Livestock Commodities Market (Beef , Pork, Poultry)

  Livestock & Grain Market News, Agricultural Marketing Service USDA

  Poultry Market News, Agricultural Marketing Service USDA

  CME Group Feeder Cattle Futures on Globex

  CME Group Live Cattle Futures on Globex

  CME Group Lean Hog Futures on Globex

  USDA Boston Federal Milk Marketing Order Class I Milk Price

  USDA U.S. Beef Cow Drought Areas

As per the U.S. Department of Agriculture, meat processing, which includes livestock and poultry slaughter, processing, and rendering, and is the largest single component of food and beverage manufacturing in the United States.

Livestock includes cattle, sheep, goats, swine, mules, horses (intended for slaughter), buffalo (bison), farm-raised cervidae (includes, but is not limited to, white-tailed deer, mule deer, red deer, fallow deer, elk, antelope, moose, caribou, reindeer, muntjac, and hybrids). The definition can also include llamas and ratite (large, flightless birds).

In the United States, an Animal Unit Month (AUM) is the amount of forage necessary to sustain one cow and one calf; or one horse; or five adult sheep; or five adult goats for one month. Ranchers who access federal and state land are allocated, and must adhere to, specific AUM grazing allotments.

Livestock Sales & Financing

When purchasing cattle one must consider the relationehip between the purchase weight, the expected selling weight, expected selling price, average daily grain, cost of grain, the percentage death loss and the miscellaneous cost per head (transportation, veterinarian, etc.) in order to earn a profit.

Under the terms of the trust provision of the Packers and Stockyards Act (P&S Act; August 15, 1921; US Code Title 7, Chapter 9, Subchapter 4, § 228b), packers, market agencies, and dealers subject to the Act must pay promptly (by the close of the next business day) for the livestock they purchase. This requirement applies to all purchases whether made directly from the owner, an auction market, a stockyard, or another dealer or market agency. However, only cash sellers - whether they are producers, dealers, or market agencies - are protected by the trust provision. The provision does not protect sellers who expressly extend credit.

Packers and Stockyards Act, 1921, text, Grain Inspection, Packers and Stockyards Administration (GIPSA) USDA   http://www.gipsa.usda.gov/GIPSA/documents/GIPSA_Documents/pands_act.pdf   (.pdf format)

Packers and Stockyards Act, 1921, text, Electronic Code of Federal Regulations (e-CFR)   ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr;sid=9cb44063e1b8ba380e8bea7427dcfd80;rgn=div5;view=text;node=9%3A2.0.1.1.2;idno=9;cc=ecfr

The "Base price," is the the price paid for livestock, delivered at the stockyard, packing plant, agent or dealer, before the application of any premiums or discounts, expressed in dollars per hundred pounds of carcass weight.

Some of the biggest challenges facing ranch operations is available or additional land due to the conversion of pasture to crop ground and increased costs for feed, fuel and utilities. Feedlot operators have seen a rise in expenses related to environmental regulations.

Cattle & Beef Industry

Cow-calf (also spelled cow/calf) producers are ranching / farming operations, which maintain cow herds (breeding beef cows and heifers) and raise their calves from birth to weaning. Cow-calf producer income is based on maintaining the herd and selling the calves annually. The ranch / farm will only keep the superior calves for breeding stock.

When the calves are six to eight months old, they are weaned (from the mother) and reamin on the ranch / farm or are moved to either a backgrounder, stocker or a feedlot operation. The rancher / farmer usually raises the calf until it reaches 500 to 600 pounds.

The finished product of a cow-calf operation is feeder cattle, or a weaned animal weighing between 600 and 800 pounds, ready to go on feed. Calves can be sold to an agent for a feedlot or to a broker. Cattle brokers buy feeder cattle, which haven't yet grown to full size, directly from ranchers / farmers, and through auctions, and sell them to feedlots where they are fattened before slaughterThe heavier calves usually go directly to a feedlot.

Backgrounder / Stocker is the process of feeding younger, weaned calves a high forage diet to get them to a size that a feedlot will accept. In many cases, cow-calf producers will background their own cattle, however, there are operations that specialize in backgrounding. The Background operation usually does not own a breeding herd. Rather, the Backgrounder will purchase calves 450 to 600 pounds in weight and feed the forage and commodity diet to the calf to get it up to 800 to 900 pounds. The Backgrounder / Stocker will also get the calves vacinated, castrated, and bunk broke (accustomed to eating dry, processed feeds). Calves are then resold by Stockers either through regional auction system or Internet sale.

All calves are eventually sold in truckload size lots to feedlots (unless they are retained on the ranch to increase herd size) to be finished (brought up to final weight) before slaughter for the meat packing industry.

Some of the largest cow-calf operations in the United States include Simplot Land & Livestock Group and Matador Cattle Company (Koch Industries).

USDA Market News, Moses Lake, WA, Weekly Combined Cattle Report   www.ams.usda.gov/mnreports/ml_ls795.txt

USDA Market News, St. Joseph, MO, National Feeder & Stocker Summary   www.ams.usda.gov/mnreports/sj_ls850.txt

Beef cattle breeds in the United States include:

Angus: solid black cattle, although white may appear on the udder. They are resistant to harsh weather, undemanding, adaptable, good natured, mature extremely early and have a high carcass yield with nicely marbled meat. Angus are renowned as a carcass breed. They are used widely in crossbreeding to improve carcass quality and milking ability. Angus females calve easily and have good calf rearing ability. They are also used as a genetic dehorner.

 

 

Brahman: thrive in the warmer climates of the United States.

Charolais: medium to large framed beef cattle with a very deep and broad body. Their color is white to cream with a pink muzzle and pale hooves. They have a short, broad head and heavily muscled loins and haunches. Charolais have demonstrated a definite superiority in growth ability, efficient feedlot gains and in carcass cutout values. With excellent meat conformation, especially of the valuable parts and relative late maturity they are well suited to fattening for high finished weight.

Hereford: medium framed cattle with distinctive red body color with the head and front of the neck, the brisket, underside, and switch in white. They have well developed fore-quarters, a deep brisket, broad head and stocky legs. Most animals have short thick horns that typically curve down at the sides of the head, but there is a polled strain in North America and UK (Polled Hereford). Herefords are generally docile and fast growing cattle with good beef quality.

Limousin: medium to large framed beef cattle of rectangular shape. The hair is yellow straw colored to reddish gold with lighter circles around the eyes and muzzle, and shading to a lighter color on the legs. Limousin on feed show high daily weight gain with high carcass yield. The combination of good cutability and medium size has given the Limousin its reputation for feed efficiency.

Simmental: spotted, occasionally with just a few white markings. The color varies from pale gold to dark reddish brown. The head is usually white in front of the eyes with the lower parts of the legs also largely white. In the feedyard they have a weight gain of 2 to 3 pounds a day.

Mixed breeds

Cattle are fed a combination of grass, which cattle forage for while in pasture or open range during the day, and prepared dry feed. Pasture quality and availability is very important in herd management: as long as there is sufficient rain to keep pasture grass growing the ranch operation can control feed costs. Once the pasture dries up then the cattle must be fed either purchased forage crops or commercial commodity crops, which is more expensive. Hay, which is normally fed to established herds during the Winter months is dried Coastal Bermuda grass (a machine rolled hay bale can be as high as six feet and weigh as much as a ton, and can provide a day's worth of feed for approximately 20 adult cows). When in a feedlot, cattle are fed a prepared feed, usually corn-based, in order to increase weight rapidly. At the feedlot, cattle must consume 20 pounds of feed to gain one pound of weight.

Meat prices are affected by droughts in ranching areas that reduce available pasture which in-turn reduces the amount of livestock that available pasture can support; disease in regional ranching areas that result a Health Department mandated culling of herds (reducing livestock); changes in demand as developing countries increase meat imports; and changes in preferences when the consuming public disregard health publications and press releases and increase their consumption of meat products. As prices rise, ranchers begin bringing livestock to market, which eventually results in an oversupply and declining prices. However, early slaughter may also result in a lower calf and heifer population which would mean an overall low livestock population available the following season, hence prices remaining high for more than one growing season. In addition with regards to beef, early slaughter results in underweight cattle being brought to market hence the meat available at the retail level is actually a lower grade at a higher price

The Chicago Mercantile Exchange Fedder Cattle Index is based on sales at the following auction locations:

Apache, OK

Billings, MT

Columbus, NE

Ericson, NE

Faith, SD

Gainsville, MO

Joplin, MO

Kingdom City, MO

Loup City, NE

McCook, NE

Mitchell, SD

Oklahoma City, OK

Palmyra, MO

Patton Junction, MO

Roswell, NM

Russell, IA

San Angelo, TX

Sedalia, MO

Sigourney, IA

Tama, IA

Tulia, TX

Tulsa, TX

	Rib Rib Roast, Large End Rib Roast, Small End Rib Steak, Small End Rib Eye Steak Rib Eye Roast Back Ribs	Short Loin Top Loin (Strip) Steak, Boneless T-Bone Steak Porterhouse Steak Tenderloin Roast, Premium Tenderloin Steaks	Sirloin Top Sirloin Steak Tenderloin Roast/Steak Tri-Tip Roast (Bottom Sirloin) Tri-Tip Steak (Bottom Sirloin)
Chuck Chuck Eye Roast, Boneless Chuck Top Blade Steak, Boneless Chuck Arm Pot Roast, Boneless Chuck Shoulder Pot Roast, Boneless Chuck Shoulder Steak, Boneless Chuck Mock Tender Steak Chuck Blade Steak, Boneless Chuck 7-Bone Pot Roast Chuch Short Ribs Denver Cut Brisket Whole Brisket Brisket, Point Half Brisket, Flat Cut, Boneless                         Shank                         Shank Cross cut			Round Round Steak Top Round Roast Top Round Steak Bottom Round Roast Tip Roast Cap Off Eye Round Roast Eye Round Steak Round Tip Steak Boneless Rump Roast Western Griller
	Plate Skirt Steak	Flank Flank Steak Flank Steak Rolls

In 2003, the United States produced record beef exports of 2.5 billion pounds.

In addition to the United States, other large beef producers include Argentina, Australia, Brazil, Canada, Mexico, New Zealand, and Uruguay. Japan has a very specialized beef production industry.

As indicated above, the nation of Argentina is one of the largest producers of beef. Historically, the domestic market has accounted for approximately 85% of total sales in the Argentine beef industry. In addition, the industry has also been very fragmented with tens of thousands of small producers. That has changed in the past few years with the entrance of large, foreign investors (especially Swift Armour SA). Traditionally, Argentine beef had the reputation of pasture (grass) fed. However, with recent increases in land prices and government subsidies for grain cultivation there has been a growth of a large scale feedlot industry. Argentine beef exports operated under the European Union Hilton Quota. The Argentine government, through SENASA, allocates the quota volume among its beef exporters (which is a controversial issue within the domestic Argentine industry). Animals must originate from approved farms and slaughtering and processing must be done in approved facilities that are regularly monitored by EU veterinarians. Argentina's largest export markets are the the European Union, the Russian Federation, and Israel. Argentine beef production suffered from a terrible drought from 2007 through 2009, resulting a 20% decline in the total number of beef cattle. In addition, several thousand ranchers have shifted to soy bean farming over the past several years due to improved soy bean prices and less regulation compared to cattle ranching. Overall, Argentina's exports declined dramatically in 2010, which resulted in the nation declining to the 7th largest exporter in the world.

Similarly, Uruguayan beef production is based primarily on pasture grazing. Approximately 70% of Uruguay's annual beef production is exported on an annual basis, which accounts for a substantial percentage of the total value of Uruguayan exports. The United States is the primary export market for Uruguayan beef products. Other major beef export markets include Canada, the European Union, Israel, and MERCOSUR member countries. Similarly to Argentina, Hilton quota permits are distributed by the Uruguayan government.

The Hilton Beef Quota is an import tariff rate quota for high-quality beef established by the European Union as a means of compensating for import restrictions in other agricultural commodities.

JBS S.A., located in Brazil, owns Swift & Company (May 2007), Australia Meat Holdings Pty Limited, and the beef unit of Smithfield Group (October 2008; renamed JBS Packerland) and is the largest beef producer and exporter in the world. The other large beef producers in the United States include National Beef (who JBS S.A. attempted to purchase in early 2009 but was not approved by regulators due to competition issues), Tyson Foods Inc. and Cargill Inc.

Hog & Pork Industry

The largest pork producing nations (in size order) in the world are Denmark, Canada, the United States (with the largest production concentrated in Iowa and North Carolina), Brazil, China, Hungary, Poland, Australia, Mexico and South Korea. The largest market for U.S. pork exports is Japan, followed by Mexico and Canada. Overall, the largest pork importing nations are Japan, Russia, United States, Mexico, Hong Kong, South Korea, Canada, European Union, Romania and Singapore.

The hogs raised in the United States today are the result of two decades of cross breeding to produce a very lean meat for consumers. In response to consumer demand, hog farmers and producers are also offering a more expensive meat from purebred hogs, which is sometimes marketed as pedigree, heritage, heirloom, free range or natural farming method hogs. However, it is important to note that actual taste of meat products is also highly influenced by what the livestock is fed.

Swine purebreds include:

Berkshire (sometime also marketed under the Japanese name Kurobuta or as Black Pig)

Chester White

Duroc

Hampshire

Landrace

Pietrain

Poland China

Spotted

Yorkshire (sometimes also referred to as Large White)

In the United States, hog farming is conducted on a large scale with set procedures:

Sows are artificially inseminated.

Sows, which weigh approximately 400 to 500 pounds, may have 3 to 4 litters per annum.

Piglets are kept in a confined area that is climate controlled and always lit in order to promote rapid growth.

Pigs are sent to slaughter in approximately 300 days or at a weight of approximately 270 pounds.

When a sow is no longer retained for breeding purposes they are then sent to slaughter.

In the United States, there are several type of hog farmers / hog producers:

Farrow-to-finish operations are those on which pigs are farrowed (breeding facility, pigs are delivered from artificially inseminated sows) and then finished to a slaughter weight of 225 to 300 pounds.

Farrow-to-feeder pig operations are those on which pigs are farrowed and then sold or removed under contract at or after weaning at a weight of about 30 to 80 pounds.

Feeder pig-to-finish operations are those on which feeder pigs are obtained from outside the operation, either purchased or placed under contract, and then finished to a slaughter weight of 225 to 300 pounds.

Weanling-to-feeder pig operations are those on which weanlings (10 to 20 pounds) are obtained from outside the operation, either purchased or placed under contract, and then fed to a feeder pig weight of about 30 to 80 pounds. This type of production is done almost exclusively under production contract arrangements.

Farrow-to-weanling operations are those on which pigs are farrowed and then sold or removed under contract after an early weaning at a weight of about 10 to 20 pounds. This type of production is done almost exclusively under production contract arrangements.

In 2008, the United States produced record pork exports of 4.7 billion pounds.

Fresh pork cuts include:

Pork loins

Pork butts

Pork spareribs

Retail trim shoulder

Ham

Center cut pork loin

Whole pork loin

Pork tenderloin

Pork sirloin

Bacon (pork bellies)

A full carcass is a mirror image of the above: each carcass yields two sets of ribs, two hams (one from either hid leg), two pork butts, etc.

Smithfield Foods is the largest pork producer in the United States and Maple Leaf Foods is the largest pork producer in Canada. In September 2009, Smithfield publicly indicated that it would source of all of its pork from the United States only in response to the institution of country-of-origin labeling laws (mCOOL). Smithfield Foods subsidiaries include Murphy-Brown, LLC, which is the livestock (pork, turkeys) production subsidiary of Smithfield Foods, Inc., and either own and operate farms or have contract production agreements with independent hog farmers (operates in Colorado, Illinois, Iowa, Missouri, North Carolina, Oklahoma, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Virginia). A second subsidiary, Premium Standard Farms, LLC, also operates hog farms within the United States (Missouri, Texas). Hog production subsidiaries outside of the United states include AgriPlus (Poland), Smithfield Ferme (Romania), Granjas Carroll de México (Mexico), Norson (Mexico).

Other competitors in the pork industry in the United States include Tyson, Swift, Excel, Hormel,

Organic Meats

Organic, boutique, heritage or conservation meat(s) refer to animals that have been primarily grass fed only and not been fattened on corn, animal by-products, hormones or antibiotics. These cuts are lower in fat content than corn fed animals and tend to sell at higher per pound prices.

Alternative Meats

North American Bison (also referred to as Buffalo) have been a developing meat source in the United States for several years.

Poultry

  National Agricultural Statistics Service (USDA) - Daily Poultry Slaughter (Released at 08:30 A.M. ET)

  National Agricultural Statistics Service (USDA) - Daily Broiler Hatchery (Released at 3:00 P.M. ET)

  USDA Daily / Weekly National Poultry and Egg Market News Reports

The poultry industry consists of three principal segments: chickens (broilers), chickens (laying hens), and turkeys. Chicken breeds are also sometimes segmented as to whether they are meat breed, egg layers or ornamental (competitive showing / pets). The primary meat breed in the United States is usually some type of Cornish cross.

The National Chicken Council, the National Turkey Federation and the U.S. Poultry & Egg Association petitioned the U.S. Environmental Protection Agency (EPA) for an exemption from CERCLA/EPCRA emergency reporting requirements that would require poutry operators to report ammonia emissions in excess of 100 pounds per day. On December 21, 2007, the EPA proposed a rule change to provide an administrative reporting exemption for air releases of ammonia and hydrogen sulfide from animal waste at farms.   www.epa.gov/emergencies/content/epcra/cercla_dec07.htm

Chicken

The USDA Economic Research Serice indicates that the "U.S. poultry industry is the world's largest producer and second largest exporter of poultry meat." Poultry is graded by the USDA Agricultural Marketing Service (AMS) Poultry Programs’ Grading Branch. These services are provided in accordance with Federal poultry grading regulations.

In the United States, the average chick size at birth is approximately 3 ounces. There are business that just incubate eggs and then sell the hatched chicks to chicken farmers. Once the chicks are delivered, they are kept in large, temperature controlled building in continuous low light (to reduce activity) where they feed over six to nine weeks to a market weight of four to eight pounds ("broilers", or chickens of either sex that are raised for meat). For farmers, it is a low margin business where profit is earned on the number of birds raised and sent to market. The U.S. National Chicken Council indicates that approximately 36.5 billion pounds of chicken were produced in the United States during 2008 (18% of which is exported).

Chicks and hens are fed medicated ffed in order to control internal parasites (tapeworms, cecal worms, small and large roundworms), which they inevitably ingest from pecking at the ground.

Some chicken (broilers) sent to grocery stores are first "plumped" or injected with salt water and / or with a seaweed extract named carrageenan (retains water). The water is added in order to increase the weight of the broiler sold to the consumer. However, the problem with the practice is that:

Some of the largest poultry companies include ConAgra (Banquet brand), Pilgrim's Pride (former Gold Kist), Perdue, Sanderson Farms, Inc., and Tyson.

Turkey

In the United States, turkey production is a very fragmented industry compared to the chicken industry. The industry rebounded during 2011 compared to several years of weak prices due to oversupply. However, the industry has experienced a substantial increase in corn feed costs similar to other livestock producers. Turkey meat usually sells at a premium price per pound in excess to chicken prices per pound, and in October 2011, that price differential increased to a record high of 51 cents per pound.

Egg Industry

Eggs are refrigerated from the point of production through delivery to retail stores or wholesale distribution to restaurants or institutional kitchens (colleges and universities, hospital, etc.) in order to lower the temperature within the egg so that bacteria will not develop. Refrigerated shell eggs have a shelf life of approximately 5 weeks.

Salmonella bacteria can be passed from infected hens to the interior of eggs when they are being formed. In the United Kingdom, farmers have vacinated laying hens against salmonella bacteria for over a decade, which substantially eliminated egg infection. In the United States, there is no mandatory FDA regulated vacination program. In August 2010, approximately 500 million eggs were recalled after a salmonella outbreak traced to infected eggs.

The United Egg Producers industry association indicates that approximately 91.4 billion eggs were produced by within the United States during 2010. The state with the largest production is Iowa with approximately 15 billion eggs produced in 2010.

There is substantial controversy within the United States regarding the humane treatment of poultry utilized for egg production. Critics want "Battery cages" eliminated. the standard batter cage provides the bird with only approximately 67 square inches of space within the cage. A federal proposal is to increase that cage size to a minimum of 124 to 144 square inches (enriched cages).

Concentrated Animal Feeding Operations (CAFO)

Concentrated / Confined Animal Feeding Operations (CAFO) have become the predominant infrastructure and method for raising livestock (poultry, swine, dairy, and beef industries, and to a lesser extent the veal calf, sheep, duck, and horse animal feeding operations) in the United States. Much has already been written about the implementation of the CAFO system, most of it negative. However, what the introduction of the CAFO system really has meant is a shift from a decentralized, many participant, labor intensive method to a centralized, automated, high volume, standardized, reduced participant, cost efficient, capital intensive system of raising livestock, processing meat, and transporting / distributing large quantities of standardized weights and cuts of meat. From a credit analysis viewpoint the issue is whether the system is sustainable by the industry, by the land and water, by the animal species, by consumers and legislature.

The U.S. Environmental Protection Agency’s (EPA) designation, a CAFO is an animal feeding operation (AFO). An AFO, as per 40 CFR 122.23 (b)(1), is a lot or facility where:

1. The animals (other than aquatic animals) are stabled or confined and fed for at least 45 days or more during any 12-month period.

The 45 days of confinement do not have to be 45 days in a row, and the 12-month period can be any consecutive 12 months.

2. In addition, crops, vegetation, forage growth, or post-harvest residues are not sustained in the normal growing season over any part of the lot or facility where the animals are confined. The key elements in the defi nition are that the animals are confined; that they are fed, rather than grazed on grass or other vegetation; and that the "facility" refers to a structure, and not to an entire farm.

CAFOs are further defined by size. Large CAFOs are defined by animal inventories of at least 700 dairy cattle, 1,000 beef cattle, 2,500 pigs if they weigh over 55 pounds or 10,000 if they do not, 30,000 broilers if the AFO has a liquid manure handling system or 125,000 if it does not, 82,000 laying hens and does not use a liquid manure handling system, 10,000 sheep or lambs, 55,000 turkeys, 5,000 ducks and uses a liquid manure handling system or 30,000 ducks and does not use a liquid manure handling system. GPO Access:   40 CFR 122.23

In some arrangements, farmers essentially become contractors. A large meat company may provide the livestock and the farmer contracts to care and feed the livestock up until a certain weight or age. However, the farmer is required to provide barns of specific design and function. Thus, the farmer may have to first borrow money to construct a barn (or barns) with specific interior design (for hogs or poultry), exhaust, lighting, automated food and water pipes, and sanitation. The farmer may also have to purchase proprietary feed, antibiotics and veterinary services from the company. The farmer is also responsible for utility (barns have to be heated in the Winter), equipment, litter, and labor costs. There may or may not be a guaranteed purchase price for the livestock. In the end the farmer must produce a sufficient enough number of healthy animals and have them sold at a price in excess of the cost of production. In some situations the maet company may also own the local processing plant and exerts complete control of the process. The contracting system also sometimes results in livestock being transported substantial distances between various growth phases. Furthermore, the introduction of large scale operations may result in the remaining smaller operators no longer being competitive, or the processing plant may not accept their livestock (as the processing plant is associated with a contract system).

Every CAFO is required to draft and follow an Animal Waste Management Plan, which is a written plan on how the operation will properly collect, store, treat, or apply animal waste to land in an environmentally safe manner. The plan generally includes information on site evaluation, facility design, and a waste utilization plan that addresses land application procedures and nutrient management. The plan is also sometimes referred to as a waste utilization plan or pollution prevention plan. The plan must also allow for the disposal of animal carcasses.

The manure and urine produced by the animals falls through slat openings in the barn floor to a collection tank, which are then usually flushed from underneath the barn with water through a channel to a control facility / lagoon, and consists of a mixture of the waste with feed, bedding, litter, or other agricultural material. A lagoon is created when a large square or round hole is dug and then lined with an impermeable covering (usually clay), and then utilized a dump for the flushed manure and other barn waste. The manure is only suppose to remain until it is transported away for usage as fertilizer (either pumped to a neighboring field or hauled away by tanker truck). The lagoon can become problematic as rain water drains into the impermeable receptacle in addition to the liquefied manure from the barns. There have been several pulicized instances where the liquefied manure has either seeped into the local groundwater aquifer or the receptacle barrier broke and the run off drained into a local river.

Critics point to the externalities of the CAFO system: the conditions related to the operation of CAFOs that require either indirect taxpayer support or effect surrounding communities. The cost of the in store food price does not reflect these other expenses that are incurred as a part of livestock growing and meat production.

Subsidies to reduce pollution.

Subsidies to grain farmers that artificially reduces the cost of livestock feed.

Reduction of property values through odor, air borne dust and pathogens, location of lagoons near property lines, lagoon retaining berm wall failures.

Health costs related to antibiotic-resistant bacterial infection.

Expense to clean up polluted land and waterways, and related human health expense.

Expense to reduce air and water pollution, and related human health expense.

Thus, the credit issue becomes whether reformed CAFOS or larger sustainable agriculture livestock operations that utilize a more natural, humane animal husbandry and agronomic waste disposal practices and require financing or refinancing can be economically viable and competitive.

Environmental, Health and Social Issues

The livestock industry often comes under criticism related to the inhumane treatment of animals. However, the argument must be framed within the issue of the cost to provide adequate conditions for animals on factory farms versus the ability of any nation to feed its citizens as inexpensively as possible and/or protect the health of its citizens. In the United States, with approximately 300 million persons consuming meat products on a daily basis (the U.S. population is approximately 310 million persons and approximately 2% publicly indentify themselves as vegetarian), well either those persons are converted to a vegetarian diet or a lower calorie diet (flexitarian) or the CAFO is the only alternative to feed such a large number of people. If the large scale production of meat is going to remain as a primary food source in developed nations then it will take very strict and more prevalent federal and state regulation to curtail any instances of animal cruelty because in the United States local humane societies, prosecutors and law enforcement officials usually have the authority and responsibility to investigate and prosecute incidents of animal cruelty and abuse. Many critics of the system indicate that the crowding and promotion of rapid growth conditions are cruel even at the commencement of the process, and life, of the individual animal.

Related to the manure lagoon issue is the operation of the Environmental Quality Incentives Program (EQIP) by the U.S. Department of Agriculture. The program was reauthorized in the Farm Security and Rural Investment Act of 2002 (Farm Bill) to provide a voluntary conservation program for farmers and ranchers that promotes agricultural production and environmental quality as compatible national goals. EQIP offers financial and technical help to assist eligible participants install or implement structural and management practices on eligible agricultural land. Funding from the program has been used to build and maintain manure lagoons. In addition, the 2002 Farm Bill allowed large livestock operations to apply for and receive funding under the program whereas these operations had prohbited from participating in the program in the past. Thus, the controversy is related to funding from the EQIP being used in the construction and expansion animal waste management systems and practices that allow the operator to conserve their own cash, hence the U.S. tax payer is subsidizing the operations of the industry rather than the large farms incurring the expense as a cost of doing business (the condition is created by the industry as part of daily operations). However, supporters of the program indicate that overall it does assist in containing the manure from polluting water sources and that is the point of the program.

The industry has also come under criticism for providing doses of antibiotics to healthy cattle, hogs and poultry in order to promote rapid growth of the animals. The group of antibiotics are fluoroquinolones, which includes ciprofloxacin (often referred to as cipro), a well known drug utilized by hospitals to control infections (low doses of penicillin are also fed to livestock). The problem is that when low doses of the drugs are provided to livestock not all of the bacteria is killed and successive cells can mutate and develop a resistance to the previous doasge level. Secondly, when agricultural workers develop infections from coming in contact with livestock, the strain of the infection is sometimes resistant to antibiotics that use to be able to easily control the specific bacteria. However, the New England Journal of Medicine has also published a study linking people infected with a Cipro-resistant bacteria to pork they had consumed. The World Health Organization (WHO) publicly indicated during 2009 that steadily increasing antibiotic resistance is one of the primary threats to human health (the Food and Drug Administration, CDC and U.S. Department of Agriculture have also all made similar public statements).

In response to the antibiotic issue, the Preservation of Antibiotics for Medical Treatment Act of 2009 (H.R.1549 / S.619) was introduced in March 2009 to amend the Federal Food, Drug, and Cosmetic Act, which would eliminate the "non-therapeutic" use of antibiotic drugs in food-producing animals. The bill was referred to Committee for review in July 2009, but no further news is available.   thomas.loc.gov/cgi-bin/query/z?c111:H.R.1549:

One of the major credit analysis concerns with beef cattle (and all livestock) is the effort to control the introduction of tainted products into the food chain.

Livestock Information Resources

American Association of Meat Processors   www.aamp.com/

American Brahman Breeders Association   www.brahman.org/

American Egg Board   www.aeb.org/

American Feed Industry Association   www.afia.org/

American Hereford Association   www.hereford.org/

American-International Charolais Association   www.charolaisusa.com/

American Maine Anjou Association   www.maine-anjou.org/

American Meat Institute   www.meatami.com/   (represents U.S. beef, pork, veal, lamb and turkey processors )

Animal Agriculture Alliance   www.animalagalliance.org/

California Poultry Federation   www.cpif.org/

Canadian Meat Council (Conseil des Viandes du Canada)   www.cmc-cvc.com/

Center For Consumer Freedom   www.consumerfreedom.com/

FARM (Farm Animal Rights Movement)   www.farmusa.org/

Farm Sanctuary   www.farmsanctuary.org/

Food and Agriculture Organization (United Nations)   www.fao.org/

Food Safety and Inspection Service (FSIS), USDA   www.fsis.usda.gov/

Foot & Mouth Disease (APHIS / Animal and Plant Health Inspection Service), USDA   www.aphis.usda.gov/lpa/issues/fmd/fmd.html

Georgia Egg Commission   www.georgiaeggs.org/

Grain Inspection, Packers and Stockyards Administration (GIPSA) USDA   www.gipsa.usda.gov/

International Meat and Poultry HACCP Alliance   haccpalliance.org/

Iowa Egg Council   www.iowaegg.org/

Kentucky Cattlemen's Association   www.kycattle.org/

Library of Export Requirements (Food Safety and Inspection Service, USDA)   www.fsis.usda.gov/OFO/export/explib.htm
Country by country listing of acceptabe livestock imports.

Livestock and Grain Market News Portal (USDA)   marketnews.usda.gov/portal/lg

Meat Industry Internet News Service   www.spcnetwork.com/mii/

Meat Safety   www.meatsafety.org/

Minnesota Beef Council   www.mnbeef.org/

Missouri Pork Producers Association   www.mppa.net/

National Animal Identification system (NAIS) USDA   animalid.aphis.usda.gov/nais/

National Broiler Council   www.eatchicken.com/

National Cattleman's Beef Association (NCBA)   www.beef.org/

National Chicken Council   www.nationalchickencouncil.com/

National Contract Poultry Growers Association   www.web-span.com/pga/

National Meat Association (NMA)   nmaonline.org/

National Pork Producers Council   www.nppc.org/

National Swine Registry   www.nationalswine.com/

Ohio Pork Producers Council   www.ohiopork.org/

Organic Consumers Association   organicconsumers.org/

PETA (People for the Ethical Treatment of Animals)   www.peta.org/

Pork Board   www.porkboard.org/

Red Angus Association of America   www.redangus1.org/

Socially Responsible Agricultural Project   www.sraproject.org/

Texas Longhorn Breeders Association of America   www.cattlehome.com/txlgh.html

Truthful Labeling Coalition   www.truthfullabeling.org/

U.S. Dept. of Agriculture (USDA), Economics Research Service - Livestock, Dairy, and Poultry Outlook   www.ers.usda.gov/publications/ldp/

U.S. Dept. of Agriculture (USDA), Economics Research Service - Livestock, Dairy, and Poultry Outlook: Tables   www.ers.usda.gov/publications/ldp/LDPTables.htm

U.S. Dept. of Agriculture (USDA), Natural Resources Conservation Service - Environmental Quality Incentives Program (EQIP)   www.nrcs.usda.gov/PROGRAMS/EQIP/

U.S. Meat Export Federation   www.usmef.org/

U.S. Poultry & Egg Association   www.poultryegg.org/

U.S. Poultry & Egg Export Council (USAPEEC)   www.usapeec.org/

United Braford Breeders   www.brafords.org/

United Egg Producers   www.unitedegg.org/