BEEF bits

Opinion
Jul 1, 2011
by WLJ

Ethanol subsidy caused corn surge

Last week, a newly released study reported that U.S. ethanol subsidies pushed up corn prices as much as 17 percent in 2011. The news comes at a time when federal policies on biofuels are coming under heightened scrutiny. The study, by Bruce Babcock of Iowa State University (ISU) and released by the Geneva-based International Centre for Trade and Sustainable Development, suggests that high gasoline prices this year may have intensified demand for ethanol, creating a tighter market for corn than in previous years.

“Under these tight conditions, the added demand incentive from the blender tax credit can have a significant impact on corn prices,” said Babcock, a professor of economics at ISU.

Congress moves on FTAs

Senate Finance Committee Chairman Max Baucus, D-MT, announced last week that the committee will hold a “mock” markup of the draft implementing bills for the South Korea, Colombia, and Panama Free Trade Agreements (FTAs) that includes an extension of Trade Adjustment Assistance (TAA). The TAA provisions reflect widespread support in both House and Senate for moving the three agreements forward, according to Baucus. Committee mock markups are the standard way Congress weighs in on the administration’s FTAs negotiated under fast-track authority, which prohibits amendments to the final implementing bills. The Finance Committee will consider the draft implementing bills during a “mock” markup because Congress cannot offer amendments to the final implementing bills submitted by the administration under the Trade Promotion Authority Act—also known as “fast track”—procedures.

NAIS plan expected soon

While USDA already has traceability requirements as part of existing animal disease control programs, the proposed framework goes much further to require animal tagging and tracing of all adult cattle moving in interstate commerce, even absent any active disease threat. According to the Texas Cattle Feeder’s Association, the group has been working with a coalition of other cattle groups to help USDA develop an effective National Animal Identification System (NAIS) program that will function at the speed of commerce and not financially burden producers.

EU creates new labeling rules for meat

The European Parliament’s negotiating team has received the Council’s green light for the provisional agreement reached last week on new European Union (EU) legislation on food labeling. According to the European Commission, the draft legislation aims to modernize, simplify and clarify food labeling within the EU. It would harmonize existing rules on information that is compulsory on all labels, such as list of ingredients, “best before” or “use by” dates, specific conditions of use, and add a requirement to list key nutritional information. The new deal extends the country of origin labeling requirements that already exist for beef, honey, olive oil and fresh fruit and vegetables to pork, sheep and goat meat, and poultry.

Red meat production increases

Commercial red meat production for the U.S. totaled 3.91 billion pounds in May, up 5 percent from the 3.73 billion pounds produced in May 2010, according to USDA’s Livestock Slaughter report. All types of red meat saw increases of between 2 percent and 9 percent: Beef production was 2 percent above the previous year; veal production was 2 percent above May a year ago; pork production was up 9 percent from the previous year; and lamb and mutton production was up 2 percent from May 2010. January to May 2011 commercial red meat production was 20 billion pounds, up 2 percent from 2010. There was one additional slaughter day in May 2011, compared to last year, accounting for at least some of the increase noted in USDA’s report.

Court will hear downer lawsuit

The U.S. Supreme Court announced it will review the 9th Circuit’s decision in a National Meat Association (NMA) suit seeking injunctive relief from a California law that bans the slaughter of non-ambulatory livestock of all species. At issue is the fact that the California law fails to distinguish between livestock at rest and livestock that have no independent mobility. It also deems non-ambulatory swine as a “kind of animal” and therefore not subject to USDA inspection regulations if a state requires immediate euthanasia, as the California law does. The law eliminates the ability of federal inspectors to conduct antemortem inspections of non-ambulatory swine.

Plaintiffs (NMA and the American Meat Institute) initially won their case in February, but the 9th Circuit Court of Appeals overturned it in April. The case is expected to be put on the Supreme Court’s calendar in the next term, which begins on Oct. 4, 2011, according to an NMA statement.

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