The word has come out that they served imported Wagyu beef from Japan at a big, fancy White House dinner last week. It reportedly cost $100 per slice.
Certainly it's an encouraging sign that the environmental activists, and the animal rights activists, who were big election supporters of the new administration, have not dissuaded them from serving beef, openly and publicly. There was probably good reason to fear that and its comforting to hear that it's not the case.
As radical as many of these supporters are, it is probably a triumph that they served meat at all. Chicken, fish, pork, veal--anything that's not veggie burgers--is a victory, compared to what we might have expected.
One little quibble might be that the White House is a place where we showcase the very finest products of American agriculture, showing the world that we produce the best there is. Particularly in these difficult economic times, the money is much more stimulative spent with American farmers and ranchers, than exporting dollars overseas.
Prime beef from Allen Brothers, located in the President's native Chicago no less, is as good as it gets--most likely even better than imported Wagyu. Midwestern corn fed beef such as Allen Brother purveys, is top flight.
Perhaps even better, would be western beef from Nebraska, Colorado, Montana or Texas, for instance.
The President needs to use his bully pulpit (bad pun) for the best possible outcomes in even the most subtle of circumstances. The White House menu is certainly one of those places, in a quiet, understated way, to showcase the bounty of American agriculture.
A rookie president needs to pick up the finer points of getting things right. Hopefully he's learned from the Japanese beef episode, the correct way to do that.
Thursday, January 29, 2009
Contact ag lender early
The natural inclination in business, such as ranching for instance, is to keep expenses low by borrowing money at the last possible moment and not get the interest bill running too early.
That may not be the best strategy in spring, 2009. Credit markets are roiling, and as another story in today's paper points out, even the most credit-worthy borrowers of long standing at a financial institution--are having trouble keeping their credit lines together. The Bush TARP funds have largely been a bust, and bank liquidity is worse than ever.
The new administration might do what should have done in the first place, which was to buy bad loans from banks at a discount and group them for resale at even bigger discounts. That wasn't done, despite what was advertised, so some $350 billion has disappeared down a rathole--leaving bank credit availability as dicey as its been all year.
The old true cliche is that the worst time to borrow money is when you need it. You've got to arrange a line of credit when your bank accounts are flush and the bills aren't yet coming due. Even the slightest hint of desperation in a loan application or interview with a lending officer, and they'll immediately freeze and assume you're filing bankruptcy.
From long personal experience, that's how you've got to do it. But it isn't good enough any more.
Bankers have been cutting, and even completely pulling, lines of credit all the last year. No matter how well-cemented you may consider your relationship with your banker, that's all history now.
It would be well to visit your banker, and both of you lay all your cards on the table, sooner rather than later. An extra month or two of interest is nothing, compared to coming upon spring planting or finishing calving, with cattle to carry through to fall, and discover that you don't have any operating money. Finding out early at least gives you more options, and more importantly, the time, to pull a few rabbits out of a hat.
That may not be the best strategy in spring, 2009. Credit markets are roiling, and as another story in today's paper points out, even the most credit-worthy borrowers of long standing at a financial institution--are having trouble keeping their credit lines together. The Bush TARP funds have largely been a bust, and bank liquidity is worse than ever.
The new administration might do what should have done in the first place, which was to buy bad loans from banks at a discount and group them for resale at even bigger discounts. That wasn't done, despite what was advertised, so some $350 billion has disappeared down a rathole--leaving bank credit availability as dicey as its been all year.
The old true cliche is that the worst time to borrow money is when you need it. You've got to arrange a line of credit when your bank accounts are flush and the bills aren't yet coming due. Even the slightest hint of desperation in a loan application or interview with a lending officer, and they'll immediately freeze and assume you're filing bankruptcy.
From long personal experience, that's how you've got to do it. But it isn't good enough any more.
Bankers have been cutting, and even completely pulling, lines of credit all the last year. No matter how well-cemented you may consider your relationship with your banker, that's all history now.
It would be well to visit your banker, and both of you lay all your cards on the table, sooner rather than later. An extra month or two of interest is nothing, compared to coming upon spring planting or finishing calving, with cattle to carry through to fall, and discover that you don't have any operating money. Finding out early at least gives you more options, and more importantly, the time, to pull a few rabbits out of a hat.
Friday, January 23, 2009
Critical wheat pasture in question
One of the great money-making opportunities in the cattle business is late winter and early spring wheat pasture grazing in the Texas-Oklahoma-Kansas panhandle. It may well not be in 2009, due to drought, that unless its alleviated very shortly, will not only cut wheat grazing, but imperil the whole wheat crop.
With moisture, things can change overnight, and still may well. But as of today, those light calves bought in the southeast or the northern tier, will have to put on their highly profitable compensatory gain someplace else. It can be tricky to find a place to do this, if the wheat pasture outlook remains poor, and result in either low feedlot in-weights or delayed placements while calves fatten up someplace else.
This is somewhat distressing, because the fundamentals of the cattle business remain very favorable to the producer, if only all the other non-related economic factors would butt out. The latest USDA Cattle-on-Feed Report shows placements down again, which means beef supplies should stay manageable and prices profitable. We've been saying this all fall and into the present time, and the weak state of the U.S. economy continues to over ride the sound fundamentals of the cattle business. Producers are losing money and the domestic market for red meat shrinks, as financially-pressed consumers seek cheaper alternatives.
There's several weeks or months of winter left, if only they can be wet ones. In the high Rocky Mountains, the snowpack is above average, but the plains are behind. As you go south into Texas, Oklahoma and Kansas, it gets drier and drier, so far.
It's time for that old bromide, Pray for Rain.
With moisture, things can change overnight, and still may well. But as of today, those light calves bought in the southeast or the northern tier, will have to put on their highly profitable compensatory gain someplace else. It can be tricky to find a place to do this, if the wheat pasture outlook remains poor, and result in either low feedlot in-weights or delayed placements while calves fatten up someplace else.
This is somewhat distressing, because the fundamentals of the cattle business remain very favorable to the producer, if only all the other non-related economic factors would butt out. The latest USDA Cattle-on-Feed Report shows placements down again, which means beef supplies should stay manageable and prices profitable. We've been saying this all fall and into the present time, and the weak state of the U.S. economy continues to over ride the sound fundamentals of the cattle business. Producers are losing money and the domestic market for red meat shrinks, as financially-pressed consumers seek cheaper alternatives.
There's several weeks or months of winter left, if only they can be wet ones. In the high Rocky Mountains, the snowpack is above average, but the plains are behind. As you go south into Texas, Oklahoma and Kansas, it gets drier and drier, so far.
It's time for that old bromide, Pray for Rain.
Cattle industry lobbyists scrambling
The turnover in Washington, both in the White House and Congress, has lobbyists for all organizations, and especially agriculture and livestock groups, scrambling for a place to hang on.
After eight years of the Bush Administration, and GOP domination of Congressional ag committees until the last two years, it's a whole new ballgame. Lobbyists have to find new friends in new places, and map new strategies for representing cattle industry interests in the nation's capitol--and at the margin, contain the damage, because in many cases the new regime has very different policies and proclivities than either the industry or the outgoing functionaries.
It's doubly daunting because agriculture is so far down the totem pole that it is not a front line priority for the first 100 days, when the new administration seeks quick action to show its engaged and competent. In this difficult economy, so-called stimulus money and bailout funds are front and center--and it will be a miracle if agriculture gets anything close to a decent share.
It's said "the squeaky wheel gets the grease" and in this realm, agriculture is not too accomplished. Pictures of starving children, soup lines at homeless shelters and tear-jerking stories of healthcare denied due to lack of insurance coverage generally do not lend themselves to helping agriculture. At the most, food stamps are in the USDA budget, so the politicians can assuage their guilt and claim they put major money into agriculture by boosting food stamp funding.
This does nothing for production agriculture, where credit has tightened up, the bad economy has wreaked havoc on commodity prices and markets, and input costs continue to skyrocket.
Interestingly, the newest U.S. Senator, Michael Bennet from Colorado--appointed to replace new Interior Secretary Ken Salazar--says he is hoping for membership on the Senate Agriculture Committee. As a latecomer with no seniority, this relatively minor committee, in the overall scheme of things, may well be all that's open to him. With no demonstrated expertise on the subject, one could question his desire for such a post. It probably falls into category of making lemonade out of a lemon of a situation.
Needing to run for re-election in two years, with no political background or familiarity to Colorado voters, Bennet is at least trying to go in a direction that might help his cause. He faces a steep climb to the Democratic nomination, much less against a Republican, in a potentially unfriendly midterm election.
But the whole mess shows the problems with new names and new faces cattle industry lobbyists are facing in Washington today. The people with real clout are not focused on America's farmers and ranchers.
After eight years of the Bush Administration, and GOP domination of Congressional ag committees until the last two years, it's a whole new ballgame. Lobbyists have to find new friends in new places, and map new strategies for representing cattle industry interests in the nation's capitol--and at the margin, contain the damage, because in many cases the new regime has very different policies and proclivities than either the industry or the outgoing functionaries.
It's doubly daunting because agriculture is so far down the totem pole that it is not a front line priority for the first 100 days, when the new administration seeks quick action to show its engaged and competent. In this difficult economy, so-called stimulus money and bailout funds are front and center--and it will be a miracle if agriculture gets anything close to a decent share.
It's said "the squeaky wheel gets the grease" and in this realm, agriculture is not too accomplished. Pictures of starving children, soup lines at homeless shelters and tear-jerking stories of healthcare denied due to lack of insurance coverage generally do not lend themselves to helping agriculture. At the most, food stamps are in the USDA budget, so the politicians can assuage their guilt and claim they put major money into agriculture by boosting food stamp funding.
This does nothing for production agriculture, where credit has tightened up, the bad economy has wreaked havoc on commodity prices and markets, and input costs continue to skyrocket.
Interestingly, the newest U.S. Senator, Michael Bennet from Colorado--appointed to replace new Interior Secretary Ken Salazar--says he is hoping for membership on the Senate Agriculture Committee. As a latecomer with no seniority, this relatively minor committee, in the overall scheme of things, may well be all that's open to him. With no demonstrated expertise on the subject, one could question his desire for such a post. It probably falls into category of making lemonade out of a lemon of a situation.
Needing to run for re-election in two years, with no political background or familiarity to Colorado voters, Bennet is at least trying to go in a direction that might help his cause. He faces a steep climb to the Democratic nomination, much less against a Republican, in a potentially unfriendly midterm election.
But the whole mess shows the problems with new names and new faces cattle industry lobbyists are facing in Washington today. The people with real clout are not focused on America's farmers and ranchers.
Subscribe to:
Posts (Atom)