Livestock “The greatest homage we can pay to truth is to use it.” – JAMES RUSSELL LOWELL SEPTEMBER 15, 2010 •
MARKET
Digest
www. aaalivestock . com
Volume 52 • No. 10
Pipeline Payola by Lee Pitts hen I first heard of the following events I was reminded of the story about the old and ugly philosopher who asked a beautiful socialite at a cocktail party if she would sleep with him for five million dollars. She said she would. “Would she sleep with him for one million dollars?” he then asked. Again the socialite said she would, albeit with her eyes closed. Then the old man asked if she would sleep with him for five dollars. The socialite was outraged and asked, “What do you think I am, a whore?” To which the philosopher replied, “We’ve already established that fact. Now I’m just trying to establish your price.” Some readers may find the socialite and the philosopher story a little disgusting but, I assure you, it is not nearly as disgusting as what you are about to read.
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Doing A Deal With The Devil
NEWSPAPER PRIORITY HANDLING
The El Paso Corporation owns North America’s largest interstate natural gas pipeline system. Their 42,000 miles of pipe transport more than a quarter of the natural gas consumed in the country each day. They are also amongst the top ten independent domestic producers of natural gas, with over a trillion cubic feet of proven reserves.
“Life is simpler when you plow around the stump.” They are big business personified. El Paso had been trying for some time to get approval from the Federal Energy Regulatory Commission (FERC) to build their Ruby Pipeline, a 675-mile conveyance of 42-inch pipe that one day will transport natural gas from Wyoming to Oregon. As is customary these days, two environmental groups, Western Watersheds Project (WWP) and Oregon Natural Desert Association (ONDA), filed lawsuits challenging the federal government’s approval of the right
of ways they gave El Paso on federal land. Rather than duke it out in court, El Paso negotiated a secret deal in which they’d give Western Watersheds $15 million and the Oregon Natural Desert Association $7 million if they would drop their lawsuits. Mobsters call such payments hush money, payola, or extortion. Big business these days call it “the cost of doing business.” Here’s the bad news: the primary goal of both Western Watersheds and the Oregon Natural Desert Association is
the elimination of the public lands rancher in this country. Western Watersheds in the past has appealed the renewal of thousands of grazing permits across the West, has challenged the current grazing fee in federal court and has petitioned the Obama administration to eliminate the grazing program because of their “concern” over the deficit. And the El Paso Corporation jumped feet first right into bed with them. We don’t even know the extent of the damage because El Paso and the green groups won’t let anyone see the agreement. Jim Cleary, President of the El Paso Western Pipeline Group said, he would work with the two green groups and “seek with reasonable diligence” a release from the confidentiality clause in the agreement that prohibits either party from disclosing details about the dirty deal. He also said, “We are committed to working with all parties — ranchers, environmental continued on page two
Branded beef company urges GIPSA caution by STEVE SUTHER, Director, Industry Information Certified Angus Beef LLC
Editor’s Note: Of all the press that has come out on this issue, pro and con, this is perhaps the best overview of the situation. Livestock producers have until November 22, 2010 to review the regulations and submit comments. The regulations can be found at http://www.gipsa.usda.gov/GIPSA/ takeholders in the U.S. livestock industry gathered in late August in Fort Collins, Colorado, to debate market access at a U.S. Department of Agriculture (USDA)Justice Department workshop on competition. Afterward, as many questions as answers remained. Was anything settled? Do all problems boil down to people leaving rural America because of corporate concentration? Does the Obama Administration have a mandate to “fix that problem” through government intervention? A crowd of more than 1,500 seemed divided
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Riding Herd
about whether new rules from the USDA Grain Inspection, Packers & Stockyards Administration (GIPSA) should be put in place — rules which aim to “enhance fairness” and may affect value-based marketing of cattle. Certified Angus Beef LLC (CAB) President John Stika testified because the non-profit subsidiary of the American Angus Association® has in interest in seeing that markets reward producers for quality as defined by consumers. Contracts paid on carcass merit are called “alternative marketing agreements” (AMAs) because they are outside of the cash market for commodity cattle. Such contracts were criticized by some as unfair, but they simply pay premiums and discounts for actual beef value rather than estimates from live appearances. The market has been moving in that direction since the Certified Angus Beef ® (CAB®) brand was born in 1978, and an estimated half of all finished cattle now sell on AMAs. In supcontinued on page four
by LEE PITTS
Caught In A Crack (Best Of) ome misinformed people think that anything that wears hair, horns or hooves is stupid. Hence the sayings, “he’s dumb as an ox,” or “silly as a filly.” Cows are thought of as being especially stupid. “Ain’t nothing dumber than a cow, except the man that owns them,” is an often heard expression. But I think cows are a lot smarter than people give them credit for, as the story of Stucky will illustrate. Notice I said that cows weren’t stupid. That doesn’t mean they aren’t creatures of habit. Often they use the same place on a ranch for the same purpose year after year, such as a birthing spot or as a sort of nursery area for calves. Old timers called these places where the cows congregate at calving “cow stomps.” Our cow stomp is on the side of a hill that provides a sheltered and protected hiding place for newborn babies. I had never thought of our nursery as a particularly dangerous place but that was before the “drouth cracks” started opening. For seven long years the ground unfolded and left gaping holes as if the earth was trying to catch the rain that never fell. It was the drouth without end. A very depressing time. These drouth cracks were a couple feet deep and several yards long and they subdivided the nursery where the cows calved. I don’t know what possessed me to check out the nursery that afternoon. After all, I had already ridden through the cows once that day on my wonder horse Gentleman. Perhaps it was the buzzards circling overhead. I figured either a cow had given birth, or died trying. The nursery was on the side of the hill tucked away where I couldn’t see it from the road, so I got out of the truck and hiked down the steep hill to the cow stomp. Upon seeing me the rest of the cows gathered up their
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