Volume 47, Number 4
January 25, 2013
TCFA’s Board of Directors Met This Week in Amarillo
The board discussed or took the following actions:
 Discussed closure of the Cargill packing plant in Plainview, TX, with Cargill leadership.
 Received an analysis of the Cargill plant closure from CattleFax.
 Received update on NCBA sustainability efforts from NCBA President J.D. Alexander and NCBA Chief
Executive Officer Forrest Roberts.
 Adopted a resolution to seek changes to the Live Cattle futures contract specifications designed to
improve deliverable supplies and cash-futures convergence. The resolution will be taken to the NCBA
Annual Convention in Tampa.
 Approved a letter to the CME supporting changes to the Live Cattle contract specs.
 Accepted the annual audit report.
 Heard reports from 2012 TCFA Leadership Program participants Blake Deyhle and Dave Venhaus.
 Accepted reports from TCFA standing committees, including adoption of 2013 goals.
 Received progress reports from staff on several TCFA projects and program updates, including beef
production sustainability, animal care and welfare, animal traceability, COOL, 2013 Farm Bill, Texas
Legislative issues, and safety program.
 Recommended amendments to the Southwest Scale of Grain Discounts.
 Discussed participation in national and state legislative meetings this Spring.
 The board was joined by 2013 TCFA Leadership Program participants Tyler Keeling, Bill Kolath and
Angus Macdonald.
Japan to Ease Restrictions on U.S. Beef Imports Next Month
Japan announced that it will relax restrictions on U.S. beef imports starting Feb. 1, 2013 – after authorities said
that the change wouldn’t pose health risks.
Prior to the bovine spongiform encephalopathy disease case in 2003, Japan was the largest buyer of U.S.
beef. In 2005, it lifted a two-year ban on beef. When the ban was lifted in 2005, Japan only took beef from
cattle that were younger than 20 months and the recent announcement would have them accept beef from
cattle up to 30 months of age.
The recent shift in regulations will likely pave the way for reform before negotiations are over for the TransPacific Partnership trade pact.
Bill Would Require Disclosure of Judgments, Settlements
Cattlemen and public lands advocates are supporting a bill in Congress that seeks to add transparency in
federal judgments paid out to plaintiffs in environmental and other lawsuits, as reported in Capital Press.
The National Cattlemen’s Beef Association and Public Lands Council are backing the Judgment Fund
Transparency Act, which would require the U.S. Treasury Department to report to Congress on payments from
its Judgment Fund.
Established in 1956, the fund is used to pay court judgments and settlements in cases brought against the
federal government, if those costs are not otherwise covered by agencies’ budgets.
Farm advocates have long complained that environmental and other groups use money won in judgments
to fund further lawsuits to curtail agricultural practices.
The bill comes as a congressional investigation last year found that the USDA and the Interior Department
didn’t know how much they spent on attorney fee compensation in environmental lawsuits and other litigation.
U.S. Hay Production and Supplies at Record Low
Two years of drought have taken a huge toll on U.S. hay production. Cow-Calf News reported that in the recent
USDA Annual Crop Production Summary, total U.S. hay production in 2012 was 120 million tons, down nearly
18 percent from the 2006-2010 average.
This is the lowest U.S. hay production total in data going back to 1974. This follows the 2011 hay production
total of 131 million tons, down nearly 10 percent from the same five-year average.
The combination of reduced hay production and increased hay feeding due to drought the past two years
leaves the U.S. with severely depleted forage supplies. Total U.S. December 1 hay stocks were 76.5 million
tons, the lowest December 1 stock level in data back to 1974. This stock level is down 25.5 percent from the
five-year average. The reduction is severe in many states.
Pasture conditions in most regions are similarly poor. With the final pasture and range condition report at
the end of October, 15 states had more than 60 percent of pastures in poor or very poor condition and another
five states had 40-60 percent poor to very poor pasture conditions.
McDonald’s Provides Australians With Food Tracking App
Consumers want to know where their food comes from, and – in Australia at least – McDonald’s is utilizing
technology to tell them, reported Drover’s.
In Australia, McDonald’s is commonly called Macca’s, so McDonald’s has launched a free iPhone app
called TrackMyMacca’s that can be downloaded via Facebook or iTunes. It uses the GPS in a smart phone to
find out what restaurant you’re in, image recognition to see what you’re eating, and the date and time to track
the exact ingredients that went into your food.
TrackMyMacca’s works with food that comes in specially marked boxes, including the McChicken burger,
Big Mac, Filet-O-Fish, and Chicken McNuggets.
Augmented reality is used to provide interactive information about McDonald’s and its supply chain, turning
the iPhone into an ingredient tracker. Image-activation software identifies the specific food purchased and all
this info, combined with the date and time, is cross-referenced with McDonald’s supply-chain data.
The app then pinpoints where (the bakery, ranch, farm, canner, etc., often by name) the ingredients in the
food about to be consumed originated. The app can supply the name and photo of the farmer, rancher or
fisherman by whom a product is supplied.
Choose an ingredient and sourcing details – customized to the location, product and date – are offered. For
example: “To make great Chicken McNuggets we need great chicken morsels. So we got ours from Eagle
Farm, Queensland.” A sourcing message for a burger bun might be, “Fresh buns are the building blocks of a
good burger. That’s why our Martin Place restaurant could have up to three deliveries a week. You’ll find our
bakers at the Fresh Start Bakery, not far away in Liverpool, New South Wales.”
McDonald’s, Franchisee Settle Halal Lawsuit
McDonald’s Corp. and one of its franchisees in Michigan will pay about $700,000 to settle a lawsuit accusing
the company of falsely claiming its food was prepared under the guidelines of Islamic law.
McDonald’s and Finley’s Management Co. advertised that two Dearborn, Mich., restaurants prepare
products produced under the strict regulations of halal, a critical differentiator since the area has about
150,000 Arab and Muslim residents. Halal Chicken McNuggets and McChicken sandwiches are created and
delivered for sale to McDonald’s by a certified purveyor, but the lawsuit alleges that at least one of the
locations sold non-halal products when it ran out of the properly prepared items.
A Dearborn Heights, Mich., resident, the Arab-American National Museum in Detroit, a health clinic in
Detroit and various attorneys will split the money once the settlement is finalized in March. McDonald’s came
under fire among Internet bloggers late last year when it acknowledged it had sold halal chicken items in
about 1,200 of its restaurants in the United Kingdom without informing customers.
M-COOL
Lobbyists for the National Farmers Union and R-CALF and the Obama administration are pushing for a
regulatory route to deal with a May 23 timeline for complying with a World Trade Organization ruling against
the United States’ mandatory country-of-origin labeling ruling, rather than including language in a new farm bill
with an indefinite timeline.
TCFA and NCBA oppose this approach and continue to work with legislators, the U.S. Trade Federation
and USDA to change the law.
The WTO ruled June 29 that M-COOL unfairly discriminates against Canada and Mexico because it gives
less favorable treatment to beef and pork imported from those countries than to US meat.
M-COOL rules have directly cost Canada’s hog and pork industry more than $2 billion, according to a
recent report that could help determine retaliation against U.S. exports if Washington does not change its
requirements. Citing no apparent movement by the U.S. Congress since the original WTO ruling in mid-2012,
the Canadian Pork Council released an estimate of damages that called on Ottawa to impose retaliatory tariffs
on imports from the United States if there is no change by the WTO deadline.
The labeling program has led to a sharp reduction in U.S. imports of Canadian pigs and cattle because it
has raised costs for U.S. packers by forcing them to segregate imported animals from U.S. livestock.
Meatless Mondays
Food Network celebrity chef Giada De Laurentiis has thrown her hat into the Meatless Mondays ring with a
recent episode of her show, “Giada at Home.”
A program on Jan. 12 focused on non-meat dishes, saying that De Laurentiis cooks meatless every
Monday for “health” and “environmental reasons.”
The Animal Agriculture Alliance decried the episode’s description, saying in a news release that it is
“misleading and false information.”
“We are disappointed that a chef as popular as Ms. De Laurentiis would lend her name to a movement
funded and supported by radical animal rights activists,” said Animal Agriculture Alliance President and CEO
Kay Johnson Smith, in the release.
“We believe in consumer choice when it comes to selecting one’s meal choices, but this particular
campaign is based on misleading and false information which is a disservice to America’s hard working farm
families, as well as consumers.”
Meatless Mondays is a campaign that the alliance describes as organized through the Center for a
Livable Future at Johns Hopkins University’s Bloomberg School of Public Health, and funded in large part by
animal rights activist Helaine Lerner.
Visit www.animalagalliance.org to learn more about the “myths and facts” of the Meatless Mondays
movement and access a resource guide on the issue.
Selling U.S. Beef to the World
At a gathering in Denver last week, U.S. Meat Export Federation regional directors updated USMEF
international staff members and guests on programs and progress for meat exports around the world. Overall,
the outlook for 2013 beef exports is positive, although challenges remain in some countries, wrote John
Maday, Drovers CattleNetwork managing editor.
The NAFTA agreement allows excellent market access in Mexico, and the country is the volume leader for
imports of U.S. beef, pork and lamb. Over the past year, Mexico eased restrictions on imports of certain beef
cuts and now is open to virtually all U.S. beef from cattle 30 months of age or younger.
USMEF staff historically has worked directly with retailers and large importers in Mexico to build demand for
U.S. beef. They recently have expanded their efforts to include smaller markets and grocery chains. About 400
grocery stores in Mexico voluntarily identify and promote U.S. beef at the point of sale, building customer
loyalty for U.S. products.
The Mexican market has been difficult for U.S. beef in recent years due to the economic downturn, which
has hit the country hard since 2008.
In Central America, the 2012 free trade agreement with Panama will bring progressive reductions in tariffs
for U.S. beef. In addition to Panama, Guatemala and El Salvador have significant potential for U.S. beef
exports.
U.S. beef has a good reputation in Europe, and exports did well during 2012 in spite of disruptions in the
European economy and stiff competition from lower-priced beef from Brazil and other exporters. Economic
factors probably will limit gains in exports to Europe this year, but USMEF hopes to at least maintain current
levels.
Russia joined the World Trade Organization in 2012, and part of the agreement was for higher countryspecific quotas for beef imports. In the long-term, the agreement should be positive for U.S. beef exports, but
Russia recently imposed a ban on beef from cattle fed ractopamine, which largely cuts U.S. beef out of the
market.
USMEF notes significant progress in the Middle East, with beef exports up 20 to 25 percent to some
countries.
USMEF expects a good year for beef exports to Asia. The region accounts for 40 to 45 percent of our beef
exports and set a record for value of imported U.S. beef last year. Hong Kong also is a growing market for U.S.
beef, and Haggard notes that fast-food restaurants in Hong Kong, a market segment traditionally dominated by
Australian beef, have begun using more U.S. beef.
Analysts See Cargill Beef Plant Closing as ‘Game Changer’
A day after Cargill announced it would idle its beef processing facility in Plainview, Texas on Feb. 1, analysts
called the move a big one that will improve packer margins and benefit rivals.
“Cargill’s announced closure of its Plainview, Texas, beef processing facility (2-3 percent of industry
capacity) is a game changer,” BMO Capital Markets Analyst Kenneth Zaslow wrote in a note to investors.
“Tyson’s beef business outlook materially improves, while its risk profile is greatly reduced.”
Analysts told www.meatingplace.com that closing the Cargill plant would improve U.S. beef packer
capacity utilization to 86 percent from 83 percent prior to the closure.
“In the short term, the closing of the facility will reduce the demand for cattle and better align capacity with
available supplies,” analysts wrote, noting packers have struggled with margins in recent months as extra
capacity forced them to aggressively compete for cattle even as beef prices languished.
Upcoming Deadlines
National Ag Day Essay Contest – Feb. 1
Deadline for Purchasing Advertising in Cattle Feeders Annual – Feb. 15
NRCS EQUIP Ranking Deadline for Texas – Feb. 15
NCBA Environmental Stewardship Award call for entries – March 1
Industry and TCFA Events
Cattle Industry Convention and NCBA Trade Show, Tampa, Fla. – Feb. 6-9
TCFA/Texas AgriLife Heavy Equipment Safety Seminar – March 12
BQA Training, Perryton, TX – March 19
BQA Training, Wheeler, TX – March 19
BQA Training, Hereford, TX – April 9
Environmental Management Meeting, Perryton, TX – May 14
Environmental Management Meeting, Wheeler, TX – May 14
Environmental Management Meeting, Hereford, TX – May 16
TCFA Annual Convention, Omni Hotel, Fort Worth, TX – Nov. 3-5
Please note: All links are available at www.tcfa.org under This Week's Newsletter links.
This copyrighted material is the property of TCFA and is intended for the use of TCFA members only. It may not be redistributed, transmitted, stored or reproduced, in whole or in
part, without the prior written consent of TCFA. The information contained in this material is believed to be reliable and correct, and the views expressed reflect judgments at this time
and are subject to change without notice. TCFA does not warrant or guarantee that the information is complete, comprehensive or accurate and it should not be relied upon as such.
Texas Cattle Feeders Association
January 25, 2013