News Update
June 2, 2010

MU talks Reveal Uncertainties in Controlling Carbon Emissions by Cap-and-Trade Legislation

“Uncertainty” was the word used most often in talks at the Breimyer Seminar on “Greenhouse Gas Regulations” at the University of Missouri (MU) Reynolds Alumni Center.

Ray Massey, MU Extension economist, said capture and sequestering of carbon could provide farmers with added revenue. Or it could complicate and change farming practices. Both potentials now exist, he told an audience interested in agricultural policy and legislation affecting farming.

Seth Meyer, analyst with the MU Food and Agricultural Policy Research Institute (FAPRI), used the newly updated FAPRI biofuels addition to its model for projecting the annual agricultural baseline.

Uncertainty about the renewal of tax credits for blenders of biodiesel adds volatility to biofuel markets, Meyer said. Blenders, who mix biofuels with petroleum products going to the fuel pumps, now receive a 45¢-per-gallon credit on ethanol. A $1-per-gallon tax credit for mixing biodiesel to petroleum diesel expired last Dec. 31. The credit for ethanol is set to expire in December of this year.

Pat Westhoff, co-director of MU FAPRI, reported on progress in passing a climate change bill, popularly known as cap-and-trade. Before going to the podium, he checked his cell phone for the latest news, as plans for Senate debate were changing as he spoke.

A version of the climate bill passed the House earlier. The Senate is considering a variation filed by Sens. John Kerry and Joe Lieberman.

Both bills would increase energy costs to farmers. But both would also allow farmers to earn money if they change farming practices to reduce greenhouse gas emissions or sequester carbon in the soil, Westhoff said.

For example, costs of natural gas could go up as much as 40%, which would raise the cost of fertilizer. “This introduces uncertainties for corn farmers,” Westhoff said.

Likewise, uncertainty exists on potential incentives for planting trees that could draw crop acres into forestry. One estimate is for 59 million added acres of planted trees by 2050.

“Other estimates foresee a much smaller shift that would have almost no effect on crop production,” Westhoff said. “At this point, any estimates you see are based on layers of assumptions that may or may not be right.”

Most important is the volatility in cost of gasoline and diesel. “The higher the fuel price, the more valuable biofuel becomes,” Westhoff said.

Meyer pointed out that a Congressional vote on tax credits and tariffs — either for or against — would clarify the market and help stabilize biofuel production. “With or without tax credits, biofuels will be produced as long as firm legislative mandates for use remain in place.”

What is being debated is policy on who should pay. “With tax credits, the taxpayer subsidizes the price. Without tax credits, the price will be paid at the fuel pump by the consumer.”

As the legislative debate evolves, Congress calls on MU FAPRI for analyses using the newly updated biofuels model, Westhoff said. “We are looking at different scenarios in the biofuel area. All look at costs and acreage shifts.”

David Miller, an economist with the Iowa Farm Bureau, told of three years of experience in trading credits for carbon sequestering. Farmers are paid for carbon returned to the soil from offsets purchased by industries emitting large volumes of carbon.

Some 40,000 producers have participated in contracts sequestering carbon. Most rely on use of no-till farming, but some farmers plant trees for a longer-term benefit.

A major obstacle to sign-up for contracts is the length of commitments, Miller said. Some environmentalists want 100-year contracts with 100-year extensions.

The average age of tree farmers is 68, Miller said. “They are not interested in 100-year contracts, not even a 15-year contract.”

“We’ve learned a lot,” Miller said. “But we’ve not made any money.” Because of the low price placed on carbon credits now, the Iowa carbon credit aggregator stopped signing new contracts last year.

“This is a case where it didn’t pay to be the first to try something new,” Miller said.

James Andrew of the Iowa Soybean Association told of his experience as a former member of a farm-oriented advisory group for the Environmental Protection Agency (EPA). “As a farmer, I like to get things done. The EPA staff in Washington does not feel that same urgency,” he said. “Sometimes I feel they are waiting for us (farmers) to go away.”

Westhoff said there is no certainty of climate legislation at all. First, the Senate must get 60 votes to overcome a potential filibuster. Then the House and Senate bills must be reconciled in committee.

Adding to all the uncertainty is a plan by the EPA to enact carbon regulations even if no climate bill passes in Congress. Westhoff added that Congress could pass legislation limiting EPA authority to regulate greenhouse gases.

Many farmers, facing uncertainty on planting their soybean crop this year, stayed home from the seminar on climate change options, waiting for a dry spell.

— Release by MU Extension.

Adopting Industry Guidelines for Animal Welfare

Bob Smith emphasized the importance of adopting industry guidelines — such as Beef Quality Assurance (BQA) practices — through the entire beef production chain as he addressed participants of the International Symposium on Beef Cattle Welfare May. The symposium was hosted May 19-21 on campus by Kansas State University’s Beef Cattle Institute.

Smith, who is a veterinarian based in Stillwater, Okla., works in private practice with five other veterinarians at Veterinary Research and Consulting Services. The group works with feedlot and stocker cattle clients across the High Plains.

Smith reminded attendees that one of the core BQA values is the belief that production practices affect consumer acceptance of beef.

“Producers can make a difference in the beef that is produced by taking responsibility and working together,” he said.

He shared how in the past through BQA and the Beef Quality Audits, injection-site lesions were identified as an industry problem. Then, through education, the incidence of these lesions was reduced from over 20% to 2%.

“This tells us producers can solve problems without regulation as long as the problems are identified and education and training is provided,” he said.

In advancing animal welfare efforts throughout the beef industry today, Smith credited the industry with building on BQA principles and more recently developing the Cattle Care and Handling Guidelines to set standards for animal care from nutrition, feeding and health to cattle handling and euthanasia, and the BQA Feedyard Self Assessment Guidelines to conduct self- or third-party audits evaluating safety, quality, environmental and animal welfare practices.

Smith called programs such as these “proactive” efforts by the industry. “This is being proactive and trying to stay ahead of the game.”

Particularly of the self-assessment guidelines that can be used for audits, Smith said he is hopeful these become the accepted audit format by all interested parties, and he shared that similar guidelines for self- or third-party audits are being developed by the industry for cow-calf and stocker operations — again so that a proactive role is taken.

Smith credited the newly instituted Masters of Beef Advocacy program as another proactive means to educate people working in the beef industry and in turn helping them better inform consumers about their stewardship and animal care efforts.

In his closing remarks, Smith reiterated the importance of character throughout the industry, saying, “Character is what you do when no one else is looking. … If you are going to do things right, you don’t just do it at the audit. We should do things right all the time, and then you don’t have to worry about an audit or the media showing your cattle operation on the 6 o’clock news.”

Angus Productions Inc. (API) is providing coverage of the event. For additional presentation summaries, visit Meetings > Other Industry Meetings > News Coverage page of the API Virtual Library (www.api-virtuallibrary.com).For more about the symposium, visit www.isbcw.beefcattleinstitute.org.

— by Kindra Gordon for API

Angus YouTube Channel Tops 200,000

The American Angus Association’s YouTube channel has achieved its second significant milestone since its creation less than two years ago — 200,000 views.

The Association has posted more than 190 videos portraying Angus shows, news coverage, market reports, interviews and the popular I Am Angus series depicting stories of those influenced by Angus cattle and beef. Read more.

Final Preparations Underway for 2010 Hay Expo

It’s now only two weeks until the Farm Progress Hay Expo, the Farm Progress Events staff and the host farmers tackle the last-minute projects before hay producers from around the country head to northeast Iowa for this year’s show.

The Hay Expo will feature demonstration highlights on:

• tripper timing and mowing demos;
  
• tedding, merging and raking; and
• large and small bale handling
  

The 2010 Farm Progress Hay Expo, will take place June 16-17 from 9 a.m. to 4 p.m. Located on the Matt and Jana Hamlett farms, the show site is located just west of Strawberry Point, Iowa, on Hwy. 3. Admission is free; parking is $7 per vehicle. The public is welcome. For more information, visit www.HayExpo.com or call 866-264-7469.

— Adapted from a Farm Progress release.

Catch the World Livestock Auctioneer Championship in OKC on RFD-TV

The 2010 World Livestock Auctioneer Championship (WLAC), to be June 19, is undoubtedly best viewed in person. But for those who can’t be at the Oklahoma National Stockyards in Oklahoma City, Okla., for the contest, Livestock Marketing Association (LMA) has a suggestion: Tune in RFD-TV at 8 p.m. (ET) July 12 for the premiere of a one-hour special on the Championship. Additional broadcast dates will be announced later, LMA officials said.

RFD-TV, the first 24-hour network aimed at rural America, is on cable systems in all 50 states. On the Dish Network, it’s channel 231, and on DirecTV, it’s channel 345.

Kristen Parman, WLAC manager and LMA’s vice president for membership services, said the program “is a great opportunity to bring our story to RFD-TV’s rural audience, who may or may not know about livestock production and marketing, and the beef industry.”

Co-hosting the program again this year, for the fourth time, are two former world champions — 1998’s Lex Madden, and 2002’s John Korrey.

The program will profile the 33 semifinalists, and then focus on the 10 finalists, through interviews and a look at their auctioneering styles.

There also will be behind-the-scenes interviews with current world champion Ty Thompson, LMA officials and guests, “and the former world champions who always attend the contest,” Parman said.

Thirty-two of the semifinalists made it to Oklahoma City by qualifying at one of four quarter-final competitions conducted last fall. The top eight scorers in each competition move on to the WLAC.

The 33rd contestant is Paul Ramirez, Tucson, Ariz., the current International Auctioneer Champion. LMA traditionally gives a “bye” into the semifinals to the winner of that contest.

The semifinalists are judged on two elements: an interview on industry topics and issues, conducted during LMA’s Annual Convention June 18, and as they sell several drafts of cattle during the actual sale at the market June 19.

The 10 finalists, as determined by their combined interview and selling scores, then return to the auction block for a final round of selling. The three titlists — world, reserve and runner-up — are announced at an awards banquet the evening of June 19.

The three winners take home thousands of dollars in cash and prizes, including, for the world champion, a year’s use of a new truck.

Sponsoring the WLAC are Meadowbrook Insurance Group/Star Insurance Co., the Cattlemen’s Beef Board and www.mybeefcheckoff.com.

The contest starts at 8 a.m. There is no admission charge, and it’s open to the public.

The WLAC caps LMA’s Annual Convention, which begins June 17 at the Renaissance Convention Center. For program and registration information, call LMA at 1-800-821-2048, or go to www.lmaweb.com; click on World Livestock Auctioneer Championship, and scroll down to “Download a Registration Form” or “Click Here to Register Online.”

— Release by LMA.

— Compiled by Mathew Elliott, assistant editor, Angus Productions Inc.