The North American Free Trade Agreement negotiations are continuing, with several contentious issues to work through. A Veteran international trade lawyer is questioning Washington’s NAFTA negotiating tactics and wants to warn American agriculture groups to keep a sharp eye on how things develop and progress.
Daniel Ujczo is an International Trade Lawyer with Dickinson Wright law firm in Columbus, Ohio. He’s concerned about America’s NAFTA negotiating tactics and wants agriculture to keep the pressure on for a positive outcome. (contributed photo)
Dan Ujczo is an International Trade and Customs Attorney for Dickinson Wright Law Firm in Columbus, Ohio. He specializes in Canada-United States trade matters, so he’s keeping an especially close eye on the NAFTA negotiations. There are seven rounds in the discussions, and he noted that the most aggressive positions on trade began to show up during Round 3. He’s worried about the tenor and tone of the Trump Administration during these negotiations.
“We saw the U.S. begin to put forth very aggressive proposals in Round 3 up in Ottawa,” Ujczo said. “The first one was on government procurement, also known as “Buy American,” which basically said the U.S. is going to cut back on the number of government contracts Canada and Mexico are allowed to procure. At the same time, the U.S. wants Canada and Mexico to allow more American participation in bidding on their government contracts.”
He said that’s when feathers first began ruffling. Round 4 saw some aggressive proposals on automotive rules-of-origin, which the U.S. wants to bump from 62 percent North American content to 85 percent. The Trump Administration wants 50 percent of that 85 percent number to come from North America. Ujczo said there are no free-trade agreements in the world that have a nation-specific rule-of-origin like that.
The Canadian supply-management program restricts the amounts of American dairy, poultry, and eggs that get into Canada. Ujczo said Canada’s called it a “red line” that they won’t cross. It’s something to keep an eye on as the U.S. negotiators have already come out against the supply-management system.
“The U.S. is also talking about a sunset provision, meaning NAFTA would automatically terminate after five years unless Congress reauthorizes it,” he said. “Those are things that will cause Canada and Mexico to carefully consider their next moves. There is a very real possibility that the U.S. knows that Canada and Mexico can’t negotiate on issues like that, which means we’re left with one conclusion.”
Ujczo said that conclusion is, in his mind, the U.S. NAFTA negotiating tactics may be designed to try and get Canada and Mexico to walk away from NAFTA. If they don’t, he said the Trump Administration very well could walk away by the end of this year. He feels the Trump Administration doesn’t necessarily want to walk away from the deal, rather, they’re more concerned about “making America great again.”
Here is the complete discussion. Is he right? Is he just being politically motivated? I didn’t get the sense he was. It felt more like a warning to American agriculture to keep making your voices heard.
A new Farm & Rural Helpline is now available to Minnesota farmers and rural residents. The service, funded by the Minnesota Department of Agriculture (MDA), is free, confidential, and open 24 hours a day, seven days a week. The toll free number is (833) 600-2670.
The Minnesota Department of Agriculture is helping to fund a Farm and Rural Helpline for those folks out in the country who are going through tough times. Don’t be afraid to reach out and talk to someone when things get tough. It’ll keep you moving in the right direction.
Farmers and rural communities face unique stresses and emotional situations, including financial challenges, unpredictable weather, physically demanding work, and more. As stress, anxiety, depression, financial burdens, and other mental and emotional issues continue to impact the lives of Minnesota farmers and rural residents, the MDA recognized the need for ongoing support.
“I farmed for 24 years, so I’m no stranger to the stress and worry that can be part of farming,” said MDA Commissioner Dave Frederickson. “I know that sometimes it helps to talk to someone about problems that can seem insurmountable. There is always help available around the corner.”
As an active farmer during the economic crisis of the 1980s, Commissioner Frederickson experienced first-hand the emotional toll farming can take on individuals and families.
He also knows that resources are available in Minnesota to families navigating the unique challenges facing farmers on a daily basis. The Farm & Rural Helpline can connect callers to financial assistance programs, health and mental health services, legal help, and more. Calls are confidential, but counselors may ask for a first name and phone number in case of a dropped call. Translation services are also available, with translators available in all languages.
The Farm & Rural Helpline is also available to those unsure of what to do about family or friends who may be experiencing anxiety, depression, or a mental health crisis.
Minnesota farmers and rural Minnesotans can call the toll free number as often as needed at (833) 600-2670.
Farmers are often independent by nature. It’s what helps them succeed in their chosen profession. Don’t be afraid to reach out and find someone to talk to. It’ll keep you healthy and going in the right direction to unload the stuff that’s on your mind, once in a while.
It’s been unbelievable to watch the Texas floods play out, hasn’t it? Watching the aftermath of Hurricane Harvey play out on TV screens, laptops, and smartphones all make it seem like you’re watching a disaster movie play out, but this is as real as it gets.
Here’s a portion of a recent press release from the Texas Department of Agriculture. It’s not pretty:
“Cotton farmers in the Upper Coastal Bend were some of the hardest-hit ag producers, with hundreds of cotton modules blown apart by gale-force winds and many more lying wet in fields and at gin yards. 13 of the 50 counties declared disaster areas by Governor Abbott are cotton-producing areas. Texas rice producers had already harvested around 75 percent of this year’s crops, but storage bins may have undergone extensive wind and water damage, leading to more crop losses. Wheat, soybean, and corn exports all ground to a halt late last week as Texas ports prepared for the oncoming hurricane. Texas is responsible for exporting almost one-fourth of the nation’s wheat and a significant portion of U.S. corn and soybeans.”
Here’s a picture of Houston as the Texas floods make life difficult in the aftermath of Hurricane Harvey, and the rains aren’t done yet. (photo from foxnews.com)
They don’t have much in the way of livestock estimates just yet but that’ll change when all that flood water finally recedes. Texas is in line for more rain yet this week so that’ll only make getting rid of the water that much more difficult.
Maybe you’ve already guessed but, as you know, Texas is home to one-third of the refineries in the U.S., and that means higher fuel prices. Most of the refineries had to shut down in anticipation of Hurricane Harvey.
Finally, Texas Agriculture Commissioner Sid Miller has also activated the State of Texas Agriculture Relief Fund (STAR Fund) to assist farmers and ranchers affected by Hurricane Harvey. As the area moves into the recovery phase, Texas ag producers in the area will need a little help getting back on their feet, and that’s where the STAR Fund comes in. Ag producers in all 54 counties declared disaster areas by Governor Abbott are eligible to apply for cost-matching funds to help get operations back up and running in the wake of this catastrophic natural disaster. You can donate from anywhere. Check out the website at texasagriculture.gov and follow the link to the STAR Fund.
Here’s a podcast with Texas Farm Bureau Director of Communications Gene Hall.
Here’s a birds-eye view of the flooding in Houston, courtesy of Bryan Rumbaugh.
Agriculture and weather go hand in hand. One (agriculture) watches the other (weather), while one (weather) has a big effect on the other (agriculture). Weather, specifically the 2017 drought, is hitting agriculture hard. That’s why it’s time to talk weather with my guy, Ryan Martin, who you can find at his personal website address, weatherstud.com. By the way, if you needed any more credibility, he’s also the Chief Meteorologist for the Hoosier Ag Today radio network in Indiana, so he’s established.
Meteorologist Ryan Martin, shown here giving a presentation at the 2017 American Farm Bureau Federation national convention, says there’s not much relief in sight for states hit hardest by the 2017 drought. (photo from twitter.com)
We’ve talked an awful lot about what’s going on with the 2017 drought in the Dakotas. Both North and South Dakota have suffered under immense heat and non-stop dry weather. What you may not realize is the coverage area of the drought is still expanding. While the focal point is at its worst in North and South Dakota, it’s also into a good deal of Montana (have you heard about the wildfires?) and well up into the Canadian prairies.
I caught up with Ryan on the phone while he was actually driving through the Canadian prairies for work, so he saw firsthand just how far north the 2017 drought went. The drought is in Saskatchewan and western Manitoba, where it’s been going on for some time now. The Saskatchewan wheat crop is starting to turn color but it’s not even at all. There are bands that actually look dead along the outside edges of some fields while still green in other places. The lack of rain has hit Canada’s wheat fields pretty hard.
The hardest hit areas are in what’s referred to as exceptional drought. In actual terms, that means many of the hardest hit areas have picked up .5-1.5 inches of rain over the past two months. In other words, not enough.
The biggest question is whether or not there’s any relief in sight, whether in the short or long term. Ryan describes it as a situation in which “dryness begets dryness.” Give a listen to the conversation.
Not good news for American beef producers to end the week on. Japan just announced it’s triggering a tariff increase on U.S. beef imports, which means our product just got a lot more expensive for the consumers in what’s been a very valuable export market.A big part of the problem is not having a bilateral trade agreement with Japan. Thank Washington for not making that happen sooner. Here’s some reaction from agriculture:
The really interesting part is the note from the Meat Export Federation that says the increase in American beef imports really hasn’t hurt domestic supplies, with carcass and feeder cattle prices lower than in recent months, but prices are still at RECORD HIGHS.
WASHINGTON, July 28, 2017 – The government of Japan has announced that rising imports of frozen beef in the first quarter of the Japanese fiscal year (April-June) have triggered a safeguard, resulting in an automatic increase to Japan’s tariff rate under the WTO on U.S. beef imports. The increase, from 38.5 percent to 50 percent, will begin August 1, 2017 and last through March 31, 2018. The tariff would affect only exporters from countries, including the United States, which do not have free trade agreements with Japan currently in force.
U.S. Secretary of Agriculture Sonny Perdue issued the following statement:
USDA Ag Secretary Sonny Perdue isn’t happy to hear that the tariff rate on U.S. beef imports to Japan is taking a 12 percent jump because higher import totals this year triggered a “safeguard.” (photo from usda.gov)
“I am concerned that an increase in Japan’s tariff on frozen beef imports will impede U.S. beef sales and is likely to increase the United States’ overall trade deficit with Japan. This would harm our important bilateral trade relationship with Japan on agricultural products. It would also negatively affect Japanese consumers by raising prices and limiting their access to high-quality U.S. frozen beef. I have asked representatives of the Japanese government directly and clearly to make every effort to address these strong concerns, and the harm that could result to both American producers and Japanese consumers.”
U.S. exports of beef and beef products to Japan totaled $1.5 billion last year, making it the United States’ top market.
National Cattlemen’s Beef Association (NCBA) President Craig Uden issued the following statement in response to the tariff increase:
NCBA President Craig Uden says the Japan announcement of a tariff increase on U.S. beef imports should send a message to Washington about the need for a bilateral trade agreement with the largest export customer of American beef. (photo from cattle business weekly)
“We’re very disappointed to learn that the tariff on U.S. beef imports to Japan will increase from 38.5 percent to 50 percent until April 2018. Japan is the top export market for U.S. beef in both volume and value, and anything that restricts our sales to Japan will have a negative impact on America’s ranching families and our Japanese consumers. NCBA opposes artificial barriers like these because they unfairly distort the market and punish both producers and consumers. Nobody wins in this situation. Our producers lose access, and beef becomes a lot more expensive for Japanese consumers. We hope the Trump Administration and Congress realize that this unfortunate development underscores the urgent need for a bilateral trade agreement with Japan absent the Trans-Pacific Partnership.”
Background: Japan was the top export market for U.S. beef, valued at $1.5 billion in 2016. According to data compiled by the U.S. Meat Export Federation, first quarter U.S. beef sales to Japan increased 42 percent over 2016. In addition to the United States, the 50 percent safeguard tariff also applies to imports from Canada, New Zealand, and other countries that do not have a free trade agreement with Japan.
The U.S. Meat Export Federation also weighed in on Japan’s move:
“USMEF recognizes that the safeguard will not only have negative implications for U.S. beef producers, but will also have a significant impact on the Japanese foodservice industry,” explained U.S. Meat Export Federation (USMEF) President and CEO Philip Seng. “It will be especially difficult for the gyudon beef bowl restaurants that rely heavily on Choice U.S. short plate as a primary ingredient. This sector endured a tremendous setback when U.S. beef was absent from the Japanese market due to BSE, and was finally enjoying robust growth due to greater availability of U.S. beef and strong consumer demand. USMEF will work with its partners in Japan to mitigate the impact of the safeguard as much as possible. We will also continue to pursue all opportunities to address the safeguard situation by encouraging the U.S. and Japanese governments to reach a mutually beneficial resolution to this issue.”
As agreed to in 1994 in the WTO Uruguay Round, Japan maintains separate quarterly import safeguards on chilled and frozen beef, allowing imports to increase by 17 percent compared to the corresponding quarter of the previous year. The duty increases from 38.5 percent to 50 percent when imports exceed the safeguard volume. Japan’s frozen beef imports in the 2016 Japanese fiscal year were lower than in previous years, thus the growth in imports during this first quarter of the current fiscal year exceeded 17 percent, driven in part by rebuilding of frozen inventories and strong demand for beef in Japan’s foodservice sector. The most recent quarter saw strong growth in imports from all of Japan’s main beef suppliers.
The implications for U.S. beef exports are significant because U.S. frozen beef now faces an even wider tariff disadvantage compared to Australian beef. The duty on U.S. frozen beef imports, effective Aug. 1, 2017 through March 31, 2018, will be 50 percent while the duty on Australian beef will remain at the current rate of 27.2 percent, as established in the Japan-Australia Economic Partnership Agreement (JAEPA). The snapback duty of 50 percent will apply to frozen imports from suppliers that do not have an economic partnership agreement (EPA) with Japan, which are mainly the U.S., Canada and New Zealand.
The U.S. Meat Export Federation isn’t happy to hear the tariff rate on U.S. beef imports is taking a twelve percent jump in Japan. They point out the move normally would protect domestic supplies. but carcass prices for feeder cattle are just off record highs.
Conditions have changed since the quarterly safeguards were established in 1994, and the growth in Japan’s imports this year has not adversely impacted Japan’s domestic beef producers. Prices for wagyu carcasses and wagyu feeder cattle are down from the record highs of last year, but are otherwise the highest in recent history. Japan has also moved away from the quarterly safeguard mechanism in its recent trade agreements. Through the JAEPA, Japan transitioned from quarterly safeguards to annual safeguards, which are much less likely to be triggered. The snapback duties on Australian beef have also been reduced, minimizing any potential impact on trade. Japan also agreed to similar terms in its economic partnership agreement with Mexico and in the Trans-Pacific Partnership (TPP).
Supplemental information on Japan’s imports of U.S. beef and possible implications of the safeguard are available in this brief USMEF fact sheet. Further analysis and charts are also available online.
It’s a debate that is guaranteed to incite emotions, both for and against. Increasing trade opportunities with Cuba is a hot button topic in Washington D.C., but it’s an important topic for agriculture. Minnesota is one state in the Union that recognizes the opportunities in Cuba. Several state officials and Ag groups took part in a recent June trade mission to our neighbors 90 miles to the south of Florida.
The timing felt a little ironic. Minnesota Lieutenant Governor Tina Smith put the trip together months ago as a follow-up to a recent state trip to Cuba last December. The Friday before the delegation arrived in Cuba on the most trade mission, President Donald Trump decided to roll back some of the Obama-era regulatory moves that opened up opportunities for the countries to do business. That made the trip a little more important in the minds of Minnesota officials and Ag groups.
Minnesota Farm Bureau President Kevin Paap was a member of the recent Minnesota delegation to travel to Cuba to talk about increasing trade opportunities between the state and the island nation 90 miles south of Cuba. (contributed photo)
“It (Trump’s announcement) didn’t change any of our goals going down there,” said Minnesota Farm Bureau President Kevin Paap, a member of the delegation, “but it certainly ratcheted up the importance of our being there. We were the first Ag trade team down there after the Trump announcement, so everybody down there was aware of it.”
Paap said it was a vital opportunity for Minnesota to highlight the importance for agriculture that the countries continue to work together to become better neighbors and trading partners. It was also an opportunity to do what they could politically to help change the situation.
That was vital because Minnesota and Cuba have been doing business for some time, dating back to 2002 when then-Governor Jesse Ventura hosted the first big trade mission to Cuba. That’s where things began to really take off with trade reaching a high water mark between Cuba and Minnesota, but things have been tailing off for the last few years. The potential is there for things to improve.
“We have to understand,” Paap said, “they aren’t the biggest market, but it is an important market and a close market. It’s important to remember when dealing with perishable goods, in terms of quality and price, distance has a negative effect on all that. We should be able to beat everyone else on quality, price, and transportation.”
Despite some of the rhetoric people may hear when talking about Cuba, it’s important to note that the people of Cuba are enthusiastic about possibly trading with America.
The opportunities are there in Cuba for commodities like corn, soy products, black beans, dried beans, and some livestock opportunities too. He said there are things Cuba just can’t produce on their own.
“They have a lot of silt in their soils with not much in the way of organic matter,” Paap said. “They really haven’t put down a lot of nutrients into the soil in the last 50 years or so. There are some tillable acres in the country but it’s just not high quality.”
It’s not just the soils. Farmers in Cuba are working with a lack of modern equipment that American farmers are used to. A Cuban farmer used a one-bottom plow and two oxen to work one of the fields Paap saw during the trip. He says it seems like the country is locked in time decades in the past.
A trade mission like this always has two goals at the top of mind. Obviously, one goal is to do business but the other, and more important, goal is to build relationships.
“When you deal with an international trade mission, it’s always about building relationships before doing business,” Paap said. “We (Americans) probably aren’t as aware of that when you talk about dealing with other countries. You have to have a relationship. There has to be a reason for doing business besides dollars and cents.”
That’s hugely important and not just in Cuba. It’s the same if you’re talking trade with Asian countries or anyplace else in the world. The trip was a big opportunity to make sure the Cuban people understood the importance America placed on the relationship in light of the Trump announcement.
“It was a chance for us to say agriculture worked hard to make sure it wasn’t affected by the Trump announcement,” Paap stressed. “When it comes to the changes by President Trump, we weren’t as affected by those as others were and we wanted the Cubans to see that as a good sign.”
It was a chance for Minnesota to also point out they have two “champions” for trade with Cuba in Senator Amy Klobuchar and Representative Tom Emmer, working in a bipartisan manner on the topic for a long time.
The delegation went face-to-face with a lot of different people while they were in the country and Paap said it ran the gamut.
One of the most interesting changes in Cuba has to do with how they deal with foreigners. As recently as the mid-1990s, Cuban farmers weren’t allowed by law to even talk to people from outside the country, even those on a trade mission. Now, everyday people in Cuba told the delegation members that they’re hoping to get some help from the USA.
It’s not the biggest market but there are opportunities there. Paap and the American delegation were walking into the Ministry of Agriculture to meet with Cuban officials and a Chinese trade delegation was walking out at the same time.
“If we’re going to choose not to be there and involved in infrastructure upgrades, that doesn’t mean it won’t happen,” Paap said. “There’s a lot of countries putting some money into the country. Even Minnesota Ag Commissioner Dave Fredrickson (who was on the first trade mission) said it was amazing how much the country had changed, even since last December.”
There’s a lot of work to do to improve the lives of the average Cuban who earns between 20 and 24 dollars a month. Paap is a farmer in Blue Earth County and his Cuban counterparts have lots of questions for the American farmers on the trip.
“I always make sure and bring along a picture book,” Paap said, “especially when there’s a language barrier. There was a lot of interest in that. They had a lot of livestock questions about pigs and what we feed them and how heavy they are. They had a lot of questions about things like rainfall and crop yields. We had a lot of great farmer-to-farmer conversations.”
Cubans understand there are things they can’t grow in their fields. Paap wants to know why wouldn’t we want to sell Ag commodities to a country that’s only 90 miles south of America. After all, farmers understand logistics and travel better than most. Farmers realized a long time ago the value of working together, and that the people you work the best with are likely those closest to you.
The biggest obstacle for agriculture to overcome in order to improve trade with Cuba is the financing mechanism. In order for America to sell agricultural products to Cuba, the buyers have to come up with all the cash up front through a third party. That’s a big disadvantage when America’s competitors are more than happy to offer financing.
“That’s where the work of Senator Klobuchar and Congressman Emmer comes in to help try to get rid of some of those requirements,” Paap says. “That would make us a more desirable trading partner as well as the closest.”
Beef prices have ridden a world-class roller coaster in recent years, making profitable cattle marketing an enormous challenge. Prices peaked in 2014, going as high as they’d been in recent memory. However, they began a downward slide in mid-2015 before tanking through most of 2016.
Troy Hadrick, pictured with wife Stacy, recently began doing things different when it came to his cattle marketing efforts. Those efforts helped him and other producers get through a recent run of the worst cattle prices the industry has seen in some time. (photo courtesy of advocatesforag.com)
Troy Hadrick is a producer from Faulkton, South Dakota, who rode the highs and lows in beef cattle prices, experiencing firsthand the challenges that low prices present. While fed cattle prices had rallied from October of 2016 into early this year, the business is cyclical and low prices will come around again. Hadrick said it is possible for beef cattle producers to make it through the down times, provided they’re willing to try new things.
There are a lot of theories as to why prices began a free-fall in 2015, falling at an unprecedented pace. Before prices got to that point, Hadrick says beef saw a perfect storm of conditions that drove prices to record highs in 2014. A large number of pigs in the U.S. had died of PED so pork production was way down. An Avian Influenza outbreak had pushed chicken and poultry production lower as well. Combine those facts with the lowest cattle numbers America had seen since the 1940s and you have the recipe for high beef prices.
“There wasn’t enough beef and protein to go around,” Hadrick said, “so our industry did what it always does. It responds and makes a bunch more of the product.”
But the number of cattle head in the herd doesn’t paint the full picture. It’s more about the pounds of product the industry produces. High prices meant producers were getting cattle as fat as possible to produce as many pounds as possible. The industry was at record carcass weight during the boom.
“We were producing carcass weights of approximately 850 pounds at that time,” he said. “Our recent carcass weights were around 814 pounds. So if we kill approximately 500,000 head a week, take that times 30 pounds a head, and look at the difference. The population stays the same as we’re killing the same number of head but the amount of product we’re producing is different.”
Needless to say, prices going from record highs to unbelievably low prices came down hard on the beef industry. There’s no doubt producers were pushed out of business as profits margins shrank to razor-thin levels. Theories ranging from oversupply to market manipulation abounded as the industry was under stress. Hadrick is very sympathetic to the plight of his fellow producers, having gone through the downturn himself. He does want to point out that if producers are willing to try new things, it’s possible to weather the downturns more efficiently.
Back in 2012, the Hadricks began changing their breeding and marketing programs for their cattle. There are different grades of beef and those grades are priced differently.
Higher quality beef demands a higher price because there’s less of it available. There’s a good demand for higher quality beef because it tastes better.
“We started shooting to produce cattle that would give us the beef that would qualify for these premium programs, such as Certified Angus Beef and USDA Prime,” he said. “If you produce cattle that fit into those categories then you get a nice premium price for your product.”
They did a couple of different things to try to speed up the process of producing premium beef. The family implemented an AI program on the ranch that covered the entire herd, using the best genetics they could find on the market to help them produce the highest quality beef. There’s a lot of data being collected on sires and they looked for the bulls that could get the job done.
So, with that as their focus, here’s where they did something different from what might be considered the ‘norm’ in beef production. Their cattle go down south to be finished but the Hadricks retain ownership.
“Those cattle are then marketed on a grid,” Troy said. “They harvest those cattle, they hang on the rail, and they’re graded by a USDA Inspector. Based off of that grade and the weight, that’s how the price we receive is calculated. We don’t know the final value of the cattle until they’re hanging on the rail as meat.”
Obviously, there’s a risk of being discounted when you market on a grid. The actual grid is just like other grids you may have seen. For example, if a particular animal graded Prime and was a Yield Grade 3, you follow those two columns and where they meet, that’s what the price was that week for that animal and that’s what we’re paid.
“We started our program with AI and then combined it with genomic testing,” Hadrick said. “We would take DNA samples from some of our cattle, get it analyzed, and that would give us an indicator as far as which cattle would perform well on the grid. We’d also keep back those females that would produce the best calves.”
Between those two technologies, Hadrick said their production went from grading 90 percent Choice, 35 percent Certified Angus Beef, and no Prime, to cattle that finished 57 percent prime, and 100 percent Choice. Hadrick said producers get really good premiums for numbers like that.
“The nice part about it is it doesn’t cost us any more money to raise those cattle,” he said. “It doesn’t cost us any more to feed them, either. Of course, we have to get them bred, but at the end of the day, they’re worth more money.”
There is an additional cost with the genomic testing, but Hadrick says it’s worth it to them because the idea is to identify the cattle that are going to make the family money and those that won’t. They sort cattle accordingly and market those cattle accordingly.
The Hadrick cattle are harvested through a cooperative called U.S. Premium Beef. It’s a rancher-owned cooperative based in Kansas that owns parts of the National Beef Packing Plants in Dodge City and Liberal, Kansas. Hadrick said some visionary people put this idea together back in the 1990s.
“They wanted to give producers the incentive to produce better beef,” Hadrick said, “and they wanted food service businesses and consumers that need beef to be able to come and know they’re getting the highest quality beef. They also wanted to reward the producers that could give them the highest quality beef consistently.”
The grid system runs off what they call plant average. Hadrick said in order to get the premiums, producers have to bring in cattle that are better than what everyone else brings in. That can be a big challenge as they’re attracting a lot of cattle that are high quality right from the start.
The plant isn’t buying cattle from the Hadricks, but instead, they’re buying carcasses. Hadrick said that makes it much harder for producers to try to sneak a bad one through the plant. There’s no hiding a poor carcass once the hide comes off.
He said the new system has advantages from the traditional way of doing business in the cow/cattle industry.
“On the farming side of things, we got into ethanol, we got into crushing soybeans, in order to get our product closer to the end point,” he said. “The closer you sell your product to the final consumer of your product, the more you’re going to get for it because you’ve added some value to it.”
He said doing business this way isn’t easy. Producers have to manage risk more, they have to have a relationship with the packer, and with the feedlots they work with. Producers also have to know their cattle because they won’t get away with trying to slip a bad one through the chain.
“If you market average cattle, you’re going to get an average price,” Hadrick said. “We’re trying to do things a little differently to do things better.”
The sounds of sheep and goats on southeast Minnesota farms are becoming a little more common than most residents realize. The last couple of years have seen increasing interest in raising the smaller breeds of livestock for a variety of reasons.
Sheep and goat numbers are picking up on farms across southeast Minnesota, due in part to the smaller size of the animal, especially when it comes to 4H competition.
As sheep interest continues growing in both Houston and Fillmore counties, the Extension Service will host a couple of sheep-related workshops this summer. A sheep producer workshop is set for Rushford on June 16th, with a sheep workshop for area 4H members on the 17th in Preston. Extension Educator Michael Cruse said many area residents might not know that sheep and goat numbers are on the rise.
“Sheep and goats are on the increase in Houston and Fillmore counties,” Cruse said, “especially for 4H projects. There are a number of reasons for this, but the primary reason is they’re smaller animals and easier to handle for 4H kids.”
He said the sheep producer meeting in Rushford is a unique opportunity for area livestock farmers. The University of Minnesota Extension Service recently hired a Sheep Specialist named Travis Hoffman, who the U of M is sharing with North Dakota. After talking with Hoffman over the winter, Cruse wanted to put together a couple of events to maximize his time if he made the trip to southeast Minnesota.
Houston and Fillmore County Extension Agent Michael Cruse is putting on Extension programs for sheep farmers and 4H kids that want to exhibit sheep and goats at local competitions. (photo from bluffcountrynews.com)
“That’s why we put together a two-day event, starting on June 16th from 2-5 pm,” Cruse said, “Hoffman will be here to do a producer meeting in Rushford and talk about everything from lamb marketing to production management to economics, with a pizza supper at the end.
“A lot of the raising and marketing of sheep is similar to other types of livestock,” Cruse added. “But with sheep, there are a lot of products you can get from them. You can market the wool, the meat, or market them as show animals. There’s a whole range of avenues you could take, and that doesn’t even take into account the organic and grass fed categories that beef is also subject to.”
He said producers would have a chance to visit with both Hoffman and Cruse after the meeting. Then, the attention turns from sheep producers to 4H kids the next day from 8 till noon at the Fillmore County Fairgrounds.
“It’ll be a rotational type of educational event with three or four sessions for the youth,” Cruse said. “Showmanship will be one of the educational sessions as Travis (Hoffman) was also a state judge for sheep. The kids will be allowed to bring one of their own 4H-registered sheep to this event in order to practice showing their sheep, learning to get their feet in the right spot, and how to answer a judge’s questions professionally.”
He said this is a great opportunity for area 4H kids to learn, providing they can get enough people signed up.
Cruse said there are a number of reasons for the growing interest in sheep and goats across the area. First and foremost, there are marketing opportunities for sheep and sheep products, especially in Iowa. There’s also an immigrant population in Rochester and the Twin Cities that prefers both sheep and goat meat.
The other side of it is the animals themselves. They’re much smaller and don’t require as much land to raise, especially for 4H families. Sheep and goats don’t need as much space as a beef cow or larger hog.
“It’s a lot easier to get three or four ewes onto a piece of property than a full-grown dairy steer, for example,” Cruse said. “It’s also easier for the younger children in a farm family to handle the animals too.
The Minnesota State FFA convention wrapped up this week with the election of new state leaders and a bunch of great memories.
The final session of the 88th Minnesota FFA Convention concluded with the election of the six-member state officer team. The newly elected team will serve more than 11,000 members in Minnesota for one year. They will also spend the next year representing Minnesota, agriculture and agricultural education at state and national levels.
The 2017-2018 Minnesota FFA State Officer Team
The state officer candidates were interviewed by a panel of FFA members, agricultural educators and representatives from partnering organizations earlier this week. Elected FFA members were:
Sentinel: Maddie Weninger, Howard Lake-Waverly-Winsted FFA Chapter
Career Development Events
During the final session, Career Development Events (CDE) winners were announced. The top chapters in the state will advance to the national competition in Indianapolis in October. CDEs are competitive activities for students to showcase their skills in their respective competition. CDE results will be sent out in early May.
National Chapter Award
The Howard Lake-Waverly-Winsted FFA Chapter received top honors for the National Chapter Award, sponsored by the Minnesota FFA Foundation. FFA Chapters apply for this honor by highlighting chapter activities in the categories of student development, chapter development, and community development. Chapter applications are reviewed and scored by a series of judges based on innovating ideas and accomplished goals.
“We live in a world where people are desperate for hope,” said Wendy Bauman, State Secretary, from the Kerkhoven Murdock Sunburg FFA Chapter in her retiring address, Feed Hope “When it comes down to it, the only thing we are able to do is love one another. When we choose to love, we feed hope.”
Mr. Gian Paul Gonzalez, motivational speaker and founder of Hope + Future, shared his insight about living “All In” at the final session of the Minnesota FFA Convention.
“‘All in’ is personal. No one can go ‘All In’ for you; It’s a personal choice.” said Gonzalez.
“No matter what our dreams look like, our success is determined not when we dream, but in the moments when we decide to strive,” said Spencer Wolter, State President, from the Windom FFA Chapter in his retiring address, Gettin’ Chicks.
About Minnesota FFA
The FFA mission is to make a positive difference in the lives of students by developing their potential for premier leadership, personal growth and career success through agricultural education. More than 25,000 students in Minnesota are enrolled in agricultural education classes. Students who have taken three or more classes in career and technical education, including agricultural education have a graduation rate of 98.7 percent. Visit www.mnffa.org for more information. Follow the Minnesota FFA Convention on social media or watch the recorded general sessions at mnffafoundation.org/livestreaming.
“The Minnesota Farm Bureau Federation (MFBF) thanks Senator Klobuchar and Senator Franken for voting for Governor Sonny Perdue’s confirmation as the next U.S. Department of Agriculture Secretary of Agriculture,” said MFBF President Kevin Paap. “Secretary Perdue is a needed voice for agriculture as the new administration addresses issues like trade, regulatory reform, agriculture labor and the next farm bill. We look forward to working with the new Secretary to address issues facing Minnesota farmers and ranchers.”
A late-afternoon confirmation vote on Monday means Sonny Perdue is finally Donald Trump’s new Secretary of Agriculture. (photo from the washingtonpost.com)
“Now that we have our Secretary of Agriculture in place, we look forward to getting down to business to address serious issues that the Secretary has committed to working on as well as filling other key roles in the U.S. Department of Agriculture,” said Paap.
Minnesota Farm Bureau – Farmers ● Families ● Food is comprised of 78 local Farm Bureau associations across Minnesota. Members make their views known to political leaders, state government officials, special interest groups and the general public. Programs for young farmers and ranchers develop leadership skills and improve farm management. Promotion and Education Committee members work with programs such as Ag in the Classroom and safety education for children. Join Farm Bureau today and support efforts to serve as an advocate for rural Minnesota, www.fbmn.org.