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OBAMA SIDESWIPES FINAL RULE ON COOL

The worst fears of Canadian beef producers about the Obama Administration came true on the first day when the new American president put a hold on all new regulations passed by the departing Bush team. As a result the final rule on the mandatory country of origin labelling (COOL) regulation went back on the shelf. It was passed on Jan. 12 and was to become effective Mar. 16. The new order calls for a 60-day delay so the rule can be reviewed by incoming agriculture secretary Tom Vilsack, and includes 30 days for further comments.

This effectively deflated any enthusiasm built up in the industry for the added flexibility USDA had surprisingly inserted back into the final rule just before it was published.

The label categories (in Canadian terms) remain:

A — born, raised and slaughtered in the U. S, labelled “Product of U. S.”

B— born in Canada, but raised and slaughtered in the U. S., labelled “Product of U. S., Canada”

— born and raised in Canada but imported for immediate slaughter, labelled “Product of Canada and U. S.”

D— born, raised and slaughtered in Canada, labelled “Product of Canada.” John Masswohl, Canadian Cattlemen’s Association’s (CCA) director of government and international relations, says the important change was in line with proposals made by the CCA and the government of Canada. “The main change that had caught everyone’s attentionisthatBand cattlecommingled and processed on the same day can use the B label,” Masswohl says, “and the USDA further clarified that the order in which the countries are listed on the label doesn’t matter.”

This was initially a USDA proposal that was in line with requests from U. S. packers and retailers but was dropped after U. S. special interests and some politicians raised fears packers would simply process everything with a mixed label.

“U. S. packers had indicated to us that they are prepared to handle A cattle and B cattle or A cattle and cattle, but few were willing to handle three separate labels— A, B and C,” explains CCA executive vice president Dennis Laycraft.

The feedback from U. S. retailers was the same. “They want a simple error-proof system and are more willing to have one mixed label than to try to manage a bunch of different mixed labels in addition to the A label beef they will carry,” he adds.

Laycraft says the published rule offers some relief for Canadian beef producers, but it’s not a complete fix for COOL. The CCA estimates COOL has cost the Canadian beef industry $90 a head to date.

There had been rumours that U. S. packers had started to change their processing protocols in response to the publication of the final rule, but a weakening in the fed cattle cash basis with Nebraska seemed to squelch those ideas. Maybe the packers were just

waiting for the dust to settle. Certainly nothing positive will happen now until May 16 at the earliest.

CROPS FERTILIZER BUDDY TAKES OFF

Within 18 days of taking Fertilizer Buddy on-line, more than 20,000 people from 43 countries around the world had paid about 350,000 page visits to this new blog created by Larry Weber of Weber Commodities at Saskatoon.

His marketing newsletter goes out to 5,000 people a day and generates about 1,500 replies each week.

“The reason for the blog was twofold: price transparency and to save time. I was spending way too much time answering questions about fertilizer prices, but I also found a $140 to $160/tonne discrepancy in the price of fertilizer between the south and north in Saskatchewan. The same was true in Manitoba and Alberta,” he says. Typically, you could expect to see a spread of $10 to $15/tonne across the province — maybe $20 to $25/tonne when fuel prices are high.

When the blog opened up Dec. 20, 2008, 46-0-0 urea was priced around $600/tonne with some good discounts for immediate delivery or pickup. By January 7, the price had dropped to about $460/tonne.

Weber expects to see fertilizer prices similar to last year come April. If commodity prices do fluctuate upward, fertilizer companies might test the market by sitting on supplies rather than discounting product to move it.

There’s no doubt fertilizer prices and grain prices are interconnected, he says. The outcome of the battle between corn and soybean for U. S. acres in 2009 will set the stage for fertilizer pricing in 2010. In a recent U. S. producer poll, 68 per cent of respondents said their fertilizer dealers hadn’t yet dropped prices. That definitely gives soybeans the leading edge for acres in 2009.

Tight corn stocks have the potential to boost corn prices above $7/bu. If your main crop is calves, you may not be too concerned with fertilizer prices, but you’re not likely to forget what skyrocketing corn prices did to calf prices during the fall of 2007.

Larry Weber, 306-657-3456, [email protected]

MARKETING ONTARIO CORN FED BEEF GAINS WIDER APPEAL

The Ontario Corn Fed Beef program is earning Canada-wide accolades.

Dr. Kee Jim, a director with the Alberta Meat & Livestock Agency (ALMA), sees it as a good example of a supply-chain developing as an alliance.

Bruce Holmquist, vice-president of the Saskatchewan Cattlemen’s Association, goes even further. “I think they’re doing a good job down here and a lot of things in the program are being incorporated into ALMA,” he says.

“The big advantage with Ontario Corn Fed is you have such a large consumer base. Out here, farmers are far more trade dependent.”

The worst fears of Canadian beef producers about the Obama Administration came true on the first day when the new American president put a hold on all new regulations passed by the departing Bush team. As a result the final rule on the mandatory country of origin labelling (COOL) regulation went back on the shelf. It was passed on Jan. 12 and was to become effective Mar. 16. The new order calls for a 60-day delay so the rule can be reviewed by incoming agriculture secretary Tom Vilsack, and includes 30 days for further comments.

This effectively deflated any enthusiasm built up in the industry for the added flexibility USDA had surprisingly inserted back into the final rule just before it was published.

The label categories (in Canadian terms) remain:

A — born, raised and slaughtered in the U. S, labelled “Product of U. S.”

B— born in Canada, but raised and slaughtered in the U. S., labelled “Product of U. S., Canada”

— born and raised in Canada but imported for immediate slaughter, labelled “Product of Canada and U. S.”

D— born, raised and slaughtered in Canada, labelled “Product of Canada.” John Masswohl, Canadian Cattlemen’s Association’s (CCA) director of government and international relations, says the important change was in line with proposals made by the CCA and the government of Canada. “The main change that had caught everyone’s attentionisthatBand cattlecommingled and processed on the same day can use the B label,” Masswohl says, “and the USDA further clarified that the order in which the countries are listed on the label doesn’t matter.”

This was initially a USDA proposal that was in line with requests from U. S. packers and retailers but was dropped after U. S. special interests and some politicians raised fears packers would simply process everything with a mixed label.

“U. S. packers had indicated to us that they are prepared to handle A cattle and B cattle or A cattle and cattle, but few were willing to handle three separate labels— A, B and C,” explains CCA executive vice president Dennis Laycraft.

The feedback from U. S. retailers was the same. “They want a simple error-proof system and are more willing to have one mixed label than to try to manage a bunch of different mixed labels in addition to the A label beef they will carry,” he adds.

Laycraft says the published rule offers some relief for Canadian beef producers, but it’s not a complete fix for COOL. The CCA estimates COOL has cost the Canadian beef industry $90 a head to date.

There had been rumours that U. S. packers had started to change their processing protocols in response to the publication of the final rule, but a weakening in the fed cattle cash basis with Nebraska seemed to squelch those ideas. Maybe the packers were just

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