The aftermath of BSE.
Just more than a month ago, the cattle industry faced one of its biggest nightmares and survived the initial impact. The announcement that one cow from a Washington state dairy had bovine spongiform encephalopathy (BSE, or mad cow disease) rocked the beef industry and beef consumers. But well-laid response plans by USDA and cattle industry officials quickly headed off widespread consumer concerns.
Now beef, dairy and pork producers will face the issue of animal identification. Winding its way through industry groups for the past decade, the animal ID issue has surfaced permanently. Livestock producers should expect to eventually have an ID number attached to every animal produced on the farm. The number will stay with the animal and meat product as it continues through the food chain. Identification systems will cost money, but much less than the cost of a major disease outbreak that decimates an industry.
USDA Secretary Ann Veneman recently stated that the department will expedite the implementation of a national animal identification system. Expect to see more soon on this project.
The USDA secretary also reviewed the BSE incident, USDA responses and other developments in her recent report. Here are some highlights:
The same day that BSE was positively identified in the cow, USDA informed the public. “We made the information public on the same day I learned of the presumptive positive test, December 23, even though the lab in England had not yet verified our findings,” Veneman reports.
USDA began daily briefings that were broadcast live on its Web site. From December 24 to 31, 2003, about 100,000 people viewed the briefings via the Web.
Safeguards to the meat supply were deepened with an immediate ban on non-ambulatory or “downer” animals from the food system as well as other risk materials, such as brain and spinal cord tissue.
President Bush's 2005 budget includes $178 million for the National Centers for Animal Health in Ames, IA. The money will be used to complete renovation of the USDA campus to make it “the most modern and best-equipped animal disease diagnostic and research facility in the world,” Veneman states.
About 10% of the country's beef production is sold to export markets, including Japan, Korea and Mexico. Immediately after the announcement of BSE, the export markets closed their borders to U.S. beef. This resulted in an initial drop of 15 to 20% in cattle prices. Prices have strengthened some but are still down 10 to 15% from levels prior to the BSE identification.
Restoration of the export markets remains a high priority for the beef industry and USDA. Japan, in particular, is the key to future strong exports. Japan is our country's biggest buyer of beef. If Japan resumes buying U.S. beef, then other countries should follow. It appears that boneless beef from animals less than 30 months of age will be the first products sold outside the U.S. Scientific evidence indicates virtually no BSE risk occurs in those animals.
Strong land market continues
The market for farmland should remain strong in 2004, according to Farmers National Company. Farmers National reports that it sold more than $150 million in real estate last year when prices for farm and ranch land were at or above all-time high prices. Lee Vermeer, vice president of real estate operations, says land values held strong even in drought areas. He expects the land market to remain strong, with prices even rising in some areas.
Ag Services sold
Ag Services of America received shareholder approval for the sale of the company to Rabobank International, the corporate and investment banking arm of the Netherlands-based Rabobank Group. The company is now named Rabo AgServices, and Ag Services shareholders received $8.50/share. The company is a supplier of crop input financing to corn and soybean growers. It is based in Cedar Falls, IA. The Rabobank Group is a financial services provider.
Raven buys Fluent
Raven Industries has acquired Fluent Systems LLC, a privately held company based in Madison, WI, for approximately $1 million cash.
Raven, which is seeking to expand its position in precision agriculture through its Flow Controls division, purchased Fluent primarily for its unique wireless liquid level monitoring system for anhydrous ammonia tanks. The monitor uses wireless technology to instantly transmit the tank volume to an electronic receiver in the cab of a tractor. This allows the user to quickly track how much product is in the tank without getting out of the tractor to check the tank gauge.
Dan Rykhus, FCD general manager, said, “Raven is committed to precision agriculture and providing new products to fit the needs of the marketplace. The Fluent Systems acquisition will allow us to expand this initiative and find new niches for control technology that will help growers be more efficient.” He also noted that the use of wireless technology has many applications in agriculture. “We expect to incorporate wider use of this technology throughout our entire product line,” Rykhus said.
StaufferSeeds, an Omaha-based producer and supplier of hybrid seed corn, recently announced that Lawhon Midwest LLC, a division of Lawhon Farm Services, has purchased the assets of the company.
The deal gives Lawhon Farm Services an expanded seed presence in the central Midwest. The McCrory, AR, company has been a producer and marketer of agricultural seed in the south with its Delta King brand soybeans and Beltwide Cotton Genetics brand cottonseed. Lawhon is one of the owners of Horizon Ag LLC, a farm services division that markets chemicals, seed, fertilizer and custom application services to farmers out of six retail locations in east-central Arkansas.
More food sales to Cuba
Cargill will sell more food and agricultural products to Cuba. Food sales between the U.S. and Cuba were legalized in 2000 and began in 2001. Since then, Cargill has sold more than 400,000 metric tons of products to Cuba.