked is one for hogs. And it’s not on my bucket list. As an auction junkie I formed the following opinions.

Auctioneers with the slowest chants are wine and art auctioneers while the fastest are cattle colonels.

The best person to have at an auction is the bidder who raises his or her hand and keeps it in the air, while the least favorite person is a non-buying busy-body who constantly waves to friends.

The most male dominated crowds are found at Safari Club, Rocky Mountain Elk and Duck’s Unlimited auctions while more females are found at quilt auctions.

The neatest trick I’ve ever seen an auctioneer do was frequently performed

by Bert and Ruben Reyes in South Texas. My friends had the ability to sell in both English and Spanish and could switch back and forth on the same lot depending on who was bidding.

The least dangerous auctions are cake auctions and you’d think that gun auctions might be the most dangerous but auto auctions are. Not because they can bankrupt you but because I almost got run over by a 56 Chevy at a car auction once.

The biggest steals at auctions are found at estate sales and silent auctions. The worse deals are found at any auction where the sales crew wears tuxedos, the auction has a theme, there is valet parking, food is served on real dishes and one spouse often asks the other for their opinion. I have NEVER seen a cow buyer ask a wife, or a mistress, for permission to continued on page fourteen

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I

January 15, 2016

PLAYING GOD?

FARMINGTON

Page 2

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Stotish says, “AquAdvantage Salmon is a game-changer that brings healthy and nutritious food to consumers in an environmentally responsible manner without damaging the ocean and other marine habitats.”

Freak Show Although AquAdvantage salmon is the first genetically modified animal cleared for human consumption in the United States, it is definitely not the first genetically modified living being on earth. Here are just a few of my favorites: • Web Weaving Goats– Silk is a highly valued textile that is expensive to produce in vast quantities. Faced with this problem Nexia Biotechnologies announced in 2000 that they had inserted a silk gene from spiders into a goat which produces milk containing the protein found in spider webs.

This cheaply produced protein can then be used to make Biosteel®, a super strong and flexible textile with a plethora of uses including replacement tendons.

• Golden Seahorses– In every state except California you can legally buy tiny seahorses with the Midas touch. Vietnamese scientists created these miniature saltwater equines by utilizing the “gene shooting method” whereby they shot a mixture of gold dust and jellyfish proteins into the eggs of a seahorse. Voila! A remuda of golden seahorses.

• Nude Poultry– I know, Chickens Without Feathers sounds like the name of a 1960’s rock band, but this plumage-challenged poultry was created by scientists in Israel. The nude chickens are supposed to be cheaper to raise, more environmentally friendly, and don’t require plucking, but we can only imagine what the freezing, humiliated chickens think.

• Rabbits As Art- An “artist”, and we’re using the term loosely here, by the name of Eduard Kac uses genetic engineering to create living art works. For example, in May of 2000, he introduced Alba, an albino rabbit that glowed fluorescent when under a blue light. Alba was actually created by a French research institute using the same method to create the golden seahorses, only in this case they injected fluorescent jellyfish protein into a fertilized rabbit egg. Alas, Alba went to bunny heaven, which may be the first ever case of a piece of art really dying.

• Incandescent Cats– In 2011 American and Japanese scientists inserted genes into lab cats that made some of their cells glow in the dark. But they weren’t just playing around with a gene gun. The glow-in-thedark cat was created as a way to fight feline immunodeficiency virus which is apparently the HIV of feral Tom cats. The cats appear normal by day, but glow at night. Tell me that wouldn’t make one cool cat!

continued from page one

Kill The Editor!

Lest you think all this genetic tomfoolery is limited to sea horses and Tom cats consider these cases of real live genetically modified cattle: •Hypo-Allergenic Cows– About three percent of babies are born allergic to cow’s milk.

So, in 2012, a New Zealand government-owned company called AgResearch bio-engineered a cow called Daisy that produced milk that didn’t contain the protein that makes babies allergic to milk. In getting rid of the gene that makes the protein the firm used a technique called RNA interference. Such a process is known as gene “editing” because scientists did not add any genes from other animals but simply eliminated one it already had.

• Green Cows– One of the negatives that greenies always bring up about cows is they produce an abundance of methane, a greenhouse gas that supposedly contributes to global warming, or absent that, climate change. Scientists from the University of Alberta were able to identify the bacterium that produces the methane and by so doing were able to create cattle that produce 25 percent less methane than your average cow.

• Hornless Holsteins– In 2013, a Minnesota-based firm, Recombinetics, borrowed a gene from the Angus breed and inserted it into Holsteins to make them polled. It worked but one of the side effects was a lowering of milk production, which no dairyman will stand for. The firm recently gave two calves, Spotigy and Burito, to the University of California at Davis where researchers plan to raise the calves and mate them to Holstein cows to measure the effects of the gene-edited trait.

This is the same technology that allowed researchers at the University of Missouri to produce a line of pigs that are resistant to Porcine Reproductive & Respiratory Syndrome.

For the best definition we’ve heard yet about “gene editing” versus “gene modification” we turn to a story in the Sacramento Bee where UC-Davis geneticist Alison Van Eenennaam compared the two. She likened gene editing to “changing the spelling of a word in a word-processing document, while genetic engineering would compare with pasting in a new word copied from a different document.”

Hammin’ It Up Most researchers agree that bioengineered pork chops will beat genetically modified organisms (GMO) hamburgers to the market as there are already numerous examples of genome edited pigs in existence. In an article published in Nature, JinSoo Kim, a molecular biologist at Seoul National University, shared photos of hogs with huge hams that would win any swine continued on page four

January 15, 2016

Livestock Market Digest

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PLAYING GOD? show in America. Interestingly, Kim’s team got their inspiration from cattle, specifically a breed called Belgian Blues. These cattle have huge rear-ends because a gene that ordinarily inhibits muscle growth somehow got switched off. So the researchers induced a similar mutation in their swine and got much hammier hams and porkier pigs.

Kim wants to sell edited pig sperm in China and according to the Nature article, “China is investing heavily in gene editing and historically hasn’t been strict on regulation. Also, because the genetic modification involves a knocking out a single gene rather than transplanting one from a completely different animal, the scientists are hoping their edited sperm will get approved more quickly. But bigger pigs aren’t always better, the sows can have challenges birthing baby piglets because their extra muscle makes them so bulky.”

Freaking Out Mention GMO’s and people start getting uncomfortable, or as author Sophia Chen wrote in Science magazine, “Start using genetic engineering technology, moving genes around or inserting one from one living thing into another, and people freak right the hell out. That’s what happened in France when they went into a panic because a lamb that was the offspring of a sheep modified to express a green fluorescent protein made it to market. In Europe, GMO’s are outright banned; in the US, lots of staple crops like corn

continued from page two have plenty of modified genes.

But animals? That’s a line supermarkets haven’t crossed.” Yet. With GMO plants we’ve seen proteins appear that our immune systems weren’t built to handle and critics point to diseases such as leaky gut syndrome as proof. Consumers are also worried about potential allergic reactions to GMO’s, whether plant or animal. And once GMO’s become so widespread what happens should there be a problem and there are no “clean” species to fall back on? Once we go down this path, there may be no turning back.

The low esteem that Americans currently hold for our federal government is perhaps only surpassed by their even lower opinion of companies like Monsanto, Dow Chemical, Syngenta and others who have been known to put profits before people. Ruthlessly so, in some cases. It doesn’t help that the FDA regulates genetically modified animals as drugs rather than food.

Consumer groups such as Consumers Union and Food & Water Watch at the very least want GMO foods labeled so that consumers can make their own well informed decisions, rather than have the government make such decisions for them. “Consumers deserve to know what type of food they’re buying and an overwhelming majority has told us that they want genetically modified food labeled in poll after poll,” said Michael Hansen, senior scientist with Consumers Union. He

points out that while countries in Europe are banning GMO foods it’s absurd that such foods don’t even have to be labeled as such in this country.

What’s For Dinner?

It’s a fine line between “altered” and “improved”. On the positive side supporters of GM foods say that such products can help reduce hunger by being more productive and resistant to disease. They point to pesticide-resistant soybeans that require fewer insecticides, rice that has been made more nutritious, apples that don’t brown and now, cheaper salmon. After AquAdvantage salmon’s FDA stamp of approval will we now see a rush to market of other genetically modified animals? Professor Bruce Whitelaw certainly hopes so. He’s head of the University of Edinburgh’s Roslin Institute. “We need to challenge our animals and we have that power now with new technology,” he says. “We can sequence the entire blueprint to make an animal better.”

The Roslin Institute has already produced swine fever-resistant pigs. Whitelaw says he created them because there are no drugs or treatments for the disease.“The only treatment is to kill the pigs and it’s a huge problem. An outbreak can really impact the pig industry.”

In the case of Whitelaw’s gene-edited pigs their genetic code was flipped to make their immune system slightly closer to a warthog’s—a wild African pig more resistant to swine fever. “It’s a swap of sequence,”

says Whitelaw. “It’s a .00000001 percent change, which is a tiny portion.”

Whitelaw thinks GM pigs will be available for “the human food chain within 5 or 10 years” and he says that rather than think of these animals as frightening things we should think of them “like breeding animals for farm use which man has been doing with pets for decades.

Any method of improving a crop or livestock variety could produce a hazardous food product” says Whitelaw. “So from a risk analysis perspective, do you want the new product where one to three known and understood genes are added/silenced, or the one with thousands of unknown changes? Do you want the one that went through regulatory screening before market approval? Because biotechnology creates precise changes using genes that are known and understood (as opposed to traits that can bring along other traits for a ride), and because the products of biotechology are tested for adverse effects, they appear to me to carry a lesser risk of unintended consequences than conventionally bred.”

Or think of it this way. Do you want to produce yield grade one or two choice beef carcasses by the long, expensive and arduous process of stacking generations of Angus genetics using EPDs and DNA analysis? Or do you want to play God, take a shortcut and simply add or subtract a few genes here and there?

I haven’t made up my mind about genetically modified animals yet but if I was a betting

man I’d say in the not-so-distant future when the question is asked, “What’s for dinner?” the answer is apt to be unlabeled genetically modified beef.

January 15, 2016

Livestock Market Digest

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Page 6 This month we look at Congressional cowardice and chicanery

Shame on Congress

C

ongress recently passed the 2,000-page Omnibus spending bill and many had hoped that with a new Speaker in the House this

Livestock Market Digest legislation would start bringing spending under control and place road blocks to the Obama Administration’s most outrageous environmental power grabs.

Recent appropriations bills had included policy riders that would: • Prevent the listing of the sage grouse under the Endangered Species Act,

• Require the de-listing of wolves in Wyoming and the Great Lakes from the endangered species list • Prevent the implementation of Secretarial Order 3310, issued on December 22, 2010 (Wildlands policy) • Require a government-wide report on expenditures for global warming, and • Prevent the enforcement of the waters of the United States (WOTUS) rule And in this bill? Nada. Zero.

Zilch.

It’s a complete cave-in to the Obama environmental agenda.

Some are even suggesting we start referring to the current leadership as The Cavemen.

Perhaps they had at least addressed the spending issue.

Not hardly.

The bill increases overall spending, including increases for the BLM, U.S. Fish & Wild-

January 15, 2016

life Service and Park Service.

And, oh yes, the bill will DOUBLE the spending for federal land acquisition.

Expressing the frustrations of many New Mexicans, Steve Wilmeth recently wrote in The Westerner, “The funding for sanctuary cities, resettlement of refugees, funding the Endangered Species Act and Planned Parenthood, acceptance of the WOTUS rule, sanctioning the Red River land grab, purchasing more private property in the West, expanding most agency budgets, and extending the tax credits for terminally deficient green energy dreams were all supported.” Resulting, says Wilmeth, in the Obama agenda being “fully sanctioned by congressional vote.”

There have been similar reactions by the national media.

Laura Ingraham calls the bill the “omni-bust”, Mark Levin

proclaims the Ryan Speakership “already a disaster” and Rush Limbaugh saying despite Republicans controlling “the largest number of seats in the House they’ve had in Congress since the Civil War,” on this bill they’ve sold the country “down the river.”

Several Presidential candidates have also taken note, with Ted Cruz saying this “big-government” bill demonstrates, “that we have a government of the lobbyist, by the lobbyists, and for the lobbyist” and Donald Trump proclaiming, “Congress threw in the towel and showed absolutely no budget discipline.”

What a shame.

All four members of the New Mexico Congressional Delegation supported the Omnibus spending bill.

Vilsack threatens Congress & The West The Forest Service has proposed a new way to fund fighting wildfires, treating them like other natural disasters.

This would replace the current system where if the costs of fire-fighting exceed current appropriations the Forest Service borrows from other programs to cover the costs.

And now Vilsack is livid that Congress didn’t include the proposal in the Omnibus spending bill. Vilsack has written what can only be described as a threatening letter to Congress declaring who will no longer initiate interdepartmental transfers to cover the costs of fighting forest fires.

“If the amount Congress appropriated in 2016 is not sufficient to cover fire suppression costs, Congress will need to appropriate additional funding on an emergency basis,” Vilsack wrote.

Give me more money or I’ll let the West burn.

Vilsack needs to explain, however, why it costs the Forest Service so much more to fight fires than the Interior Dept. In terms of Firefighting Costs Per Acre, in 2014 the Forest Service costs were $1,317 while the costs for the Interior Dept. were $264 per acre. Why the huge difference in costs, with the Forest Service charging five times as much as Interior?

And in case some may think different, Interior’s role is not insignificant. The Forest Service and Secretary Vilsack are constantly pointing to the near-record number of acres burned in 2015, approximately 9.8 million. Problem is, less than 20 percent of those acres were on national forest lands, while 54 percent were on Interior lands.

No wonder Congress didn’t rubber stamp the proposal.

And that, folks, is all I can stand to write about this month.

Till next time, be a nuisance to the devil and always check that cinch.

Frank DuBois was the NM Secretary of Agriculture from 1988 to 2003, is the author of a blog: The Westerner (www.thewesterner.blogspot.com) and is the founder of The DuBois Rodeo Scholarship and The DuBois Western Heritage Foundation.

January 15, 2016

Livestock Market Digest

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Shaw Elected AHA President

S

am Shaw of Caldwell, Idaho, was announced as the new president of the American Hereford Association (AHA) during the Annual Membership Meeting Oct. 31 in Kansas City, Mo. Sam has been involved in the Hereford business since birth.

His family, which has been in the Hereford business for 71 years, owns and operates Shaw Cattle Co. Sam’s children represent the fourth generation involved with Hereford cattle.

“It’s an honor for me to represent the breed that has been my family’s passion for four generations,” Sam says. “Having grown up through the National Junior Hereford Association (NJHA) program, the Hereford breed and breeders have given me a lot of opportunities, and it is a pleasure for me to be able to give something back.”

The Shaws currently run more than 1,500 cows including registered Herefords, Angus and Red Angus. Two-thirds of the Shaw herd calves in the spring with the remainder calving in the fall. The Shaws market 400 bulls in their annual bull sale and host an annual female sale in the spring marketing 200 females. They also sell bulls and females private treaty throughout the year.

Sam says he believes in the value the AHA provides Hereford breeders and plans to lead the Association with that in mind. “I want to see the AHA continue to be a member-service-driven organization that provides our members with the information needed to gain back market share in their marketing area,” he says. “As a Board we want to see the Certified Hereford Beef (CHB®) program continue to grow through foodservice and retail. Also, staying financially responsible is top of mind.”

The Shaws’ breeding philosophy is based on their customers’ needs including production, soundness and performance.

They have an extensive artificial insemination (AI) program.

All females are synchronized once and then heat detected for a second cycle. They also collect feed intake data using the GrowSafe program. The entire crop of bulls from their fall calving herd is placed in the program.

Growing up, Sam was active in the NJHA, serving as president of the junior board. He represented AHA at the Young Cattlemen’s Conference (YCC) in 2003 and served as chairman of YCC in 2004.

He served as the Idaho Cattlemen’s Association purebred council chairman from 20062008. Sam and his wife, Janel, have three daughters.

“The Hereford breed is in a great position in the beef industry,” Sam says. “As cattlemen are looking to grow the national cow herd, there is not a better female to expand cattle operations with than a Hereford or

Hereford-influenced female.

Our breed can do many things to help the beef industry move forward.”

Barber selected vice president Selected to serve as the 2016 vice president was Terri Barber, Channing, Texas. Terri has been involved in the Hereford business since birth. Her family owns and operates Barber Ranch, Channing, Texas.

Founded in 1904, Barber Ranch was a 2004 honoree of the Texas Family Land Heritage Program for being in continuous family ownership for 100 years. Herefords have been the mainstay of the Barber program since the beginning, with the herd currently consisting of 200 registered females.

The Barber family uses extensive AI and embryo transfer (ET) in their efforts to offer customers the best genetics available. They host an annual bull sale in November in San Saba – the heart of the Texas Hill Country. Show heifer and donor prospects are sold in special sales in the spring and fall.

To increase marketing efforts, the Barbers also exhibit at the

national shows.

Along with assisting on the ranch as time permits, since 2007 Terri works for Elanco Animal Health as its beef stocker sales representative for south and central Texas and Louisiana. In this role she calls on beef producers, veterinarians and academia within her territory. She has also served as Elanco’s branded beef marketing associate and has worked directly with premier branded programs in the U.S. Terri is a member of the Texas Hereford Association and is currently serving as vice president. She is also a past president of the Texas Hereford Auxiliary.

Directors elected Delegates elected three new directors during the membership meeting. Peter Atkins, Tea, S.D.; Jim Bellis, Aurora, Mo.; and Kyle Pérez, Nara Visa, N.M., will serve four-year terms on the 12-member Board.

Completing their terms on the AHA Board were outgoing president Eric Walker, Morrison, Tenn.; Fred Larson, Spring Valley, Wis.; and David Trowbridge, Tabor, Iowa.

Peter Atkins Peter “Pete” Atkins and his wife, Laura, and three sons, Scott, Craig and Paul, own and operate Atkins Herefords, Tea, S.D. Pete was raised on a diversified cattle, hog and crop farming operation in southeastern South Dakota, where he and his wife live today. His parents, Alvin and Marguerite Atkins, purchased the family’s first Herefords in 1971 and have had as many as 100 registered cows at their peak in size.

The Atkins family started collecting and reporting performance data in 1975 and has used artificial AI since the late 1970s and ET for the past 10 years.

Atkins Herefords’ goal is to produce high-performing cattle with moderate birth weights that have eye appeal and will work for the commercial cattleman. Emphasis is placed on raising sound, trouble-free cattle, and udder quality in the cow herd is stressed heavily.

Pete thinks it is important to use a balance of all tools availcontinued on page eight

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Page 8

Livestock Market Digest

January 15, 2016

SHAW ELECTED able when selecting breeding stock.

Today, Atkins Herefords consists of a base herd of 30 registered cows, and it produces an additional 20 to 50 ET calves each year. Together with their good friends and partners, the Jerry Delaney family, the Atkinses market bulls through a bull sale each January, and every other year they market females through a fall production sale. In the year between female production sales, females are offered at their fall preview event, which includes a customer appreciation dinner and previews that year’s calf crop along with the Denver prospects. At-

continued from page seven kins Herefords consigns bulls and females to the Mile High Night Sale and exhibits carloads of bulls and pens of heifers with the Delaneys each year in Denver.

Pete has served as a board member and president of the South Dakota Hereford Association. He is a board member for the John Leibel Memorial Scholarship and has been the chairman of the Sioux Empire Farm Show Hereford sale committee since its inception 15 years ago. He has served as a voting delegate at the AHA Annual Meeting and is a former field representative for the American Polled Hereford As-

sociation (APHA).

He is also a board member for the 4-H Livestock Industry Trust Fund of South Dakota and a member and past church councilman of the Trinity Lutheran Church in Tea. Jim Bellis Hereford breeder Jim Bellis, Aurora, Mo., got his start in the business 46 years ago as a high school freshman. His interest in genetics and breed improvement began early in life.

With a career in agriculture education, he grew his cow herd slowly, utilizing AI when affordable. He participated in the former APHA young sire testing program. For the exis-

tence of the program, the Bellis herd sampled young sires in comparison with proven reference sires.

Jim operated Missouri’s only Gold Performance Bull Test, cooperating with breeders from four states in feeding up to 50 bulls each season. He was diligent in keeping both the bull and heifer calf crops together as contemporary groups to maximize the use of data utilized to calculate expected progeny differences (EPDs).

He was one of the first breeders to put EPDs in his sale catalogs. The Bellis family first cooperated with other breeders for 14 annual or semiannual sales prior to starting its own production sale in 2005. It has also been a regular participant in the AHA’s National Reference Sire Program.

Working to breed low-birthweight and calving-ease bulls that don’t sacrifice the growth and carcass traits needed for top-performing cattle, the Bellises sell up to 60 Hereford bulls per year. They calve approximately 150 purebred females per year also, using mostly purebred females as recips for their ET program.

Jim has been named purebred breeder of the year by the Missouri Beef Industry Council, as well as seedstock breeder of the year four times by the Missouri Hereford or Polled Hereford Associations.

He has served as president of Missouri Cattlemen’s Association’s seedstock committee and is a past president of the Missouri Hereford Association.

Professionally, after six years as a high school agriculture teacher, Jim began work for the state supervising Missouri high school agricultural education and FFA programs. He worked 24 years providing leadership to Missouri’s ag education programs with statewide enrollments more than doubling during his tenure.

He then transitioned to Missouri State University’s (MSU) School of Agriculture in 2009, where he now serves as assistant to the director for MSU’s Darr School of Agriculture in Springfield. Leading MSU’s recruitment efforts, in five years the agriculture enrollment has grown from about 380 to almost 700 this fall.

In late 2013, Jim’s right leg was amputated below the knee due to clear cell sarcoma, a rare form of cancer. He describes the experience as a serious time of faith building, but prayers continue to be answered as regular scans show him as cancer free. He now wears a prosthetic.

Jim and his wife, Carla, have two grown daughters — Jamie Johansen and Joanna Wilkinson — and a son, Jonathan, who is a senior at MSU. Kyle Pérez New Mexico Hereford breeder Kyle has been involved in the Hereford industry since birth. Kyle and his dad, Michael, manage Pérez Cattle

Co., formally known as C&M Herefords, on the ranch belonging to Kyle’s grandfather, Don Kuper, where they began raising Hereford cattle in 1945.

Today Pérez Cattle Co. includes 550 registered and commercial mother cows that are managed on 22,000 acres. The Pérezes’ registered program is designed to raise quality seedstock that will advance both commercial and registered operations. Through the extensive use of AI and ET, the Pérez family is able to offer its bull and female clients the most modern and progressive genetics.

The family sells females through Internet sales and registered yearling bulls by private treaty.

Pérez Cattle Co.’s commercial cow herd is a combination of both Hereford and Angus genetics, with the primary goal of raising quality F1s. The operation markets 400 commercial calves annually, and for the past three years, its calves have been sold through the GAP (Good Agricultural Practices), Age and Source, and All Natural Verified programs.

The area demands a low input cow that can survive in a harsh environment, so Kyle and his family continue to improve their cow herd by placing emphasis on efficiency, udder quality, fertility and performance along with visual appraisal. The Pérez family is committed to expanding its local bull market and family members pride themselves on showing their best range cattle that perform both in the pasture and in the showring. The Pérez family has exhibited cattle at national shows across the country and has had several national champions and reserve champions.

This past fall the Pérez family was honored by the New Mexico Cattle Growers’ Association as the 2014 Ranch Family of the Year.

As a youth, Kyle served on the NJHA board. During his junior career, he was named Junior Herdsman of the Year and National Champion Senior Showman. He was also awarded the John Wayne Memorial Award, the Future Cattleman’s Award and the Golden Bull Achievement Award. A graduate of Kansas State University, Kyle was a member of the livestock judging team and honored with the F.W. Bell Livestock Judging Award.

Kyle is currently a member of both the New Mexico and the Texas Hereford Associations. He has attended the AHA Young Guns Conference and has served on the AHA nominating committee. In 2009 he was named the AHA Herdsman of the Year.

He is a director for the New Mexico Cattle Growers’ Association, serves as his local county fair beef superintendent and is a member of St. Anne’s Catholic Church.

Kyle and his wife, Tonya, have two children — Peyton and Libby.

January 15, 2016

Livestock Market Digest

Page 9

Is EPA Trying To Sabotage Its Gold King Mine Blowout Investigation?

BY MICHAEL BASTASCH, DAILYCALLER.COM

L

awmakers are concerned the Environmental Protection Agency is trying to derail an internal investigation into the agency’s handling of a massive mine wastewater spill in Colorado caused by federal workers just months ago.

Republican chairmen of two key House committees sent a letter to EPA highlighting their concerns agency officials are trying to undermine an investigation by the inspector general’s office in the wake of a recent agency document weaving a “new narrative” about the Gold King Mine blowout in August. “[T]he Committee on Natural Resources is troubled by the EPA’s disclosure last week that it had recently interviewed two material witnesses to the EPA’s activities at Gold King Mine,” Republican Reps. Rob Bishop, Utah and Louie Gohmert, Texas wrote to the EPA’s inspector general.

“Specifically, the Committee is concerned that the EPA’s interview did not follow best investigative practices and may have interfered with the OIG’s ongoing investigation,” the lawmakers wrote to the agency.

About two weeks ago, the EPA released a document it says is intended to “clarify any misunderstandings about the incident.” The document was based on interviews the agency conducted with two on-scene coordinators “closely associated” with the Gold King Mine blowout in August.

Bishop and Gohmert, however, say the document meant to “clarify” what happened at the mine have only served to obfuscate an internal agency review of the mine blowout being conducted by the inspector general’s office.

“The timing of the interview calls into question the EPA’s respect for the OIG’s ongoing investigation and commitment to

ensuring the integrity of witness testimony,” wrote Bishop and Gohmert. “As you know, the EPA’s own guidance states that ‘managers should not question staff about their interactions with the OIG.’” The lawmakers wrote “it appears likely that a regional supervisor and two officials from headquarters questioned [the on-scene coordinators] about matters central to an ongoing OIG investigation, and may have done so following their interactions with the OIG.” “Second, the interview was conducted not by independent investigators or technical experts from unaffected regions, but by three EPA employees with close ties to the agency’s public response to the Gold King Mine spill,” according to lawmakers.

The Republicans argue EPA is trying to create a new narrative about the spill that the agency was actually going to open the mine on August 14 — nine days after the mine spill actually occurred. They say this “claim is demonstrably false and is one of multiple claims that diverge from the facts and conclusions presented in reports issued previously by EPA and the Interior Department.”

“The initial EPA Internal Review, for its part, makes no mention of the meeting [one of the coordinators] scheduled for August 14, 2015, and does not indicate that any further technical expertise was needed before proceeding with the plan to reopen the Gold King Mine,” Republicans wrote.

“Moreover, the claim that EPA intended to excavate the adit and then leave it in a disturbed condition for at least nine days before taking further steps is nonsensical,” they added.

In August, EPA workers and contractors working on the Gold King Mine accidentally caused a massive blowout, sending 3 million gallons of mine wastewater into Colorado’s Animas River.

The toxic mine waste eventual-

ly wound its way through Utah and New Mexico, also contaminating drinking water in Navajo Nation.

The EPA eventually took responsibility for the spill, but so far the agency has not taken action against any employees or contractors involved with the spill. Instead, EPA has given contractors involved with the spilleven more money in the weeks after the disastrous event.

An EPA internal review of the incident released in August even claimed a mine blowout “was likely inevitable,” despite the fact contractors ignored “expen-

sive and technically challenging” that could have prevented a blowout.

The Department of the Interior was tasked with conducting an outside review of the incident, which it released last month. Interior faulted EPA for the spill, noting had the agency used “a drill rig to bore into the mine from above” to open Gold King “the mine would have been revised, and the blowout would not have occurred.”

More importantly, the Army Corps of Engineer experts reviewing Interior’s report found it was inadequate because it

was “non-specific regarding the source of information concerning EPA documents and interviews with EPA employees and the onsite contractor.” “[The Corps] believes that the investigation and report should have described what happened internal within EPA that resulted in the path forward and eventually caused the failure,” according to a section of Interior’s report describing the Corps concerns.

“We are reviewing the letter and will respond appropriately,” an EPA spokeswoman told The Daily Caller News Foundation.

Page 10

Livestock Market Digest

January 15, 2016

Remote Montana ranch rare source of critical blood DAVID MURRAY, DMURRAY@ GREATFALLSTRIBUNE.COM

T

he wide, treeless plains of Golden Valley County seem a long way from the world’s international centers of medical diagnostic testing. North of the small town of Ryegate, sheep and cattle browse for grass among clumps of sagebrush and greasewood, and antelope outnumber humans by more than two to one.

Yet lab techs, doctors and university professors from Tel Aviv to Singapore are all aware of this remote locale — or are at least familiar with one isolated Montana ranch that provides the world with one of the most critical components of human diagnostic testing — animal blood products.

“It’s something that the average person will never think of, but it’s very, very important to the medical industry,” said Jennifer “J.R.” Tonjum, quality control consultant for the Quad Five Ranch. “There’s a huge market for it and we provide what we feel is the best quality blood product in the world.”

Quad Five is one of only five companies in the U.S., and perhaps a couple dozen more across the planet, that collect and sell animal blood products to pharmaceutical companies, laboratories, hospitals and universities worldwide. Without the blood products these companies provide, human diagnostic testing as we know it would be nearly

impossible.

Ever been tested for strep throat or a urinary tract infection? If so, the results of your test almost certainly hinged on the presence of a small quantity of sheep’s blood. Sterile goat serum is an integral component of HIV test kits. Factors of horse blood are frequently used to test for venereal disease, and the blood of cows is a common substitute for human blood — used by medical schools to train a new generation of doctors and researchers dedicated to the treatment of blood-borne illnesses.

The human medical applications for animal blood are extensive and worldwide, and much of the raw product comes from donor animals living on the Quad Five ranch north of Ryegate.

Most of the blood harvested there goes toward the production of agar plates: petri dishes that contain a sterilized growth medium and are used to culture microorganisms. Tens of millions of agar plates are used in medical research and for diagnostic testing each year.

“Think about a huge hospital and how many agar plates they’re going to have,” Tonjum said. “Then multiply it by all the doctor’s offices, all the hospitals, all the academic labs and all the universities in the world.”

In describing the need for animal blood, many people might assume that acquiring it would require the destruction of the animal. In many instances, that assumption is accurate.

According to Wiley Micks,

owner of the Quad Five Ranch, the nation’s largest suppliers of animal blood products are companies affiliated with the meat packing industry. In these cases, blood is drawn from sheep, cattle and goats in a sterile environment prior to their eventual slaughter.

However, since its establishment in 1990, Quad Five has relied upon a “donor animal” program in which blood is drawn in limited quantities from young animals (primarily sheep) loaned to the ranch from outside livestock operations. Over the course of one year, blood is drawn repeatedly from these donor sheep; approximately once every 28 days. They are cared for, sheltered and fed, and eventually returned to their original owners — very much alive.

“We have a very strong relationship with the sheep breeders who have been coming back to us for 20 years,” Micks said.

“The sheep are all ewe (female) lambs which we receive when they are around 8 months of age. The owners do not want the ewe lambs in their first year because they are too young to safely lamb.”

“Over the course of a year we’ll put on 40-50 pounds of gain on the lambs,” Micks added. “We don’t skimp on the feed.

In October we sell them back to their initial owners as yearling ewes. They just come here for a year, then they go back and are bred for the next 10 years. Killing them would not make financial sense.”

The emphasis in Quad Five’s operating model is squarely focused upon the health of the animals. A healthy animal will provide a better blood product, and because they are obtained as lambs, Quad Five can better guarantee that the blood they obtain is free from antibiotics and growth hormones — contaminants that can foul the results obtained from blood agar plates used for medical diagnostic testing.

In total, Quad Five maintains a flock of around 7,500 sheep from which they draw approximately 1,500 liters (roughly 400 gallons) of blood each week.

Blood products are also drawn from the ranch’s 600 goats, 85 horses and 50 head of cattle.

All of this is done under the close scrutiny of the U.S. Department of Agriculture, the Food and Drug Administration and independent auditors who can arrive unannounced to inspect the facility at any moment.

“The USDA comes at least once a year to look at the facilities and all the animal housing,” Tonjum said. “We probably have half a dozen on-site audits a year where companies from all over the world inspect our facilities. We have some of the biggest players in the world that buy blood from this facility. The scrutiny comes in a measure far beyond anything most livestock producers will ever have to experience.”

The bleeding process itself is surprisingly sedate.

The sheep are led into a nar-

row, sheltered corridor, eight at a time, where they are immobilized in a squeeze chute similar to a calf branding table. Once the ewes are rotated onto their sides, they immediately become docile, entering into a quiet torpor — a characteristic of the animals that shearers have known for centuries.

There is no bleating or struggle in the blood drawing room.

The ewes’ heads are restrained with a rope to prevent the needle from being dislodged. The wool around their throat is shaved and antiseptic is swabbed across the extraction site. Then a 16-gauge needle — about the same diameter as those used for human blood draws — is inserted into their jugular vein.

A vacuum pump draws about a liter of blood into a sterilized plastic bag, while their human attendants watch the animals closely for any signs of adverse effects. The whole process takes about five minutes.

Once the blood draw is completed the animals are released and wander, somewhat wobbly, out into a holding pen where they are held overnight for observation.

Back in the laboratory, the newly filled blood bags are placed into a plastic sack and put into an old clothes dryer where they are tumbled for several minutes. As the blood is tumbled the fibrin, or clotting factor, adheres to a small foam sponge contained within each continued on page eleven

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January 15, 2016

Livestock Market Digest

Red Meat Club Names Ron Williams 2016 Friend of the National Western

T

he Red Meat Club of Denver has announced that the coveted Friend of the National Western and Red Meat Industry award will be presented in 2016 to Ron Williams, Chairman of the Board of the Western Stock Show Association, also known as the National Western Stock Show. The award will be presented at the Red Meat Club’s annual dinner promoting the red meat and livestock industry, which is set for Thursday, January 14, 2016 at the National Western Club.

A native of Farnam, Nebraska, Williams spent 35 years as the President and CEO of the Gary-Williams Energy Company, a Denver-based company engaged in crude oil refining, oil and gas exploration and production, real estate, investment management and community development.

After Williams and his partner Sam Gary sold the company in 2011, Williams “retired” and took over the helm of the National Western as Chairman in 2012.

Williams fulfilled a life-

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long dream in 1996 when he assembled three separate ranch properties located in the Gyp Hills region of south-central Kansas between Medicine Lodge and Coldwater. He ran yearlings at first, building over a tenyear period a home-grown purebred Angus herd that now numbers around 1,000 bred cows and heifers. In addition to ranching, Williams and his wife Cille are annual fixtures at the National Western’s Junior Livestock Auction, where they support both youth in agriculture and the National Western Scholarship Trust by staying late and anchoring the back end of the sale order. Both are active in community service and philanthropy as well, with Williams serving as a longtime board member of the Children’s Hospital Foundation.

Complementing the recognition of Williams, the featured speaker for the 2016 Red Meat Club is National Western President and CEO Paul Andrews.

Now in his sixth season at the helm, Paul has been

the day-to-day force behind not only the management of operations, programming and administration of the entire National Western Complex, but also the monumental task of charting the Stock Show’s future plans in coordination with a host of development partners, elected leaders, and other stakeholders. Those efforts were validated and confirmed with this fall’s approval by a 2-to-1 margin of Denver Measure 2C, which provides a substantial portion of the funding required to transform the National Western Complex into a year-round, stateof-the art educational, research, and entertainment venue. With that milestone in place, Paul will speak to the group about the Stock Show’s exciting future plans.

The Red Meat Club dinner begins at 5:30 p.m. on January 14, 2016 at the National Western Club.

Tickets are $40 per person and may be purchased by calling 303/299-5556 or by emailing aphippen@nationalwestern.com.

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TUCUMCARI, NM AREA – 4 irr. farms totaling 1,022.22 deeded ac. +/- with 887.21 ac. +/- of Arch Hurley Water Rights (one farm w/a modern 2 bdrm. – 1 bath home, w/a metal roof, barn & shop) together with 1,063 addtl. deeded ac. +/- of native grass (good set of livestock pens & well-watered). All one-owner, all on pvmt., can be bought together or separately.

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Please view our websites for details on these properties, choice TX, NM & CO ranches (large & small), choice ranches in the high rainfall areas of OK, irr./dryland/CRP & commercial properties.

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continued from page ten

blood bag. Removing the fibrin ensures the blood will remain in its liquid state prior to future processing.

The blood is then transferred into larger sterile bags and prepared for shipment according to the directions of the individual customer. Blood products are picked up each afternoon and flown out of Billings to different delivery points throughout the world.

Customers in North America can typically expect to receive Quad Five blood products less than 24 hours after they are drawn from the animal.

Overseas deliveries are frozen and typically take two to four days to arrive.

On the day of the Tribune’s visit, blood products were being prepared for shipment to customers in Thailand, Israel, Hong Kong and to the University of Toronto in Canada.

Quad Five employs 20 people, providing well-paying jobs in a community where independent employment is in short supply. Micks’ own entry into the blood products industry came 27 years ago, when he was employed by Quad Five’s original owner, Herman Wessel.

According to Micks, Wessel came to Golden Valley County in 1988 with the goal of establishing a lamb slaughter operation, but low market prices nearly put him out of business.

“He was bringing probably 50,000 head of sheep through here a year, but he couldn’t make any money at it,” Micks said of his former employer. “He was sending out one

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Page 11

or two shipments a week, but he lost his tail.”

Then, during an international flight, Wessel began a conversation with another passenger who suggested the sheep man look into harvesting the animals’ blood for the diagnostic testing industry.

“Herm had no idea, and we started bleeding from ground zero,” Micks recalled. “We began bleeding horses for an antibody product that was used to treat newborn foals for the failure of passive transfer (not enough antibody protection from the mother). We basically taught ourselves how to make this operation work.”

Within two years, the Quad Five had shifted its major focus of operations toward blood products. Today they manufacture 110 different blood fraction products.

Micks said that it’s difficult for him to believe the career path his life has taken. He graduated from the University of Illinois with a degree in animal science, but the potential for him to earn a living selling blood products never entered his mind.

“I cannot believe I’d ever have a calling to do this,” Micks said. “I took microbiology as an elective course and I didn’t do very well. I wish like hell I’d paid more attention in my biology courses.”

The lessons Micks has learned through 25 years of on-the-job training have served both him, and thousands of unsuspecting patients very well.

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Page 12

Livestock Market Digest

January 15, 2016

Cattlemen should be ‘steeling’ for the future

C

ow-calf producers have made some money and now need to be “steeling” for what is to come, a Texas A&M AgriLife Extension Service specialist said.

Dr. Ted McCollum, AgriLife Extension beef specialist in Amarillo, spoke at the Amarillo Farm and Ranch Show recently.

He said the definition of steeling as a verb is “to prepare oneself for something difficult or unpleasant.”

“We are just out of the drought of the decades and rangeland recovery is underway,” McCollum said. “But the strong El Nino is over next spring and we could revert back to dry conditions very quickly.”

The question is whether conditions will return to the longterm normal or “do we run the risk of dry weather,” he said.

Couple that with the end of a long bull cattle market that is settling back into a lower trading range, a strong dollar that is hampering exports and incentivizing imports, and large meat supplies after both the poultry and pork industries overcompensated to recover from bouts with disease issues.

“Where will the trading range be for the calves we are producing? The price of cows and replacements hit all-time highs,” McCollum said. “On average, cow-calf returns are still good.

We, the cow-calf producers,

have some money in our pockets and need to be investing in the future.”

He said some measures to be taken at this time of profitability would be those that will help maintain productivity during the drier times: improve rangeland resources by building ground cover and improving water infiltration, manage woody plant competition, and enhance grazing distribution by improving water and fencing layouts.

“Set some money aside to invest in these rangeland resources,” McCollum said. “The longer we wait to do some of these things, the more the cost will be, especially on suppression of woody plant competition such

as mesquite and redberry juniper.”

He also said that the investment in cows today is relatively high, and producers need to set themselves up to maintain productivity and profitability from those high-value assets. This will require efficient cows able to convert forage resources to pounds of calf or beef.

The continued increase in cow size has been a point of discussion in the industry for several years, McCollum said. As cow size increases, more land and forage resources must be allocated to the cow, thus the herd size that can be maintained on a finite resource is reduced.

The question of efficiency revolves around whether the larger cows will wean proportionately heavier calves to offset the reduced herd size, he said.

Based on averages, this is not the case.

Producers need to strive to reduce the upward drift of cow weight on their operations or manage the larger cows so that their production is proportional to their size, McCollum said. In either case, bull selection and sourcing of replacement heifers will be focal areas.

He also recommended producers study “Key Performance Indicator Targets for Cow-Calf Operators” by Stan Bevers, AgriLife Extension beef economist in Vernon. Bevers outlines 15 indicators of financial performance that will help producers evaluate their operations and prepare for the future.

The booklet can be found at http://bit.ly/1N8Wqtm.

Source: AgriLife Today

American Shorthorn Assn. announces internships

T

he American Shorthorn Association (ASA) and the American Junior Shorthorn Association (AJSA) seek individuals interested in a full-time paid summer internship. ASA will be selecting two individuals for the 2016 summer internships.

This is an outstanding opportunity to attain training and work experience in an association atmosphere. The intern will assist with programs of the ASA and AJSA activities, such as the planning and execution of the National Junior Shorthorn Show & Youth Conference, including but not limited to press releases, creative design work, media contact, correspondence with planning committees, and data and entry input and organization.

We will select a “Registrations” intern as well as a “Communications” intern.

Applicants should be a soph-

omore, junior, or senior in college and have an interest in working in an agriculture-related field after college. Located at the ASA headquarters in Kansas City, MO., with beginning and ending dates flexible, the intern will assist with the daily in-office preparations for various ASA activities, correspondence, communications, as well as other work as assigned. Computer skills and experience with communications and agriculture are desired.

More information can be found at www.shorthorn.org or by contacting Gwen Crawford, 816/599-7777 or gwen@ shorthorn.org. Interested applicants should email a cover letter, resume, and three letters of reference by February 15, 2016 to the American Shorthorn Association: Internship, 7607 NW Prairie View Rd, Kansas City, MO 64151. (Letters of References may be mailed.)

January 15, 2016

Livestock Market Digest

Page 13

Benny Peiser: The Non-Binding Paris Deal and Its Implications

BY BENNY PEISER, THE DAILY TELEGRAP

T

he real battle about the implications of the Paris climate agreement has just begun. The fuzzy and essentially aspirational deal suits most governments and allows them to declare a victory. Its woolly and non-committal form, however, poses a serious challenge to the EU’s and Britain’s climate policy framework.

The problem arises because the EU failed to achieve its core objective, namely that the Paris agreement should adopt “CO mitigation commitments that are legally binding on all Parties.” This failure has major consequences for Britain’s unilateral climate policy.

As part of its Paris negotiations, the EU had offered to cut CO emissions by 40 per cent below the 1990 level by 2030.

However, this pledge was conditional on all major emitters adopting legally binding targets.

In contrast to the Kyoto Protocol (which runs out in 2020), the new accord no longer includes legally binding CO reduction targets. Instead, it is based on voluntary pledges of intentions determined and monitored by individual governments in line with their national 2

2

2

Century Club members honored

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entury Club Award honorees were announced during the American Shorthorn Association’s Annual Meeting in December 2015. The Century Club recognizes breeders who have registered over 100 head of Shorthorns in the past year. The following breeders were recognized for their achievements: • Sullivan Farms, Iowa-Registered 262 head • Waukaru Farms, Inc., Indiana -Registered 193 head • Hugh W. Moore Jr. & Sons, Illinois -Registered 145 head • Dale Studer Family, Iowa-Registered 133 head • Fischer Cattle Company, Kansas -Registered 127 head • Martindell Shorthorns, Kentucky-Registered 120 head • WHR Shorthorns, Texas-Registered 114 head • Jungels Shorthorn Farm, North Dakota-Registered 112 head •BylandShorthorns,OhioRegistered 109 head • J. Phillip Bowman & Family, Indiana-Registered 101 head

interests.

Without legally binding de-carbonisation caps, there will be strong opposition within the EU to making its own conditional pledges legally binding. Poland and other poor member states in Eastern and Central Europe are widely expected to rebel against accepting new unilateral policies that have seriously undermined Europe’s competitiveness. But if EU member states reject new binding targets for the post-Kyoto period, Britain’s aggressive climate policies would stick out like a sore thumb, making them politically and economically toxic.

After all, Britain’s unilateral decarbonisation policy makes no sense in the absence of the world’s major economies adopting equally binding caps. As a result of the voluntary Paris agreement, both the EU and the UK will be pushed to abandon CO unilateralism.

That’s why Amber Rudd, the Secretary of State, has promised that the government’s new climate policy will no longer go it alone, but “travel in step with what is happening in the rest of the world” so that energy bills remain affordable for households, business remains competitive, 2

and the economy remains secure.

Ms. Rudd is following in the footsteps of George Osborne, who has led the fight against the fourth carbon budget. In 2011 the Coalition government, under pressure from the Liberal Democrats, set the UK’s carbon budget to cover 2023 to 2027. It set out a C0 reduction of 50 per cent compared to 1990 levels by 2025 – the most aggressive target in the world and far more ambitious than the conditional EU target of 40 percent by 2030.

Mr. Osborne has warned repeatedly that adhering to its current targets would damage Britain’s economy significantly. He has pledged that the UK will no longer adopt unilateral policies that “cut our carbon emissions faster than our fellow countries in Europe.”

The emissions target of the Climate Change Act may be amended if there have been significant developments in international law or policy that make it appropriate to do so. The Government has been clear that the UK may revise the fourth carbon budget in light of developments in the EU. If member states refuse to turn the 2030 pledge 2

into nationally binding targets, we can expect Mr. Osborne to finally achieve what he has been trying for years: to revise the UK’s 2025 target to more modest commitments.

The Secretary of State is to be commended for stressing pragmatism over the unrealistic car-

bon budget. Even the Climate Change Act must logically be up for amendment given that the Paris summit rejected Europe’s and Britain’s key demand. The battle for rational climate and energy policies has just begun.

Benny Peiser is the director of the Global Warming Policy Forum

Page 14

Livestock Market Digest

RIDING HERD bid.

The shortest sales are charity auctions and the longest are cattle video auctions, often lasting a week! The highest commission rates are at bit, spur and art auctions where the sales management often charges the consignor 20 percent AND the buyer 20 percent. The cheapest commission rates are found at your local auction market.

The most fun I ever had at a sale was working a farm auction with my buddy Butch and the worst time I ever had was a 600 head bull sale where I worked the ring after a dentist had just removed a wisdom tooth from my mouth with a hammer and chisel! The best economic climate for a cattle sale was last year and the worst was in 1973 when I started

continued from page one my career as a ring man. Back then we often had to stop bull sales because there were no buyers and we had a sale in Arizona once where we failed to sell a single animal! The quickest auction was a real estate auction where we only sold one house. I took two bids the entire auction after traveling four hours to get there.

The most savvy bidders are cow buyers and the least savvy are buyers at Jr. Livestock auctions.

Bless their charitable hearts.

The dirtiest auction I ever worked was a llama sale when one spit at me. (That hardly ever happens at cow sales.) The strangest thing I’ve ever seen sold was a rabbit carrying the embryo of a Chianina and we even sold an auction market once. At auction, of course. Another unusual

item I saw sold was O.J. Simpson’s Ferrari with the license plate “JUICE”. It was interesting because the insulation under the hood had been sliced and diced where the cops had been looking for the murder weapon.

One of my most unforgettable memories was the charity auction where we didn’t discover there was no clerk until after the sale was over. But I think my favorite auction memory occurred when computers were first being introduced to auction markets.

Yes, I was a witness to the legendary occasion when a hot-headed auctioneer threw a brand new computer into the ring causing a very big computer crash. And I do mean crash. With it went the record of all the prices paid for the preceding three hour’s work!

January 15, 2016

National Ag Day Essay Contest January 29 is the deadline

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he Agriculture Council of America (ACA) calls on ninth- to 12th-grade students to submit an original, 450-word essay or a two-minute video essay about the importance of agriculture.

This year’s theme is “Agriculture: Stewards of a Healthy Planet” and the deadline is January 29, 2016. The ACA asks teachers and parents to encourage their students and children to participate.

The theme, “Agriculture: Stewards of a Healthy Planet,” presents an opportunity for students to address how the individuals involved in agriculture have a duty to protect the planet and its people through what they produce.

Entrants may choose to either write an essay or create a video focusing on how today’s growers are overcoming challenges to provide a safe food supply to uphold our planet’s health.

“CHS is proud to support rural youth and showcase their ideas,” says Annette Degnan, marketing communications director, CHS Inc., one of this year’s essay contest sponsors. “The essay and video contests are engaging ways to share the perspectives and career goals of these young people with a larger audience.”

The national written essay winner receives a $1,000 prize and round-trip ticket to Washington, D.C., for recognition during the Celebration of Ag Dinner held March 15,

LETTUCE ories, and as a general rule it is still the case that reducing meat consumption in favour of plantbased proteins can reduce emissions,” he said.

According to the authors, the study analysed the impact on the environment from changing the average US diet to three new “dietary scenarios”.

Simply reducing the number of calories consumed, without changing the proportion of meat and other food types, cut combined emissions, energy and water use by around 9 percent.

Perhaps understandably, maintaining calorie intake but completely shifting to healthy foods increased energy use by 43 percent, water use by 16 percent and emissions by 11 percent.

But surprisingly, even if people cut out meat and reduced their calories to USDA-recommended levels, their environmental impact would increase across energy use (38 percent), water (10 percent) and emissions (6 percent).

2016. During dinner, the winner will have the opportunity to read the winning essay and join with industry representatives, members of Congress, federal agency representatives, media and other friends in a festive ag celebration.

The video essay winner wins a $1,000 prize, and the winning video will play during the Celebration of Ag Dinner.

This is the 43rd anniversary of National Ag Day. The goal of the ACA is to provide a spotlight on agriculture and the food and fiber industry.

The ACA not only helps consumers understand how food and fiber products are produced, but also brings people together to celebrate accomplishments in providing safe, abundant and affordable products.

The Ag Day Essay Contest is sponsored by CHS Inc., National Association of Farm Broadcasting, National Agri-Marketing Association and Penton Agriculture.

All written entries should be sent to: 2016 Ag Day Essay Contest, Agriculture Council of America, 11020 King Street, Suite 205, Overland Park, KS 66210, or submitted by email to essay@ agday.org. Students may upload video essays at http:// agday.leapfile.net and follow the directions on the page, or students may choose to mail video entries on a compact disc to the address above.

Visit www.agday.org to read official contest rules and for more details regarding entry applications.

continued from page one Michelle Tom, another co-author, said the relationship between diet and environment was “complex”.

“What is good for us healthwise isn’t always what’s best for the environment,” she said.

“That’s important for public officials to know and for them to be cognisant of these trade-offs as they develop or continue to develop dietary guidelines in the future.”

Chatham House’s Mr. Froggatt, who was not involved in the research, said it was important to look at production methods as well as the complex issue of how land use is “likely to be impacted by changing diets”.

“The key point I would agree with here is that you need to look at both the environmental and health impacts at the same time,” he said.

“We do know there is global overconsumption of meat, particularly in countries such as the US,” he said. “Looking forward that is set to increase significantly, which will have a significant impact on global warming.”

January 15, 2016

Livestock Market Digest

Page 15

Apply for the 2016 Beef Leaders Institute

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he Beef Leaders Institute (BLI) is a premier leadership experience for American Angus Association® members that provides a look into the entire beef supply chain, while enhancing participant knowledge of the Association and strengthening their leadership skills. Angus producers between 2545 years old are encouraged to apply for the ninth annual BLI scheduled for June 20-24, 2016. Applications are due back to the Association by March 1.

“The Beef Leaders Institute is an annual highlight, as we bring together Angus breeders from across the country for an in-depth look at our

business,” says Jaclyn Clark, Association director of events and education. “Participants gain practical knowledge, valuable connections and a greater appreciation for the role of quality beef in today’s marketplace.”

American Gelbvieh Association Elects Board of Directors

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embers of the American Gelbvieh Association (AGA) elected five candidates to serve three-year terms on the AGA Board of Directors. The election took place during the annual membership meeting at the 45th Annual AGA National Convention “Moving at the Speed of Change” in Kansas City, Missouri, December 11, 2015.

Newly elected board members are Dennis Gustin, Mandan, North Dakota; Andrea Murray, Kingfisher, Oklahoma; Randy Sienknecht, Gladbrook, Iowa and Jeff Swanson, Oxford, Nebraska. Re-elected to serve a second term was Scott Starr, Stapleton, Nebraska.

The Board of Directors also elected individuals to serve in leadership positions on the 2016 AGA Executive Committee. Neal Pearson, Lake City, South Dakota, was re-elected for a second

term as American Gelbvieh Association president.

Elected as vice president was Scott Starr. Duane Strider, Asheboro, North Carolina was elected as secretary and Grant Thayer, Ramah, Colorado was elected as treasurer.

Other members of the AGA Board of Directors are: Emily Griffiths, Kendallville, Indiana; Bob Hart, Kansas City, Kansas; Andy LeDoux, Agenda, Kansas; David Martin, Judsonia, Arkansas; Dustin Rippe, Hubbell, Nebraska; Lowell Rogers, Seminary, Mississippi, and Walter Teeter, Mt. Ulla, North Carolina.

Retiring members of the 2015 AGA Board of Directors were Brian Dunn, St. John, Kansas; Ronnie Rogers, Mendon, Missouri; Gary Tilghman, Glasgow, Kentucky, and Dan Warner, Beaver City, Nebraska. The service of these four gentlemen to the association is greatly appreciated.

The program brings Angus producers together in Saint Joseph, Mo., for a series of informative sessions, followed by a three-day tour across several industry segments.

During the event, BLI participants are able to tour a beef harvesting and packing facility, retailer, fabricator, feedlots and other industry segments, including the American Angus Association. Those selected will also learn about the ultimate end product — the Certified Angus Beef® brand — and how the branded beef program drives demand for quality Angus genetics.

“BLI overall has been an excellent experience, and I encourage other producers to attend,” said Jed

Connealy of Whitman, Neb. “It’s a unique opportunity to see many different sectors of the industry, and most of the things we’ve seen on BLI are things you don’t just walk in and see by yourself. It’s a really neat opportunity that cattlemen on all levels should take advantage of.”

The Association provides transportation, lodging, meals and materials during BLI. Attendees will be responsible for round-trip transportation between their home and either Kansas City or Saint Joseph, Mo. To apply, download an application or contact the American Angus Association at 816/383-5100. Information can also be found on www.angus.org.

Page 16

Livestock Market Digest

January 15, 2016

Fiscal Deal Winners & Losers

BY NAOMI JAGODA AND LYDIA WHEELER, THEHILL.COM

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he sweeping year-end tax and spending bills unveiled recently in Congress follow months of lobbying by industry and public interest groups, followed by weeks of intense negotiations on Capitol Hill.

The final legislation, weighing in at nearly 2,250 pages, is chock full of language representing major victories for some groups and economic sectors — and bitter defeats for others.

Here’s a rundown on some of the biggest winners and losers in the $1.8 trillion deal.

WINNERS Oil The oil industry emerged as a major beneficiary of the spending bill because, which indefinitely lifts a decades-old ban on crude exports. The oil industry has been pushing for about a year-and-a-half for the measure, which was championed

by Republicans but met with skepticism from many Democrats, environmental groups and the White House.

“Extensive research has determined that lifting the ban on U.S. crude oil exports would create American jobs, bolster the U.S. economy, and benefit consumers,” American Petroleum Institute President Jack Gerard said Wednesday in a letter backing the deal that was sent to congressional leaders Wednesday.

Supporters of ending the ban said that it would allow the U.S. to help our allies who want to decrease their dependency from certain other countries.

“By passing this legislation and lifting the outdated exports ban, American producers will be able to compete on a level playing field with countries like Iran and Russia, delivering energy security to our friends and allies, advancing the energy revolution that has revitalized our economy, and providing meaningful benefits to families and consumers across the Unit-

ed States,” said Independent Petroleum Association of America President Barry Russell.

Unions Labor unions also have something to celebrate in the omnibus, since it includes a two-year delay of ObamaCare’s “Cadillac” tax on high-cost plans. Unions have sought to roll back the tax because they are concerned the tax would hurt their plans. The groups often negotiate larger benefits packages instead of higher wages.

The Cadillac tax would take effect in 2018 under current law and would not apply until 2020 under the spending bill.

Bill Samuel, director of government affairs for the AFL-CIO, said that the group is “relieved” about the delay.

“The tax is beginning to have a negative effect already in bargaining,” he said.

Employers are trying to raise costs or reduce benefits for employees, he added.

Renewable Energy The nation’s renewable energy producers claimed a key win by securing extensions of key tax credits for wind and solar, despite opposition from some Republicans. The solar investment tax credit and the wind production tax credit are extended and phased out over five years under the spending bill.

“This agreement will enable wind energy to create more affordable, reliable and clean energy for America by providing multi-year predictability as we have called for,” said Tom Kiernan, CEO of the American Wind Energy Association.

Advocates for the extension of the renewable energy credits said that doing so provides certainty for businesses and new jobs.

“By extending the solar investment tax credit for five years with a commence construction provision and a gradual ramp down, bipartisan members in both Houses have reestablished America as the global leader in clean energy, which will boost our economy and create thousands of jobs across America,” said Rhone Resch, president and CEO of the Solar Energy Industries Association.

The legislation extends a slate of corporate tax breaks, representing big victories for business and manufacturing groups.

The tax package indefinitely extends the research and development tax credit, enhanced section 179 small-business expensing and the active-financing exception, and it extends for five years bonus depreciation and the controlled-foreign corporation look-through rule.

Enhanced section 179 and bonus depreciation allow businesses to expense more of their capital investments immediately. The active-financing exception and CFC look-through rule help U.S. companies compete overseas, according to officials with the National Association of Manufacturers.

NAM Vice President of Tax and Domestic Economic Policy Dorothy Coleman said in a news release that the tax package is “a historic and very promising breakthrough.”

“The R&D tax credit, investment incentives for manufacturers of all sizes and provisions that affect U.S. global companies are all key to helping manufacturers innovate, compete in a global marketplace and contribute to U.S. economic growth and job creation,” she said.

NAM also praised the two-year suspensions of ObamaCare’s Cadillac and medical-device taxes.

Business Roundtable, which represents chief executive officers, also praised the permanent provisions and freeze of the medical device tax.

“The importance of this agreement, which includes permanent tax extenders, cannot be overstated. We strongly urge immediate action on this package,” said BRT Tax and Fiscal Policy Committee Chair Mark Weinberger. “Congress has also wisely proposed delaying the medical device tax. Taxing these devices only increases costs and discourages investment.”

Low and middle-income families The deal cements expansions of the earned income tax credit and the child

tax credit that were created by President Obama’s stimulus law. The permanency is “a really big deal for working families,” said Steve Taylor, the senior vice president and counsel for public policy at United Way Worldwide.

Robert Greenstein, president of the Center on Budget and Policy Priorities, said that with the EITC and CTC improvements permanent, the programs keep more children out of poverty than any other federal initiative.

“Making the EITC and CTC improvements permanent would rank among the biggest anti-poverty achievements, outside of health reform, in years. These improvements lift about 16 million people, including about 8 million children, out of poverty or closer to the poverty line each year,” he said in a statement.

LOSERS E-cigarette, cigar industries Makers of cigars and electronic cigarettes mounted an aggressive — yet ultimately unsuccessful — bid to include language in the bill they claimed would have saved their industries from being wiped out by a provision in looming regulations from the Food and Drugs Administration (FDA).

In its proposed rule to assert its authority to over cigars and e-cigarettes, the FDA said any product that hit stores after February of 2007 would have to apply retroactively for approval.

Because the review process would cost millions per product, industry groups were pushing for a rider in the omnibus spending bill to move that “grandfather date” to the day FDA issues its final rule. Anti-smoking groups were in a panic in the days leading up to the bill’s release, fearing they had been successful.

Recently, groups like the American Lung Association and the Campaign for Tobacco Free Kids breathed a sigh of relief.

“By rejecting these special interest giveaways to the tobacco industry, this agreement bolsters the nation’s fight against tobacco use, the number one cause of preventable death,” Matthew Myers, the campaign’s president said in a statement.

Financial reformers Financial reform advocates were hoping the Obama administration would finalize two new rules in 2016 that shed light on the so-called “dark-money” that corporations and certain non-profit organizations pour into political campaigns. The final legislation includes measures to block both.

Language in the spending bill prevents the Securities and Exchange Commission from issuing a rule that requires publicly traded companies to disclose their political spending, and the IRS from defining the activity that’s allowed by 501(c)(4) groups.

Wall Street The financial sector also struck out.

Wall Street fell short in its efforts to ease rules under the 2010 Dodd-Frank financial reform law and delay the Labor Department’s “fiduciary rule,” which would force retirement investment advisers to act solely to the benefit of their clients.

GMOs Opponents of mandatory labeling laws for foods that contain genetically modified organisms (GMOs) were handed language that forces producers to develop guidelines and implement a program for the mandatory labeling of genetically engineered salmon.

January 15, 2016

Livestock Market Digest

Baxter BLACK ON THE EDGE OF COMMON SENSE www.baxterblack.com

Cowboy Christianity

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funny thing happened at the rodeo. I saw the power of prayer.

The National Finals Rodeo (NFR) last December in Las Vegas came at the end of a tumultuous year of savage terrorism around the world and in our own front yard. The news media has been awash with violence. The deliverers of the death and chaos claim that their God, Mohammad, and their ‘bible’ the Quran, commands Muslims to “kill the infidels” and thus are justified in doing it.

Obviously, most Muslims don’t translate it that way, nor do the victims of what is now known as radical Islam. Yet the shootings, bombings and murders continue unabated.

Americans are walkin’ circles on the sidewalk waiting for some-

one in our government to give us marching orders, some direction to protect ourselves, someone willing to take a stand. Washington, DC is dizzy. Protesters would have the 1st Amendment selectively eliminated so only they can talk. And amidst all this, our leaders threaten us with politically correct “no, no’s” that turn us into liars, deceivers and fools.

What is missing in this picture?

Our government has forsaken the strongest force that unites us…God. It is Christians the terrorists fear the most. Terrorists watch with glee as America continues to desert the bedrock of our country. Christianity is the backbone of our Constitution, our laws, our moral compass and our daily lives. ISIS knows it and

is sworn to wipe us out.

The NFR rodeo is a sport borne, supported and loved by primarily rural people. It is the “superbowl” of rodeos. 77 percent of Americans are Christians, three out of four. The belief in God is obvious at the performances. The rodeo begins with a prayer. How many other sporting events from Little League to the World Series begin with a prayer? How many grade school days start with a prayer? How many political speeches begin with a prayer?

Muslims pray publicly 5 times a day. Are Muslims forced to join Christians in prayer?

No. This is a free country. But it is a Christian country. The final night, none other than the winningest professional rodeo cowboy in the world, reining All Around Champion Trevor Brazile, in front of 15,000 plus television, spoke for most of us during his acceptance speech. (I paraphrase) He gave thanks to God, said America was built on Christian faith, that we can be merciful and forgiving to others but that does not include forsaking our beliefs just because it offends somebody.

In times of war our armed forces are visible. At the rodeo they are recognized for their service. Fifteen thousand flags were

Congress Refused to Pay the Wildfire Bill

BY DARRYL FEARS, WASHINGTON POST

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s Congress headed home for the Christmas break after passing a budget deal, Agriculture Department Secretary Tom Vilsack presented lawmakers with an angry ultimatum: Put up more cash if you want the U.S. Forest Service (USFS) to keep putting out huge wildfires.

Vilsack is fuming because Congress set aside $1.6 billion to pay for wildfire suppression in 2016 despite the USFS, which he controls, spending $100 million more than that to fight blazes this year. Year after year, Congress has underfunded the firefighting effort, forcing the Forest Service to borrow hundreds of millions of dollars from other departments in the agency to pay for equipment and firefighters.

Congress allocated $1 billion for fire suppression in 2015 — a year fast approaching another record for most acres burned. As fires continued, Vilsack pleaded for more money to avoid the frantic inter-agency borrowing of fire seasons, such as $999 million in 2002; $695 million in 2003; $200 million in 2006, along with four other years when the budget came up short.

In a smoldering letter to lawmakers, Vilsack put his foot down. The 2016 budget “fails to provide a long-term solution to address the critical and growing problem of paying for catastrophic wildfire and instead leaves the Forest Service hob-

bled by the current untenable budget situation,” he wrote. He issued what amounts to a threat, saying he will no longer rob from other departments to pay for firefighting efforts that Congress doesn’t fund.

“If the amount Congress appropriated in 2016 is not sufficient to cover fire suppression costs, Congress will need to appropriate additional funding on an emergency basis,” Vilsack wrote.

Ironically, money was diverted this year from the department devoted to prevent wildfires by removing debris that helps them burn. The Forest Service pays loggers to remove trees left dead and dying from insect infestation, as well as foliage that grew in previous years but dried and turned to kindling during long periods without snow or rain.

“We will continue to protect lives, property and our natural resources, but it is the responsibility of Congress to ensure those resources are sufficient each year so that the Forest Service is able to accomplish the full complement of its work,” said Matt Herrick, a USDA spokesman.

In the future, the agency “will notify Congress well in advance” if emergency funding is needed when the budget is short.

The nation’s worst fire season in recorded history was 2006, when 9.87 million acres were scorched. This year’s season is only a few thousand acres below that mark with two large fires still going in Kentucky. Herrick said the Forest Service has estimated that the record will be surpassed.

Another record was broken in August when the agency paid $243 million to suppress fires in only one week.

In an era of climate change, fire seasons that once started in May now start in March. They end in December, not October.

Alaska, dry from a lack of snow, saw its second-worst fire season when a freakish series of lightcontinued on page nineteen

Page 17 passed out. When Lee Greenwood sings “God Bless the USA” the roof comes off Thomas & Mack Arena…you can hear it as far away as Tulsa!

Iran and Saudi Arabia are described as Muslim countries. In our world the United States is described as a Christian country.

In our world God and Country are inseparable…as are America and Christianity.

It is common in rodeo for a rider or roper to genuflect or point upward after his run…do a Tebow, I guess. We don’t mock him…we know who he is talkin’ to.

Page 18

Livestock Market Digest

January 15, 2016

Attend a Cattlemen’s Boot Camp in Washington this April Register by March 1, 2016, to secure a place at the educational event

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attle producers are invited to gather for a Cattlemen’s Boot Camp April 15-16, 2016, at the Benton County Fairgrounds in Kennewick, Wash. The event is hosted by the American Angus Association in partnership with Washington State University (WSU), and provides purebred and commercial producers timely information presented by academic and industry professionals. Registration is now available online and open until March 1, 2016.

“Cattlemen’s Boot Camp events are engaging educational opportunities for both seedstock and commercial producers alike,” says Jaclyn Clark, Association director of events and education. “The day-and-a-half event is packed

with industry speakers and reports on research with significant impacts on the beef business.”

Open to all cattle producers, the event is funded by the Angus Foundation and features a day and a half of educational speakers and handson activities to help improve their herd operations. The workshop is packed with pertinent information including bull selection, reproductive technologies, genetic markets, forage management and much more.

Registration is $75 per person, and includes meals and educational materials. Registration forms are due March 1, 2016, and can be submitted electronically or mailed to Jaclyn Clark at the American Angus Association, 3201 Frederick Ave., Saint Joseph, MO 64506. Late and walk-in registrations are not accepted.

Hotel rooms are available at the Hampton Inn located at 3715 Plaza Way in Kennewick, Washington, for $119 plus tax until March 15, 2016.

Use code “ANG” to receive the group rate. A tentative schedule follows.

Friday, April 15 Evening Session — Post-fire Techniques, Tools and Strategies for Beef Producers 5-6:30 p.m. – Registration and Dinner 6 p.m. – Post-fire Ecology of Range and Pasture: Kevin Guinn, NRCS WA State Range Management Specialist 6:45 p.m. – Post-fire Pasture Management; Reseeding and Grazing Management: Tip Hudson, Range and Livestock Management Specialist 7:15 p.m. – Irrigated Pasture Management to Lengthen the Grazing Season: Frank Hendrix, Livestock Extension Specialist

8 p.m. – Emergency Feeding and Alternative Feedstuffs for Beef Cattle: Don Llewellyn, Regional Livestock Extension Specialist Saturday, April 16 Tools and Techniques for Beef Production 7:30 a.m. – Registration Continued: Benton County Fairgrounds 8 a.m. – Greetings & Introductions: Jake Troutt, American Angus Association, and Mark Nelson, Washington State University 8:15 a.m. – Beef Cattle Economic Outlook: Shannon Neibergs, WSU Associate Professor, Extension Economist 9 a.m. – Selecting Bulls for the Beef Herd: Tonya Amen, Director of Genetic Service, Angus Genetics Inc. 9:45 a.m. – Genomics of Feed Intake: Holly Neibergs, Associate Professor, and Kris Johnson, Professor and Interim

Chair, WSU 10:30 a.m. – Break 10:45 a.m. – AI Concepts: Martin Macquivar, Clinical Assistant Professor, WSU 11:30 a.m. – Cow-Calf Nutrition, Fetal Programming: Min Du, Professor, WSU 12:15 p.m. – Lunch and Keynote: Mark McCully, Vice President, Certified Angus Beef 1:15 p.m. – The Value of Source Verification: Ginette Gottswiller, Director of Commercial Programs, American Angus Association 2 p.m. – Beef Quality: Jan Busboom, Extension Meats Specialist, and Paul Kuber, Regional Livestock Extension Specialist, WSU 2:45 p.m. – Break 3-3:45 p.m. – Beef Cattle Health: Dale Moore, WSU Extension Veterinarian 3:45-4 p.m. – Veterinary Feed Directive: Dale Moore and Mark Nelson

auer Dependable Genetics The Cold Hard Facts of Using 39 Annual Angus Bull & Female Sale Futures & Options to Hedge Cattle January 30, 2016 • 1:00 p.m.

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n my opinion, volatility and expanse of price structure has exposed weakness in sectors and the cattle industry as a whole. Vertical integration is a process that continues to streamline the efficiency of beef production from birth to plate. With a majority of the inventory perceived under some form of captive supply, it leaves those not participating vulnerable to the ill-liquidity in smaller market venues. The massive 30% decline in cattle prices, coupled with intense volatility, has exposed weakness in every sector. Fundamental analysis of every kind was disregarded as producers adopted poor production practices in an environment which no one could have anticipated. The result being that many cattle producers are finding themselves totally inadequate in their marketing abilities. Losses compounded at a rate not seen in the cattle market in decades. While many lay blame, marketing is a function of production, with the responsibility only to oneself. The inability to capitalize on months of work and input costs for lack of attention to marketing is no longer acceptable. The habits of consumers change rapidly and the beef industry cannot make production changes at the same rate. This exposes discrepancies in supply and demand and leads to price fluctuation. Although there may be a disconnect between cash and futures, inner

action of high frequency traders, presence of large fund trading, and seeming hyper volatile trading environment, there are tools available that can mitigate risk of adverse price fluctuation. The purpose of this article is to help readers understand what transpires in a live cattle or feeder cattle hedge and what tools are available to help you get started.

Understanding the market you are participating in is crucial. A futures contract is an agreement between two people. One agrees to take delivery (buyer), the other agrees to make delivery (seller) of a commodity of uniform quality and quantity, at a specific place, on a specific date, at a price that is determined upon entry of the contract. A futures contract is the substitute purchase or sale of the physical commodity needed to be marketed until the physical inventory can be.

An option on a futures contract gives the buyer the right, but not the obligation to buy (call) or sell (put) a future contract at a specific price (strike price), for a premium that is determined upon length of time to expiration, proximity to the underlying futures contract, and volatility. While many have blamed the participants of futures markets for causing exaggerated or unnecessary price swings, these are factors to deal with when participating in a hedging program. The use of futures and options comes with a slew of factors to overcome.

Knowing what these factors are and how to address each

of them, increases ones knowledge of how to use futures and options more efficiently in your operation. The knowledge that there are high frequency traders causing exceptional price swings can be used to ones advantage as much as to ones disadvantage. Whereas locals and floor brokers from large firms provided liquidity to the market place in the past, today this liquidity comes from the high frequency traders and large hedge or commodity fund participation.

Although many scoff at their presences, they are perceived a necessity to provide a source of liquidity. For that, they expect to be paid or their odds of success increased.

Knowledge of option pricing, how premiums are influenced by market volatility, and strategies that may or may not reduce cash or futures market exposure are all factors to overcome.

There are tremendous factors that are beneficial to have a firm understanding of in order to make the most informed marketing decision. In my opinion, marketing is not addressed as frequently as it should be. It’s complicated, time consuming, it can be capital extensive, and is not always suitable for specific operations. However, regardless of its flaws, the futures market has provided an arena in which one could have offset potential adverse price fluctuation that mirrored the decline in cash. Yes, it was wild and woolly, but those who chose to continued on page nineteen

January 15, 2016

Livestock Market Digest

FACTS

continued from page eighteen atwww.shootinthebull.com <http://www.shootinthebull. com>.

An unfortunate consequence of recent events will be securing capital for years to come. Old business plans are perceived obsolete. The next 5 years are anticipated to have a multitude of price swings, both up and down.

Beef production is an exceptionally slow moving industry.

Attempts to keep up with a consumers habits, that has information instantaneously at their finger tips, leave most far behind. These potential changes in eating habits are anticipated to continue to cause ebbs and flows in beef production. Hence the potential for adverse price fluctuation, and therefore the need for price protection.

Large corporations may trade with a multitude of firms to spread risk or veil trading. Although the retail brokerage side of the futures industry has contracted greatly through the years, there remains several firms to trade with. Ask for a referral from someone that enjoys doing business with their broker or brokerage firm. Trust continues to be on the top of the concern list whether with the firm or broker. There is a relationship between a client and a broker that can last for decades. Mine will soon span three with some of my clientele.

These relationships are a must as trust with capital and positions acquired in this environment can be more than taxing. As stated above, marketing is not easy. The work you do to increase your knowledge of every marketing aspect is anticipated to directly impact the amount of price risk you incur. There are some good commentaries being written on the market movement. They provide information from which to help make a more informed marketing decision. Swift Trading Company publishes two market comments every business day, and contributes to several other publications on a regular basis. Your work is already cut out for you. If you have a broker you like, get with them to discuss your plan of action.

If you don’t have a plan of action, I recommend getting one.

Christopher B. Swift is a commodity broker and consultant with Swift Trading Company in Nashville, TN. Mr. Swift authors the daily commentaries “Mid Day Cattle Comment” and “Shootin’ the Bull” commentary found on his website @ www.shootinthebull.com <http://www.shootinthebull. com> An investment in futures contracts is speculative, involves a high degree of risk and is suitable only for persons who can assume the risk of loss in excess of their margin deposits. You should carefully consider whether futures trading is appropriate for you in light of your investment experience, trading objectives, financial resources and other relevant circumstances.

This is a solicitation. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

continued from page seventeen

ning strikes ignited blazes that burned more than 5 million acres.

“The future trend will be hotter, longer, more severe, and ultimately more costly fire seasons,” Vilsack wrote, with little money to pay firefighters to suppress them and for support such as fire engines, airplanes and logistics personnel. By 2025, the Forest Service estimates, fighting fires

will eat 67 percent of its budget, “a dramatic increase from 16 percent in 1995,” according to his letter.

“This directly impacts the Forest Service’s ability to fund other critical work such as restoration that can reduce wildfire threat, drinking water area protection, and recreation investments, not just in the West, but across the country,” Vilsack wrote.

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original minimum sale price calculated prior to the entry of the option position.

Slight differences in realized price are due to the local basis of your area. This example played out a multitude of times by clients who chose to use price risk protection this fall. Each participant went through the same market upheavals, unfair practices and wild volatility as did those that watched from the sidelines and criticized. Hedging is a decision made as part of production, and acknowledging the need for price protection is perceived a must from here on in livestock production.

The year of 2014 saw record high cattle prices. To some, it produced record returns, but to the majority of the industry they are perceived to have just done better than average. The year of 2015 saw near record declines in cattle prices. To some, it has produced record losses, to the majority of the industry they are perceived to have performed just a little worse than average. This is perceived because some did not use price protection, and the majority are perceived to have used some in both years.

The year of 2016 has yet to be written. My analysis suggests that slight to moderate changes will be made in all sectors of production as a result of the destruction of working capital. Some changes are anticipated to be a small percentage change in heifer retention, not keeping high risk cows to calve, not adding additional weight/backing up marketing dates, and more frequent use of futures and options. Working capital is strained.

In my opinion, I do not see the ability to recoup the losses from even the best run organization for two to four years.

This is because after a major price structure adjustment, and in the midst of herd expansion running at full speed, the width of price fluctuation is anticipated to narrow, not widen. Exceptional attention will need to be paid to this.

While the price moves are anticipated to remain inordinately large, to see feeders or fats run $50 to $65 higher between now and June is not anticipated. From all of the aforementioned, we see now that another tool would be useful in helping to secure the capital that will be needed to continue production at your operation. This could be in the form of an “Assignment of Futures Contract”. An “Assignment of Futures Contract” is a security agreement used as a financing method in which the producer/purveyor can utilize futures or options on futures contracts to collateralize a loan or line of credit for a bona fide hedge. There is a tutorial on how this trade can be used on my website

CONGRESS

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take a proactive stance in the marketing of their inventory are perceived to have reduced their risk exposure to the extent taken. Examples at this point may be futile to show as everyone now knows that any kind of price protection would have been better than nothing. However, here is a typical hedge that I have transacted for clients in the past: A discussion of the producer’s exposure to price risk leads to the decision to purchase put options. Knowing the break-even price and date of marketing, strike prices and premiums on the contract month of marketing will be determined. Calculations of price protection desired (strike price) and the cost of (premium), leads to an order to buy a put option.

I place the order to buy a specific strike put option, for a premium decided upon, on an electronic order entry platform. The order is filled, or sometimes it’s not, and the position is placed in the clients account, or the order is changed until filled or canceled. Both high frequency and more traditional traders have created exceptional volatility and therefore exceptional volatility in the pricing of option premiums. These are issues that can be overcome.

The client has now established a minimum sale price, which is strike price minus premium, minus commissions. Now, movement of the underlying futures contract dictates the increase or decrease in option value. Here is the end result.

The value of an out of the money option is all theoretical. Due to time, proximity to underlying futures contract and market volatility, the option “in theory” is worth X. An in the money option can share both theoretical value and intrinsic value. The intrinsic value is the exact difference between the strike price and the underlying futures contract. Upon the purchase of the put option, as the price of the underlying futures moves lower, the value of the option increases.

Eventually, as we’ve seen, the price drops dramatically and the value of the option has increased to the extent of the difference between the strike price and the underlying futures contract. At the time of the physical sale, the inventory is liquidated and the option on futures contract offset. A note here is that the offset of such a position, due to the function of an option, could be one of two ways. The sale of the put, or the exercise of and buy a futures contract.

More knowledge you will need to know. One would then reconcile the revenue from the cash sale of inventory and the revenue from the option position with the ending result being in close proximity to the

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Livestock Market Digest

January 15, 2016