February 10, 2017
CapitalPress.com
7
U.S. beef herd expansion not done yet
By CAROL RYAN DUMAS
Capital Press
USDA’s annual cattle in-
ventory answers one of the
top questions circulating in
the beef industry: Is the fall-
out in cattle prices since the
record highs of 2014 and ear-
ly 2015 bringing herd expan-
sion to an end?
The answer is “apparently
not as much as we thought,”
said Derrell Peel, Oklahoma
State University Extension
livestock marketing special-
ist.
“It certainly surprises me.
We have two years really of
significant expansion under
our belt, and it looks like
we’re set up for another year
of reasonable expansion,”
U.S. cattle inventory, Jan. 1
Item
Cattle and calves
Beef cows and heifers
that have calved
Replacement beef heifers
Replacement beef heifers
expected to calve
Item
Calf crop
(1,000 head)
2016
2017
91,918
30,165.8
93,584.6
31,210.2
2
3
6,340.2
3,936.6
6,419.2
4,000.2
1
2
(1,000 head)
2015
2016
34,086.7
Percent
change
35,082.7
Source: USDA NASS
Peel said.
The beef cow herd on Jan.
1 stood at 31.2 million head,
an increase of more than 1
million head, the National
Agricultural Statistics Service
reported Jan. 31.
Percent
change
3
Capital Press graphic
With USDA’s revision to
the Jan. 1, 2016, beef cow
numbers, the beef cows herd
is up 3.5 percent coming into
2017. But the biggest surprise
is the increase in replacement
heifers, he said.
NASS no longer puts out a
mid-year inventory report, but
Peel has been tracking heifers
on feed. That number start-
ed increasing in the second
quarter of 2016, followed by
increased heifer slaughter —
which was up 12 percent year
over year in the fourth quarter.
While replacement heifers
in the Jan. 1 inventory aren’t
up a lot, about 1.2 percent,
that’s on top of a big number
last year (up 3.2 percent) and
is a big surprise, Peel said.
“I thought we’d back off
significantly,” he said.
Peel is not alone in his low-
er expectations. Beef cows and
replacement heifers are both
about 2 percent higher than
industry analysts expected, ac-
cording to pre-report estimates
tracked by Urner Barry and re-
ported in the Daily Livestock
Report.
Total cattle inventory, both
beef and dairy animals, is up
1.8 percent year over year,
about what Peel expected but
about 1 percent higher than the
surveyed analysts expected.
“With the herd doing what
it appears to be doing, we’ll
continue to grow this year,”
Peel said.
Drilling down into the
numbers, the estimated supply
of feeder cattle is up 2.2 per-
cent, which is not surprising.
It’s a large increase but not
near as much as the 5.6 percent
increase a year ago, he said.
Last year was probably the
biggest year of market adjust-
ment in this expansion. The
industry is in better shape to
handle the increase in feeder
supplies this year, and there’s
a reason for the little stronger
market that started in Decem-
ber, he said.
The increased feeder sup-
plies don’t really change his
price outlook for 2017. He is
expecting prices to level off
where they are now for a side-
ways year with some seasonal
moves.
Total feedlot numbers are
down slightly, and the 2016
calf crop is up 2.9 percent —
fairly close to what was ex-
pected, he said.
Overall, the inventory re-
port suggests larger beef pro-
duction through 2019 and a
“pretty aggressive expansion
mode” he said.
Oregon lawmakers urged Report shows significant drop in Idaho spud costs
to boost noxious weed
spending by $1 million
POCATELLO, Idaho — A
By JOHN O’CONNELL
Capital Press
Plants estimated to
cost state’s economy
$83 million a year
By MATEUSZ PERKOWSKI
Capital Press
SALEM — Oregon farm
groups are urging lawmakers
to boost noxious weed con-
trol funding by $1 million,
arguing the investment will
prevent even costlier future
battles against invasives.
House Bill 2043 would
appropriate $1 million from
the general fund to carry out
the Oregon Department of
Agriculture’s noxious weed
programs in the 2017-2019
biennium.
“It’s penny-wise and
pound-foolish to cut ourselves
short now,” said Peter Ke-
nagy, a Benton County farm-
er who testified in support of
HB 2043 at a Feb. 7 hearing
before the House Agriculture
Committee.
Under Gov. Kate Brown’s
proposed budget for the next
biennium, ODA is slated to
cut its biocontrol program for
invasive weeds, which relies
on predatory insects to sup-
press unwanted plants.
Eliminating the weed bio-
control position, which is cur-
rently vacant, would save the
ODA $250,000 at a time when
state agencies are under finan-
cial pressure due to a loom-
ing $1.8 billion state budget
shortfall.
“If we don’t keep fund-
ing these things, we’re going
to pay for it later,” Kenagy
said. “Cutting money out of
the budget for this, we’ll pay
for it and our kids will pay
for it.”
Representatives of the
Oregon Farm Bureau, the
Oregon Cattlemen’s Associ-
ation, Oregonians for Food
and Shelter and the Oregon
Association of Conservation
Districts also testified in favor
of the bill.
Noxious weeds are es-
timated to cost Oregon’s
economy about $83 million
per year, said Katie Fast, ex-
ecutive director of the Ore-
gonians for Food and Shelter
agribusiness group.
Lawmakers should not
consider adding new natural
resource programs until “base
programs” such as noxious
weed control are funded, Fast
said.
Invasive species don’t
recognize boundaries and the
problem with noxious weeds
will get worse if ignored, said
Michelle Delepine on behalf
of the Oregon Association of
Conservation Districts.
“This isn’t something you
can just put on hold,” she said.
Aside from the weeds that
already afflict Oregon farm-
ers, the state is facing an incur-
sion of new invasives, such as
the flowering rush that’s been
found growing along the Co-
lumbia River, said Sen. Bill
Hansell, R-Athena.
The weed spreads by piec-
es of root breaking off and
traveling downstream.
The populations of the
weed in Oregon and Washing-
ton are thought to have orig-
inated in Montana’s Flathead
Lake, he said.
Flowering rush threatens
to clog up irrigation systems
and disrupt ecosystems to the
detriment of native fish spe-
cies.
“We need all the help we
can get,” said Hansell.
During the Feb. 7 hearing,
the House Agriculture Com-
mittee also heard testimony
on several other bills:
• House Bill 2327 would
require the recipients of grants
from the Oregon Watershed
Enhancement Board to obtain
liability insurance for projects
aimed at improving water
quality and riparian habitats.
The cost would be covered
by grant funds, so the added
expense wouldn’t be borne by
recipients.
The bill would also repeal
statutory language related to a
“healthy streams partnership”
that’s no longer operational
and add a representative of
the U.S. Fish and Wildlife
Service as a non-voting mem-
ber of OWEB’s board, among
other provisions.
• House Bill 2254 would
allow individual contain-
ers of Oregon fresh produce
to be unlabeled if they’re
headed for export to for-
eign markets. Under current
law, all such containers must
be labeled for sale, which
imposes an added burden
on exporters. The change
would allow foreign buyers
to label Oregon farm goods
when they arrive in another
country.
• House Bill 2255 would
update Oregon’s milk-related
statutes to align with feder-
al rules for pasteurized milk
safety, because current stat-
utes are outdated and don’t
conform with the federal re-
quirements.
• House Bill 2256 would
clarify that nutritional supple-
ments are regulated as food
by the Oregon Department
of Agriculture, which will
ensure the agency has the au-
thority for potential enforce-
ment actions.
USDA NATURAL RESOURCES CONSERVATION SERVICE
Local Work Group Meeting for Marion County
February 24 th , 2017
February 24 , 2017
9:00am - 12:00pm
650 Hawthorne Ave SE, Suite 130, Salem, OR
For more information call:
Les Bachelor 503-399-5741 x4816
NRCS will hold their annual Local Work Group
Meeting to gather input from farmers, ranchers,
state and federal agencies, agriculture, energy, and
conservation organizations regarding Farm Bill
conservation priorities in Marion County.
Request accommodations for persons with disabilities should
be made at least 48 hours before the meeting to Les
Bachelor at 503-399-5741 x4816.
6-2/.#7
significant decline in produc-
tion costs in 2016 has helped
Idaho potato farmers cope
with low commodity prices,
according to a new study by
University of Idaho Extension
agricultural economist Ben
Eborn.
Eborn took over respon-
sibilities for the Idaho Potato
Commission’s annual potato
production cost report from
Paul Patterson, who retired as
a UI economist in 2015.
Eborn estimated spud
producers’ production costs
dropped from 5.5 percent in
fumigated southwestern fields
to 8.5 percent in southcentral
fields without fumigation.
Eborn developed model
farms raising Russet Bur-
banks typifying each region,
based on surveys of growers,
lenders and input and ser-
vice providers. Yields were
based on a three-year average
through 2015. Total costs on
his model farms ranged from
as low as $2,236 per acre for
northeastern Idaho farmers
using no fumigation — a re-
duction of $143 from the pre-
vious year — to $3,466 per
acre for southwestern Idaho
farmers with fumigation —
down $276 per acre.
“It’s not often the costs of
production go down in agri-
culture, but thankfully they
did,” Eborn said, noting pric-
es paid to growers were also
down, especially in the fresh
market.
He also made calcula-
tions factoring storage costs.
For example, he placed the
break-even point for a grow-
er raising a crop with 95 per-
cent marketable spuds stored
through February at $7.75 to
$8.34 per hundredweight.
Photos by John O’Connell/Capital Press
Potatoes are harvested Aug. 23 in Eastern Idaho. Lower production costs have helped Idaho potato
farmers cope with low commodity prices, according to a new study by University of Idaho Extension
agricultural economist Ben Eborn.
University of Idaho Extension
agricultural economist Ben
Eborn presents data from his
report on the cost of produc-
ing potatoes in Idaho Jan. 19
during the annual UI Potato
Conference.
The production cost de-
cline was led by inputs
tied to oil, including fuel,
fertilizer, custom services
and chemicals. There were
some notable exceptions to
the trend, including cost in-
creases posted in labor, in-
terest and irrigation.
Eborn estimated fertilizer
costs were down by 25 to 27
percent. Pesticide and chemi-
cal expenses were down 10 to
21 percent, which also factors
in a reduction of one to two
applications based on reduced
disease pressure in 2016. Cus-
tom and consultant expenses
were down 9 to 26 percent,
based on cheaper fuel for
field work. Cheaper fuel also
reduced the cost of operating
machinery by 8 to 9 percent.
Equipment ownership costs
were up 1 to 2 percent, how-
ever.
Both water assessments
and power rates rose, driving
an irrigation cost increase of
1 to 3 percent. Interest rates
rose by a quarter of a percent.
Eborn increased field labor by
3.5 percent, based on national
USDA estimates. More labor
also contributed a 2 to 4 per-
cent increase in seed cutting
and treatment. Insurance rates
rose 3 percent, and land rental
rates were flat.
American Falls potato
farmer Jim Tiede said Eborn’s
estimates are in line with his
costs in most cases, with a
few exceptions. He renego-
tiated land rentals in 2016 at
a 5 percent increase. His cus-
tom application costs were
flat, rather than decreased as
Eborn estimated, but he also
didn’t notice any increase in
labor costs. Though power
rates were up, good growing
conditions enabled him to cut
back on irrigation and save on
power costs.
“I would say my total cost
of production was flat,” Tiede
said, adding processors paid
him $7.35 per hundredweight
for usable, field-delivered
Burbanks.
Shelley grower Kent Bit-
ter said growers raising spuds
for the fresh market, however,
are losing money “hand over
fist” at current prices. Nor-
mally, the market would dic-
tate a reduction in acreage for
the coming season, but Bitter
doubts that will happen, given
that prices of most of the other
commodities are also down.