April 15, 2016
CapitalPress.com
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Dairy/Livestock
Grazing, financial
plans go together
U.S. meat
exporters see
TPP as a boon
in Japanese
market
By DOUG WARNOCK
For the Capital Press
Greener
Pastures
T
he time to turn livestock
out on pasture will soon
be here and managers
will need to begin implement-
ing their 2016 grazing plan.
The best results of im-
plementing the grazing plan
will come from activating a
financial plan along with the
grazing plan. The financial
plan should include the best
estimates available on both
the expected costs and an-
ticipated returns from your
grazing enterprise.
Generally we have con-
sidered profit to be what is
left over after all costs are
covered. A newer and more
holistic approach in finan-
cial planning is to actual-
ly plan for a certain profit.
Profit can be increased by
reducing costs, increasing
income or a combination of
the two.
Achieving the desired
profit level may require con-
trolling or limiting costs.
This must be done with
an eye to those costs with
which we have some flexi-
bility. We can’t trim the in-
escapable costs nor should
we cut those that directly
affect production. The main-
tenance cost items are prop-
er candidates to consider in
making cost reductions.
A well-laid-out financial
plan will be a guide when
monitoring income and ex-
penses. If costs run higher or
lower than planned, we need
to know as soon as possible
and determine why that is
happening. So, a monthly
reckoning will give us an
early notice of what is taking
place and allow necessary
adjustments to be made.
Also, if income is high-
er or lower than planned,
knowing early helps the
manager to make any adjust-
ments needed to get back on
track.
For most producers, profit
is a result of the total pounds
of meat or milk produced per
acre. Seeking the highest in-
dividual gain per animal is
Doug Warnock
By RICHARD SMITH
For the Capital Press
not the same. Animals tend
to make the highest individ-
ual gain per head when they
are allowed to find the best
feed, the ability to be very
selective. This normally
takes place in lower density
grazing where competition
for forage is low.
The highest gain per acre
comes from a high densi-
ty and short duration type
of grazing management. In
this type of management,
animals are competing with
each other for forage and
less able to be selective as
they graze. This manage-
ment requires a higher input
of management and labor, so
this fact needs to be consid-
ered when assessing the cost
in the planning process.
In considering profit, we
must be aware of biologi-
cal profit. This is the return
from good management that
keeps the land healthy, pro-
ductive and contributes to
sustainability. Management
that promotes plant recovery
after grazing and fosters the
longevity of healthy perenni-
als will make for greater bio-
logical profit. It will result in
minimal erosion, higher soil
organic matter and enhance
the environment for soil mi-
cro-organisms.
Good management is the
best investment to make to
achieve profit from a graz-
ing enterprise. Good man-
agement includes proper
planning, monitoring to
gauge what is happening and
adapting, as needed, to keep
the results moving toward
the managers’ desired out-
comes.
Doug Warnock, retired
from Washington State
University Extension, lives
on a ranch in the Touchet
River Valley where he writes
about and teaches grazing
management. He can be
contacted at dwarnock-
greenerpastures@gmail.com.
Stephen Ausmus/ARS
The USDA has proposed stricter rules for how organic livestock and poultry are raised. Included are
standards for how densely poultry can be stocked as well as minimum indoor and outdoor space.
Ag Department floats stricter
welfare rules for organic meat
By MARY CLARE JALONICK
Associated Press
WASHINGTON — The
Agriculture Department has
proposed stricter animal wel-
fare standards for organic
chicken and meat in a multibil-
lion-dollar market that is rap-
idly expanding each year.
The rules would ensure that
all livestock, including poul-
try, have enough space to lie
down, turn around, stand up
and fully stretch their limbs.
Beaks couldn’t be removed
and tails couldn’t be cut. Poul-
try houses would have to have
fresh air and ventilation.
“This will support the con-
tinued growth in the organic
livestock and poultry sectors,
and ensure consumer confi-
dence in the organic label,”
said Miles McEvoy, the head
of USDA’s organic program.
The retail market for or-
ganic products is valued at al-
most $40 billion in the United
States. USDA said this week
that the number of certified
organic operations in the Unit-
ed States increased by almost
12 percent between 2014 and
2015, the highest growth rate
since 2008 and an increase of
nearly 300 percent since the
department began counting
operations in 2002.
The broadest changes pro-
posed by USDA would cover
outdoor access for poultry,
suggesting standards for how
densely poultry can be stocked
as well as minimum indoor
and outdoor space require-
ments. The rules would require
poultry to have access to areas
that are at least 50 percent cov-
ered in soil. Hen houses would
not be allowed to only have a
porch; producers would have
to provide additional outdoor
space.
In addition to clean water
and direct access to sun and
shade, the rules would require
producers to design facilities to
encourage all birds to go out-
side on a daily basis. The out-
door areas would have to have
“suitable enrichment” to entice
birds to go outside, McEvoy
said.
The amount of outside
access for poultry has been
a subject of debate, as some
food safety advocates have ex-
pressed concerns that more out-
door access may increase the
chances of salmonella contami-
nation. The Food and Drug Ad-
ministration issued guidance in
2013 to try to help organic egg
producers better prevent salmo-
nella, a bacteria that can cause
diarrhea, fever, and abdominal
cramps and can be deadly with-
out prompt antibiotic treatment.
The Organic Trade Associa-
tion, which represents many of
the nation’s largest companies
that sell organic products, did
not comment on specifics of the
proposal.
But the group’s president,
Laura Batcha, said she was
pleased USDA is moving for-
ward with the rule.
“Ensuring that the high ex-
pectations consumers have for
organic foods are met preserves
the organic seal’s reputation as
the gold standard for agricultur-
al production practices,” Bat-
cha said.
Other producers expressed
concerns.
Jim Byrum, president of the
Michigan Agri-Business As-
sociation, said the rules could
slow business for egg produc-
ers, which could in turn reduce
the demand for organic corn
and soybeans that the chickens
eat.
“Eliminating porches that
already allow organic hens to
be outside would render tens
of millions of dollars of in-
vestment by many organic egg
producers obsolete,” Bynum
said. “The proposal also makes
deeply unrealistic assumptions
about food safety, requiring
direct exposure of hens to the
outdoors.”
U.S. butter market shows some resilience
By LEE MIELKE
For the Capital Press
T
he resilient butter mar-
ket has been again fight-
ing its way up the price
ladder.
The CME spot price
jumped 4 1/4 cents last Tues-
day, 7 3/4 cents on Wednesday,
with 21 cars traded on the day,
and then added 4 cents Friday
to close at $2.12 per pound,
up 16 cents on the week, 36
3/4-cents above a year ago,
and the highest spot price since
Feb. 12.
Twenty-six cars traded
hands last week at the CME.
The golden cash cow
13
Dairy
Markets
Lee Mielke
jumped a nickel on Monday
but then dropped a dime on
Tuesday, to $2.07 per pound.
USDA’s Dairy Market
News says market partici-
pants are “puzzled” over the
price strength, considering the
spring holidays are behind us
and “especially in light of do-
mestic prices being above in-
ternational prices and stocks
on hand registering higher the
two previous years.”
“The pace of retail sales
is slower than the previous
month, but food service in-
terest is steady,” DMN says.
“Producers are content to build
inventories ahead of Third and
Fourth Quarter.”
Western buttermakers say
production remains active but
they have slowed the churns
slightly.
“Butter stocks are build-
ing,” DMN says, but retail de-
mand continues to be strong,
and some contacts say “a few
new end users, who once used
hydrogenated vegetable oils,
are requesting butter instead.”
Block Cheddar cheese closed
the first full week of April at
$1.42 per pound, down a nickel
on the week, 15 3/4-cents below
a year ago, and the lowest block
price since Dec. 23, 2015.
The barrels ended at $1.4175,
down 3 3/4-cents on the week,
19 1/4-cents below a year ago,
and the lowest since Feb. 24,
2015. Only one car of block and
five of barrel were sold on the
week at the CME.
The blocks inched a quar-
ter-cent lower Monday but
gained three-quarters Tuesday,
inching to $1.4250. The barrels
were also down a quarter-cent
Monday but jumped 2 cents
Tuesday, to top the blocks at
$1.4350.
DMN says milk supplies are
increasing and being offered at
below-class prices. Many Mid-
west cheese plants are at full
capacity. Domestic cheese sales
are “decent but export sales re-
main challenging.” Tight cold
storage availability is a con-
cern and aging programs are
“well stocked.”
CHIBA CITY, Japan —
U.S. Meat Export Federation
president and CEO Philip
Seng says he’s not ready to
make any volume increase
predictions yet, but the new
Trans-Pacific
Partnership
agreement will surely enhance
the competitiveness of U.S.
meat in the Japanese market.
“It will bring down the tar-
iffs on beef and give us a level
playing field,” Seng said.
In an interview with Cap-
ital Press at the recent FOO-
DEX international trade show,
Seng said that under the Aus-
tralia-Japan free trade agree-
ment, the Japanese tariffs on
beef don’t go down as low as
those under the TPP agree-
ment.
Under the Australia-Japan
FTA that went into effect last
year, Japanese tariffs on beef,
normally at 38.5 percent,
will drop to 23.5 percent for
chilled beef within 15 years.
The tariff for frozen beef will
fall to 19.5 percent within 18
years.
Conversely, under the TPP,
the overall tariffs will fall to 9
percent within 15 years.
Seng pointed out that the
Japanese yen has recently
appreciated compared to the
U.S. dollar but weakened
compared to the Australian
dollar, giving U.S. exporters
an exchange rate edge over
their Aussie counterparts.
Also, the drought in Aus-
tralia has reduced the coun-
try’s cattle herd. “So we think
our (beef) exports (to Japan)
will increase,” Seng said.
As of April 12, the U.S.
dollar was worth 108.5 yen,
down from 112 yen last fall.
Pork exports evoke the
same optimism, Seng said, as
Japan’s 20 percent tariff on
ground seasoned pork and 10
percent tariff on sausages will
be eliminated under the TPP
after six years.
Japan’s current 4.3 percent
tariff on fresh, chilled, and
frozen pork cuts will imme-
diately be reduced by 50 per-
cent, with the residual duty
eliminated in 10 years.
Japan will immediately
reduce the specific duty on
pork cuts from its previous
maximum charge of 482 yen
per kilo to 125 yen, with a fur-
ther reduction to 50 yen by the
10th year.
Seng said one hears a lot of
talk about Japan’s population
declining, which would re-
duce demand for overall food
exports. He emphasized, how-
ever, that tourists in Japan last
year numbered 20 million.
“We see that going up to
30 million” a year, Seng said.
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