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The National Livestock Weekly July 23, 2007 • Vol. 86, No. 41 “The Industry’s Largest Weekly Circulation” Web site: www.wlj.net • E-mail: [email protected] • [email protected] • [email protected] A Crow Publication Ag land tax breaks threatened in California —Funding for Williamson Act dollars faces veto threat. Williamson Act payments to California coun- Canada hopes ties, which offset tax decreases on agricultural land, could disappear if Gov. Arnold Schwarzeneg- new feed ger carries out his plan to axe the estimated $40 million in funding during this year’s budget ne- gotiation. His initial budget contained no money ban will for the program, however, after an uproar, the Cal- ifornia Legislature added funding for the pro- gram to its budget package. However, the program be effective remains in jeopardy; the governor could still use On July 12, the Canadian government im- his line-item veto power to remove the funds. posed a new ‘enhanced’ feed ban, one they hope The Williamson Act is a program, similar to a will effectively stop all new cases of bovine conservation easement, which allows California spongiform encephalopathy (BSE) from occur- producers to guarantee that their land will remain ring within their borders. in agricultural production for a period of 10 or more “The Canadian Cattleman’s Association years in exchange for a tax break on property en- (CCA) supports the enhanced ban and what it rolled in the program. will do for our food safety. It’s something Cana- Funding of just $40 million for the Williamson da needs to become compliant as far as the program represents a small fraction of the state’s World Organization for Animal Health is con- enormous $103.7 billion budget. For the state’s cerned,” said Theresa Keddy, communications producers however, it represents a substantial sav- manager for CCA. ings in terms of property tax assessments. In all, Canada first implemented a feed ban in 1997 according to the California Department of Con- which disallowed the feeding of specified risk servation, 16 million of the state’s 29 million materials (SRMs) to cattle. The brain and spinal acres of agricultural land in 54 counties are en- cord were not allowed to be processed into cat- rolled in the conservation program. Cattle producers in California could lose an important tax incentive if Gov. Arnold Schwarzenegger vetoes funding for the Williamson Act. As many as 30 percent of tle feed, as the SRMs may have come from an- See Williamson on page 5 producers in the state say they would be out of business without the program. imals harboring the disease. To date, howev- er, Canada’s feed ban has been shown to be less than effective, with the 10th confirmed case of Market provides hedging opportunity BSE discovered in May. The Canadian Food Inspection Agency (CFIA) Fed cattle trade was expect- at $142-145 live basis, steady into hedging programs or con- release of the two cattle inven- will administer the feed ban effective immedi- ed to move lower in most re- with prior week prices. tracting for slaughter steers tory reports, which were ex- ately. The new ‘enhanced’guidelines for the ban gions last week, although with The action on the Chicago and heifers to be sold in Octo- pected to be supportive of the will prohibit SRMs from being processed into fer- the exception of a few scat- Mercantile Exchange (CME) ber through December looks markets. In particular, the in- tilizer or other animal feeds, including pet food. tered trades in the north at last week was lower in the live like sound business manage- ventory report was expected The Canadian government has announced some prices $2 lower than the pre- cattle pit Thursday in antici- ment,” said Jim Robb, director to show that herd-building, funding for the measure, aimed mostly at eas- vious week. Most trade was pation of lower cash trade. of Livestock Marketing Infor- typical for this point in the cat- ing the costs of disposing at-risk materials. expected to wait until the re- That said, the futures market mation Center. tle cycle, has not occurred. This With the new guidelines come changes which lease of last Friday’s cattle on was still trading at a premium, Last Thursday, the market year’s calf crop was trimmed by some say will prove to be a large burden on the feed and cattle inventory re- in some cases a significant one, gave up some of the premium, sub-freezing temperatures dur- Canadian cattle industry. The SRMs previously ports. Prices in the south, in to the cash market. Deferred however, prices for deferred ing calving season. In addi- had a value as a byproduct which could be ground particular, which were still $4- months last week offered an months were still positive. Au- tion, heifer retention has been up for fertilizer or used as protein in other live- 5 apart last Thursday, ap- excellent hedging opportuni- gust dropped 55 cents to hurt by drought in the south- stock or pet foods. Now however, the industry will peared to indicate late trade ty for cattle feeders with cat- $90.82. October contracts shed east and calf prices which are be responsible for an unknown disposal cost. was likely. By mid-day last tle for the October through De- 82 points and December fell making it attractive for pro- Special handling equipment and dedicated Thursday, there had been a cember fed market. 62 points to close at $96.45 and ducers to sell females into feed- trucks must be used for the estimated 100,000 tons few sales reported in Nebras- “Current futures prices are $98.40 respectively. However, lots. The result will likely be of SRMs generated yearly. Incineration, burial ka at $140, however, most feed- even more optimistic than weakness was expected to be a mid-year inventory report See Ban on page 12 lot showlists were still priced market fundamentals, scaling short lived ahead of USDA’s See Market on page 7 Deal reached in New Mexico’s Montana brucellosis case —State will maintain its brucellosis-free status as TB-free status at risk USDA could revoke New hanns. “We urge you to adhere they’re confident the state can a result of ranchers’ sacrifice. Mexico’s Bovine Tuberculosis to the existing regulations and continuing doing so. Nearly 600 head of Montana cattle were destroyed last week after ranch own- (TB)-free status as a result of maintain New Mexico’s cur- Most of New Mexico is recog- ers reached a deal with USDA officials to accept $475,000 in compensation af- a case of TB at a dairy in Cur- rent TB status.” nized as being TB-free. Howev- ter brucellosis was found in the herd. The infection was likely a result of con- ry County unless it is proven to The increase in costs as a re- er, a portion of southeastern tact with infected elk from nearby Yellowstone National Park which frequent- be an isolated case. sult of government mandated New Mexico has a ‘modified ac- ly migrate outside the park and are known carriers of the disease. Two weeks ago, the state’s testing could have a serious im- credited advanced’ status, The deal came just eight hours before a July 13 deadline set by the Mon- congressional delegation and pact on the state’s nearly $2 which is the result of earlier tana Department of Livestock, after which time the state intended to force Democratic Gov. Bill Richard- billion beef and dairy industry. findings of the disease. In 2005, the condemnation and slaughter of the animals to protect the state’s brucel- son expressed concern that US- “We are aggressively ad- USDAofficials approved a split- losis-free rating. The deal averted that possibility. DAofficials appeared prepared dressing the issue and contin- state status that covered por- “It’s a brutal process for everyone involved,” said Department of Livestock to alter the state’s current TB ue to manage our split-state tions of Roosevelt and Curry Executive Director Christian Mackay, who was involved in the negotiations on status as a result of the finding. status through control of move- Counties while the rest of the behalf of the state. “We’re trying to do right by these producers, but we’ve got All cattle producers in New ment and continuation of the state was a TB-free zone. to protect the industry, as well. ... It’s a no-win, no-win situation.” Mexico would have to test for tuberculosis eradication re- See TB-free on page 4 Jim and Sandy Morgan, who owned most of the animals on the ranch, had bovine TB if the state loses its quirements and, therefore, we already rejected two previous offers from USDA because they undervalued the status as a TB-free state. can preserve the integrity of herd significantly. “A downgrade of New Mexi- our state’s TB-Free Status,” The Morgans will receive $423,000 under the deal reached with Brian McCluskey, co’s status could cost our pro- said Richardson. the USDA’s western regional director for veterinary services. The remaining $52,000 ducers more than $4 million Richardson and members of goes to Karen Hergenrider of Belfry, MT, who will lose 33 cows and 32 calves per year,” the state’s congres- New Mexico’s congressional del- that she ran on the Morgan ranch. Mackay also said the state was prepared to sional delegation said earlier egation said the state has been See Brucellosis on page 4 this month in a letter to U.S.