News Update

News Update
Dec. 4, 2007

AMS Extends Back Verification

The Agriculture Marketing Service’s (AMS’s) Audit, Review and Compliance (ARC) branch announced Nov. 28 during an industry call that it has extended the use of back verification as a means of cattle age verification.

In late October, the U.S. Department of Agriculture (USDA) announced back verification would no longer be used as of Jan. 1, 2008, and by that date all animals would have to be qualified at premises of birth to participate in the agency’s age verification program.

ARC has postponed indefinitely the Jan. 1 implementation date while it conducts further investigation. The procedures for back verification have not changed and can be used to qualify cattle for age verification until further notice.

Adapted from a MeatingPlace.com report.

R-Calf USA Opposes Peru Free Trade Agreement

R-Calf USA sent formal letters to members of the U.S. Senate today to urge each of them to oppose tomorrow’s vote on the Peru-U.S. Free Trade Agreement (Peru FTA) because the deal fails to include key provisions needed to ensure that independent U.S. cattle producers can compete fairly and equitably in the global market.

Specifically, R-Calf USA says the Peru FTA does not include special rules to reflect the perishable nature of cattle and beef and lacks any safeguards based on price and quantity to protect against import surges, even though the Trade Act of 2002 contained a Congressional directive to include special rules and safeguards for cattle and beef.

The Peru FTA contains inadequate rules of origin that allow countries surrounding Peru (non-FTA members) to export live cattle into Peru for harvest that would qualify for preferential access to the United States, thus disadvantaging U.S. cattle producers. There is also a preexisting FTA between Peru and major agricultural exporters Argentina and Brazil, the Peru-MERCOSUR pact, signed in 2003. The pact extends any tariff cuts offered to third parties, such as the U.S., to all the neighboring Southern Common Market (MERCOSUR) countries.

The Peru FTA only requires Peru to meet standards equivalent to the U.S. for meat production and meat processing, not identical standards that would be necessary to ensure the safety of imported products. Equivalency standards may not be properly enforced and may differ significantly from U.S. standards, as has recently been proven by the detections of unsafe food products produced in foreign countries.

“The Peru FTA should not be approved because it does not provide for balanced market access opportunities that will serve the interests of U. S. cattle producers,” says R-Calf USA Trade Committee Co-chairman Eric Nelson. “Given Peru’s significant export potential, an FTA without adequate import safeguards that are triggered by volume and by price and that endure beyond tariff and quota phase-out periods, this FTA would seriously disadvantage U.S. cattle producers.”

Nelson also said the rules of origin and equivalency standards in the Peru FTA are inadequate to protect U.S. cattle producers and U.S. consumers.

— Adapted from an R-Calf USA release.

U.S., Russia Near Deal on Beef Exports

After months of negotiating, Gretchen Hamel, deputy assistant U.S. trade representative for public and media affairs, told MeatingPlace.com that the United States and Russia are near a deal on opening the Russian market to U.S. beef products.

The United States has been basically shut out of the Russian market because of bovine spongiform encephalopathy (BSE) concerns since 2003. Russia eased its rules enough in November 2006 to make U.S. beef imports legal, but restrictions remain that have resulted in very little trade.

According to the U.S. Meat Export Federation (USMEF), U.S. beef exports to Russia from January through September of this year totaled just 265 metric tons, worth $824,000.

U.S. negotiators have been pushing for full access to the Russian beef market since May when the World Organization for Animal Health (OIE) cleared U.S. beef from animals of any age as a “controlled risk” and safe for export.

The timing would be good for a deal as the weak U.S. dollar would favor U.S. beef. Currently, beef exporters such as Brazil, Argentina and Australia have benefited from rising Russian incomes that have spurred demand for more and better beef.

— Adapted from a MeatingPlace.com report.

Tax Workshop Addresses Agricultural Issues

Tax practitioners with an interest in farm income taxes will have an opportunity to attend a one-day farm tax workshop Dec. 17. The Agricultural Tax Issues Workshop will supplement the 2007 National Income Tax Workbook and is intended for tax practitioners who have a significant number of farm clients and need a substantial amount of information on agricultural tax issues.

The workshop, sponsored by Ohio State University Extension and Ohio State University’s Department (OSU’s) of Agricultural, Environmental, and Development Economics, will be at the following locations:

Caldwell — OSU Extension Southeast Region office, 16714 Wolf Run Rd., Caldwell; contact Vickie Snyder at 740-732-2381 or snyder.252@osu.edu.
Chillicothe — Ross County Service Center, 475 Western Ave., Chillicothe; contact Marianne Guthrie at 740-702-3200 or guthrie.76@osu.edu.
Columbus — Holiday Inn on the Lane, 328 W. Lane Ave., Columbus; contact Warren Lee or Barb Lee at 614-292-6308 or lee.97@osu.edu.
Greenville — OSU Extension Darke County office, 603 Wagner Ave., Greenville; contact Warren Lee or Barb Lee at 614-292-6308 or lee.97@osu.edu.
Ottawa — OSU Extension Putnam County office, 219 S. Oak St., Ottawa; contact Warren Lee or Barb Lee at 614-292-6308 or lee.97@osu.edu.
Urbana — OSU Extension Champaign County office, 1512 S. U.S. Hwy. 68, Suite B100, Urbana; contact Warren Lee or Barb Lee at 614-292-6308 or lee.97@osu.edu.
Upper Sandusky — OSU Extension Wyandot County office, 109 S. Sandusky, Room 16, Upper Sandusky; contact Warren Lee or Barb Lee at 614-292-6308 or lee.97@osu.edu.
Wooster — OSU Extension Center at Wooster, 1680 Madison Ave., Wooster; contact Vickie Snyder at 740-732-2381 or snyder.252@osu.edu.

The registration fee is $110 and should be received by Dec. 7. At all locations, registration begins at 9:30 a.m., with the program beginning at 10 a.m. and finishing at 4 p.m.

Topics covered during the workshop include crop insurance and disaster payments; defining farm income; flexible cash rents; deferral of income from milk sales; domestic production activities deduction; Form 1099 requirements for farmers; and safe harbors for farmers.

The workshop will be taught by Phil Harris, professor of agricultural economics at the University of Wisconsin. An audiotape of Harris will be supplemented by his slide presentation on current agricultural issues. Harris will be available for questions during two scheduled conference calls and OSU Extension faculty will also be available to answer questions. Participants will also receive a 300-page book on agricultural tax issues.

The workshop has been accepted for continuing education credits by the Accountancy Board of Ohio, IRS Director of Practice and the Ohio Supreme Court Commission on Continuing Legal Education.

Workshop information, a downloadable registration form and online registration are available at http://aede.osu.edu/programs/TaxSchool by clicking on “Ag Issues Workshops” or by contacting Warren Lee, Ohio Income Tax Schools, at 614-292-6308 or lee.69@osu.edu.

— From an Ohio State University release.

4th Annual Southwest Beef Symposium set for Jan. 16-17 in Roswell

For the fourth time in as many years, Texas and New Mexico Cooperative Extension agencies will hold their annual “Southwest Beef Symposium.” This year’s meeting is set for Jan. 16-17 at the Roswell Convention Center.

Bruce Carpenter, Texas Cooperative Extension livestock specialist at Fort Stockton, says the symposium is tailored for southwestern beef producers. The event centers on three educational sessions and a trade show. It alternates between locations in West Texas and eastern New Mexico.

The first session will target controlling ranch costs, with Extension specialists from Texas, New Mexico and Oklahoma teaming up to address cost management strategies and ways to soften the effects of inflated feed and fuel prices on extensive, range-based ranching operations.

The second day will address current topics and how emerging issues may affect how future business is done back at the ranch.

Key industry leaders will also provide information concerning the status of U.S. beef’s access to foreign markets, the “greening of America” and how environmentally conscious consumers influence beef production. The session will end with a summary of the status of non-fed beef (cull cow) production and marketing in the U.S.

The final session deals with managing calf health beyond the ranch. Beef producers, feeders and veterinarians will talk about what calf health means and how to manage it — even when things don’t go as planned.

Individual registration is $50 and includes a prime rib dinner, lunch, refreshments and printed proceedings. For planning purposes, preregistration by Jan. 3 would be appreciated.

For more information call Carpenter at 432-336-8585 or Clay Mathis at New Mexico State University at 505-646-8022.

A schedule of events, speaker information, registration materials and lodging information can be found at http://cahe.nmsu.edu/ces/swbeef.

USDA Appoints 20 Members to Beginning Farmers and Ranchers Committee

Acting Agriculture Secretary Chuck Conner today appointed 20 members to serve on the Advisory Committee on Beginning Farmers and Ranchers. Seven of the appointments are new; the other 13 are reappointments. This committee identifies ways to increase participation between federal and state programs to provide joint financing for beginning producers. Committee members also suggest agricultural opportunities that will help beginning farmers and ranchers.

The Agricultural Credit Improvement Act of 1992 required the formation of the committee. Members serve a two-year term, and can be reappointed for up to six consecutive years. The committee meets at least once a year and the meetings are open to the public.

All members have experience in agriculture. The law requires committee members to include representatives from the following groups: state beginning farmer programs; educational institutions; lending institutions; nonprofit organizations; USDA’s Farm Service Agency (FSA); USDA’s Cooperative State Research, Education and Extension Service (CSREES); and other entities providing assistance to beginning farmers and ranchers. USDA also appoints farmers and ranchers to serve on the committee.

To see the USDA announcement and the list of appointees, visit www.usda.gov.

— Adapted from a USDA release.

USDA Announces No Partial 2007 Crop Year Counter-Cyclical Payments

USDA announced Dec. 3 that because market prices are high, producers with wheat, barley or oats base acres who are enrolled in the agency’s Direct and Counter-cyclical Payment Program will not receive partial 2007-crop year counter-cyclical payments.

Producers enrolled in the program may receive counter-cyclical payments when effective prices for eligible commodities are less than their respective target prices specified in the 2002 Farm Bill. USDA calculates these program payments based on historical base acreage and payment yields, not current production. USDA used the November World Agricultural Supply and Demand Estimates Report, which was released Nov. 9, to project these rates and determined that the effective prices exceed their respective target prices.

Any partial payments for producers with upland cotton, rice or peanut base acres will be announced on or after Feb. 1, 2008. Any partial payments for producers with corn, grain sorghum or soybean base acres will be announced on or after March 1, 2008.

By statute, the 2007 crop counter-cyclical payments can be made in only two installments, a change from prior crop years when counter-cyclical payments were made in three installments. For 2007, if partial payments are made, the first installment will equal 40% of the projected total payment and will be made after the first six months of the beginning of the marketing year. The final payment is made after the end of the marketing year.

The 2002 Farm Bill requires that any overpayments to producers must be repaid. If not repaid, USDA may deduct the overpayments from any future USDA payments.

More information on the program is available at local Farm Service Agency offices and at www.fsa.usda.gov.