LMD May 2013 by Livestock Publishers

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

Riding Herd

MARKET

Digest R

by LEE PITTS

Create-A-Crises

– JAMES RUSSELL LOWELL MAY 15, 2013 • www. aaalivestock . com

Volume 55 • No. 5

Fat Thumbs And Black Boxes by Lee Pitts n April 23, the Dow Jones Industrial Average dropped 145 points in the blink of an eye, erasing $200 billion worth of investor’s wealth. What caused the minicrash? Was it a negative report about the slow growth of our economy, another European country going broke or, did Warren Buffett die? The answers are nope, no and we certainly hope not. The event that caused IRA’s to fall faster than President Obama’s approval ratings was a “tweet” on Twitter. If you’re like me and the only tweet you are aware of is made by a robin in the spring, a tweet these days occurs when someone makes a comment via an online social networking service known as Twitter. In this case, a group known as the Syrian Electronic Army hacked into the Associated Press and “reported” that the White House had been rocked by two explosions and Barack Obama had been injured. That “tweet” sent the Dow Jones tumbling 145 points. A few minutes later the Associated Press said the tweet was not true, the White House confirmed there were no explosions, and the market made up all of its losses and closed higher on the day. Welcome to the world of something called “High Frequency Trading” where traders on Wall Street use complex

er.

NEWSPAPER PRIORITY HANDLING

Lawyers, bankers, and hoot owls sleep with one eye open. mathematical formulas to buy and sell shares of stock, commodities and bonds. In this case, computers picked up the news of the fake White House bombing and immediately signaled other computers to start selling stock, with nary a human doing anything. Why are we telling you about all this about a stock market that doesn’t have anything to do with the stock you have to feed? Because this is what passes for a “market” these days and the

price you get for your cattle, no matter how you sell them, could very well be determined by a bunch of computers talking to each other.

In The Wired World Even veteran traders on Wall Street were startled by the Twitter crash. “It’s frustrating and scary that a tweet can erase hundreds of billions from the market in a short time, but that’s the world we live in,” said R.J. Grant, a Wall Street equity trad-

“We haven’t seen anything like this before” said Giovanni Vigna, chief technology officer of the security firm Lastline. It may not be right, moral, or helpful, but you’d better get used to it because High-Frequency Trading (HFT) is legal and made up for half of all stock trades last year! Here’s how it works, or in some cases, doesn’t work. Sophisticated computer programs and models are constructed that are owned by trading firms. They then use computer programs to trade securities, bonds and commodities on a screamingly-fast basis. Their goal is to make just a fraction of a cent per share, or pound of beef, on every trade. But make no mistake, these pennies do mount up. Although you may hold stocks in your portfolio for years, an HFT trader’s position may be held for only milliseconds. The continued on page two

U.S. Beef Academy offers young producers a unique, advanced learning experience he second annual U.S. Beef Academy is focused on providing the next generation of beef producers a unique, applied beef cattle management experience on the historic Baca Ranch location, now a national preserve, in the high country of northern New Mexico. The USBA, hosted at the Valles Caldera National Preserve, is the second tier of the New Mexico Youth Ranch Management Program. New Mexico State University’s Cooperative Extension Service, Zoetis animal health products, New Mexico Beef Council and other members of the beef cattle industry sponsor the youth ranch management program. The beef academy, scheduled for July 13-18, is tailored as an advanced, applied educational experience for youth between the ages of 16-19 with a sincere desire to be the next generation of beef industry producers and leaders. NMYRM was developed in 2011 to promote applied learning opportunities for youth from family ranches. The NMYRM program, now in its third year, initially started with a single, week-long ranch camp experience in June for

youth from New Mexico. The ranch camp, now open to youth from across the United States, covers multiple aspects of ranch management, including beef production, range management, wildlife management, marketing and economics. “During the ranch camp, we have one day to cover all aspects of producing safe and quality beef, which is a sizable task in a hands-on format,” said Manny Encinias, NMSU Extension beef cattle specialist and member of the ranch camp organizing committee. By design, the curriculum at the academy is to build off the foundation developed at the ranch camp experience. “Instead of one or two hours per topic, we spend an entire day,” Encinias said. The hands-on, USBA curriculum is developed by beef industry experts and professionals from across the United States. Faculty from Cooperative Extension Service affiliates at NMSU, Texas A&M University, University of Wisconsin-River Falls, South Dakota State Uni-

ealizing that most people don’t understand the role that cattle and sheep play in sequestering carbon, fertilizing the ground, breaking the surface crust to prevent runoff, reducing fuel loads to prevent catastrophic fires, and creating high quality protein from grass, I recently made a phone call to 1-800GOT-RICH. “Hello, you have reached the main office of Create-ACrises Corporation. With offices in all 50 states and 100 countries around the world we can specifically design and create a crises just for you. We have a proven track record and are the go-to experts if you want to to shut down a business, farm, ranch or tie up a private citizen in court and make he or she go broke by paying lawyer bills. All of our lawyers are currently out creating crises and emergencies at the moment so please listen carefully and select from the following menu options. “If you would like for us to create a crises for you to stop someone from building on their own land or improving their home, press 1. “We have an answer for everything and can be very creative. If you have a specific complaint about an oil company, or other corporate criminal, and would like for us to create a crises to stop them from producing energy to run your car and heat your home, press 2. “If you have witnessed someone mistreating an animal by tugging on its leash too hard, press 3 and our animal rights lawyers will put them in Leavenworth or San Quentin faster than PETA can strip the clothes off another fruitcake model or Hollywood actress. “If, while trespassing on a farmer or rancher’s private property you think you saw what should be an endangered species, press 4. If you would be willing to trespass on private property and plant an endangered species, please press 5. We are always looking for volunteers. “If you, a member of your family, or anyone you know continued on page four

continued on page four

www.LeePittsbooks.com

Livestock Market Digest

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May 15, 2013

Black Boxes computer may trade in and out of the same commodity or stock tens of thousands of times in the same day! At this point we can only speculate as to how much money was made in those few minutes of the Twitter crash, with short sellers riding it all the way down, and then becoming bullish and riding it all the way back up, right back to where they started from. It’s ironic that in a business where information is the key, how little information we have about these high frequency traders. The regulators are light years behind the traders and just last year the Commodity Futures Trading Commission decided to form a special working group that included academics and industry experts to advise the CFTC on how best to “define” HFT. These sort of mini crashes are occurring and the CFTC is worried about definitions and semantics? Heaven help us!

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The success of the HFT traders depends on how well constructed the computer program, or algorithm, is and how fast their computers can respond to new information. Those utilizing high-frequency trading platforms lobby for their continued use, saying that they provide liquidity and price discovery to the markets. But how can anyone defend a tool that allows billions of dollars of equity to be erased because someone hacked into a computer and tweeted about a fake bomb, seemingly reported by a trusted news source such as AP. In the computer age, information is gold and how well you mine it determines profit. In the Twitter crash the computers of the high frequency traders were scanning Twitter tweets for any news leads. When they read the words “bombing”, “White House”, and “injured President”, the computers put in sell orders before any human read the fake tweet. Later, when those same computers came across the words “fake”, “hacking” and “Syrian Electronic Army” they surmised it was all a hoax and started issuing “buy” orders. All without any human input. If one of the Baldwin brothers in Hollywood said of someone, “She’s crazy as a mad cow,” can’t you just imagine those same computers seeing the words “mad cow” and “crazy” and interpreting that as another mad cow scare? The price of cattle would crash. Even more absurd, the Securities and Exchange Commission has given their approval for companies to release important information through venues such as Twitter. So, in addition to futures markets acting erratically when cattle on feed reports are issued, now we have to worry about “news” on Twitter and Facebook. What’s next, will the trader’s computers scan the National Enquirer for stock tips?

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High-frequency trading is not as new as you’d expect. It has taken place ever since the SEC authorized electronic exchanges in 1998. But you hardly ever heard of it because in the year 2000 the time it took for the computers to execute a trade was several seconds. Then, out of nowhere, high frequency trading volume grew by 164 percent between 2005 and 2009. That’s because the time it took to execute a trade had been reduced from several seconds to microseconds, which made it easy for traders to get out ahead of the market. Although highfrequency trading firms today comprise just 2 percent of the approximately 20,000 trading firms in operation, in the past few years they have accounted for as high as 73 percent of all equity orders! Who knows how many commodities they’ve traded.

The Players Let’s meet the players in the high frequency trading game. The Twitter crash was a good example of algorithmic, or “algo”, trading. In both the American and European markets algorithmic traders in 2008 were responsible for 80 percent of the trades in some markets, including commodities. Algorithmic trading is also referred to as automated trading or black-box trading and orders to buy and sell are based on variables and instructions that humans program into the formula, or algorithm. Once they are up and running there is little human intervention. These days, algorithmic trading is widely used by investment banks, pension funds, mutual funds, and commodities traders. So, while the humans are out to a three martini lunch, the computers back at the office are directing the flow of billions of your money. Flash trading is a sub category of high frequency traders and this is where the line between right and wrong gets a little fuzzy, in our book. For a fee, flash traders are allowed to see incoming buy and sell orders for stocks and commodities ahead of everyone else. And even though the head start can be as little as 30 milliseconds, it’s enough to make a quick buck. I’m no Martha Stewart fan, but how is what she did and was incarcerated for, insider trading, any different than flash trading? And it’s not just s bunch of Cisco servers and Dell computers who should be doing hard time. We don’t have to go too far back in history to see the effect that flash trading can have. In May of 2010 we had what is now called “The Flash Crash,” when the Dow lost 600 points in a matter of minutes. Initially, some said the flash crash was caused by a person with fat thumbs who hit the wrong key on his keyboard, but after five continued on page three

May 15, 2013

“America’s Favorite Livestock Newspaper”

Black Boxes months of investigations, the SEC and the Commodity Futures Trading Commission issued a joint report concluding that high-frequency trading firms were to blame. The report found that a single sale of $4.1 billion in futures contracts by a mutual fund, in an aggressive attempt to hedge its investment position, started the Flash Crash. The joint report also found that “high-frequency traders quickly magnified the impact of the mutual fund’s selling.” The report “portrayed a market so fragmented and fragile that a single large trade could send prices into a sudden spiral. HFTs began to quickly buy and then resell contracts to each other — generating a ‘hot-potato’ volume effect as the same positions were passed rapidly back and forth.” Then there are the Filter Traders. These folks use algorithms to detect unusual changes in price and volume. For example, if an unusual number of company insiders are selling their stock, the filter traders would know this first and issue sell orders. They are similar in kind to another subspecies, the event arbitrageurs. These folks program their computers to look for announcements, reports, or unusual events in the news. For example, the computers of the high frequency traders might see that Apple Computer won a patent fight, the White House was bombed, or JBS was closing a kill plant, and would then generate buy or sell orders accordingly. Since all this information would eventually become public, the feds rationalize that such trades are legal. There is a subset of traders who have struck it rich preying on the mutual funds you probably have in your 401K. Whether in commodities or stocks, the most popular funds today are index funds, which do not depend on just one stock or commodity, but reflect what the market is doing. If the Dow goes up 4 percent for the year, theoretically, so too will your IRA. If commodities go up or down 15 percent for the year, so too will your commodity fund. But to reflect this average, or index, the funds have to constantly rebalance themselves to account for current prices. Traders know this adjustment will be made at a preset time and their computers get advance information from large institutional block orders made by the index funds. They then trade on this knowledge. Again, all perfectly legal. Momentum players live by the principle that once something is in motion, it will tend to stay in motion in the direction it’s going. I have a friend who lost his business but has to support his wife’s luxurious lifestyle so, after reading one book on the subject, he bought a computer program and decided to become a momentum player. There are thousands just like him and cattlemen the past few

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years have been the beneficiaries of these traders. When cattle prices looked like they were going higher due to a shortage of cattle, the folks in their slippers sitting in front of their computers went long in the futures market, and you received more for your cattle as a result. It’s great when things are looking up, but watch out below when the computers decide that cattle are going down, for no other reason than they are going down. Momentum investing might explain the steady decline in feeder cattle prices since the beginning of this year, even though supplies have tightened, on-feed inventory is down 5 percent from a year ago and retail choice beef prices set a new record in March. These would seem to be positive signs, but the computers see something we don’t. Those who engage in statistical arbitrage crunch all the numbers before issuing buy and sell orders to generate short term profits. An example here would be the reaction to cattle on-feed reports, crop reports, consumption reports, etc. Ranchers and farmers give the USDA information which they dutifully report, and the computers of folks who wouldn’t know a Hereford from a heifer, know this news first and make millions on information we gave them for free. No matter what they are called, or what numbers they crunch, in high frequency trading all portfolio decisions are made by computer models. Needless to say, they have a huge advantage over human traders. Except, of course, when the inputs are wrong and they are dealing with false information, as in the Twitter crash. You probably won’t recognize

the names of the biggest highfrequency trading firms such as Getco LLC, Knight Capital Group, Jump Trading, Citadel and Louis Dreyfus. But look past the flashy names, and you’ll find that the 2.4 billion dollar Louis Dreyfus Commodities Alpha Fund is owned by the big grain trader, and one called Black River Asset Management, is owned by the grain-tradingcattle-feeding behemoth, Cargill. You think their computers might have information that the rest of us don’t?

Sequestering The Cash If your dander isn’t up yet, there’s more. You remember how we bailed out the big banks in the name of “stimulating the economy? We gave them billions that they were, in turn, supposed to lend out. It turns out that a large chunk of that change was used in high frequency trading. After all, you can’t make big money loaning money when it’s not worth anything. Why not invest it in the commodities market where the computers made profits “a sure thing”? The trouble is, the commodities market wasn’t ready to absorb all that cash and we had a runaway commodities market. That’s why in many banker’s recent quarterly reports it shows they made their money trading in bonds, currencies and commodities, not making house loans. Goldman Sachs recent quarterly report showed they heaped huge rewards in the HFT market. And why not? They were all playing in the government’s casino and were given the chips to play with. Welcome to the world of argos, fat thumbs, HFT’s and black boxes. But we wonder . . . what happens when the computers all decide that the party is over?

Montie Soules hired as Shorthorn Executive he American Shorthorn Association (ASA) Board of Directors announces Montie Soules as the new Executive Secretary/CEO of the American Shorthorn Association in Omaha, Nebraska, effective April 15, 2013. The Shorthorn breed is excited to have Soules on board in this leadership position and is looking forward to the fresh and innovative ideas that he brings to move Shorthorns ahead in the commercial and purebred ranks of the beef industry. “I am excited to be part of the Shorthorn family,” Soules says. “As a past producer I can relate to the challenges that the membership or breeders may have; I can relate because I have been there. Because of this I bring a unique perspective to the breed and its breeders.” Soules brings a lifetime of experience in the purebred beef cattle industry. He was the General Manager for the past 34 years of one of the leading registered beef cattle operations in the world, Star Lake Cattle Ranch, Skiatook, Okla. During his tenure at Star Lake, they showed 13 consecutive Champion Hereford Carloads in Denver at the National Western Stock Show. The ranch was named 12-time Junior National Premier Adult Breeder. Under Soules management, Star Lake had seven sales grossing over $1 million and sold cattle to 12 foreign countries on five continents.

Soules was instrumental in starting monthly internet sales five years ago. He made it a priority to develop a commercial bull trade by reaching out with new and innovative marketing strategies. He has judged cattle in North America at Denver, Louisville, Canadian Agribition and Toronto Royal Winter Fair in addition to the Prado National Show in Montevideo, Uruguay. Soules is impressed with the strong junior program at Shorthorn and foresees bigger and greater participation in the future. The Shorthorn breed registers nearly 15,000 head and has 500 head at the Junior National show, which reflects a high percentage of participation compared to registrations. He understands the future of any organization is the young people who are its future leaders. While Shorthorns have a long history of great contributions that have been made to the beef cattle industry, including being the first purebred beef breed brought to the U.S.; Soules believes it is important in the modern beef cattle world to collect as much data as possible. “This documentation will give our product the attention and value it deserves, helping Shorthorns USA earn their rightful place in the industry,” Soules says. “The goal is to reposition the breed in this area while building on the strengths of the breeders.”

Livestock Market Digest

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May 15, 2013

Beef Academy

Make Note of 2013 NJAS Deadlines National Junior Angus Show entry and ownership deadline is May 15 he National Junior Angus Show (NJAS) is the highlight of the year for many involved in the National Junior Angus Association (NJAA). This year, the event is being held in Kansas City, Mo. “Aberdeen in Twenty-Thirteen” will take place July 5 – 11 at the American Royal Complex. That’s about a week earlier than last year’s NJAS. Pay special attention to deadlines, which have been moved forward on the calendar, to make sure documents

are completed in a timely manner. Wednesday, May 15 ■ Ownership and entry deadline for the 2013 NJAS. Requirements and rules can be found online. Information on the NJAS showmanship contest is posted, as well. ■ NJAA writing, photography, creative writing and graphic design entries due. ■ Entry and recipe deadline for the American Angus Auxiliary-sponsored All-American Certified Angus Beef®Cook-

Off. Saturday, May 25 ■ Deadline to submit NJAA career development contest resumes and public speaking contest speech outlines. Complete contest information is also available online. Saturday, June 1 ■ NJAA Board applications due. Visit the NJAA website for more information and deadlines. Please note there are no exceptions to any of the ownership and entry deadlines.

Working to Protect the Rich Tapestry of the West What They are Saying About Us… • The $206,098,920 Endangered Species Act Settlement Agreements — Is all that paperwork worth it? • Leveling the Playing Field: Support for the Grazing Improvement Act of 2011 • Support for the Governmental Litigation Savings Act of 2011 — Reform of Excessive Litigation Pay-outs • Foreign & Domestic Train Wreck in the Making — More of the ESA • The Secret World of the Animal Rights Agenda TO SUPPORT THESE CAUSES AND MORE, JOIN US!

I am/our organization is committed to protecting the open spaces, private property, private businesses & ensuring the responsible use of public lands. Please list me/my organization as a member of the Western Legacy Alliance. I have included my membership dues and my $____________ additional contribution. Name: _____________________________________________________________________________________ Organization: _______________________________________________________________________________ Address: ________________________________________ City: __________________________ State: _____ Zip: __________ Phone: __________________ Fax: __________________ Email: ______________________

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versity and Colorado State University, as well as allied industry specialists and veterinarians, design each day to cover the spectrum of producing safe and quality beef. Daily highlights include: ■ Day 1: learning the process of producing high quality beef from pasture to plate by fabricating a beef carcass on-site, predicting quality and yield grades visually and with real-time ultrasound, and evaluating the impacts of cooking methods and beef quality on consumer preferences. ■ Day 2: promoting healthy cattle management through chute-side beef quality assurance practices, discussion on basic immunology and vaccinology, as well as effective stockmanship methods to improve gathering, chute work and hauling of beef cattle. ■ Day 3: improving reproductive efficiency and genetic quality of the cowherd by understanding reproductive function of the cow and bull to incorporate reproductive technologies, such as estrus synchronization, artificial insemination, embryo transfer and using sexed semen. ■ Day 4: understanding the role of nutritional management in each segment of the beef industry as it relates to growth and development of bulls and heifers, managing the mature cowherd, and growing and finishing cattle in the feedlot. ■ Day 5: exploring consumer insights, trends and perspectives of the beef industry and beef products to develop successful marketing strategies for various classes of cattle. “It’s a challenging, yet fun learning opportunity for these young people,” Encinias said. “In perspective, each hour of instruction at the academy is equivalent to one semester of college.”

Riding Herd is suffering from a heat rash, hot flashes, or sunburn, all caused by global warming, press 6 and we will connect you to our wholly owned subsidiary, Lawsuits Incorporated. Or you can always visit us on the web at ProfitablySuingEveryoneOnEarth.com. “To buy our latest book by Al Gore, You Too Can Create A Crises: 10 Simple Steps to Become an Instant Expert, Become Fabulously Wealthy And Win A Nobel Prize, press 7. Make just three simple installment payments for $19.95 and we’ll throw in Al’s Best Selling cookbook, How I Lost My Wife and Gained 200 Pounds. “Want to tie up your land and your offspring forever? Press 8 and our real estate division will help broker a deal with the Nature Conservancy. “If your fortune exceeds a billion bucks, you are older than dirt, aren’t feeling well and want to make sure your money goes for green causes, press 9. Your call will be immediately forwarded to the President of Create-A-

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Youth spend 12 to 16 hours per day immersed in a learn-bydoing format, which also includes daily Top Hand quiz bowl competitions. At the end of the week the daily Top Hands compete for the overall Top Hand and the custom-made USBA spurs. Participating youth will leave this unique experience with an expanded toolbox of new concepts and ideas, advanced technologies and applied skills that are currently being used throughout the beef industry to improve efficiency and profitability. The goals for youth who attend the academy are two-fold: 1) introduce them to subject matter they can take back to their family ranch, and 2) expose and provide direction on future educational and career opportunities across various sectors of the beef industry. “I strongly recommend attending the USBA to any youth who has an interest in the cattle industry,” said Shea Esser, 2012 academy attendee from Wisconsin. “I can honestly say there was not an hour that passed that I did not learn something. It afforded me the opportunity to broaden my knowledge and introduced me to industry professionals who I hope to be working with when I graduate from college. If you are looking for an in-depth, fast-paced, hands-on beef production seminar, USBA is the place to go.” Application and enrollment to the USBA is open to youth from across the United States. Online application and more information can be found at http://nmbeef.nmsu.edu. Applications for enrollment are due by June 1. The top 35 applications, as determined by the organizing committee, will be invited to this year’s academy. continued from page one

Crises who is playing golf today, as he does every Wednesday, with the Secretary of the Interior. If your fortune is between a million and a billion press 10 . If you have good intentions but no money, press 11 to be put on hold forever.” I got tired of getting the runaround so, even though I don’t have a billion dollars to give anyone, I pressed 8 to talk directly to the President of Create-ACrises. “What can I do for you?” answered the President of CCC. “You have a lot of money you want to give us, uh, er, I mean, give to a worthy cause?” “Not really. My name is Lee Pitts and I just wanted to explain to you how cows could help solve a few of the crises you have created.” “Mr. Pitts, I’m afraid you clearly do not understand the concept. I assure you we are not in the business of fixing problems. We create crises, we don’t fix them. What kind of business model would that be?”

May 15, 2013

“America’s Favorite Livestock Newspaper”

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Genetic bootstraps Climatologists are no Einsteins, says his successor Beef producers and the power of BY PAUL MULSHINE, THE STAR LEDGER BY MIRANDA REIMAN, CERTIFIED ANGUS BEEF

ou decide. Each time you buy a bull, keep a heifer or cull a cow, you choose a future for your herd and, collectively, for a beef industry that is either blessed or burdened with high prices. “I don’t want record prices because of the lowest beef supplies in 50-some-odd years, said a University of Missouri livestock economist. “I want the highest price because demand is pulling us along.” Most everybody in the cattle business would want what Scott Brown wants. There were certainly nods of agreement at the March 12 Midwest Section, American Society of Animal Scientists meetings in Des Moines, Iowa. Brown said history, economic modeling and consumer-preference studies point the way to make that happen, speaking at the Harlan Ritchie Beef Symposium during those meetings. Analysts are good at looking into demand caused by price, income levels and available substitutions, “but there are other factors we economists don’t often deal very well with: taste and preferences,” he said. “Those can cause that demand function to shift, either to the left—which is not good news for the industry—or to the right,” Brown said. “Shifting that demand curve to the right is always important for us.” Marbling level is a clear indicator of probable satisfaction, he noted. “If we’re at the low end of the marbling side, the probability of a consumer having a good experience is not very high,” Brown said. “The last thing you want to do is spend money on what is perhaps the most expensive meat product, and not have a good experience.” But is there enough producer incentive to target these higher marbling levels? “That Prime premium relative to Choice has been very attractive as of late,” and during a time of sluggish growth in the U.S. gross domestic product (GDP). Besides more dollars, a real bonus for aiming that high is “a lot less volatility,” Brown said. “Certain times of the year, we probably have plenty of Choice cattle and we’re not paying much more for them relative to Selects, and at other times we’re tight on Choice supplies,” he said. To that seasonality, add decisions by large-scale retailers and you have a recipe for variation in the signals. “If I can target higher-end

quality, higher than Choice, there are some real rewards in the marketplace,” Brown said, showing a chart. The Choice boxed-beef cutout hasn’t made it above $200 per hundredweight (cwt.), while Prime broke through $240/cwt. last year. “Frankly, it takes that kind of movement, if we’re going to have an industry that can survive on $7-plus corn,” he said. Overall U.S. beef demand hit a bottom in 1997, followed by brief recovery before sliding again since 2004. “Changing that is a huge step in getting back to 100 million or 105 million head of cattle in this country,” Brown said. From 2004 to 2008, total consumer expenditures on Choice beef was fairly constant at $25 billion. “But in 2010, 2011, 2012, we’ve seen a nice increase,” he said. “At the same time, we have not seen much recovery in Select expenditures.” Prime trends are similar to that of Choice. “We often talk about consumers ‘buying down,’ going to McDonald’s instead of those steakhouses,” Brown said. “When you look at the graphs this way, you don’t get quite that same picture.” While U.S. demand remains uncertain, globally the picture is a little brighter. “In 2012, we were actually down in terms of U.S. beef export quantity, but if we instead look at it on a value basis, we’re still growing,” he said. “That tells me we’re shipping more and more higher-valued products out of the United States, and that’s likely going to continue.” Half of the world’s population will have 6 percent more disposable income in the immediate future. Brown said they’re going to demand higher-quality products. Beef’s alternatives are simple: Either it plods along the same path, or it breaks out and follows a path like that of poultry in the 1980s and ’90s, or the recent boom in the corn business. “You may not like it from a policy standpoint,” he said, “but they generated new demand for their products and, guess what? It’s not going to go away anytime soon.” The drought has given the beef industry a clear way to choose its destiny. “We have a chance to rebuild that cowherd with better genetics,” Brown said. “And I don’t want to undersell that those who jump early are the ones who are going to get the benefits of adopting.”

reeman Dyson is a physicist who has been teaching at the Institute for Advanced Study in Princeton since Albert Einstein was there. When Einstein died in 1955, there was an opening for the title of “most brilliant physicist on the planet.” Dyson has filled it. So when the global-warming movement came along, a lot of people wondered why he didn’t come along with it. The reason he’s a skeptic is simple, the 89-year-old Dyson said when I phoned him. “I think any good scientist ought to be a skeptic,” Dyson said. Dyson came to this country from his native England at age 23 and immediately made major breakthroughs in quantum theory. After that he worked on a nuclearpowered rocket. Then in the late 1970s, he got involved with early research on climate change at the Institute for Energy Analysis in Oak Ridge, Tenn. “I just think they don’t understand the climate,” he said of climatologists. “Their computer models are full of fudge factors.” That research, which involved scientists from many disciplines, was based on experimentation. The scientists studied such questions as how atmospheric carbon dioxide interacts with plant life and the role of clouds in warming. But that approach lost out to the computer-modeling approach favored by climate scientists. And that approach was flawed from the beginning, Dyson said. “I just think they don’t understand the climate,” he said of climatologists. “Their computer models are full of fudge factors.” A major fudge factor concerns

the role of clouds. The greenhouse effect of carbon dioxide on its own is limited. To get to the apocalyptic projections trumpeted by Al Gore and company, the models have to include assumptions that CO2 will cause clouds to form in a way that produces more warming. “The models are extremely oversimplified,” he said. “They don’t represent the clouds in detail at all. They simply use a fudge factor to represent the clouds.” Dyson said his skepticism about those computer models was borne out by recent reports of a study by Ed Hawkins of the University of Reading in Great Britain that showed global temperatures were flat between 2000 and 2010 — even though we humans poured record amounts of CO2 into the atmosphere during that decade. That was vindication for a man who was termed “a civil heretic” in a New York Times Magazine article on his contrarian views. Dyson embraces that label, with its implication that what he opposes is a religious movement. So does his fellow Princeton physicist and fellow skeptic, William Happer. “There are people who just need a cause that’s bigger than themselves,” said Happer. “Then they can feel virtuous and say other people are not virtuous.” To show how uncivil this crowd can get, Happer e-mailed me an article about an Australian professor who proposes — quite seriously — the death penalty for heretics such as Dyson. As did Galileo, they can get a reprieve if they recant. I hope that guy never gets to hear Dyson’s most heretical assertion: Atmospheric CO2 may actually be improving the environment. “It’s certainly true that carbon dioxide is good for vegetation,” Dyson said. “About 15 percent of

ELM

agricultural yields are due to CO2 we put in the atmosphere. From that point of view, it’s a real plus to burn coal and oil.” In fact, there’s more solid evidence for the beneficial effects of CO2 than the negative effects, he said. So why does the public hear only one side of this debate? Because the media do an awful job of reporting it. “They’re absolutely lousy,” he said of American journalists. “That’s true also in Europe. I don’t know why they’ve been brainwashed.” I know why: They’re lazy. Instead of digging into the details, most journalists are content to repeat that mantra about “consensus” among climate scientists. The problem, said Dyson, is that the consensus is based on those computer models. Computers are great for analyzing what happened in the past, he said, but not so good at figuring out what will happen in the future. But a lot of scientists have built their careers on them. Hence the hatred for dissenters. “It was similar in the Soviet Union,” he said. “Who could doubt Marxist economics was the future? Everything else was in the dustbin.” There’s a lot of room left in that bin for the ideas promulgated by people dumber than Dyson. Which is just about everyone. This quote from the great H.L. Mencken captures perfectly the religious nature of those in the climate cult: “The essence of science is that it is always willing to abandon a given idea, however fundamental it may seem to be, for a better one; the essence of theology is that it holds its truths to be eternal and immutable.”

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Livestock Market Digest

Page 6

My Cowboy Heroes

Everett Shaw First on the List by Jim Olson n October 30, 1936, sixtyone men signed a simple piece of paper which turned out to be a historic document and a cornerstone in the foundation of professional rodeo. The document simply states: “For the Boston Show, we the undersigned demand that the Purses be doubled and the Entrance Fees added in each and every event. Any Contestant failing to sign the Petition will not be permitted to contest, by order of the undersigned.” After presenting the signed petition to Col. William T. Johnson (producer/stock contractor for the Boston Garden Show), he told them, “Strike and be damned.” Those men did indeed strike and refused to compete at that night’s performance—hoping their demands be met. While it was a little shaky at times, the cowboys and Johnson finally got together on an agreement. Shortly thereafter, the cowboys gathered round and formed the Cowboy Turtles Association (predecessor to the Professional Rodeo Cowboy Association or PRCA). The rest, as they say, is history. The cowboys originally called themselves “Turtles” because they had been slow to stick their necks out and get started. Someone had to be first even to “stick their neck out” and sign the petition, that fateful October day in Boston, before others would fol-

careers, Shaw who was in his late thirties, just hit full stride. It began with the win of his first world title (the 1945 single steer roping title). He won six world steer roping world titles over a seventeen-year period thereafter

low. The man whose name appears very first on that list is none other than — Everett Shaw. Born June 7, 1908, in Hogshooter Creek, Oklahoma, Shaw was known as one of the best single steer roping competitors in rodeo history. He started out however, as primarily a calf roper in 1926 at Nowata, Oklahoma (his first rodeo). His first major win at the professional level came in the calf roping event at Tulsa, Oklahoma in 1932. He won Madison Square Garden (Considered the World Championship rodeo of the day) in ’34, ‘36 and ’39 as a calf roper. Throughout the late 1920s till the early 1940s, he competed in both calf roping and steer roping. Sometime in the early ‘40s however, Shaw decided to focus mainly on single steer roping. At an age when many professional ropers are winding down their

(1945, ‘46, ‘48, ‘51, ‘59 and ‘62) and during a period from 1945 to ’65 he finished in the top five in the world fifteen out of twentyone seasons. From the time he entered his first rodeo to the last world title was a whopping thirty-six years! He remained competitive at the professional level for over forty years! Shaw even competed actively until eventually winning his last roping event in 1977 at the age of sixty-nine! He then retired to his ranch near Stonewall, Oklahoma. In an old newspaper interview,

May 15, 2013 when asked about his longevity in rodeo, Everett said, “. . . once saw a rodeo and got the bug. Thirty years later — I still got the bug.” Shaw won most of his championships on a bay horse named Peanuts who was Hancock bred. He had been hired to train the horse by Fred Lowry (Everett was well-known for his horse training abilities). However, he was so impressed with Peanuts

that he bought the horse instead. He paid $2,000 for the horse, an amazing sum of money back then. It was not money ill-spent however as Peanuts and Shaw roped together for about sixteen years and the duo won most of Shaw’s Steer Roping titles together. Peanuts is now honored at the National Cowboy and Western Heritage Museum on the Trail of Great Cow Ponies. So how did Everett’s name happen first on that historic strike document from 1936? Was he the first to stand up, the most vocal and passionate about what it represented? Probably not. Was he arbitrarily picked by accident because he was close at hand once it was typed up? Maybe. There is only one man left alive at the time of this writing who was actually there when it all happened. When asked what he remembered about Everett signing the document, he couldn’t recall the exact details, but Louis Bowman did say, “Everett was one hell of a roper and horse trainer. He was quiet

and unassuming in his leadership role. He led by example and was a great representative of rodeo.” While we may never know for sure how he became first on the list, what we do know is that Everett Shaw was a solid supporter of rodeo and its fledgling organization. He signed up with the “Turtles” and was given card number seven (indicating he was the seventh member of what is now the PRCA). He also was the very first calf roping director for the organization and was on the executive committee. In all, Shaw spent twenty years on the board of the Turtles and its successor, the Rodeo Cowboys Association (RCA), which later became the PRCA. In fact, when the Turtles reorganized in 1945 to become the RCA, it is said that Shaw played a major part in the event. Later in life, he was in high demand as a rodeo judge because of his honest ways. He even judged the National Finals Rodeo (NFR) while it was in Oklahoma City. Everett Shaw married Nell Truitt on Feb 13, 1936. That act made him a brother in-law to none other than Dick Truitt (1939 World Champion Steer Roper) who was a mentor to Shaw on rodeo circuit in his early days. Eventually, the Shaws had a daughter (Mary Sue Shaw) who married another rodeo cowboy (Sonny Worrell of Kansas) in 1957. All three men are now in the Rodeo Hall of Fame at Oklahoma City. Shaw and his extended family represent quite a family of rodeo cowboys! In May 1979 the Oklahoma State Senate passed a special resolution commending Everett as one of Oklahoma’s greatest cowboys. He had become a living legend. Shaw was inducted into the ProRodeo Hall of Fame in 1979, and the National Cowboy & Western Heritage Museum Rodeo Hall of Fame in 1980. On November 11, 1979, the great Everett Shaw passed away due to complications from heart surgery.

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May 15, 2013

Page 7

Farm Credit Bank of Texas Appoints New General Counsel arm Credit Bank of Texas, a cooperatively owned wholesale funding bank, has named Carolyn Owen senior vice president of corporate affairs, general counsel and corporate secretary, effective April 6. Previously, Owen was vice president and deputy general counsel of the $15.4-billion Austin-based bank. She succeeds Kyle Pankonien,

who has announced his retirement after a 35-year legal career with the Farm Credit System. “Farm Credit Bank is extremely grateful for Kyle’s wise counsel and leadership over the years, and we welcome Carolyn to the role of general counsel. We are fortunate to have had such a deep bench of legal experience and knowledge of the Farm Credit System for so many years,”

said Larry Doyle, FCBT chief executive officer. A 30-year Farm Credit veteran, Owen joined the legal department of the Federal Intermediate Credit Bank of Texas in 1983. She has held various positions within the bank’s legal department, including attorney, senior attorney, associate general counsel and assistant general counsel. At the national level, Owen has

Income Tax Effects of Drought – Forced Sales of Livestock JERRY M. HAWKES, NEW MEXICO STATE UNIVERSITY EXTENSION RANGE LIVESTOCK ECONOMIST

ne of the obvious effects of a severe drought is that livestock must be liquidated in order to save the range and forage resources for future rehabilitation and use. While the fact that livestock must be sold under conditions that are much worse than normal and at a rate much higher than the normal replacement rate would seem to be punishment enough, most U.S. taxpayers are now conditioned to at least ask the question about what are the tax consequences of those sales. This question is always appropriate, because most of us now have come to understand, virtually every dollar that we receive is taxable unless the tax code says otherwise, and no dollar spent is deductible from taxable income unless the tax code says otherwise. That is not common wisdom, it is not common sense, and it is the law! That principle is one of the first foundations upon which our income tax code is built. When ranchers are forced to sell livestock because of drought conditions on their ranges, tax issues are not, and should not be, one of the major concerns. But, nevertheless, the question of the implications should always be asked before the action is taken, and a qualified tax advisor should be consulted to determine whether there is something you can do before the fact. Tax planning opportunities abound before an event; they seldom appear after the event. If livestock have been or will soon be sold due to drought conditions, the tax code provides two options for tax treatment. Note right away, there are two options for how the sale price of the forced sales will be treated. There are no options for avoiding taxation altogether. The drought-related sale of livestock may be treated as an involuntary conversion or the gain from the sale may be postponed.

Involuntary Conversion To qualify for treatment as an involuntary conversion simply means that the income from the droughtforced sale of livestock would be taxable on the tax return filed for the year 2012 tax year filed in the spring of 2013 (or the return filed for the 2013 tax year filed in 2014) for sales of livestock made in 2012. The following restrictions apply: ■ Only livestock held for breeding, dairy, or draft purposes qualify. Any drought forced sales of calves or yearlings are taxable with the next tax return filed, regardless of the nature or intensity of the drought. If you have substantial droughtforced sales of market animals, choose the postponement alternative. ■ Only livestock sold in excess of normal culling rates are eligible. If in the absence of drought 25 cows are normally culled, but 45 cows are culled in the drought year, only the gain from 20 New Mexico State University Extension Animal Sciences & Natural Resources Department Volume 42 April 2013 cows could be deferred. Use Form 4797 numbers from previous years to establish the normal culling rates. ■ The livestock must be replaced by similar ani-

mals within the next two tax years. If replacements are not purchased within that time period, an amended return must be filed for the year of the sale, the gain reported, and any additional taxes paid. If the drought continues, preventing replacement, an extension of time to replace must be obtained in writing from the District Director of the IRS. Older cows may be replaced by younger cows, but should not be replaced by race horses. ■ If replacement animals are purchased at a price below what was received from the droughtinduced sales, the difference is taxed as a gain by filing an amended return for the drought year. The tax basis (the amount that will be depreciated) of the replacement animal is equal to the price paid for that animal minus the gain on the droughtinduced sale that was not taxed due to involuntary conversion treatment. For example, if the price received for a raised beef cow that was sold because of drought is $750 and a replacement is purchased for $750 or less, the tax basis on the replacement is zero. This means that there would be no depreciation deductions generated by the replacement.

Postpone Gain from Sale Instead of treating drought-induced sales as an involuntary conversion, the gain may be deferred one year (gain will be reported on the 2012 tax return filed in 2013 for 2012 sales). ■ Livestock held for breeding, dairy, or sporting purposes qualify as livestock held for sale (whether raised or purchased) qualify for a oneyear postponement. ■ Producers must be able to show that the sale would not have occurred under usual business circumstances (i.e., the drought had not occurred). The rules for sales in excess of normal would suffice. ■ Drought-affected area must be an area eligible for federal assistance. However, the forced sales may have occurred before the area became eligible for federal assistance. A letter from an FSA representative can help establish the assistance declaration for your county. ■ The tax basis for purchased replacement arrivals is not reduced by the amount of the postponed gain. Thus, if a raised cow is sold for $750 and a replacement is purchased for $750, the $750 paid for the replacement is depreciable.

Making the Choice No simple recommendation is possible about which of the two choices will be to any individual’s advantage; except for such situations as if a large number of market animals are involved. Relative to a one-year postponement, opting for the involuntary conversion has the potential advantage of more than a one-year tax deferral on the gain and the disadvantage of limiting the tax basis (and depreciation deductions) to the excess (if any) of the replacement animal’s purchase price over the price received for the animal sold due to drought. Generally, a qualified tax preparer should work out both avenues and given the length of the drought, whether the drought continues next spring, whether the tax bill can be paid earlier, and the time value of money should all come into the analysis.

served on the Farm Credit System Workgroup on Mission-Related Investments. She is currently a member of the System’s Capital Workgroup, which is providing input to the Farm Credit Administration in the development of new capital adequacy

regulations based on the Basel III Accord. Owen graduated from the University of New Mexico and received her Doctor of Jurisprudence from the University of Texas. She is a member of the State Bar of Texas.

Arizona National Livestock Show Launches New Website he Arizona National Livestock Show is thrilled to announce the launch of their new website www.anls.org. The new site has a fresh new look to it with easy navigation for both the exhibitor and general public. Some of the new features include: ■ Optimized for mobile devices ■ Frequently Asked Question section ■ More photos of the various events ■ Online ordering system for the Pioneer Ranch Histories ■ Capability to join as a member of the Arizona National Livestock Show online ■ Capability to sort events by livestock show, special events, auc-

tions and more ■ History of the Arizona National Livestock Show ■ And much more! New features will continue to be added to the site and exciting updates so you will want to make sure you bookmark this site and visit often. Arizona National Livestock Show also has a social media presence through Facebook, Twitter, and Pinterest. The Steer Nomination Book is also now available on the new site with rules and regulations for the Steer Nomination Process. The deadline for the steer nominations is August 31. DNA Kits will be available to purchase the beginning of June.

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Livestock Market Digest

Page 8

May 15, 2013

Every Cattleman Needs An Edge any of us were fortunate enough to receive some of the spotty rains and over this hard dry time and have been able to preserve a herd. Others that trimmed the size of their herds early started saving most of their heifers in 2011. Lastly, there were those that were unable to save any of their herd. We got a little winter moisture and it appears that the dry time is beginning to break. USDA thinks that the drought cycle will see some improvement in the second half of 2013. They also expect the corn crop will be a “bumper” and bring prices down to about $5.00 - $6.00 for corn. This added with high cattle prices and the improved grazing and management techniques that have been forced upon us all by the drought, has created the right combination of elements to trigger a rebuilding of the national herd in the United States and particularly the Southwest.

Each of us operates within a unique environment. We are restricted by the altitudes, forage, weather and surface water only to name a few of the confining conditions that determine that make up; the nature of the land that we graze. As we think about rebuilding our own cattle herds we need to develop a “PLAN” that will bring us out of this drought with some advantage. Like deer musk, in our “hunt bag” there needs to be something in our plan that will give us an “edge” over our competitors when we market the animals we have produced. In 2007 the USDA survey of Midwest Packers identified the Red Angus breed as having a higher percentage of choice and better graded carcasses than all other breeds. This along with the scientific data base that produces the most reliable EPDs in the industry can give relevance to the consideration of maintenance

requirements, body fat, birth weights, yield grade and more when we select seed stock and replacements. Your plan to recover may need to include basic business strategies. Cash flow and profit margins that allow for the rebuilding of not only your herd but the cash reserves you depleted during the drought. Your unique circumstances also must carry heavy weighting in your considerations. In all business the first factor is Product, the second factor is Product, and third factor is Product. Without it we have nothing to sell. It would serve each of you well, as you go through the planning process, to think about how you can give yourself an “edge” while you rebuild.

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you graze BLM or USFS lands you don’t need to be told that the restriction of your use of leased land prohibits many improvements that you might already have made under other circumstances. These restrictions and how they fit into your unique operation have to be taken into consideration before going out and looking at prospective herd bulls or other seed stock. The wide variety of choices can be bewildering. It is hard to know which way to go. Don’t give up or give in, try to think out what you need based on the traits that best work for you. If you have big pastures and long distances to water you may not want that “pretty” bull that shows himself off. Look at his legs, hooves, overall body condition, NOT FAT. That fat bull may melt away when placed on rough country if he isn’t used to the marginal deserts of the Southwest. The terrain we graze every day is pristine and beautiful, but very hard and unforgiving. They say “Western Land is Hard on Horse”, but it is hard on bulls too. We have each learned to deal with all that in variations of our management that would seem absurd to “Eastern” cattle raisers. About 1999 my wife and I began to introduce Red Angus cattle into our operation. The altitude here is 4,500 feet and our vegetation tends to be of marginal dessert plant varieties, many of which are mildly toxic. In our operation all dams and calves are on native pasture 10 months a year as a minimum. We utilize a fence line weaning that gives the dams and calves 10-14 days prior to the placement of the dams with a “cleanup bull” and the weaned

calves either with the “open heifers” or in the “bull grow out pasture”. In the “grow out” pasture the young bulls are on native grass and are supplemented only twice each week with 3 pounds of a 20 percent range cube. We select the top ½ of the body condition and low birth weight performers after they have been on the program at least 90 days. When ranchers come and look at our animals, often they see animals with burrs in their hair and all the assorted superficial flaws that one might see in their own calves. What these ranchers do see in addition, are animals that know how to walk long distances for water, feed themselves from native forage, survive, adapt, and procreate. The aim of our program is to produce highly effective bulls and females that can live on the land and produce a high quality seed stock animal for the Commercial Cattle Raiser. My wife and I are not the only producers that have this end result incorporated into their raising programs. The aim of the Southwest Red Angus Assoc., is to produce high quality hearty and adaptable breeding stock targeted to the needs of Commercial Cattle Raisers. We are each driven by our own circumstance. Some of our bulls will not be so “pretty”, but they are able to adapt to your rough country just like they have adapted to mine. In the “mean time, back at the ranch” they just might give you a big selling price advantage in your calf crop. Good Luck. We are really pleased that you survived the drought, and are still in the cattle business . . . – Tim Head, President, Southwest Red Angus Assoc.

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May 15, 2013

“America’s Favorite Livestock Newspaper”

Page 9

Rancher Who Lost 354 Cows to Feds Can Sue BY JAMIE ROSS, COURTHOUSENEWS.COM

n Arizona cattle rancher can sue the U.S. Forest Service for seizing and selling nearly 400 of his herd, the Court of Federal Claims ruled. Though Daniel Gabino Martinez’s land sits in the ApacheSitgreaves National Forest, he refused to get federal permits so that his cattle could graze because he claimed that his water and forage rights entitled such use. The Forest Service issued a notice of trespass in February 2005, but Gabino Martinez refused to remove the cattle. Agents ultimately seized 354 of his cattle in November 2004, but Gabino Martinez waited until November 2011 to file suit. The government claimed that the complaint failed under the six-year statute of limitations, but Judge Eric

Bruggink disagreed. “If impoundment of the cattle were grounds for asserting a taking, then presumably those impoundments which took place more than six years prior to the filing of the complaint could be dismissed as stale,” Bruggink wrote. During oral arguments, however, the government’s counsel argued the Forest Service’s actions should be analyzed as the exercise of a police power, not as a taking. “If we agree with counsel that impoundment by the government would not create liability for a taking, then it is difficult to understand how plaintiff forfeited its taking claim by not suing before November 8, 2011,” Bruggink wrote. Gabino Martinez maintains that since his cattle were not sold until December 2005, he was within the six-year statutory period when he filed suit in

November 2011. The government claimed, however, that the clock started when it took possession of the cattle on Nov. 8, 2005. “We are reluctant to dismiss the action at this early stage, when plaintiff’s theory is that

turkey, pumpkin pie or eggnog. She would be grievously worried about his health because he has always been known for his cast iron stomach, able to eat road kill, metal bottle caps, and his brother’s science project growing in the refrigerator! He also cautioned me against overdosing. I could best translate his admonition as “a little bit goes a long way!” The distance to the doctor’s office is also critical. As Martin described the twohour trip from Bruneau to Homedale, it was like a leaky boat racing to shore and having to make frequent stops to lighten the load. But, in the end . . . pardon me, Martin got a clean bill of health and he thought by sharing his story with our readers he could benefit us all, Butt . . . see, it just keeps on punning . . . his attempt to make humor about a serious subject isn’t always proper, especially in my column. There are just too many temptations to use questionable analogies like, preg checking, bull’s eye, slicker than a whistle, sighting in, Roto Rooter, the long run, a tapeworm’s eye view, a snake charmer, an emissions check, Hazmat suit, shrapnel protection . . . Sorry Martin, as you can see I have a responsibility to my readers. Call me when you want to talk about something less sensitive . . . like infertility of Sage hens in Colorado.

defendant’s counsel ventured at oral argument that, if the claim was brought before the sale and viewed as a regulatory taking, ‘then the government would have an argument that his claim is not ripe,’” Bruggink wrote.

THE LIVESTOCK MARKET DIGEST

Real Estate GUIDE To place your Real Estate Guide listings, contact RANDY SUMMERS at 505/243-9515 or at randy@aaalivestock.com !1)2 %7!2 %7#%,,%.3 0!2341% 0!5%$ 1/!$ &1/.3!'% (4'% ,!+% -!.2)/. (/-% ). 3(% 2(!$/6 /& !,,!2 %#,4$%$ ,!+%2 31%%2 %7#%,,%.3 '1!22 4.3).' &)2().' $1%!(/-% 2)3%2 !# !. !$$ -/1% !#1%2 /.,8 -),%2 /43 /& !, ,!2 #!33,% 1!.#( /& ,!1+25),,% %$ )5%1 / .)#% "1)#+ (/-% "!1.2 0)0% &%.#%2 '//$ $%%1 (/'2 $4#+2 (4.3).' 6)3( ! "%$1//DING!.$ 2(/0 EN'!1!'% "!3( !.$ L!E P#!1 A S &/1 /6.%1 &).!.#%$ 6)3( #!2( $/6. /13(!%7!2 !# 4.3).' !.$ #!33,% 1/.32 68 9 !33,% !.$ /-% )3% 0! ENDING 9 LE 6P2(/0 SA!,,!2 9 4.3 /4.38 7 2411/4.$%$ "8 ,!1'% (/-%2 %7#%,,%.3 2#(//,2 0!

Unsuitable Topics for Column hen I’m asked where I get ideas for this column, I explain that in my travels among the agricultural masses, everyone has a story to tell . . . and they tell me! Almost always they include getting bucked off, run over or humiliated in some form, by large domestic mammals. However, there are some subjects that are just not suitable for a column with such integrity, like mine. Even if I intend to be educational I am somehow lead to the whacko side . . . like Martin and his colonoscopy saga. I admit I could write a serious column about the necessity of 50-year-olds to include this exam on their bucket list . . . whoops. See what I mean? I’m already speaking in the double entendre; bucket list, chamber pot, honey wagon. It would also be acceptable for me to discuss the procedure using proper medical terminology with words like preparation, fasting, administration, evacuation, but I begin to drift into wind velocity, high tide, flood warning, and the Seismic scale which make me sound more like a first responder than a serious medical person! Martin’s version is more colorful, probably TMI . . . too much information, for our serious readers. For instance, he warns about scheduling the fasting stage over the holiday and not being able to eat Mom’s

the sale of the cattle constituted the taking, when it is the government’s real position that neither the impoundment nor the sale would ever trigger a taking, when the government conduct was pursuant to a regulatory scheme, and when

INTEREST RATES A S L OW A S 3% Pay m en t s Sch ed u l ed o n 25 Year s

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■ 113 acres SOLD / 214 acres REMAINING: “Snooze Ya Loose.” Cattle/horse ranch. Over 150 acres in grass. 3/4 mile State Hwy. frontage. Live water, 60x80 multi-function barn. 2-bedroom, 1-bath rock home. Priced to sell at $1,620 per acre. MLS #1204641 ■ NEW LISTING - RARE FIND - 226 ACRES 1.5 miles of Beaver Creek runs along & thru this "Ozark Treasure." Long bottom hay field, walnut grove, upland grazing, excellent hunting, deep swimming hole, 4 BR, 2BA older farm house. Don't snooze and loose on this one. Call today! MLS #1303944

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for 600 + cows on 40 sections of choice ranch land w/excellent homes, barns, pens, livestock water & fences. This is a working ranch with improvements in top-notch condition on an all-weather road nestled in the foothills of the Capitan Mountains w/rolling hills, canyons & large valleys. – 864 ac. +/-, w/ 552 ac. +/of cropland presently in improved grasses, balance native grass. At $450.00/per acre this property needs looking at (large deer in the area)! – 2,107 ac. +/- (CRP, dryland & grass) in NE Parmer with Hwy. 60 frontage, irr. potential, irr. wells. $ %)) - '%! ' "(%$ * " , $ '%! ' 800-933-9698 day/eve www.scottlandcompany.com • www.texascrp.com 1301 Front Street, Dimmitt, TX 79027 ',() "

Livestock Market Digest

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May 15, 2013

Cattle Production Veterinarian Hall of Fame Nominees Announced ix legendary cattle veterinarians have been nominated for the 2013 Cattle Production Veterinarian Hall of Fame, which celebrates the rich traditions of production veterinary medicine by honoring exceptional individuals who have made lasting contributions to the veterinary profession. From the development of herd health protocols and management strategies to maintaining leadership roles in teaching and research, these nominees have helped shape the industry throughout their distinguished careers. The Cattle Production Veterinarian Hall of Fame is sponsored by the American Association of Bovine Practitioners (AABP), the Academy of Veterinary Consultants (AVC), Bovine Veterinarian, Merck Animal Health and Osborn Barr, an agricultural marketing and communications company. “Selected by their peers, each of the nominees represents a legacy of excellence, dedication and accomplishment that make them truly worthy of Hall of Fame recognition,”

says Mark Spire, D.V.M., technical services manager for Merck Animal Health. “During their extraordinary careers, they have played key roles in establishing standards of cattle care and developing health protocols that have had a remarkable impact on our industry.” Voting is currently underway and concludes Aug. 5. AVC and AABP members may vote for one beef and one dairy nominee. AVC members may vote during the organization’s spring and summer conferences or online at www.avc-beef.org/halloffame. AABP members may vote online at www.aabp.org/halloffame. The third annual Hall of Fame inductees will be honored Saturday, Sept. 21, at the AABP Annual Conference in Milwaukee, Wis. 2013 Beef Nominees Robert Bohlender, D.V.M., has practiced for more than 50 years in North Platte, Neb., and is considered a pioneer in the beef cattle industry. He developed the Beef Quality Assurance (BQA) Program and also is recognized for having

Angus Seeks Applicants for the Next Junior Breed Ambassador Submit an application by June 15 to be considered for this distinct position. ngus cattle play a role in every aspect of Lauren Adcock’s life. From the farm to the showring, and the classroom and into the working world, the Moweaqua, Ill., native is a prime example of how National Junior Angus Association (NJAA) members are using their talents to promote the breed. And, this year more than ever, the Angus business is the center of her attention. Adcock is the first-ever Angus Ambassador and has travelled across the country in the past year representing the Angus breed at major beef industry conferences. “It is a year of unforgettable experiences,” Adcock says. “I gained a wealth of knowledge from an industry and personal standpoint; information I could not have learned in a classroom.” Her year of travel allowed her to step out of her comfort zone, especially when mingling with Angus members twice her age. “The Ambassador program is designed to allow our young Angus leaders a chance to get involved early in higher levels of the cattle business,” says Robin Ruff, American Angus Association®’s director of junior activities. “This is a great opportunity for youth to get their foot in the door and create a network in the industry they are passionate about.”

Selecting the next Angus Ambassador On July 25, the Association will select a new Angus Ambassador to serve for a one-year term. During that time, the Ambassador will travel to the Association headquaters for an orientation in Saint Joseph, Mo.; the National Angus Conference and Tour in New York; a Certified Angus Beef® Building Blocks Seminar in Wooster, Ohio; the National Cattlemen’s Beef Association Cattle Industry Annual Convention in Nashville, Tenn.; the Beef Improvement Federation Annual Research Symposium and Convention; and the Guiding Outstanding Angus Leaders Conference in Canada. Additonal travel options vary on the selected ambassador’s location, schedule and availability. Ambassador applicants must be American Angus Association members, ages 17-20 as of Jan. 1, of good standing and who own purebred cattle. To apply, send a cover letter, resume and two essay responses. More information on the application process can be found online. All applications must be postmarked by June 15 and sent to the Association’s Junior Activities Department, 3201 Frederick Ave., Saint Joseph, MO 64506.

developed numerous health management strategies that have benefited the cow-calf and feedyard industries. Robert Pierson, D.V.M., developed the Colorado State University Student Feedlot Program, which is focused on the study of feedlot health, and encouraged the development of vaccination programs used by feedlot owners to treat and control bovine respiratory disease. He is retired and lives in Ft. Collins, Colo., Don Williams, D.V.M., developed the first national preconditioning program and was instrumental in developing large-scale cattle health programs, training initiatives for feed-

yard personnel and science-based animal health management protocols. He is retired and lives in Guymon, Okla. 2013 Dairy Nominees David Morrow III, D.V.M., Ph.D., spent a lifetime committed to dairy cattle health and reproductive physiology, and earned numerous accolades for his teaching and research at Michigan State University. He was honored as the World Dairy Expo Industry Person of the Year in 1997. Dr. Morrow passed away in 2005. H. Fred Troutt, D.V.M., Ph.D., established herd health pro-

grams for cattle and swine at the University of Georgia College of Veterinary Medicine, where he taught large-animal medicine and pathology. He also was founder of the American Board of Veterinary Practitioners. Dr. Trout passed away in 2010. Elmer Woelffer, D.V.M., is considered by many to be the father of bovine reproductive programs. He received numerous awards, including the AABP Award for Excellence in Dairy Preventive Medicine. Dr. Woelffer remained a private practitioner in Oconomowoc, Wis., until his death in 1995.

Killer bacteria and the cattle industry: what is the threat? BY PEGGY COFFEEN DAIRY / LIVESTOCK EDITOR AGRI-VIEW ,

ased on the emergence of forums, alliances, and Facebook pages on the topic of antibiotic and antimicrobial resistance, it is clear that there are questions and concerns among both the public and the livestock sector over so-called “super bugs” and “killer bacteria.” As a livestock producer, you may be experiencing the same curiosity and confusion. How does resistance occur and what threat does it really pose to human health? Further, is the health concern greater for people who handle livestock and administer antibiotic treatments to cattle? Are there practices that are part of your daily protocol that feed into this problem? Dr. Reynold Bergen with the Canadian Cattle Association addresses these questions through the Beef Research School informational video series. Bergen provides scientific and industry expertise to Canada’s Beef Cattle Research Council (BCRC). Gaining a better understanding of the potential for resistance begins with defining two terms often tossed around in the conversation: antibiotics and antimicrobials. As Bergen explains, the two are related but not quite interchangeable. “An antibiotic is a substance produced by a microbe that will kill another microbe, and an antimicrobial is just any compound that will kill a microbe,” he says. The category of antimicrobials actually includes antibiotics, along with anti-protozoas, alcohol, soap and bleach. Antimicrobial resistance (AMR) occurs in much the same way herbicide resistance happens in crops. If the same herbicide is used continually – over and over again – it will be effective at killing most of the weeds in the field. However, a few will continue to survive and grow, and these are the ones that become a problem. “It is the same thing with antimicrobials,” he adds. This concept creates fear that AMR resistance will cross over to people. “The reason we are concerned about antimicrobial use in beef cattle and all livestock industries is that there is a perception that antimicrobial use and resistance is related to and causes a problem in human health,” Bergen says, which is why the beef industry has taken a proactive approach in studying the possible correlation. A Canadian study in the late 1990s and early 2000s looked at drug use and resistance among feedlot cattle, as well as drug resistance in feed-

lot workers who were exposed to sick cattle and handled treatments. They did not find any antimicrobial resistance among this sample of people. In fact, they had lower resistance levels than the population of human patients who visited the same Alberta clinic. “That suggests there is really not a strong link – if any,” Bergen notes. He believes that the beef cattle industry has a good story to tell when it comes to AMR. Extremely prudent drug use is reflected by such low levels of resistance, he affirms. The drugs that are of very high importance in human health may be used for cattle, however, they are used sparingly, making up less than 1 percent of drugs administered. That is why we see very low levels of resistance, around 1 percent. In fact, that is lowest among all livestock sectors and very close to the baseline that occurs in cattle raised without any antibiotics at all. “Some of that resistance is naturally occurring, and the fact that we are using drugs prudently means that resistance isn’t getting selected for,” he says, adding that using an antibiotic does not necessarily cause the resistance. Sometimes the resistance is there already. Using the antibiotic can give a “competitive advantage” to the bugs that already have some resistance, thus, promoting their growth. When it comes to antimicrobials, they are categorized into four main classes, depending upon their importance in human medicine. Those classified as “very high importance” are used to treat very serious human infections. These are the “drugs of last resort,” he says. “High importance” are drugs of intermediate importance to human health, while “medium importance” drugs are not generally used to treat serious illness but may be prescribed for treatment of something like acne. Those antimicrobials that are not used in human health at all are labeled as “low importance,” such as ionophores and growth promotants. This class makes up the majority of antimicrobials used by the beef cattle industry. Dr. Calvin Booker, DVM, Feedlot Health Management Services, promotes the responsible use of antimicrobials in beef cattle production among cattle producers through the BCRC. That includes consulting with a veterinarian to be sure antimicrobials are being used to treat diseases that are of bacterial origin because antimicrobials are not effective against viral diseases. Producers should also follow the label or directions for use prescribed by a veterinarian for directions, dosage and route of administration of any drug.

May 15, 2013

“America’s Favorite Livestock Newspaper”

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Arizona National Livestock

Impact of management practices and distillers’ grains feeding on the prevalence Show Awards Over $49,000 of E. coli O157 in feedlot cattle in Minnesota in Scholarships BY DOUG POWELL / HTTP://BARFBLOG.COM / FROM BEEF

ecent reports indicated that feeding distillers’ grains (DG) to cattle increased fecal shedding and prevalence of E. coli O157. In Minnesota, feeding DG with solubles (DGS) to livestock became widespread within the last 10 years, but there is no report about the prevalence of E. coli O157 in beef cattle in this state. This study was undertaken to survey the fecal prevalence of E. coli O157 in cattle fed diets con-

taining DG and its association with environmental conditions and management practices. Fecal samples were collected from three feedlots during a 1-year period. All animals in those feedlots were fed different DGS levels. E. coli O157 presence was determined using a combination of enrichment, immunomagnetic separation, plating onto sorbitol MacConkey agar, and confirmation of isolates by immunoassay and multiplex virulence genes polymerase chain reaction analysis. Overall, E. coli O157 was confirmed in 9.7 percent of samples. Prevalence during summer was 30 percent and

declined to less than 10 percent the rest of the year. In animals grouped by dietary DGS concentration, no significant difference in prevalence (12.0 and 5.5 percent) was detected between the low and the high average groups (less and more than 20 percent). Previous feeding of DGS before arriving to the feedlot also had no influence on fecal prevalence. The presence of several interacting variables, uncontrolled in a real-life feedlot environment, was the likely reason for our observation and suggested that at the levels studied, DGS had no effect on the STEC O157 prevalence in

NIAA Opposes “Humane Education;” Supports Animal Welfare omesticated animals deserve respect and care. That’s animal welfare— and a priority of the National Institute for Animal Agriculture, an organization comprised of livestock, equine, poultry and aquaculture producers, producer organizations, veterinarians, extension personnel, academicians, scientists, Federal and state regulatory agencies and allied industry. Jim Fraley, Livestock Program Director for Illinois Farm Bureau and co-chair of NIAA’s Animal Care Council, stresses that animal welfare and animal rights, however, are not the same. Significant discussion was devoted to this topic during NIAA’s annual conference in Louisville, Ky., April 15-17. In the end, NIAA’s membership agreed on two key items: 1) NIAA believes in animal welfare and does not believe in animal rights; and 2) Today’s children and future generations should understand the importance of animal welfare and not confuse animal welfare with animal rights. “We believe in, and support, animal welfare as these practices focus on the prevention of suffering and cruelty to animals,” Fraley explains. “NIAA does not believe in animal rights as the animal rights philosophy advocates an end to all ‘human use of animals.’ “NIAA members believe human societies require and accept the use of animals as sources of food and fiber, as well as for scientific research, sport, companionship, entertainment and clothing. It is the obligation of animal caretakers to provide the best care possible of animals throughout their lifetime, and NIAA’s membership takes this obligation very seriously.” During its annual conference, NIAA members adopted a position that public schools should

not stir confusion regarding the difference between animal welfare and animal rights by allowing extremist animal rights groups to present their views which can be erroneously perceived as facts. Concern about what public schools should or should not allow regarding animal welfare and animal rights education arose when NIAA members learned about a California school system that allowed a movie involving animals to be shown and followed up the movie with a discussion focusing on how cruel it is to eat fish. “Those of us in animal agriculture do not believe that extremist animal rights groups should be allowed to dictate information children are exposed to—or will be exposed to—at our public schools regarding animal

welfare,” Fraley states. “Animal rights groups led by the Humane Society of the United States (HSUS), PETA and the Institute of Humane Education (IHE) do not reflect balanced views and are campaigning across the United States to implement what they refer to as ‘humane education,’ a program of extreme ideological material they aspire to teach in our school systems. “They have been successful in a few cities, but up to now have not been successful at the state or federal levels, despite repeated efforts to introduce legislation.” Fraley emphasizes that emotional, subliminal vegan messages replacing animal care based on accepted, proven animal husbandry practices is “not education, but indoctrination.”

he Arizona National Livestock Show recently awarded $49,500 in scholarships for the 2013 academic school year. The Arizona National Livestock Show Scholarship Program has awarded $741,759 in scholarships to 726 recipients over the past 22 years. The scholarship recipients will be honored at the 66th Arizona National Livestock Show Dedication on December 27, 2013 at the Arizona State Fairgrounds. Congratulations to the following recipients: Jessica Burson – Roswell, NM; Rachel ClausWalker – McNeal, AZ; Haley Cooley – Gilbert, AZ; Brooke Griggeory – Gilbert, AZ; Ellen Hill – Phoenix, AZ; Holly Howard – Phoenix, AZ; Mariana Hudson –Scottsdale, AZ; Holly Johnson – Buckeye, AZ; Cheyanne Keith – Pomerene, AZ; Nathan Kempton – Queen Creek, AZ; Garrett Lochner – Tucson, AZ; Tiffani Maggard – Buckeye, AZ; Korinne Leigh Molever – Scottsdale, AZ; Shannon Nigh – Yuma, AZ; Kaitlyn Parks – Oro Valley, AZ; Shelby

Rojas – Phoenix, AZ; Helena Schlegel – Tucson, AZ; Sylvalyn Simpson – Benson, AZ; Amy Van Rijn – Mesa, AZ; Breanna Watkins – McNeal, AZ; Jessica Zamudio – Elfrida, AZ Scholarships are available to students attending pursing a bachelor degree at an accredited university or college for the current academic year. Other requirements include: High School graduation; completion of at least 12 semester hours post High School graduation before applying; currently taking at least 12 credit hours; a minimum grade point average of 2.5 (A=4); and prior participation in the Arizona National Livestock Show. Scholarships are funded through donations to the show with the help from the Arizona Horse Lovers Foundation, Farm Credit Services Southwest, Bob Boice Memorial and Everett Bowman Memorial. Applications are available online and due March 15. For more information visit www.anls.org or call 602/258-8568.

Livestock Market Digest

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Grazing season extension for the beef cow-calf producer BY KABLE THURLOW, MICHIGAN STATE UNIVERSITY EXTENSION FROM THE GLADWIN COUNTY RECORD & BEAVERTON CLARION

ost of production for cowcalf producers has risen drastically over the last decade. Because of the widespread drought of 2012 and high cash crop prices, forage prices remain at record highs and supplies are very tight. Couple that with the fact that available grazing land is also getting harder to find and beef producers can have challenges in keeping their costs of production at profitable levels. Grain prices remain high and so will the competition for these acres. It’s important that cowcalf producers utilize available land as efficiently as possible, to keep feed costs at a reasonable level. Improving grazing management on pastures and utilizing crop residues will be very important for the survival of the cowcalf industry. Now is a great time to come up with a plan for the 2013 grazing season because waiting until the grass is ready for turn out makes it extremely challenging for having success at grazing season extension. Over grazing in the spring growing season because of a lack of stored or stockpiled forages will also create a disadvantage for the rest of the year and could lead to potential forage shortages for the next winter. Goals for profitable grazing management should include: ■ Meeting the nutritional needs of the livestock from standing forage as many days as possible. ■ Harvest forage with animals as efficiently as possible. Winter feed cost is the greatest expense of a cow-calf operation. According to data from the North Dakota Farm Business Management Program, total annual cost per cow was $574 in 2011, of that total cost, 54 percent or $309.96 could be attributed to winter feed costs. Data from

Advertise to Cattleman in the

Livestock Market Digest

North Dakota also indicates that pasture costs are estimated at $0.85 per cow per day, while feeding harvested, stored forages can increase that number to $2.33 per head per day. The stored forage costs were derived from using $150 per ton costs on hay and a daily intake of 31 pounds of dry matter. This cost could be much higher if you take into account the cost to purchase hay has since gone over the $150 per ton price. The Weekly Hay Market Demand Report from the University of Wisconsin has large round bale hay prices ranging from $154-$268 per ton, depending upon quality. Given the difference in the cost of grazing versus feeding stored forage, it becomes very evident why extending the grazing season is beneficial in keeping production costs as low as possible. How those grazing acres are managed will also have an impact on the level of cost reduction that is attainable. Utilization rates will vary greatly, depending upon the frequency of the moves; in a continuous paddock situation, the utilization rate would be 3040 percent. Increasing the frequency that the animals are moved, will increase the percent utilization. In a four-year grazing study at the University of Missouri Forage Systems Research Center, researchers found that moving the fence every three days compared to every two weeks resulted in 40 percent more grazing days per acre. Improving grazing yield will allow producers to better meet forage requirements of the herd during summer slump and into the fall months. The same types of improved efficiency can be found in the grazing of stockpiled forages, crop residues, and cover crops. The more frequently cattle are moved to a new paddock, or strip of forage, the higher the utilization rate will be. To contact an expert in your area, visit http://expert.msue.msu.edu, or call 888-MSUE4MI (888678-3464)

May 15, 2013

EPA continues to release producers’ personal information he Environmental Protection Agency (EPA) continues to illegally release information on cattle operations to the activist groups Earth Justice, the Pew Charitable Trust and the Natural Resources Defense Council, According to the National Cattlemen’s Beef Association (NCBA). In the latest action, the agency again admitted it had released too much information on livestock producers, specifically producers from Montana and Nebraska. This action happened less a month after the agency found it had released too much information on livestock producers in 10 states. NCBA Past President J.D. Alexander, a cattle feeder from Pilger, Nebraska, and whose information was released to the activists groups in the initial EPA action, said it is clear “someone at EPA is either completely incompetent or intentionally violating federal law. Either way, this action shows EPA cannot be trusted with sensitive information and should not have the authority to procure or disseminate it. NCBA is calling for an investigation by the Office of Inspector General into this matter.” The records released in February by EPA include names of producers and operations, locations and in some cases even personal phone numbers for farmers and ranchers who own beef, swine or poultry operations. Most of the 80,000 facilities listed are not regulated under the Clean Water Act (CWA), some having as few as 12 head of livestock. After NCBA and other livestock groups expressed outrage over the initial release of information, EPA conducted a review of the records and admitted it released too much personal information for 10 of the 29 states included in the documents. After a second review, the agency once again said too much information was released for operations located in Nebraska and Montana. “These actions by EPA once again prove that the agency is incapable of properly doing its job. Nowhere in law is EPA required to obtain and display such personal information on all these livestock operations. On the contrary, the federal government should be protecting its citizens from unwarranted attacks,” Alexander said. “Instead, EPA has once again threatened the health and safety of America’s farmers and their fami-

lies, as well as decreased the security of our food system. Now they have politely asked these activist groups twice to return those documents with extremely sensitive information on them. What makes EPA think that these groups will listen and act appropriately in order to protect hardworking farming and ranching families, those families that environmental activist groups want out of business?” He added that NCBA continues to pursue legislative action that would prevent the agency from being able to make these devastating mistakes. Nebraska Sens. Mike Johanns and Deb Fischer said the fact that EPA disregarded the privacy of cattle producers in their home state of Nebraska and across the country shows the agency continues to act as if it is above the law. “EPA’s disclosure of personal and confidential information of private citizens and business owners – including 3,500 Nebraskans – demonstrates a complete disregard for their privacy and safety. Now, we have learned that, in the agency’s mismanaged attempt to recover the information, the EPA failed to request the return of hundreds of Nebraskans’ personal data that should not have been released,” said Fischer. “This whole episode is more than a mere comedy of errors; it represents a pattern of disturbing disregard for the rights of our citizens. I believe Nebraskans – and Congress – deserve a thorough, independent and speedy review of the EPA’s handling of the deliberate disclosure and botched recovery process.” Johanns agreed with Fischer, stating that “EPA’s ongoing assault on America’s agriculture producers is nothing short of alarming.” “EPA’s disregard for the privacy of farmers and ranchers in Nebraska and across the country is, at best, woeful negligence, and at worst, a flagrant effort to aid organizations seeking to radically dismantle agriculture practices, with no regard for what it takes to feed the world. I certainly hope EPA’s release of sensitive personal data was not part of a larger agenda to jeopardize American agriculture operations, but its track record does not help its case. EPA must now explain how it will ensure private information is not abused.”

Case IH & American Farm Bureau announce tractor & equipment incentive program hanks to a membership value program partnership between Case IH, the American Farm Bureau Federation (AFBF) and American Farm Bureau, Inc. (AFBI), Farm Bureau members can now take advantage of farm equipment discounts. Eligible Farm Bureau members will receive an incentive discount – from $300 to $500 – when purchasing qualifying Case IH products and equipment from participating dealerships. “We selected Case IH as a member benefit program partner because they offer product expertise and field support, as well as the resources of a leading tractor manufacturer,” says Ron Gaskill, Executive Director of AFBI. “The program’s goal is to provide Farm Bureau members with greater value when they purchase or lease eligible equipment.” “Case IH is proud to support the American Farm Bureau and its mission of building strong, prosperous agricultural communities,” says Zach Hetterick,

Case IH Livestock Marketing Manager. “The organization unifies farmers to make farming more sustainable and the community a better place to live in a way that could not be accomplished on an individual level.”

How it works Farm Bureau members from participating states can receive the manufacturer’s incentive discount when an eligible tractor or implement is acquired. “There is no limit to the number of incentive discounts that a Farm Bureau member may use as long as it is no more than one per unit and the equipment included provides opportunities for small landowners to larger, professional producers,” says Hetterick. “This discount is also stackable, meaning it can be used with other discounts, promotions, rebates or offers that may be provided by Case IH or a Case IH dealership.” A current Farm Bureau membership verification certificate must be presented to the Case IH dealer in advance of product

delivery to receive the incentive discount. Certificates may be obtained by visiting fbadvantage.com and selecting the Case IH offer. Eligible individuals, family or business members will receive the following discounts on purchases of these qualifying products: ■ Case IH Farmall® Compact Tractors (A & B) – $300 per unit ■ Case IH Farmall® Utility Tractors (C, U, J Series) – $500 per unit ■ Case IH Maxxum® Series Tractors – $500 per unit ■ Case IH Farmall® 100A Series Tractors – $500 per unit ■ Case IH self-propelled windrowers – $500 per unit ■ Case IH large square balers – $500 per unit ■ Case IH round balers – $300 per unit ■ Case IH disc mower conditioners – $300 per unit ■ Case IH sickle mower conditioners – $300 per unit ■ Case IH Scout™ utility vehicles – $300 per unit

May 15, 2013

“America’s Favorite Livestock Newspaper”

Page 13

This Land Is Our Land . . . But For How Long? armwalk is back and better than ever. The 21st annual Pierce College event offers an open house on its 225-acre farm for the public to experience its Agriculture Department’s Teaching Farm, and to expose children to the experience so that they may become future students in the Agriculture Department’s programs and at Pierce College, Woodland, Hills, CA. “This year’s events are perhaps the most vital in the college’s 65year history,” said Dr. Leland Shapiro, Agriculture Department Chair and Pre-Veterinary Science Program Director at Pierce College. “We’re thrilled to have the support of Alex Warren and Losing the West, a film whose message is directly inline with that of our program. It promotes not only the conservation of fertile land for agricultural use but also encourages people all over the world to take their lives and health into their own hands and get to know where the food they put on their tables come from and the importance of farming worldwide.” About the Pierce College Farm – According to Dr. Leland Shapiro Dr. Shapiro, who has spearheaded Pierce’s Agricultural and Pre-Veterinary Science programs for nearly 40 years, is set to retire within the next two years. According to Shapiro, upon his retirement, if funds are not raised to help support the farm and the educa-

tional programs connected with it, Shapiro’s position will be in jeopardy and some of the highest ranked agricultural and pre-veterinary science programs in the country along with it. “Paradise could literally be paved to make a parking lot,” said actor, activist and publicist for Losing the West Lon Haber. The Pierce College Agricultural Foundation was formed to revitalize the Farm at Pierce College. An Agriculture Endowment has been established to raise the money needed and rebuild programs that can continually generate cash flow. This will enable Pierce to hire and maintain two full-time faculty members (one of whom must be a food animal veterinarian able to care for the college’s animals and teach its students), and four classified employees (two to care for the pastures and fields, and two for the animals). One of these four will also assist in managing the equine facility in preparing its lab for its daily equine courses. All money raised will be utilized to maintain, improve and expand the animal science programs – pre-veterinary, general animal science and equine. Losing the West “Our society is trying too hard to sustain an unsustainable way of life,” said Losing the West’s director/producer and 2013 Farmwalk sponsor Alex Warren. “It’s time to come together to protect the land that needs to be protected, the fertile land and the

open spaces that preserve the habitat and migration patterns of wildlife. The Pierce College farm is a prime example of what’s happening all over the world and we have the ability to make a difference in our own backyard. If we can’t start at home then where can we start?” Losing the West is a quintessentially American documentary examining the transformation of the iconic old west that was, for so long, a rugged, thriving natural habitat. It is the significant story of a sacred society threatened with extinction and an essential industry on which we all rely put in mortal peril due to the disappearance of natural resources. The film is a vital audit of America’s values and addresses some of the most important issues of our time. In the face of increasingly turbulent economic times, why would farmers and ranchers continue their grueling lifestyles when the monumental rise in the value of their properties makes cashing out their best prospect? Who will be left to grow the nation’s food as population continues to soar? And who will fill the roles as stewards of the land as concrete paves over the fertile ground? Dr. Shapiro and Jose Luis Fernandez, Dean of Academic Affairs and Farm Manager at Pierce College, among many other notable personalities are featured in Losing the West. Save the Farm! Losing the West has just been

completed and special screenings will take place in the Old Feed Mill during Farmwalk. A star-studded benefit to help save the Pierce College Farm, Agricultural and PreVeterinary programs with a prerelease screening of Losing the West is tentatively set for early June in Pierce College’s Grand Hall. Sponsors for the event include Losing the West, LLC and Kathy Eldon & Creative Visions. The Host Committee includes Zev Yaroslavsky, Los Angeles County Supervisor (3rd District), Michael Antonovich, Los Angeles County Supervisor (5th District), Andy Lipkis & Tree People and Jeff Michael FoxNews – Los Angeles. More information will be released as it becomes available. The Bottom Line Both the Foundation and Losing the West demonstrate how each person has the power to positively affect the environment and community, and to take a hands-on approach to making land and food sustainability a reality. About Farmwalk Farmwalk activities include A Petting Zoo, Live Music, Tons of animals, Hay Wagon Rides, Sheep Shearing, Wool Spinning, Wool Dyeing, Multiple Horse Activities & Shows, Face Painting, Cow Milking with the Dairy Council, Losing the West Movie Screening, Nature Canyon walks overlooking our city, the band Simply Marie, Greater LA Vector Control Department, Pierce College Choir,

A journalism nonprofit’s nonagenda agenda BY RON ARNOLD, WASHINGTON EXAMINER COLUMNIST

mong the standout names of outfits recently whacking the Donors Trust is the nonprofit investigative journalism organization known as the Center for Public Integrity. To many, the group’s name seems presumptuous and agenda-laden, despite its insistence that it is “nonpartisan and does no advocacy work.” Because most of CPI’s funding comes from wealthy foundations, it’s possible to investigate the investigators through the IRS Form 990 reports of its donors. Those handy documents publicly reveal everything about every grant to CPI, including the grant description — what the money is for. The bulk of those descriptions reinforce CPI’s assertion with such purposes as “general support” and “operating support,” meaning to pay the crew, pay the rent, keep the lights and heat on, and feed the office cat. In other words, no agenda there. Then there is the $75,000 from President Obama’s old board of directors home, Chicago’s Joyce Foundation, which was given to CPI to “fund a series of investigative reports on the gun industry lobby in America.” Among Second Amendment defenders, the Joyce Foundation is known as the Gun Control National Bank ($12 mil-

lion to anti-gun groups since 2003). That sounds like an agenda. There’s also $150,000 from the Public Welfare Foundation (based on the fortune of the late Texas newspaper owner and Democratic activist Charles E. Marsh) for “regulating worker exposure to chemicals” — which, when you think about it, sounds like advocacy for an anti-industry agenda. I found 19 specific-purpose grants that sounded agenda-laden, ranging from funds for land use critiques, to anti-mining, anti-coal, anti-fishing and anti-telecommunications company stories. I found more than three times that many election reform grants out of 317 total grants. Not big in numbers, but possibly big as regards the question of “advocacy” and “agenda.” The key question here isn’t whether you like what CPI does (they have a ton of awards), or whether it’s lopsided toward the left (even the progressive media criticism organization Fairness & Accuracy in Reporting called CPI “progressive”). The real question is, who’s running the show? There’s supposed to be "an absolute firewall” between a nonprofit’s fundraising officers and the program officers (the news section in CPI’s case). In philanthrospeak, is CPI taking “prescriptive grants” that demand specific performance? That would be a journalistic

showstopper. And some of the foundations that fund CPI are notorious for making prescriptive grants. Does CPI have that absolute firewall between all its money and all its news? I asked CPI Executive Director Bill Buzenberg that exact question. At first he gave me the answer to a number of other questions. After realizing I hadn’t made myself clear, I asked, “Who initiated the transaction? You or the donor?” His answer was emphatic and considerably more detailed than I expected. Buzenberg told me, “Our development officer (chief fundraiser) talks to donors, visits donors, has donors visit us, and she familiarizes them with our investigations. I go with her and I talk to the donors, too. If they find things we target that they like, the money side makes all the grant arrangements and the news side does what it would do, grant or no grant. Some foundations have offered us money that we refused because we don’t work on what they wanted. We are not investigators for hire.” I asked, “What don’t you work on? That would reveal your agenda.” Buzenberg said, “Look at the topics we work on. If it’s not there, we don’t work on it.” Do the folks at CPI have an

agenda? Buzenberg insists they don’t. I think they do, but at least it’s theirs and not some ideological philanthropist’s. But they are indeed taking money. Of CPI’s total $63 million revenue between 1998 and 2011, $42.2 million, or more than two-thirds, came from foundation grants. Examiner Columnist Ron Arnold is executive vice president of the Center for the Defense of Free Enterprise.

Firefighter Station 72 with their Fire Engine, California Cattle Woman, Mountain Lion Foundation, Agriculture & Animal Class information, Horticulture Displays, Cooked to Order Hamburgers Veggie Burgers and Hotdogs, Community Information Displays, Presentation by City Councilman Dennis Zine and much more! Farmwalk is open to the entire community and all ages are welcome to attend. A $5 donation is requested and children under 12 are admitted free. The Pierce College Farmwalk takes place on west side of campus at 6201 Winnetka Ave., Woodland Hills, CA 91371 Enter off Victory Blvd. at Mason Avenue and enjoy free parking. The 21st Annual Pierce College Farmwalk is sponsored by the Pierce College Agriculture Department & the Foundation for Pierce College& Losing the West.

Livestock Market Digest

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May 15, 2013

How beef can compete Higher prices bring higher expectations BY MIRANDA REIMAN, WWW.PROVISIONERONLINE.COM

leven to one — those were the odds the beef industry was up against for two decades. “We got $10 in new spending over that 20 years, meanwhile our pork and poultry competitors got $110,” said Nevil Speer, an animal scientist at Western Kentucky University. “You can’t grow an industry without new revenue coming in, and we basically worked in a stagnant industry for 20 years.” Speer presented as part of the Harlan Ritchie Beef Symposium during Midwest American Society of Animal Science meetings in Des Moines, Iowa in March. Beef struggled with health perception issues, convenience woes and the challenge of being the most expensive protein in the meat case, he said. Then, the independent sector orientation began to adjust for mutual good. “We began to understand that we need to work together in this industry,” Speer said. That lent itself to more branded programs and supplychain alliances. “Today we’re averaging somewhere around 12 percent to 15 percent branded sales on a weekly basis,” he said. “This push will probably continue in the years ahead.” As a result, grid and other negotiated sales make up 75 percent of all fed-cattle marketings today. Part of that also comes from increased competition for feeder cattle, and the need to recoup premiums paid on cattle coming into the feedyards. “They’ve begun to implement more and more supply management over the last 10 years, and those are strategic business decision,” Speer said. “If we can find cattle that meet some enduser specification and then

match our inputs and do that securely, we begin to kind of distance ourselves from the rivalry of fighting it out in a commodity market.” That’s not only happening on the cattle side of the business, but once it’s processed into beef, too. An estimated two-thirds of retail marketings are “out front sales,” Speer said. “They’re not spot sales.” “What’s happening is that we are continuing to have more need for efficiency of movement, precision, to meet consumer needs,” he said. “We need the right cattle, the right products, at the right time and the right place, and that’s ultimately because we want to offer highquality, highly competitive products with consistent, predictable turnover.” That’s especially important as beef looks to compete with much cheaper alternatives. Beef is running at 240 percent the price of chicken and 140 percent that of pork. “We’re on the upper edge of where we’ve ever been,” Speer said. “At what point do consumers begin to push back? I don’t know; they’ve shown amazing resilience and continue to do so, but this is a concern.” “Certainly, higher price equals higher expectations,” he said. The apparent solution is more teamwork. “If we can supply high-quality product on a consistent basis, then we create demand,” Speer said. “Then the demand feeds back into the supply and it’s really a network-type of perspective where we create an entire ecosystem around a business, and ultimately we get new value creation.” To those who say at some point the industry will have too much Prime or Choice beef, Speer counters, “If we can overdeliver that in an efficient way,

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and be more price-competitive with a quality product, I say let’s go. That means more opportunities in the beef industry.” The National Beef Quality

Audits, along with numerous other studies, show that meeting consumer demand sets the industry up for success. “We have pretty good

evidence that as we increase cooperation and responsive to consumers, we do a much better job in this industry,” he said.

Feeding Group Looks To Cattle Marketing Alternatives BY BURT RUTHERFORD, BEEF

ack in the late ’90s, as cattle feeders in Texas and Oklahoma looked at trends and dynamics in the fed cattle market, it was increasingly evident that formulas and forward contracts, and later grids, would forever change the way cattle would be marketed. So, as the world left the 20th century behind and stepped bravely into the 21st, a group of independent cattle feeders joined together to form Consolidated Beef Producers (CBP). Designed as a marketing organization, the idea was to consolidate groups of fed cattle into volume lots, giving independent cattle feeders the negotiating leverage with packers to maximize price on the cash market. Since it was formed in 2000, CBP has grown to include nearly 200 cattle feeders in 15 states, with a total combined capacity of more than 4 million head. In the ensuing 13 years, not only have those market dynamics continued, but other forces have come to the fore to affect the fed cattle market – ethanol, higher volatility, a shrinking cowherd and production technologies like beta agonists that shorten the marketing window. To adapt to an ever-changing marketing environment, CBP leaders and staff recently developed a six-point strategic initiative, which they rolled out to members during their recent annual meeting. Those six points are: 1. A customer needs assessment and communications plan. No business can be successful if it talks more than it listens, says Bruce Cobb, CBP general manager. “You have a lot of challenges and our goal is to help our group understand those challenges, then put together services and programs that address those needs and address those challenges to help you better compete in the marketplace,” he says. A big part of that is open and aggressive communication between the CBP office in Canyon, TX, and its members, says Shelby Horn, with Great Plains Cattle Feeders in Hereford and incoming CBP chairman. While CBP does a good job already in communicating market information to its members, more can be done.

“We feel that trades happen within our membership that aren’t widely known,” Horn says. “We may make a basis trade at Great Plains, but everybody else may not know about that trade. We feel we need to do a better job communicating those things among our membership.” 2. Develop new, innovative cattle marketing options. “Competition in the spot market is becoming less and less,” Cobb says. “So we have to find ways to go back to the initial concept of CBP creating competition in the marketplace and find new ways to do it.” However, CBP doesn’t plan on turning any cattle over to a packer that are unpriced at time of sale. “If we’re determined to sell cash at all costs on the spot market, I think we’re in a formula to not succeed,” Horn says. “So our strategy is to try to create competition from a packer at an earlier day (out-front sales) but make sure the cattle are priced and negotiated.” 3. Develop a comprehensive risk management system. “One of the things CBP has identified is a comprehensive risk management system to go along with some of the other systems we have,” Horn says. “That system will be designed to help members tract hedging and evaluate risk.” However, CBP doesn’t intend to get into the futures brokerage business, he says. The system will simply allow members to keep track of their risk management positions and help them quantify their market risk. “It’s pretty difficult to separate cash marketing and risk management. Whether any of us like it or not, the futures market basically prices our cattle,” Horn says. And, adds Cobb, with the velocity and volatility that characterizes futures markets, being able to better understand risk is essential. 4. Develop a comprehensive plan for CBP story beef. “Probably one of the least-capitalized advantages we have as independent cattle producers is telling our story,” Horn says. “Research continues to show that consumers want to know who is producing their food. And as independent cattle producers, we have a great advantage in that effort.” Cobb agrees. “Consumers have a natural trust with producers. It’s the greatest unutilized and unleveraged asset in our

industry today and has been for years. And I believe there’s an opportunity for us to begin tapping into that asset and leveraging it.” Several years ago, CBP explored the possibility of developing its own “story beef” – that is, beef products with a background story to them. “We had an obstacle that we just couldn’t get through, so we set it on the shelf and waited for another day. I think that day is here,” Cobb says. 5. Explore opportunities to expand into eastern Nebraska and Iowa. While CBP has members in 15 states, it is strongest in the High Plains. “The area we’re lacking in is eastern Nebraska and Iowa,” Horn says. Expanding CBP’s membership base into that region would benefit everyone, he says, because of the market intelligence it would create. “One of the key benefits I see with CBP is the coverage we have in the cattle market in all areas. We know what’s going on in western Nebraska; we know what’s going on in Kansas; we know what’s going on in Texas. And to be able to have one entity to assimilate that market intelligence for us as producers, having a presence in eastern Nebraska and Iowa I think would enhance that.” 6. Aggressively market feedercattlelistings.com. As cow numbers shrink, sourcing feeder cattle is becoming a greater challenge for cattle feeders. To help its members, CBP launched feedercattlelistings.com earlier this year. It’s a lot like Carmax.com, Cobb says. A member can put in the various criteria it wants in feeder cattle, then the site searches its database and delivers listings that match. “So we’re in the process of setting up some relationships to get it populated with cattle,” Cobb says. CBP staff and leadership will now go to its membership to hear their opinions and ideas on the strategic plan. Horn is hopeful the independent cattle feeders who constitute CBP’s base will see its value. “I think CBP needs to make a big step,” he says. “I think we’re at a point in our marketing where it’s important for us to look at all our opportunities. I think it’s going to require us to do that if we’re going to remain viable as independent cattle producers.”

May 15, 2013

“America’s Favorite Livestock Newspaper”

Web Application to Support Local Food Business Startups ocal food system planners and business developers can now easily estimate unmet market demand for local food in their region. Business advisory firm New Venture Advisors LLC has created the Local Food MarketSizer™, a Web-based application which estimates the gap between local food supply and demand in markets across the nation. The tool was developed to help communities and entrepreneurs in the growing local food arena determine the size of the business opportunities in their region. “Despite the growing size and importance of locally-produced food in the United States, food industry analysts are not yet vigorously measuring local food sales,” says Kathy Nyquist, the company’s founder and principal. “It is difficult to convince an investor that you have a sound business case without a reliable estimate of market size.” The Local Food MarketSizer™ was used successfully by Blue Ridge Produce LLC, a pioneering local food hub in Elkwood, Virgina, New Venture Advisors helped launch in 2011. “Uncovering a multi-billion-dollar business opportunity in Washington, DC and the surrounding region was incredibly motivating for us,” says Jim Epstein, the company’s co-founder and chairman. “Not only did it give us confi-

dence to build this business, it gave our investors confidence as well.” The Local Food MarketSizer™ uses data from public and private sources to calculate unmet demand for local food at the state, metropolitan area and county level. With a few clicks, the tool estimates market potential for local meat, dairy, poultry & eggs and fruits & vegetables. The methodology performs dozens of calculations accessing more than 70 data tables from the U.S. Department of Agriculture, U.S. Bureau of Labor Statistics, U.S. Census and private surveys. The application displays the estimated value of local food demand and supply in wholesale dollars, and the gap between them as a measure of the unmet market for local food. New Venture Advisors developed the methodology to provide robust analytics for feasibility studies and business plans for local food startups, particularly food hubs which aggregate, process and distribute farm products for local customers. After conducting the painstaking analysis for a number of clients, the company created the Local Food MarketSizer™ to automate the process and make it widely available. The Local Food MarketSizer™ by New Venture Advisors can be accessed free of charge on the company’s website http://newventureadvisors.net.

Livestock Risk Protection for Calves SOUTH DAKOTA AG CONNECTION 05/02/2013

attle producers can use Livestock Risk Protection (LRP) to guard against lower calf prices this fall, says Matthew Diersen, SDSU Extension Risk/Business Management specialist. “LRP for calves works well for cattle producers because a specific number of head can be insured,” Diersen said. “In addition, there is a fixed basis adjustment for calves that offers better protection than when using futures or options contracts.” Given the risk in the market and it’s relatively low cost to manage has Diersen encouraging livestock producers to consider the coverage. “The cost to transfer the volatility is less than at any time in the past five years,” he said. “The trend is for volatility to increase in the coming months before declining in late summer. Ideally, producers would time the purchase of LRP to

when cattle prices are seasonally high and before volatility increases.” In mid-April LRP was available with end dates that stretched into January of 2014. Although the floor prices available right now are not as good as in recent years, Diersen explains that LRP leaves the upside open. “Thus, a producer can still benefit if calf prices are higher this fall than currently expected,” he said. “The risk covered by LRP has been significant in recent years. Even with deductibles, LRP had a loss ratio above 1.0 in 2008, 2009 and 2012. Thus, producers received back more in indemnity payments than the cost of the premiums.” As of mid-April, South Dakota producers had insured 31,821 head of feeder cattle through the fiscal year that ends in June. That compares to the nationwide total of 106,370-head insured. “South Dakota has more insured than any other state - a position held on feeder cattle annually since fiscal year 2008,” Diersen said.

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Lawmakers Reintroduce Bill to Boost Economic Growth, Create Jobs, and Provide Healthy Food enator Sherrod Brown of Ohio and Representative Chellie Pingree of Maine introduced the Local Farms, Food, and Jobs Act of 2013 in the Senate and the House of Representatives in early April. The two identical bills expand business and marketing opportunities for farmers and ranchers while increasing consumer access to healthy foods. The legislation addresses production, aggregation, processing, marketing, and distribution barriers that limit growth in local and regional food markets. The bill also makes targeted investments in programs that create jobs and spur economic growth through food and farms. “This bill will improve the economics of farming in Maine and across the country,” commented Maine organic farmer Sarah Smith, who joined Representative Pingree, Senator Brown, and Chef Tom Colicchio on Capitol Hill for today’s reintroduction of the bill. “Passage of the Local Farms, Food, and Jobs Act will mean more jobs and income for farming communities nationwide and greater availability of high quality locally and regionally produced food for consumers.” The Local Farms, Food, and Jobs Act includes provisions in seven different titles of the Farm Bill, including proposals that address crop insurance, credit, nutrition, rural development, research and extension, horticulture, and livestock. Many of the bill’s provisions were included in either or both the Senate-passed and House Agriculture Committee-passed farm bills in 2012. The bill also invests in several sustainable agriculture programs that were left stranded and without funding by the 2008 Farm Bill extension passed earlier this year, including the Farmers Market Promotion Program, National Organic Certification Cost Share Program, and Val-

ue-Added Producer Grants. Some of the specific proposals within the bill include: Whole Farm Revenue Insurance for Diversified Operations – The bill would direct USDA’s Risk Management Agency to develop a Whole Farm Diversified Risk Management insurance product that is available in all states and all counties. The product is relevant to all diversified operations, including, but not limited to, specialty crops and mixed grain-livestock or dairy operations, contract producers, and organic and conventional farms. The new insurance product would be offered at the same buy-up coverage levels as other policies, include a strong crop diversification bonus, and account for all the normal costs involved in moving the crop off the farm and into marketing channels. School Meals – The bill will improve institutional access to local and regional foods through a series of provisions regarding school meal procurement. For example, the bill would create USDA pilot projects through which school systems could experiment with local food procurement and would allow small school districts to make their own food purchases on an ongoing basis if doing so creates administrative savings. Rural Development – The bill boosts rural investment by restoring funding for the Value-Added Producer Grant program to $20 million a year and improving its delivery, with an emphasis on regional market and supply chains. The bill also strengthens the Business & Industry Loan funding set-aside for local and regionally produced agriculture products and food enterprises, and provides authority for local and regional food system funding under Rural Business Opportunity Grants, Rural Business Enterprise Grants, and Community Facility Grants and Loans. Farmers Markets and Local Food –

The legislation will establish $20 million a year in mandatory farm bill direct funding for the Farmers Market and Local Food Promotion Program. The expanded program will support direct farmer-to-consumer marketing but also will provide grants to scale up local and regional food enterprises, including processing, distribution, aggregation, storage, and marketing. Fifty percent of funding will go to direct marketing, with the remaining 50 percent to local and regional food system development beyond direct marketing, including institutional and retail value chains and markets. The bill also increases funding for the Seniors Farmers Market Nutrition Program and provides funding for incentives through the SNAP program to encourage low-income consumers to purchase healthy local food directly from local farmers. Specialty Crop Block Grant Program – The bill would expand the purpose of the Specialty Crop Block Grant program to include the consumption and availability of local/regional specialty crops, the profitability and ecological sustainability of specialty crops, and the affordability of specialty crops for low-income consumers. National Organic Certification Cost Share Program – The legislation includes a provision to streamline and renew funding for national organic certification cost share to assist organic producers with the annual regulatory costs of producing certified organic products. Assistance to Small and Very Small Meat and Poultry Processors – The bill improves market access for local and regional livestock and poultry producers by enhancing USDA’s technical assistance and guidance to such facilities. It also helps farmers, ranchers, and small local processors by providing greater public information from USDA on approved meat labels.

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May 15, 2013

The North American Model of Wildlife Management, Public Trust Doctrine & Property Rights BY SAMUEL T. SMALLIDGE, PHD., NEW MEXICO STATE UNIVERSITY

he North American model of wildlife management and conservation is unique in the world and to many represents an important parallel to the challenges and individual freedoms we enjoy as citizens of this great nation. Our nation was forged from the fires of discontent in Europe, and as with European institutions, the model of private ownership of wildlife was rejected by our young nation. Two competing uses of wildlife occurring during the mid-19th century set the stage for development of this unique model. Market hunting focused on exploitation of wildlife for profit, was unregulated and resulted in a profound loss in abundance of wildlife. Sport hunting was evolving from newfound wealth and leisure of an urban class that focused on fair chase, self-restraint in pursuit, woodcraft skills and promotion of personal health. Habitat destruction near areas of an expanding human population further influenced people’s perceptions. The Wildlife Society’s 2007 position statement on the subject states, “Conflicts between sport hunters and market

hunters lead to advocacy by the former for elimination of markets for game, allocation of wildlife by law rather than privilege, and restraint on the killing of wildlife for anything other than legitimate purposes, conditions that eventually prevailed.” Abundant wildlife, open landscapes, and freedom to roam were common through most of the formative years of our young nation. Most people lived in rural areas and relied on wildlife for survival. These conditions and an 1842 U.S. Supreme Court case (Martin v. Waddell) set the foundation in common law that wildlife resources were owned by no one individual and were to be held in trust by the state. The federal government has established trust responsibilities for international migratory species, marine mammals and endangered wildlife. The public trust doctrine has roots in Roman law and had been applied primarily to navigable waters and seashores to protect navigation, commercial enterprise and fishing rights. The public trust doctrine is the principle that certain natural resources belong to the public for their use and that the government is to manage those resources for the benefit of the public. Through the traditions estab-

lished by the settlers, founding fathers, and common law, the public owns wildlife, which is held in trust by each state for the benefit of its citizens. Wildlife as a public resource and access to wildlife has raised concerns regarding property rights. By law and tradition, sportsmen recognize property rights and gain permission from the landowner to hunt their property. In his 1962 book Our Wildlife Legacy (p. 311), Durward Allen states, “The conception of wildlife as a public asset stems from days of few people and little competition for game and fish. No one has advocated strongly that the legal ownership of wild things should be changed — we have enough inherited conviction to keep that as it is. But such proprietorship never has carried with it the privilege of entry other than by consent of the landowner. Many troubles have grown out of the tendency of hunters to contest the basic and legal right of one who owns a piece of land to determine who will use that land and what will be taken from it.” It remains today that ethical sportsmen seek permission from landowners to hunt their property. It is an unethical hunter that breaks the law by trespassing on private property to hunt and by such actions only creates greater problems for all sportsmen. By tradition and law it is established that the public trust doctrine, as related to wildlife, does not overtake individual property rights. However, the public trust doctrine is also established in common and legislative law involving resources such as water and air. A 1970 article by Joseph Sax in the Michigan Law Review outlined how the public trust doctrine may be used to influence environmental advocacy by suing the government on behalf of the public interest. This concept was already being put into practice as Professor Sax wrote his manuscript. Several articles have been written further exploring the idea of legal environmental advocacy. The end result is an approach to test the limits of the public trust doctrine with regard to environmental advocacy on public and private lands using the judicial system to transform common law. It is now common for individuals or non-governmental organizations to sue state or federal governments to expand the scope and influence of public trust common law by setting legal precedence in management

of natural resources on public and private land. A U.S. Supreme Court decision in 1992 (Lucas v. South Carolina Coastal Council) reversed a lower court and found a clear regulatory taking against Mr. Lucas’ beachfront property. Professor Martin Belsky (1994, Albany Law Journal of Science and Technology) states that the Lucas case, and others, represents an evolution in regulatory takings principles and suggests that the, “public trust doctrine is one of those “common law property doctrines” that can justify regulations without the paying of compensation.” Based on Belsky’s interpretation, the majority opinion written by Justice Scalia establishes that if the government can identify preexisting principles that prohibited the intended use then no need to pay compensation exists. This is not an established legal principle, however, Professor Belsky states that the public trust doctrine could be used wherever and whenever stewardship of natural resources is at issue; but would require aggressive lawyering to assure success. The potential consequences of such lawsuits, over time, may greatly influence how natural resources on public and even private lands are managed. How might an expanded interpretation and application of the public trust doctrine impact wildlife? We have already seen an impact with regards to endangered species management. Non-governmental advocacy groups regularly sue the federal government, often on procedural grounds, with the claimed purpose of protecting the public trust with regards to habitat or endangered wildlife. If public trust doctrine were interpreted to transform property rights in a manner to limit a private citizens ability to manage their land, impacts to wildlife might be substantial. One possibility would be for landowners to actively manage lands to limit ecological attributes (wildlife and habitat). A worse case scenario would be an interpretation allowing government policy to dictate natural resources management activities on private lands. At present, much of this discussion has been speculative and has yet to be defined in the courts. However, there are numerous non-governmental advocacy organizations testing legal mechanisms such as the public trust doctrine to influence management of public and private lands. Because of the

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importance of private property to wildlife in North America, the unknown consequences to wildlife of public trust doctrine expansion is unsettling. Private property provides the majority of habitat for wildlife in North America, making up about 75 percent of landscape in the U.S. Privately owned lands generate or support greater than 75 percent of wildlife at some point during their biological year, often during critical breeding or birthing seasons. While state law dictates that wildlife are held in trust by the state for its citizens, private lands often provide the best habitat and security necessary for a species population to thrive. Farms, ranches and suburban landscaping all contribute to the mosaic of habitats beneficial for wildlife. Agricultural lands often provide the necessary shelter, water, food and space that comprise important wildlife habitat. Ranches support wildlife by planning for wildlife and their habitat in normal operations, actively managing for wildlife, and managing wildlife damage. While the public is regularly informed of wildlife benefits found on federally managed lands, far fewer know that private lands contribute substantially more to wildlife in America. Even in states largely under federal land management, wildlife often benefit from private land management disproportionately to its occurrence. In summary, the public trust doctrine is an important principle that defined the public’s ownership of wildlife in America. Because of this common ownership, it celebrates America’s devotion to individual rights and the law over a tradition of ancestral inheritance as was common in Europe. By law and tradition, sportsmen ask for permission from landowners to hunt their property. Private property is important to the well being of wildlife habitats and populations nationwide. We are entering the fifth decade of efforts by special interests to expand the scope of the public trust doctrine in influencing natural resources management on public and private lands. While consequences of these expansion efforts to wildlife are poorly understood, it is unsettling to consider the potential impacts to wildlife. Moreover, it is unsettling to consider the corresponding transformation of property rights in America.