07-14-12 ASI WEEKLY NEWS FOR SHEEP INDUSTRY LEADERS...

Sens. Introduce One-Year Extension of Ag Disaster Assistance Programs 

Sens. Max Baucus (Mont.), Kent Conrad (N.D.), Jon Tester (Mont.) and Tim Johnson (S.D.) introduced legislation this week to provide a one-year extension of agriculture disaster assistance programs that expired at the end of Sept. 2011. As severe fires and drought threaten ranchers and farmers across the country, this extension will provide certainty for American producers while Congress works to pass the next Farm Bill. With uncertainty of how the Farm Bill will proceed, the senators are leading this effort as a standalone bill as a two-pronged approach to extend disaster assistance, given the continuing drought conditions.

Disaster programs extended under this bill include the Supplemental Revenue Assistance Payments (SURE) program, which provided crop insurance for farmers affected by disasters; the Livestock Indemnity Program that compensates ranchers at a rate of 75 percent market value for livestock mortality caused by disasters; the Livestock Forage Program, which assists ranchers who graze livestock on qualifying drought- or fire-affected pasture land; and the Emergency Livestock Assistance Program designed to compensate producers for disaster losses not covered under other disaster programs.

“Montana ranchers and farmers are pitching in and helping each other out in the face of devastating fires and Congress needs to follow their lead,” Baucus said.

“The SURE program and livestock disaster assistance programs are designed to give farmers and ranchers greater security when disaster strikes,” Conrad said. “This bill will cover crop and livestock losses in 2012 for farmers and ranchers across the nation who are suffering as a result of weather-related disasters.”

“Conditions around the country are as dry as I’ve seen them in a long time, and producers can’t wait for help in the Farm Bill. We need to get this assistance on the ground as soon as possible,” Tester said.

“The ongoing drought is causing major problems and the disaster assistance programs included in this bill are crucial for our crop and livestock producers,” said Johnson.

Farm Bill Reported Out of Full House Committee 

In an all day mark-up session that concluded at 1:00 a.m., House Agriculture Chairman Frank Lucas (Okla.), supported by the committee’s Ranking Member Collin Peterson (Minn.), skillfully managed the mark-up of the House version of the 2012 Farm Bill to a final vote of 35-11 with a strong bi-partisan majority. The attention is now focused on the House Republican leadership to allow floor debate on the bill before the House breaks in about three weeks to begin its August recess.

“The bill includes the marketing loan provisions for wool and the extension of the disaster programs that are very important to U.S sheep producers,” said Peter Orwick, executive director of the American Sheep Industry Association. “The committee included in its report the majority of the legislative issues that the industry requested.”

House Speaker Boehner (Ohio) was questioned about his attentions toward the consideration of the Farm Bill before Congress recesses. His response was noncommittal. He praised Chairman Lucas’s leadership in getting a Farm Bill from committee acknowledging that he likes part of the bill and not other parts.

The Farm Bill, as reported by the committee, provided approximately $35 billion in savings over 10 years achieved through a major rewrite of commodity programs and cuts from food stamps and other feeding programs. The House reported bill differs significantly from the Senate-passed Farm Bill in several areas. The House maintained traditional target price programs, which are more favorable to rice and peanut programs than in the Senate-passed bill and, of significance to many members of the House as the bill makes its way to the floor, the House bill cuts approximately $16.5 billion from the Supplemental Nutrition Assistance Program and nutrition programs compared with the $4.5 billion in savings from these programs in the Senate-passed bill.

There are only 11 legislative days before the August break, so if the Farm Bill is going to be considered prior to the recess, it will have to happen soon. The current Farm Bill expires on Sept. 30.

Appropriations-House Likely to Delay Five of Six Spending Bills

The defense spending bill for fiscal year (FY) 2013 will be the last appropriations measure brought to the floor of the House before the November elections according to House Republican leadership aides. In the Senate, Majority Leader Harry Reid (Nev.) made it clear that the Senate would not take up any of the 12 annual spending bills (FY 2013) before the election. This Tuesday announcement was not received well by the House Republican leadership.

“It is extremely disappointing that the Senate democrat leadership is defaulting on their most basic fiscal duty as representatives of the people of this country,” House Appropriations Chairman Hal Rogers (Ky.) said in a statement. “The 12 annual appropriations bills cannot be swept under the rug and ignored until a more convenient political time.”

The six bills the full House has passed include Commerce, Justice and Science; Energy and Water; Homeland Security; the Legislative Branch; Military Construction and Veterans Affairs; as well as Transportation and Housing and Urban Development.

The five appropriation measures it appears the House will delay until after the election are Agriculture; Financial Services; Interior and Environment; State and Foreign Operations; and Labor-Health and Human Services appropriations bills.

EU Discusses Regulatory Changes for Importing Greasy Wool

Over the last few months, the International Wool Textile Organization (IWTO) members advocated that the European Union (EU) Commission change the Regulation 142/2011 in favor of the wool industry.

EU Regulation 142/2011 implements Regulation 1069/2009, which lays down health rules in regard to animal by-products and derived products not intended for human consumption. This regulation leads to greasy wool currently being stopped at customs, subject to veterinary controls and demands for special transport vehicles normally used for livestock animals. This not only causes delays for manufacturing but also increases costs for the wool industry.

Through the advocacy work of IWTO, the EU Commission agreed on a new draft proposal, together with the representatives of all EU member states who are in charge of the veterinary controls in relation to 142/2011 in their respective EU countries. The draft will now be translated into 23 languages and submitted to the EU Parliament and EU Council for approval before it can be implemented on a national level within the EU.

With this new draft, two goals would be reached:

• The notification of transport of untreated wool and hair would no longer be needed as long as it is securely enclosed in packaging and dry and sent directly to the plant; and
• Lower veterinary costs for untreated wool and hair coming from certain ‘safe’ countries such as Australia, New Zealand, the United States, Canada and parts of Argentina.

“ASI applauds these changes and has supported the IWTO efforts to eliminate additional costs and complications in transporting wool in the EU,” said Rita Kourlis Samuelson, director of wool programs for the American Sheep Industry Association (ASI).

ASI represents the U.S. wool industry with IWTO.

USDA/USTR Named Livestock Advisory Committee

Agriculture Secretary Tom Vilsack and United States Trade Representative Ron Kirk announced appointments to the Agricultural Policy Advisory Committee (APAC) and six Agricultural Technical Advisory Committees (ATACs), including one on animals and animal products.

Paul Rodgers, deputy director of policy for the American Sheep Industry Association, has been re-appointed to the Animal and Animal Products ATAC Committee.

Congress established the advisory committee system in 1974 to ensure a private-sector voice in establishing U.S. agricultural trade policy objectives to reflect U.S. commercial and economic interests.

The committees represent a cross-section of the food and agriculture industry and must have knowledge of agriculture and trade matters.

Introducing the North American Meat Association

A brand new trade association has been created to represent the meat industry on the North American continent. North American Meat Association (NAMA) is the result of more than a year of planning and effort by the leaders of two major industry groups, National Meat Association and the North American Meat Processors Association.

NAMA will continue to support its members with workplace issues support, legislative analysis and media assistance, as well as deliver regulatory guidance and proactive information to the membership. NAMA will also continue to publish The NAMP Meat Buyer’s Guide® and associated products.

The officers from the consolidating organizations will share the leadership positions to assure a seamless transition while maximizing synergies.

The first meeting of the new association will be the NAMA Outlook Conference on Oct. 24-27 in San Antonio, Texas. With nearly 700 member companies in the United States, Canada, Mexico and other countries, the new association is one of the larger meat-industry associations in North America and dedicated to a goal of safe food in a sound and competitive marketplace.

The new association has two offices in the United States, one in Oakland, Calif., and another in Reston, Va. It also has an office in Ottawa, Ontario, Canada.

For more information, visit NAMA’s new website at www.meatassociation.com.

Ugg Boot Sales Drop as Market Falls to Fleeces

A slump in overseas sales of the classic Australian Ugg boot has triggered a collapse in global sheepskin prices and left farmers with a pittance for their once highly prized hides. American footwear giant Deckers, the predominant company in the international Ugg boot market, has reported a sharp fall in sales growth for the shoes, prompted by a mild northern winter and Europe’s economic woes.

Sales of the company’s Ugg brand boots slowed markedly in the three months to March this year, spurring a fall in sheepskin prices by up to 70 percent and signaling a change in fortunes for the global juggernaut, which sold more than US$1.2 billion worth of Ugg shoes last year. Even the best quality skins, usually a lucrative by-product for sheep farmers, now fetch as little as $10 a piece, down from $30 during last year’s peak, the Meat and Livestock Australia sheep meat analyst Robert Barker said.

The director of Australian Lamb Skin Processors, Darren Vinton, said stockpiles of skins and boots mean orders from overseas buyers, mostly from China, have dropped substantially.

“If [the northern hemisphere nations] don’t get a cold winter again, it will have a flow-on effect to our business next year,” he said.

MARKET NEWS

Weekly National Market Prices for Wool 

The U.S. Department of Agriculture’s prices for wool can be accessed at www.fsa.usda.gov/FSA/webapp?area=home&subject=prsu&topic=col-nl-wm. The effective repayment rate is the lower of either the 30-day average or weekly rate.

< 18.6 Micron 3.88 4.88 Not Available 18.6-19.5 3.38 4.69 Not Available 19.6-20.5 2.94 4.56 Not Available 20.6-22.0 2.72 4.52 Not Available 22.1-23.5 2.56 4.40 Not Available 23.6-25.9 2.33 3.85 Not Available 26.0-28.9 1.78 2.21 Not Available > 29 Micron 1.38 1.75 Not Available

GREASE PRICES in $ per pound

Ungraded Wool 40 cents 59 cents Not Available Unshorn Pelt

6.865 lbs x
Ungraded Wool LDP

Not Available Wool LDPs are not available when the weekly repayment rate is above loan rate.

Market Summary, Week ending July 6, 2012 
Feeder Prices, From 2 weeks ago: San Angelo, 40-60 lbs. for 130-144 $/cwt.; 60-105 lbs. for 125-130 $/cwt.
Slaughter Prices – Negotiated, Live, wooled and shorn 100-177 lbs. for 130-142.37 $/cwt. (wtd. ave. 132.60); load shorn 180-200 lbs. for $80.50/cwt.
Slaughter Prices – Formula¹, 3,845 head at 271.18-337.34 $/cwt. for 79.8 ave. lbs.; 4,935 head at 228.42-272.11 $/cwt. for 106.2 ave. lbs.
Equity Electronic Auction, no sales.
Cutout value/Net carcass value², $308.66/cwt.
Carcass Price, Choice and Prime, YG 1-4, weighted averages, 669 head at 55-65 lbs. for $342.09/cwt., 822 head at 65-75 lbs. for $319/cwt., 796 head at 75-85 lbs. for $303.71/cwt., 492 head at 85 lbs. and up for $259.79/cwt..
Boxed Lamb, weighted average prices ($/cwt.), Trimmed 4″ Loins $562.51, Rack, roast-ready, frenched $1,190.94, Leg, trotter-off, partial boneless $531.79, Ground lamb $557.44, Shoulder, square-cut $240.38.
Imported Boxed Lamb, weighted average prices ($/cwt), AUS Rack (fresh, frenched, cap-off, 24-28 oz) $1,041.33, AUS Rack (frozen, frenched, cap-off, 20 oz/dn to 28 oz/up) $955.62, NZ Rack (frozen, frenched, cap-off, 12-16 oz & 20 oz/up) $1,201.77.
Exported Adult Sheep, 0.
Wool, Price ($/pound) Clean, Delivered, Prices from 7 weeks ago: 18 micron (Grade 80s) NA, 19 micron (Grade 80s) NA, 20 micron (Grade 70s) NA, 21 micron (Grade 64-70s) 4.36, 22 micron (Grade 64s) 3.99, 23 micron (Grade 62s) 3.78, 24 micron (Grade 60-62s) 3.63, 25 micron (Grade 58s) 3.28, 26 micron (Grade 56-58s) 2.90, 27 micron (Grade 56s) 2.51, 28 micron (Grade 54s) NA, 29 micron (Grade 50-54s) NA, 30-34 micron (Grade 44-50s) NA.
Australian Wool, Clean, delivered FOB warehouse & gross producers ($/pound), 18 micron (Grade 80s) 4.77-5.40, 19 micron (Grade 80s) 4.58-5.19, 20 micron (Grade 70s) 4.41-5.00, 21 micron (Grade 64-70s) 4.39-4.98, 22 micron (Grade 64s) 4.39-4.97, 23 micron (Grade 62s) 4.33-4.90, 24 micron (Grade 60-62s) 4.07-4.61, 25 micron (Grade 58s) 3.77-4.28, 26 micron (Grade 56-58s) 3.34-3.79, 28 micron (Grade 54s) 2.31-2.62, 30 micron (Grade 50s) 2.15-2.44, 32 micron (Grade 46-48s) 1.83-2.08, Merino Clippings 2.21-2.51.
¹Prices reported for the two weight categories of the largest volume traded. Second, multiplying the carcass prices by an estimated 50.4% dressing percentage yields live weight prices. ²The cutout value is the same as a net carcass value. It is a composite value that sums the value of the respective lamb cuts multiplied by their weights. It is also the gross carcass value less processing and packaging costs.
(Source: USDA/Agricultural Marketing Service)

American Sheep Industry Association; 9785 Maroon Circle, Suite 360; Englewood, CO 80112-2692
Phone: (303) 771-3500 Fax: (303) 771-8200 Writer/Editor: Judy Malone E-mail: judym@sheepusa.org
Web sites: http://www.sheepusa.org and http://www.sheepindustrynews.org