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NEWS ROUNDUP – for Nov. 9, 2009

TRADE

RUSSIA NOW OPEN TO CANADIAN UTM BEEF

Canada’s beef trade duo — Stockwell Day and Gerry Ritz — struck again last month when the Russian government finalized agreement on a certificate granting immediate market access to Canadian bone-in beef from animals under 30 months old (UTM).

The certificate, which follows through on an agreement in principle negotiated during a June mission by Canada’s International Trade Minister Stockwell Day, also contains an agreement to work toward similar status for boneless beef from cattle over 30 months old (OTMs).

An OTM deal “will give Canadian ranchers and dairy farmers another market for cull cows,” said Agriculture Minister Gerry Ritz during a media conference call from Moscow. “There’s some homework left to do in Russia, but we received firm commitments that this tremendous progress will continue.”

The OTM agreement should be finalized by year-end, Ritz said.

The two countries also agreed to technical sessions “within this calendar year” toward granting Russian importers access to Canadian beef offal, Ritz said.

The Canada Beef Export Federation (CBEF) estimates the value of Russian exports of UTM and OTM beef up to $32 million. Opening the trade in offal will add another $10 million to the trade.

The Canadian Cattlemen’s Association was obviously pleased with the announcement. In a press statement the CCA noted Russia first restored access for Canadian boneless UTM beef in 2006, but technical hurdles and difficulties obtaining approvals on export facilities kept volumes to a trickle. CCA is hopeful Minister Ritz’s mission has finally resolved the technical issues. Certainly, the addition of bone-in UTM beef, plus boneless OTM, means commercially significant quantities of beef will soon be on their way to Russia.

Russian officials have committed to send a technical team to work with Canadian officials and industry to complete meat plant approvals within the calendar year.

Ritz’s mission has already paved the way for some commercial deals. Saskatchewan-based Hawkeye Land and Livestock signed an order to ship up to 10,000 head of purebred beef breeding stock to the Russian-owned Northern Agro Industrial Co.

Calgary-based Alta Exports International signed an agreement with Inter-Regional Beef Breeding Cattle Development Fund to support the establishment of a beef-breeding training centre, “to make sure Russian buyers can maximize production from Canadian breeding stock,” the government said.

IDENTIFICATION

ASKATCHEWAN WILL “PAY TO THE BRAND” AS OF APRIL 10

Starting April 10, 2010 Saskatchewan’s brand inspectors will start using a “pay the brand” policy to settle ownership disputes about ownership of cattle carrying a jointly registered brand. Essentially, the payment will be directed to the registered holder of the brand.

Saskatchewan brand registrar Rusty Hawryluk says the new policy does not apply to producers who purchase cattle that have already been branded. When those animals are resold, it’s business as usual and the animals will be cleared in the normal fashion.

This is more of a housekeeping policy, to avoid disputes that pop up when family members or business partners run into a dispute over ownership. The brand holder can authorize payment to another individual by signing a transfer document before the sale.

The policy is intended to ensure that the payment for an animal offered for sale with a jointly registered brand is directed to all the parties listed on the brand registration. It’s also meant to stop people from using brands that aren’t registered to them, which is prohibited by provincial brand regulations.

The confusion could have begun innocently enough. Over time owners of registered brands may have died and

other family members kept on using the brand without having it legally transferred, or the owner simply allowed family members or friends to use his brand, thinking this was perfectly OK. The result has been confusion over the ownership of cattle and in a number of cases disputes over payment.

Even when brands are registered jointly to more than one person, the ownership by all parties is not always recorded or recognized on the livestock manifest.

Disputes of this type places a significant drain on the resources of the inspection program, as well as the livestock producers involved.

To avoid payment problems in the future, producers who use brands that are not registered to them are being encouraged to get the brand legally transferred into their name before the April 10 deadline. For more details contact the brand registrars office at 306-787-4682.

BREEDING

MATCHING UP COW SIZE AND EFFICIENCY

With feed short, costs rising and prices nothing to write home about a lot of beef producers are looking to squeeze every bit of efficiency they can from their cow herds. A good place to start, says Jason Rowntree, an animal scientist at Michigan State University is cow size when you make decisions about culling and replacement.

Too many people, he feels, are locked in solely on weaning weight as a selection criteria without giving enough thought to what it costs to produce those heavy weights. The net result of this formula “can greatly influence our production efficiency,” he says.

“When developing a grazing management plan, I recommend taking three steps: one, conduct an animal inventory plan; two, conduct a forage inventory and three, decide on a grazing system (continuous or rotational),” he says.

Matching cow genetics in that herd inventory to your environment is the first step in attempting to map out a grazing management plan. What is the mature size and milk potential of your cow herd? In his own work Rowntree refers to a review by New Mexico

State researchers of data compiled at the U.S. Meat Animal Research Center in Clay Center, Nebraska.

Generally speaking, a cow consumes two per cent of her body weight in dry matter feed, or maybe six tons of dry matter per year. It may be more with better-quality forage or the cow is lactating, but in general the research shows at this level of consumption the smaller-size, moderately milking cows will wean the most pounds per exposure. Only when intake approaches seven tons do the bigger, heavier-milking cows become more efficient converters of dry matter intake to pounds of weaned calf.

Production data from North Dakota State University supports this finding. Dickinson Research Extension Center divided their cow herd, by weight, into two herds. The first herd (52 cows, ranging from 856 to 1,395 lb.) averaged 1,216 lb. The second herd (50 cows, from 1,350 to 1,935 lb.) averaged 1,571. The weaning weights of calves from cows, by weight class, are shown in the accompanying table.

TRADE

CANADA ASKS FOR WTO PANEL ON COOL

To much cheering from the livestock sector early last month, the Canadian government asked the World Trade Organization (WTO) to convene a dispute settlement panel over Washington’s mandatory country-of-origin labelling (COOL) laws.

The announcement followed two rounds of consultations with the U.S. that failed to resolve the issue. Consultations are the first step a WTO member country takes to try and avoid the time-consuming dispute settlement process.

Since mandatory COOL came into effect one year ago, Canadian cattle producers claim they have lost over a quarter of a billion dollars in lower cattle prices and increased costs.

The Canadian Cattlemen’s Association (CCA) says U.S. consumers haven’t demonstrated an aversion to Canadian beef. Rather, the main impact has been caused by large commercial meat and cattle buyers trying to avoid the extra costs of separately managing meat from Canadianand U.S.-born cattle. U.S. companies that still buy Canadian cattle have reduced their price to cover the extra cost of segregating inventories.

“Once our Canadian beef gets to U.S. store shelves, it sells just fine,” says CCA president Brad Wildeman. “But COOL ensures that beef from Canadian cattle faces difficulties just making it to those shelves.”

For its part, the U.S. government believes mandatory COOL provides information to consumers in a manner consistent with its WTO commitments.

“We regret that formal consultations have not been successful in resolving Canada’s concerns,” Tom Vilsack, President Barack Obama’s new agriculture secretary, and U.S. Trade Representative Tom Kirk said in separate releases, adding that they hope to continue to work with Canada to resolve this issue amicably.

“Countries have agreed since long before the existence of the WTO that country-of-origin labelling is a legitimate policy,” Vilsack said.

The National Cattlemen’s Beef Association (U.S.) is concerned with the impact COOL has had on trade in cattle and beef with both Canada and Mexico. “The U.S. imports and adds value to Mexican and Canadian livestock through our feedlots, processing and infrastructure; and we export this value-added finished product back to Mexican and Canadian consumers,” the NCBA said in a statement.

“Any disruptions to either of these markets will have a significant economic impact on our industry. Unfortunately, it’s becoming clear that COOL has damaged these critically important trading relationships, and is not putting any additional money into the pockets of cattlemen.”

Once a WTO panel is established, it normally takes up to nine months for the panel to issue its final report.

Assuming Canada wins and the U.S. agrees to comply, the best case would see some easing of the restrictions at the border by the middle of 2011.

FEEDING

MOVE THE COWS NOT THE FEED

With the high cost of forage and the cost of trucking, Ted Nibourg, a business management specialist with Alberta Agriculture and Rural Development, is telling cow-calf producers short on forage that it may make more sense to move the cows to the feed rather than the other way around.

He figures it this way. Average-size cows weighing about 1,300 lb. before calving will cost $1.60 to $1.75 per head per day to feed. After calving, the feed costs for that cow should range between $1.75 and $1.90 per head per day, based on current hay prices of $120-$140 per ton, barley at $2.80-$3.20 a bushel and silage selling at $35-$37 per wet ton.

Quotes for yardage on overwintered cows this fall were ranged between $0.75 and $1 per head per day. For a relatively modest group of cows of around 100 head, yardage costs will run approximately $0.80 per head per day. This is assuming a feeding period of 200 days. Annual ownership

State researchers of data compiled at the U.S. Meat Animal Research Center in Clay Center, Nebraska.

Generally speaking, a cow consumes two per cent of her body weight in dry matter feed, or maybe six tons of dry matter per year. It may be more with better-quality forage or the cow is lactating, but in general the research shows at this level of consumption the smaller-size, moderately milking cows will wean the most pounds per exposure. Only when intake approaches seven tons do the bigger, heavier-milking cows become more efficient converters of dry matter intake to pounds of weaned calf.

Production data from North Dakota State University supports this finding. Dickinson Research Extension Center divided their cow herd, by weight, into two herds. The first herd (52 cows, ranging from 856 to 1,395 lb.) averaged 1,216 lb. The second herd (50 cows, from 1,350 to 1,935 lb.) averaged 1,571. The weaning weights of calves from cows, by weight class, are shown in the accompanying table.

TRADE

CANADA ASKS FOR WTO PANEL ON COOL

To much cheering from the livestock sector early last month, the Canadian government asked the World Trade Organization (WTO) to convene a dispute settlement panel over Washington’s mandatory country-of-origin labelling (COOL) laws.

The announcement followed two rounds of consultations with the U.S. that failed to resolve the issue. Consultations are the first step a WTO member country takes to try and avoid the time-consuming dispute settlement process.

Since mandatory COOL came into effect one year ago, Canadian cattle producers claim they have lost over a quarter of a billion dollars in lower cattle prices and increased costs.

The Canadian Cattlemen’s Association (CCA) says U.S. consumers haven’t demonstrated an aversion to Canadian beef. Rather, the main impact has been caused by large commercial meat and cattle buyers trying to avoid the extra costs of separately managing meat from Canadianand U.S.-born cattle. U.S. companies that still buy Canadian cattle have reduced their price to cover the extra cost of segregating inventories.

“Once our Canadian beef gets to U.S. store shelves, it sells just fine,” says CCA president Brad Wildeman. “But COOL ensures that beef from Canadian cattle faces difficulties just making it to those shelves.”

For its part, the U.S. government believes mandatory COOL provides information to consumers in a manner consistent with its WTO commitments.

“We regret that formal consultations have not been successful in resolving Canada’s concerns,” Tom Vilsack, President Barack Obama’s new agriculture secretary, and U.S. Trade Representative Tom Kirk said in separate releases, adding that they hope to continue to work with Canada to resolve this issue amicably.

“Countries have agreed since long before the existence of the WTO that country-of-origin labelling is a legitimate policy,” Vilsack said.

The National Cattlemen’s Beef Association (U.S.) is concerned with the impact COOL has had on trade in cattle and beef with both Canada and Mexico. “The U.S. imports and adds value to Mexican and Canadian livestock through our feedlots, processing and infrastructure; and we export this value-added finished product back to Mexican and Canadian consumers,” the NCBA said in a statement.

“Any disruptions to either of these markets will have a significant economic impact on our industry. Unfortunately, it’s becoming clear that COOL has damaged these critically important trading relationships, and is not putting any additional money into the pockets of cattlemen.”

Once a WTO panel is established, it normally takes up to nine months for the panel to issue its final report.

Assuming Canada wins and the U.S. agrees to comply, the best case would see some easing of the restrictions at the border by the middle of 2011.

FEEDING

MOVE THE COWS NOT THE FEED

With the high cost of forage and the cost of trucking, Ted Nibourg, a business management specialist with Alberta Agriculture and Rural Development, is telling cow-calf producers short on forage that it may make more sense to move the cows to the feed rather than the other way around.

He figures it this way. Average-size cows weighing about 1,300 lb. before calving will cost $1.60 to $1.75 per head per day to feed. After calving, the feed costs for that cow should range between $1.75 and $1.90 per head per day, based on current hay prices of $120-$140 per ton, barley at $2.80-$3.20 a bushel and silage selling at $35-$37 per wet ton.

Quotes for yardage on overwintered cows this fall were ranged between $0.75 and $1 per head per day. For a relatively modest group of cows of around 100 head, yardage costs will run approximately $0.80 per head per day. This is assuming a feeding period of 200 days. Annual ownership

costs of facilities, including depreciation, taxes, insurance and interest on investment, will total about $2,400. Annual operating costs for the feeding equipment will be around $5,700. Remaining variable costs (power, heat, fuel, repairs and labour) will be about $7,900. The total yardage costs of $16,000 is spread over 20,000 cow-days.

“One can easily see that economies of scale come into play,” says Nibourg. “While more cows will not affect variable costs much, they will reduce the per-cow operating and ownership costs. This is the reason larger lots are able to charge less for yardage.”

Typical calving charges are between $25 and $50 per live calf. Extra vet and medicine costs are over and above this cost. Occasionally, higher-priced calves such as purebreds will incur higher calving charges mainly because the perceived value of the calves is higher.

“The best way to ensure that cows are maintained properly is to monitor their body condition,” says Nibourg. “To protect both parties, it is advisable to agree upon a body condition of the cows going into the custom operation. Both parties should agree on a body condition for when the cows leave after the feeding period. Furthermore, some system of mid-period monitoring should be in place to prevent a yo-yo feeding effect.”

The Alberta Farm Animal Care group has developed a Term Care Agreement for Livestock to help producers manage the care of custom-fed cows. The agreement is posted on the group’s website at

DISEASE

ONTARIO WANTS MORE DISEASE-FIGHTING POWERS

The Ontario government has introduced a new Animal Health Act to beef up its ability to respond when disease hits the livestock sector.

The law, if passed, would require veterinarians and laboratories to report specifianimal diseases to the provincial chief veterinarian (CVO). The CVO could also grant inspectors the authority to inspect a farm operation on reasonable grounds of a possible hazard.

It also enables the use of quarantine orders, surveillance zones and animal health control area orders to help control the spread of any detected disease or hazard.

The CVO gains new powers to order livestock destroyed.

costs of facilities, including depreciation, taxes, insurance and interest on investment, will total about $2,400. Annual operating costs for the feeding equipment will be around $5,700. Remaining variable costs (power, heat, fuel, repairs and labour) will be about $7,900. The total yardage costs of $16,000 is spread over 20,000 cow-days.

“One can easily see that economies of scale come into play,” says Nibourg. “While more cows will not affect variable costs much, they will reduce the per-cow operating and ownership costs. This is the reason larger lots are able to charge less for yardage.”

Typical calving charges are between $25 and $50 per live calf. Extra vet and medicine costs are over and above this cost. Occasionally, higher-priced calves such as purebreds will incur higher calving charges mainly because the perceived value of the calves is higher.

“The best way to ensure that cows are maintained properly is to monitor their body condition,” says Nibourg. “To protect both parties, it is advisable to agree upon a body condition of the cows going into the custom operation. Both parties should agree on a body condition for when the cows leave after the feeding period. Furthermore, some system of mid-period monitoring should be in place to prevent a yo-yo feeding effect.”

The Alberta Farm Animal Care group has developed a Term Care Agreement for Livestock to help producers manage the care of custom-fed cows. The agreement is posted on the group’s website at www.afac.ab.ca.

DISEASE

ONTARIO WANTS MORE DISEASE-FIGHTING POWERS

The Ontario government has introduced a new Animal Health Act to beef up its ability to respond when disease hits the livestock sector.

The law, if passed, would require veterinarians and laboratories to report specifianimal diseases to the provincial chief veterinarian (CVO). The CVO could also grant inspectors the authority to inspect a farm operation on reasonable grounds of a possible hazard.

It also enables the use of quarantine orders, surveillance zones and animal health control area orders to help control the spread of any detected disease or hazard.

The CVO gains new powers to order livestock destroyed.

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