Forgive Father Time for looking so
haggard and bewildered as he limped from the party welcoming the
new year. But, he had a time of it: global economic recession,
federal government running roughshod over capitalism, populism
run amok and all of the rest.
Pardon, too, the infant 2010 for looking so reluctant; there’s
so much to be done and undone. These are just a few likely key
issues that will shape the fortunes of the cattle business this
year.
Economy
Depending on which prognosticator you listen to, the nation’s
economy has bottomed out and begun the slow, long road to
recovery. Or the worst is just fixing to happen.
Ben Bernanke, Federal Reserve Chairman explained in a November
speech to the Economics Club of New York, though financial
conditions have improved considerably in recent months,
significant challenges remain.
“On the one hand, those who see
further weakness or even a relapse into recession next year
point out that some of the sources of the recent
pickup—including a reduced pace of inventory liquidation and
limited-time policies such as the ‘cash for clunkers’
program—are likely to provide only temporary support to the
economy,” Bernanke said. “On the other hand, those who are more
optimistic point to indications of more fundamental
improvements, including strengthening consumer spending outside
of autos, a nascent recovery in home construction, continued
stabilization in financial conditions, and stronger growth
abroad.
“My own view is that the recent pickup reflects more than purely
temporary factors and that continued growth next year is likely.
However, some important headwinds—in particular, constrained
bank lending and a weak job market—likely will prevent the
expansion from being as robust as we would hope.”
Consumer Beef Demand
In the past two years the beef industry has lost all of the
domestic demand it had increased for the previous eight years or
so. Based on the domestic beef demand index, 2009 ended about
where it was in 1998 when it was finally beginning to reverse
the trend of the previous two decades.
At this fall’s annual meeting of
the Texas Cattle Feeders Association, Randy Blach, CattleFax
Executive Vice President said, “We’ve averaged $83 to $84 on fed
cattle this year. If we had the same demand we had a year ago,
our market would be averaging $94 to $95 per hundredweight.”
Globally, U.S. beef exports still
lag behind levels before the 2003 discovery of bovine spongiform
encephalopathy.
“We still aren’t back to the same
levels of beef exports that we were pre-BSE. We were exporting
2.5 billion lbs. in 2003. We’re going to be lucky to be at 1.8
to 1.9 billion lbs. this year,” Blach said. If U.S. beef was
operating under the same trade protocols with Japan as it is
with South Korea, he adds, “it would be worth another $60 to $70
per head across our fed cattle market.”
Deciding the Ethanol Blend
As expected, the Environmental Protection Agency (EPA)
avoided its December 1 deadline for deciding whether or not to
allow increased ethanol content in fuel by delaying the decision
until mid-2010. Last March, the Growth Energy organization
requested a waiver to allow up to 15% ethanol content from the
current 10%. EPA says it will make a final determination by
mid-2010. Increasing the limit threatens to add to the price
misery and volatility already caused by government-mandated
ethanol-from-grain production. Especially this year, though the
corn crop is estimated to be the second largest on record, there
are all kinds of questions about the quality due to the late
harvest.
Food Safety
This is how ludicrous it all has become:
“Food producers must be obligated to produce food that is free
of pathogens. It is the responsibility of the food producer, not
the consumer, to make sure our food is safe to eat,” said
Senator Dianne Feinstein (D-CA) as she introduced a bill (S.
2819) in December that would prohibit the sale of any food not
certified to be pathogen-free.
Among other things, the
legislation would:
Amend the Poultry Products Inspection Act, the Meat Inspection
Act and the Food, Drug, and Cosmetic Act to prohibit the sale of
any processed poultry, meat and FDA-regulated food that has not
either undergone a pathogen reduction treatment, or been
certified to contain no verifiable traces of pathogens.
Require that labels on ground
beef, or any other ground meat product, specifically name every
cut of meat that is contained in the product…
According to Feinstein’s press
statement, “By enacting these simple changes, the Processed Food
Safety Act will drastically reduce the presence of pathogens in
our food and improve the ability of the consumer to make
informed choices about the products they wish to eat.”
While we’re at it, since it’s so
easy, let’s just legislate away the common cold, flu and any
other pathogen we don’t want.
Climate legislation
You’d think that in a profession presumably guided by fact
and reason that it would have occurred to the global warming
crowd that mankind can’t do much about Mom Nature one way or the
other. In light of the hacked e-mails revealing the deliberate
efforts of some to skew the evidence in favor of their global
warming position (Climategate), you’d think the media and
society would have at least some second thoughts. But there they
were in Denmark at the United Nation’s Climate Change
Conference, U.S. government officials included, working to
legislate that which can’t be legislated.
“Climate change poses significant
threats and challenges for farmers, ranchers, and those who make
a living off the land, which will have a serious impact on our
ability to feed the people of the United States and the world,”
said Agriculture Secretary Tom Vilsack.
“President Obama has made climate
change one of his top domestic priorities and under his
Administration, the United States has done more to reduce
greenhouse gas emissions than at any other time in history, both
by supporting domestic policies that advance clean energy,
climate security, and economic recovery; and by vigorously
engaging in international climate negotiations.”
That came on the heels of the
Environmental protection agency declaring Greenhouse Gases (GHGs)
an endangerment to public health and the environment.
“It’s premature to issue this
kind of finding, especially given the recent controversy
surrounding the scientific validity of alleged human
contributions to climate change,” said Tamara Thies, chief
environmental counsel for the National Cattlemen’s Beef
Association (NCBA). “Regulation of greenhouse gases should be
based on science, and it should be thoughtfully considered and
voted on by Congress through a democratic process, not dictated
by the EPA.”
According to NCBA, ultimate
regulation of GHGs under the Clean Air Act could impose massive
regulatory compliance costs on producers, which could force many
operations out of business.
Elections
No matter your political leanings, you’ve got to look at the
outcome of legislative carte blanche this past year and wonder
how much more the nation can afford. Next November’s elections
can interject balance, or at least some barriers to the runaway
usurpation of private rights. Or, the elections can further the
current administration’s flavor-of-the-week policy making.
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