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.
Tuesday, December 30, 2008
Mexico buffoons cave again
I was out of town, and didn't get to post last Friday, when Mexico pols drove beef futures at the Chicago Mercantile Exchange into the ground with a transparently political, phony banning of U.S. beef imports due to alleged failures in Country-of-Origin labeling regs.
Anyone with even the vaguest, most shallow, rudimentary knowledge of Mexico trade machinations, could see through this one a mile away. Everyone, that is, except the traders at the Merc, who were salivating at the opportunity to harvest some quick trading commissions at the expense of U.S. cattlemen.
Mexico has already caved, three days later, allowing imports back in from 21 of the 30 U.S. beef plants it banned imports from. The others will be approved shortly. What a farce!
It happens with Mexico all the time, and was definitely of the "ho hum, so what?" category. As the events a mere 72 hours later have proven, this was just one more dalliance by the tinhorn pols in Mexico, taking great delight in kicking sand in the face of the big United States of America.
We could all have a good laugh at Mexico's expense, if it hadn't been so costly for U.S. producers. The Merc peeled a chunk off futures contracts, which naturally spilled over into the cash cattle market. Some of the loss has been restored, as traders sought to earn even more commissions by driving prices back up to where they belong--once the ruse was uncovered.
The stench of the rot and decay at the Merc, and its stranglehold over U.S. cattle prices, is overpowering and cries out for reform. Don't hold your breath, though, with a Democratic president from Illinois who took big campaign contributions from the Merc, voted their way in the Senate, and will most likely leave everything just the way it is.
Anyone with even the vaguest, most shallow, rudimentary knowledge of Mexico trade machinations, could see through this one a mile away. Everyone, that is, except the traders at the Merc, who were salivating at the opportunity to harvest some quick trading commissions at the expense of U.S. cattlemen.
Mexico has already caved, three days later, allowing imports back in from 21 of the 30 U.S. beef plants it banned imports from. The others will be approved shortly. What a farce!
It happens with Mexico all the time, and was definitely of the "ho hum, so what?" category. As the events a mere 72 hours later have proven, this was just one more dalliance by the tinhorn pols in Mexico, taking great delight in kicking sand in the face of the big United States of America.
We could all have a good laugh at Mexico's expense, if it hadn't been so costly for U.S. producers. The Merc peeled a chunk off futures contracts, which naturally spilled over into the cash cattle market. Some of the loss has been restored, as traders sought to earn even more commissions by driving prices back up to where they belong--once the ruse was uncovered.
The stench of the rot and decay at the Merc, and its stranglehold over U.S. cattle prices, is overpowering and cries out for reform. Don't hold your breath, though, with a Democratic president from Illinois who took big campaign contributions from the Merc, voted their way in the Senate, and will most likely leave everything just the way it is.
Foolish consistency to resurface
Disgraced, corrupted Democratic Gov. Rod Blagojevich of Illinois, caught on wiretaps brokering President-elect Obama's Senate seat for campaign contributions, has just put his party in a vice--and particularly U.S. Senate Majority Leader Harry Reid, who said the party will never seat a Senator appointed by Blago.
He named former Illinois Attorney General Roland Burris, 71, to the seat. A revered figure in Illinois Democratic politics and trailblazing black officeholder, the Democrats will look terrible if they disallow the appointment of their body's only black member. They will also look terrible if they go back on their word, and seat a Blago nominee.
The problem is that the wheels of justice grind slowly, if at all, in Illinois and at the rate the legislature is moving to impeach and try Blago for his many crimes, it could be March or April before he's out of office. Then the Lt. Governor would take over and appoint a Senator. With the theft of a Minnesota Senate seat for comedian Al Franken likely to come up for a vote, the Democrats need the seat from Illinois filled as soon as possible.
Many members of the legislature in Illinois are bound up in Blago's transgressions, and as beholden as Blago is, to the Chicago Daily machine. They clearly see the truth of the scripture: "There, but for the grace of God, goeth I." Many would look like total hypocrites to impeach and convict Blago, but carry on their own transgressions.
The face-saving way out is to pass a bill setting up a special election, which Blago has said he will sign. Democrats in Washington hate this alternative, because in a single-shot election, given their total screwing up of the Senate seat, a Republican could well be elected to it.
Thoreau said "Foolish consistency is the hobglobin of little minds." This probably rings true to U.S. Senate Democrat ears, who are looking for a fig leaf to cover the acceptance of Roland Burris as the junior U.S. Senator from Illinois.
He named former Illinois Attorney General Roland Burris, 71, to the seat. A revered figure in Illinois Democratic politics and trailblazing black officeholder, the Democrats will look terrible if they disallow the appointment of their body's only black member. They will also look terrible if they go back on their word, and seat a Blago nominee.
The problem is that the wheels of justice grind slowly, if at all, in Illinois and at the rate the legislature is moving to impeach and try Blago for his many crimes, it could be March or April before he's out of office. Then the Lt. Governor would take over and appoint a Senator. With the theft of a Minnesota Senate seat for comedian Al Franken likely to come up for a vote, the Democrats need the seat from Illinois filled as soon as possible.
Many members of the legislature in Illinois are bound up in Blago's transgressions, and as beholden as Blago is, to the Chicago Daily machine. They clearly see the truth of the scripture: "There, but for the grace of God, goeth I." Many would look like total hypocrites to impeach and convict Blago, but carry on their own transgressions.
The face-saving way out is to pass a bill setting up a special election, which Blago has said he will sign. Democrats in Washington hate this alternative, because in a single-shot election, given their total screwing up of the Senate seat, a Republican could well be elected to it.
Thoreau said "Foolish consistency is the hobglobin of little minds." This probably rings true to U.S. Senate Democrat ears, who are looking for a fig leaf to cover the acceptance of Roland Burris as the junior U.S. Senator from Illinois.
Monday, December 22, 2008
Some late, great Bush regs to fall
In the waning days of the George W. Bush administration, federal agencies are shelling out new regulations that are very favorable to ranchers and farmers, oil drillers and miners, as well as outdoor recreation buffs using motorized vehicles.
The real question would be, where have they been the last 8 years? Why is the pro-business Bush administration taking all these good actions at the last minute?
You can bet that the ones that Obama can overturn by executive order, will be quickly. It may take a little longer if they have to go through the same federal rule making process that Bush did, but you can bet that sharp-eyed environmentalists already have their strategy underway.
For instance, the CAFO air pollution regulations largely exempt cattle and hog feedlots, as well as grazing cattle on ranches, from federal air pollution regulations. This is only sensible and fair--so much so, that's ludicrous that federal bureaucrats even had to issue a rule. What is really driving enviros nuts is that motorized recreational vehicles such as ATVs are going to be allowed in national parks.
Other regs make it easier to drill for oil or mine shale on federal lands. This is badly needed, to ever have any hope of bringing America to energy independence. But that doesn't mean the enviros aren't apoplectic. They don't care that over 60% of Americans favor expanded drilling and mining for energy development. They've never supported the democratic principle of majority rule, so why start now?
It's fun to watch them squirm, but it's only for a season. The Obama administration will be coming on like gangbusters, and these rulings won't stand. You can count on it.
The real question would be, where have they been the last 8 years? Why is the pro-business Bush administration taking all these good actions at the last minute?
You can bet that the ones that Obama can overturn by executive order, will be quickly. It may take a little longer if they have to go through the same federal rule making process that Bush did, but you can bet that sharp-eyed environmentalists already have their strategy underway.
For instance, the CAFO air pollution regulations largely exempt cattle and hog feedlots, as well as grazing cattle on ranches, from federal air pollution regulations. This is only sensible and fair--so much so, that's ludicrous that federal bureaucrats even had to issue a rule. What is really driving enviros nuts is that motorized recreational vehicles such as ATVs are going to be allowed in national parks.
Other regs make it easier to drill for oil or mine shale on federal lands. This is badly needed, to ever have any hope of bringing America to energy independence. But that doesn't mean the enviros aren't apoplectic. They don't care that over 60% of Americans favor expanded drilling and mining for energy development. They've never supported the democratic principle of majority rule, so why start now?
It's fun to watch them squirm, but it's only for a season. The Obama administration will be coming on like gangbusters, and these rulings won't stand. You can count on it.
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