Despite the weakening worldwide economy, U.S. beef exports to other countries were up 12% in 2008 over 2007.
There is definitely a demand for the superior U.S. product, finished in the feedlot to standards much higher than beef off grass from our competitors for the international trade like Australia, New Zealand, Argentina and Brazil. 2007 was just the awakening from the long BSE caused closure of the Japanese and Korean markets for U.S. beef, so the trend remained upward in 2008, but the top two markets for U.S. beef--Canada and Mexico--bought more in 2008 too.
This speaks more to the preferability and quality of the U.S. product, that despite a slowing world economy in the latter stages of 2008, they still kept buying U.S. beef. In light of hard-hit U.S. domestic consumers, who are moving down the feeding chain from steaks to hamburger, and beef to chicken, and next, chicken to beans--the foreigners are still buying. This is crucially important for U.S. producers and speaks volumes about how the market is now a world market.
This is why the early drafts passing through the U.S. House of Representatives of the Obama Economic Stimulus bill, which called for all moneys expended under the bill to be spent on U.S. goods, were so damaging. Such a provision would touch off an international trade war, replete with tariffs and counter-tariffs reminiscent of the Smoot-Hawley tariffs that touched off the Great Depression of the 1930s.
Which brings to mind, that there is no comparison between the current downturn and the Great Depression. Unemployment then reached 25%, and today stands at 7.6%. Even the downturn of the 1980s, which everyone has forgotten about, saw unemployment hit 9%. As bad as times might be, we've seen worst times since the Great Depression, than we're seeing now.
Of course it's also beyond question that World War II is what pulled the U.S. out of the Great Depression, not the FDR economic stimulus program. It actually set the recovery back a few years, and the current porkulus bill has the potential to do the same thing.
For the good of the beef industry and cattlemen trying to make a living, my sincere hope is that will not be the case.
Thursday, February 19, 2009
Thursday, February 12, 2009
Gregg rises in my estimation
I always considered New Hampshire Sen. Judd Gregg to be a garden-variety eastern RINO (Republican In Name Only). His father Hugh was the New Hampshire Governor who helped torpedo Sen. Robert Taft's nomination for president in 1952 in favor of liberal Dwight Eisenhower. Gregg himself is the one who lobbied George Bush I to nominate liberal David Souter to the U.S. Supreme Court.
Gregg has been a relatively quiet, non-descript Senator, fitting in with the Hugh Scotts, Jacob Javits, Nelson Rockefellers, Olympia Snows, Susan Collins and Arlan Spectors of the world. The conservatives in New Hampshire were the Sununus, Gov. John the father and White House Chief of Staff, and Sen. John, the son, who the liberals torpedoed in this last election.
It was no surprise to me at all, then, for Judd Gregg to accept Barack Obama's appointment as Commerce Secretary. Just like former Illinois Rep. Ray LaHood, the new Transportation Secretary, both were from the port side of the party. The only mildly shocking thing was that Gregg demanded a deal be cut for the Democratic Governor of New Hampshire to appoint a Republican to fill out his term in the Senate.
As the Valley Girls would say "you could gag me with a rag" today, when Gregg withdrew as the nominee for Commerce Secretary and chose to remain a Senator from New Hampshire. He exhibited character, principle and backbone I never would have believed he had.
After seeing the pork-laden Economic Stimulus bill, rather than shut up and roll over as Republicans have done for the last eight years, Gregg said he could never vote for it or defend it. And the plan by Obama to take the Census Bureau out of the Department of Commerce and run it directly from the White House, to be sure minorities are counted "accurately" in the 2010 census, drove him over the edge.
Census figures, of course, govern the apportionment of congressional seats and the divvying-up of welfare funds to the states.
The Community Organizer in Chief recognizes this first and foremost, and was determined to see that it went his way.
For Judd Gregg to rise up on such matters of principle is exemplary--and totally unexpected.
Gregg has been a relatively quiet, non-descript Senator, fitting in with the Hugh Scotts, Jacob Javits, Nelson Rockefellers, Olympia Snows, Susan Collins and Arlan Spectors of the world. The conservatives in New Hampshire were the Sununus, Gov. John the father and White House Chief of Staff, and Sen. John, the son, who the liberals torpedoed in this last election.
It was no surprise to me at all, then, for Judd Gregg to accept Barack Obama's appointment as Commerce Secretary. Just like former Illinois Rep. Ray LaHood, the new Transportation Secretary, both were from the port side of the party. The only mildly shocking thing was that Gregg demanded a deal be cut for the Democratic Governor of New Hampshire to appoint a Republican to fill out his term in the Senate.
As the Valley Girls would say "you could gag me with a rag" today, when Gregg withdrew as the nominee for Commerce Secretary and chose to remain a Senator from New Hampshire. He exhibited character, principle and backbone I never would have believed he had.
After seeing the pork-laden Economic Stimulus bill, rather than shut up and roll over as Republicans have done for the last eight years, Gregg said he could never vote for it or defend it. And the plan by Obama to take the Census Bureau out of the Department of Commerce and run it directly from the White House, to be sure minorities are counted "accurately" in the 2010 census, drove him over the edge.
Census figures, of course, govern the apportionment of congressional seats and the divvying-up of welfare funds to the states.
The Community Organizer in Chief recognizes this first and foremost, and was determined to see that it went his way.
For Judd Gregg to rise up on such matters of principle is exemplary--and totally unexpected.
Boosting beef demand: research
I can speak from very personal experience that research creates beef demand.
A new study from Kansas State and Michigan State universities, reported elsewhere in this issue, documents this, pointing out that in the 2002-2005 period, the Atkins Diet raised beef demand by 2%. I have been on maintenance from the Atkins Diet that I started six years ago, and remain at the same 155 pounds that I dropped to from 205 at that time.
I eat a heavy meat and protein diet, along with lots of salad and vegetables. I never did like sweets, can do without potatoes and buy low-carb bread and pasta. That was the essence of the Atkins Diet. It fit the way I liked to eat anyway and came along at the right time.
Subsequent studies have shown that it is easier to stick with, and that a low-carb regime does cause the body to burn fat.
I could tell at the time that a lot more beef was being sold to Atkins dieters. I'm glad for this academic research to document what I knew to be true. What is funny is that there were hundreds of low carb products for sale back in the Atkins heyday. Most were expensive and tasted bad. The low-carb bread and pasta are all that have endured, primarily because they taste like the real thing, and are heavily prescribed for diabetics.
But the major point is, yes, the beef-consuming public is swayed by scientific research and marketing of it like the Atkins Diet did. The fact that the Atkins Diet alone, a tiny corner, really, of the whole food melieu, drove beef consumption up 2% by itself, shows the potential for scientifically documenting other health-giving properties of beef, and getting these facts popularized among the consuming public, as the Atkins diet did.
A new study from Kansas State and Michigan State universities, reported elsewhere in this issue, documents this, pointing out that in the 2002-2005 period, the Atkins Diet raised beef demand by 2%. I have been on maintenance from the Atkins Diet that I started six years ago, and remain at the same 155 pounds that I dropped to from 205 at that time.
I eat a heavy meat and protein diet, along with lots of salad and vegetables. I never did like sweets, can do without potatoes and buy low-carb bread and pasta. That was the essence of the Atkins Diet. It fit the way I liked to eat anyway and came along at the right time.
Subsequent studies have shown that it is easier to stick with, and that a low-carb regime does cause the body to burn fat.
I could tell at the time that a lot more beef was being sold to Atkins dieters. I'm glad for this academic research to document what I knew to be true. What is funny is that there were hundreds of low carb products for sale back in the Atkins heyday. Most were expensive and tasted bad. The low-carb bread and pasta are all that have endured, primarily because they taste like the real thing, and are heavily prescribed for diabetics.
But the major point is, yes, the beef-consuming public is swayed by scientific research and marketing of it like the Atkins Diet did. The fact that the Atkins Diet alone, a tiny corner, really, of the whole food melieu, drove beef consumption up 2% by itself, shows the potential for scientifically documenting other health-giving properties of beef, and getting these facts popularized among the consuming public, as the Atkins diet did.
Friday, February 6, 2009
Good news not as good as it should be
The latest statistical abstract from the U.S. Department of Agriculture's National Agricultural Statistics Service (NASS), reported elsewhere in today's paper, should be almost total good news for the cattle industry. It shows cattle numbers down in every category, that such a downward trend is continuing, and that herd expansion is not currently on the horizon.
This should mean strong cattle prices, with strong beef demand, both domestically and internationally, competing for all the available supply and driving prices even higher. Unfortunately, this is not the case.
The weak world and U.S. economy trumps all this good news, and cattle prices are limping along at barely break even, and even losing, levels. Credit is tight to non-existent, job layoffs are rife, beef demand is falling and the uncertainty of it all keeps what should be a great time to be in the cattle business, mediocre at best.
Time magazine has a great article on the rural economy this week, and how, unlike urban America, when something closes down in a recession--it most likely won't come back when the good times return. Rural towns and population are shrinking once again in the current downturn, and based on past experience, won't be coming back.
The article speaks specifically of churches, and of the consolidation underway, with one pastor serving several small congregations, widely dispersed. But the trend applies in other areas of rural life too.
In the case of agriculture and cattle, the human population may decline, but modern technology and efficiency keeps food production up and growing, with fewer people involved. The community may shrink away, but a strong level of agricultural production continues on.
These trends and NASS statistics still portend a great future for the beef business. It will be tough to wait out the next year or two of international economic downturn, but sure to follow is an expansionary phase that will be very profitable for those who stick it out.
There's still reason for optimism around the corner--despite the present gloom.
This should mean strong cattle prices, with strong beef demand, both domestically and internationally, competing for all the available supply and driving prices even higher. Unfortunately, this is not the case.
The weak world and U.S. economy trumps all this good news, and cattle prices are limping along at barely break even, and even losing, levels. Credit is tight to non-existent, job layoffs are rife, beef demand is falling and the uncertainty of it all keeps what should be a great time to be in the cattle business, mediocre at best.
Time magazine has a great article on the rural economy this week, and how, unlike urban America, when something closes down in a recession--it most likely won't come back when the good times return. Rural towns and population are shrinking once again in the current downturn, and based on past experience, won't be coming back.
The article speaks specifically of churches, and of the consolidation underway, with one pastor serving several small congregations, widely dispersed. But the trend applies in other areas of rural life too.
In the case of agriculture and cattle, the human population may decline, but modern technology and efficiency keeps food production up and growing, with fewer people involved. The community may shrink away, but a strong level of agricultural production continues on.
These trends and NASS statistics still portend a great future for the beef business. It will be tough to wait out the next year or two of international economic downturn, but sure to follow is an expansionary phase that will be very profitable for those who stick it out.
There's still reason for optimism around the corner--despite the present gloom.
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