LMD January 2012

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

MARKET

Digest W

by LEE PITTS

From Leeuary to Pittstober

– JAMES RUSSELL LOWELL JANUARY 15, 2012 • www. aaalivestock . com

Volume 54 • No. 1

Is Beef In A Bubble? by Lee Pitts

Are They Crazy?

irst it was tech stocks that crashed bigger than an old computer running Windows 7. Then the real estate bubble burst which brought us The Great Recession. Next the stock market bubble was pricked which left Investors with ravaged 401K’s and at a loss where to put their money. They only knew they wanted something safe and solid. And tangible. And so they invested in commodities and a host of ag products hit all time highs. Beef was also a beneficiary in the flight to commodities. But gold, silver and most other ag products, except dairy and beef, have lost some of their luster lately. So the question for cattlemen: is beef in a bubble too?

Our future fortunes are closely tied to that of our ag cousins, the farmers. In the years from 2000-2009 farmers raised 28 percent more corn so you’d think prices would have stumbled. But, instead, corn prices skyrocketed due to ethanol. As long as we’re going to try to raise our energy instead of drill for it, more and more corn will be taken from the mouths of livestock and poured into the tanks of automobiles. Ethanol has definitely caused a bubble in farm land as one 74acre farm in Iowa set a new record selling for $20,000 per acre. And a farmer bought it, not some hedge fund trader. The Federal Reserve Bank of Chicago said that Iowa farmland rose a “stunning” 34 percent in 12 months through October of 2011. The USDA says that during 2005-2010, the price of farmland climbed as much as 70 per-

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And The Exodus Continues To answer that question we must first examine why cattlemen in 2011 enjoyed the highest profit per cow ($150 per head) in history. The easy answer is that ranchers are enjoying heady times because there are a lot fewer of them. In the last three decades the U.S. has lost 42 percent of its cattle producers. And the exodus continues. The worst drought in the history of Texas (that we know of) has led to the largest ever oneyear decline in cow numbers in the largest cow-owning state in

“If you expect to follow the trail, you must do your sleepin' in the winter.” the country. According to David Anderson, Texas AgriLife Extension, Texas has seen a 12 percent decline from the 5 million cows the state had at the beginning of 2011. Not only is that the biggest drop in Texas history, Anderson says it’s likely the largest drop in the number of cows any state has ever seen. And we’re not even mentioning the drought related losses in New Mexico, Louisiana,

Arkansas and Oklahoma. On a national basis we saw a two percent reduction in cows in 2011 and due to the high prices, more replacement heifers went into feedyards, which means we aren’t rebuilding our infrastructure. Beef production will be down another four percent in 2012. It’s good for those who are left standing but we are gradually killing the proverbial goose?

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Meet the North Dakota family of anti-government separatists busted by cops using a Predator drone . . . after ‘stealing six cows’ A SPY PLANE COMES HOME: PRIVACY ADVOCATES FEAR THE USE OF PREDATOR DRONES ON U.S. CITIZENS GIVES POLICE AGENCIES TOO MUCH POWER by DAILY MAIL REPORTER

NEWSPAPER PRIORITY HANDLING

Riding Herd

eet the Brossarts, a North Dakota family deemed so dangerous that the local sheriff unleashed an unmanned Predator drone to help bring them in. The Brossart’s alleged crime? They wouldn’t give back three cows and their calves that wandered onto their 3,000-acre farm this summer. The same aerial vehicles used by the CIA to track down and assassinate terrorists and militants in Pakistan and Afghanistan are now being deployed by cops to spy on Americans in their own backyards. The head of the anti-government Brossart family are Susan and husband Rodney, who live with seven of their eight adult children in a compound which includes a house, trailer and two RVs. Daughter Abby allegedly hit an officer during the arrests, which included brother Alex, after the family was spied on by a gov-

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ernment drone. Sons Thomas and Jacob were also arrested in the bust after a 16-hour stand off, which stemmed from a half dozen stolen cows. The Brossarts are the first known subjects of the high-flying new surveillance technology that the federal government has made available to some local sheriffs and police chiefs — all without Congressional approval or search warrants. Local authorities say the Brossarts are known for being armed, anti-government separatists whose sprawling farm is used as a compound. Rodney Brossart, 55, and his wife Susan live in a house and a trailer and two RVs with seven of their eight adult children. When the cattle wandered onto the Brossarts’ land, Sheriff Kelly Janke, who patrols a county of just 3,000 people, rounded up some sheriff’s deputies and arrested Mr. Brossart for failing to report the stray livecontinued on page three

henever I get the much-appreciated free calendars at the start of every year there are a few months I’d like to tear out right then and there and be done with them. Sadly, I have to go through the process of living through these muchdreaded months. “January” sounds promising enough but then the month actually begins and many folks start the year with a hangover. If that’s not a sign of what’s to come I don’t know what is! How good can a month be that starts out with a bunch of fu-fu flower parades on TV? I’ve always felt January needs a new name that more accurately reflects it’s personality, something like “Depress-u-ary.” Christmas is over, everyone is grouchy because they’re back at work, and my favorite football teams lose again. Every year I’m convinced that early Alzheimer’s has kicked in because I can never remember to write the correct year on my checks. February isn’t much better. I’ve hated it ever since I was a kid because of Rejection Day, otherwise known as Valentine’s Day. I spend the entire month in confusion, not knowing how many days are in the month, or when we celebrate the dead President’s birthdays. I think we should change our calendar and make all months exactly four weeks long, and then create an all new month out of the days left over. This month would be work-free, tax free and free of all stupid holidays like National Sponge Cake Day. We’d call this new month Leeuary, Pittstober or Pittstember, in honor of its founder. And because there would be no more 29th, 30th of 31st of the month, there’s an added bonus: people born on those days would have no more birthdays! Adding Pittstober to the calendar would be a veritable Fountain of Youth for many. March is one of my favorite months because continued on page ten

www.LeePittsbooks.com


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