A
Anonymous
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I received this article today- Very well written- Pretty well sums up a lot of what we have been discussing- Highlighting is mine...
The CommStock Report - 02/01/06
David Kruse
***On The Cattle***
The media described it as a "heated" discussion. Japanese lawmakers met with ag Sec. Mike Johanns and the confrontation didn't go well. There are 2000 tons of U.S. beef worth $17 mln backed up in the pipeline in Japan, unmarketable, none of the loss insured. The Japanese are not impressed with our HAACP inspection system. In the U.S., we have a law that says that in order to import meat into the U.S., the foreign inspection systems must equal ours. The USDA doesn't follow the law, but that's what it is. Japan has a tighter inspection system and higher safety standards than we do, but was willing to concede to BSE untested beef and USDA inspection until the USDA blunder. The lead Japanese lawmaker said he would take back a message of "caution" over U.S. beef to Japan. I think that ticked Johanns off.
The Japanese leaders demanded a national ID program and 100% BSE testing of cattle for beef exports to Japan. Johanns responded with the AMI's time worn rebuttal, "It is just something that we've looked at, we've discussed, we've debated over and over again, and it's not justified by science." We know that based upon U.S. science, 100% testing is not justified. So what!!! If the customer wants a purple cow, is willing to provide or pay for the paint and give you a premium price for the purple cow, you paint the #$&*!^%$# cow purple if you want to sell it. @#$%^^%$@! paint a rising sun on its hide if that's what the Japanese want.
Johanns can take BSE science and stick it under the cow's tail up to his armpit. That's what it's worth if it costs you the sale. Johanns has run all the defense for U.S. packers that is called for. Way beyond enough. The bottom line is do we want this business or do we blow it off, standing on stupid principles? Even if the Japanese government tomorrow said, "Okay, we give up, bring all the beef you want and try to sell it here," Japanese consumers wouldn't buy it.
The NCBA, USDA, AMI and Johanns just don't get it. They seem to think they are dealing with the Japanese government when it's the Japanese consumer who buys or doesn't buy beef. Creekstone, Harris Ranch, even the Iowa Quality Beef Supply Coop were strategically set up to deliver ID'd BSE tested beef, exactly what the Japanese asked for. Major packers wouldn't allow it. Didn't want the competition. Ag Sec. Mike Johanns should be careful of his back for all the weight of the water he's carrying for major packers. Producers have been ready to do their part. They'd ID cattle for Japan and feed them to Japanese taste. Packers like Creekstone and Harris Ranch would have tested cattle at Japanese expense and let the Japanese inspect the process, exceeding HACCP. The road was paved but the USDA blocked it. They sat down in the middle and refused to move; getting more stubbornly stupid about it. The beef industry tells the world how it's future rides on filling consumer demand, but it tells Japanese consumers they are ignorant and refuse to sell them the beef they want.
In Iowa, the GOP hierarchy refuses to support an E-10 mandate in gasoline, arguing personal choice. The GOP USDA refuses consumer requests, only selling beef the way they want to sell it, no choice offered. GOP philosophy or choice is obviously selective and driven by whichever special interest writes out campaign donations, petroleum distributors in IA and beef packers in Washington. House Ag Committee Chairperson Bob Goodlatte's threat to slap economic sanctions on Japan for closing its market over the USDA's blunder shows how ill-suited and uninformed he is for the job. When you tell your customer you are going to beat them up if they don't buy your product, you won't have a satisfied customer. This is not a trade dispute as much as Washington wants to make it one. It's about sellers and consumers with the seller, the USDA, refusing to sell the consumer the product he wants.
We've not had two back to back lower cash market weeks for a long time, but from the looks of scattered sales that have taken place so far this week, that's about to change. Beef demand doesn't support higher cash cattle prices. Beef demand is under severe pressure from enormous pork and poultry supply. No one knows for sure how to gage downside potential when standing on the top of the cattle cycle. Competitive meats, larger cattle numbers, shifting supply leverage to packers this spring/summer, without significant export markets and with the Canadian feeding industry getting all cranked up, could take prices a lot lower than where cattle futures are trading.[b][/b]
The CommStock Report - 02/01/06
David Kruse
***On The Cattle***
The media described it as a "heated" discussion. Japanese lawmakers met with ag Sec. Mike Johanns and the confrontation didn't go well. There are 2000 tons of U.S. beef worth $17 mln backed up in the pipeline in Japan, unmarketable, none of the loss insured. The Japanese are not impressed with our HAACP inspection system. In the U.S., we have a law that says that in order to import meat into the U.S., the foreign inspection systems must equal ours. The USDA doesn't follow the law, but that's what it is. Japan has a tighter inspection system and higher safety standards than we do, but was willing to concede to BSE untested beef and USDA inspection until the USDA blunder. The lead Japanese lawmaker said he would take back a message of "caution" over U.S. beef to Japan. I think that ticked Johanns off.
The Japanese leaders demanded a national ID program and 100% BSE testing of cattle for beef exports to Japan. Johanns responded with the AMI's time worn rebuttal, "It is just something that we've looked at, we've discussed, we've debated over and over again, and it's not justified by science." We know that based upon U.S. science, 100% testing is not justified. So what!!! If the customer wants a purple cow, is willing to provide or pay for the paint and give you a premium price for the purple cow, you paint the #$&*!^%$# cow purple if you want to sell it. @#$%^^%$@! paint a rising sun on its hide if that's what the Japanese want.
Johanns can take BSE science and stick it under the cow's tail up to his armpit. That's what it's worth if it costs you the sale. Johanns has run all the defense for U.S. packers that is called for. Way beyond enough. The bottom line is do we want this business or do we blow it off, standing on stupid principles? Even if the Japanese government tomorrow said, "Okay, we give up, bring all the beef you want and try to sell it here," Japanese consumers wouldn't buy it.
The NCBA, USDA, AMI and Johanns just don't get it. They seem to think they are dealing with the Japanese government when it's the Japanese consumer who buys or doesn't buy beef. Creekstone, Harris Ranch, even the Iowa Quality Beef Supply Coop were strategically set up to deliver ID'd BSE tested beef, exactly what the Japanese asked for. Major packers wouldn't allow it. Didn't want the competition. Ag Sec. Mike Johanns should be careful of his back for all the weight of the water he's carrying for major packers. Producers have been ready to do their part. They'd ID cattle for Japan and feed them to Japanese taste. Packers like Creekstone and Harris Ranch would have tested cattle at Japanese expense and let the Japanese inspect the process, exceeding HACCP. The road was paved but the USDA blocked it. They sat down in the middle and refused to move; getting more stubbornly stupid about it. The beef industry tells the world how it's future rides on filling consumer demand, but it tells Japanese consumers they are ignorant and refuse to sell them the beef they want.
In Iowa, the GOP hierarchy refuses to support an E-10 mandate in gasoline, arguing personal choice. The GOP USDA refuses consumer requests, only selling beef the way they want to sell it, no choice offered. GOP philosophy or choice is obviously selective and driven by whichever special interest writes out campaign donations, petroleum distributors in IA and beef packers in Washington. House Ag Committee Chairperson Bob Goodlatte's threat to slap economic sanctions on Japan for closing its market over the USDA's blunder shows how ill-suited and uninformed he is for the job. When you tell your customer you are going to beat them up if they don't buy your product, you won't have a satisfied customer. This is not a trade dispute as much as Washington wants to make it one. It's about sellers and consumers with the seller, the USDA, refusing to sell the consumer the product he wants.
We've not had two back to back lower cash market weeks for a long time, but from the looks of scattered sales that have taken place so far this week, that's about to change. Beef demand doesn't support higher cash cattle prices. Beef demand is under severe pressure from enormous pork and poultry supply. No one knows for sure how to gage downside potential when standing on the top of the cattle cycle. Competitive meats, larger cattle numbers, shifting supply leverage to packers this spring/summer, without significant export markets and with the Canadian feeding industry getting all cranked up, could take prices a lot lower than where cattle futures are trading.[b][/b]