Chairman of CFTC to Headline Stockgrowers’ Midyear Meeting

The Montana Stockgrowers Association (MSGA) has confirmed J. Christopher Giancarlo, acting Chairman of the U.S. Commodity Futures Trading Commission (CFTC), will be the keynote speaker at this year’s Midyear Meeting held in Great Falls, May 30 – June 1.

“We are excited to have someone as knowledgeable and respected as Chairman Giancarlo joining us for Midyear,” noted MSGA President Bryan Mussard of Dillon, MT. “We look forward to the insight he will share with our members surrounding the recent cattle market volatility and his outlook on the futures market.”

The Midyear Meeting is one of two meetings that is held during the year to set association policy. This year’s meeting is held in conjunction with the Montana Ag Summit; hosted and co-sponsored by U.S. Senator Steve Daines. The summit will bring the nation’s agricultural leaders to Montana, including newly confirmed Secretary of Agriculture, Sonny Perdue.

Other Midyear highlights include an update from the National Cattlemen’s Beef Association; policy meetings; a Tuberculosis update from Montana State Veterinarian, Dr. Marty Zaluski; and a reception held by the Montana Stockgrowers Foundation featuring music by Kyle Shobe and & the Walk ‘Em Boys.

To register or for more information visit www.mtbeef.org or call 406-442-3420.

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The Montana Stockgrowers Association, a non-profit organization representing nearly 2,500 members, strives to serve, protect and advance the economic, political, environmental and cultural interests of cattle producers, the largest sector of Montana’s number one industry – agriculture.

DEADLINE EXTENDED: NCBA, PLC Accepting Fall Law Clerk Applications

WASHINGTON (May 2, 2017) – The National Cattlemen’s Beef Association and the Public Lands Council’s government affairs office in Washington, D.C., has extended the law clerk application deadline for the 2017 fall semester. The new deadline to submit an application for the position is June 1, 2017.

NCBA Vice President of Government Affairs Colin Woodall said that the law clerk position is a great opportunity for students with an interest in legislation and regulations concerning the beef industry.

“The clerkship gives law students the opportunity to work closely with NCBA’s environmental counsel and the executive director of the Public Lands Council on a wide range of regulatory issues that impact beef producers across the country,” Woodall said. “The law clerk position provides law students a one-of-a-kind view into the policy-making process while working as a valuable team member assisting the staff on several fronts.”

Producer-led and consumer-focused, NCBA is the nation’s oldest and largest national organization representing America’s cattle producers. PLC is the only organization in Washington, D.C., dedicated solely to representing cattle and sheep ranchers that utilize federal lands. The organizations work hand-in-hand on many issues, sharing office space in the heart of the nation’s capital.

The fall law clerk will provide support to both NCBA and PLC staff on matters ranging from environmental legislation and regulations to issues relating to federal lands management, grazing, and the Endangered Species Act. The law clerk will have the opportunity to attend key hearings, evaluate detailed policy documents, research current and proposed federal regulations, and help inform industry response to new federal regulations. To apply, students must be currently enrolled in an ABA-accredited law school.

The full-time law clerk position will begin August 28 and end December 22, 2017.  To apply for the law clerk position, visit www.beefusa.org.

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Cattlemen Applaud Delay of GIPSA Rule, Call for Its Ultimate Demise

The National Cattlemen’s Beef Association (NCBA) applauded today’s announcement that the Grain Inspection, Packers and Stockyards Administration (GIPSA) is delaying the effective date of its interim final rule an additional six months to Oct. 19, 2017.

 

“This is another step toward common sense and away from counterproductive government intrusion in the free market,” said NCBA President Craig Uden. “That said, while a delay is welcome, ultimately this rule should be killed and American cattle producers should be free to market our beef without the threat of government-sanctioned frivolous lawsuits.”

 

Two proposed rules and one interim final rule came out on December 20, 2016, one month before the end of the Obama Administration. The interim final rule regarding the scope of the Packers and Stockyards Act and the proposed rule regarding undue preference and unjust treatment have a direct negative impact on the cattle industry.
Current systems that allow producers to market their cattle as they see fit reward them for producing the higher-quality beef that consumers demand. Under the interim final rule, USDA or a producer no longer needs to prove true economic harm. Instead, one only needs to say that he or she was treated “unfairly” to file a damaging lawsuit that could discourage cattlemen from continuing to invest in improving the quality of beef being produced.

“Trial lawyers are salivating at the prospect of this rule becoming the law of the land,” Uden said. “If this rule isn’t killed once and for all, cattle producers will lose nearly all incentive to invest in the production of higher-quality beef. That would mean less revenue for producers and lower quality for consumers. That’s a lose-lose proposition and exactly why the rule needs to not only be delayed – it needs to be killed outright.”

From: NCBA

USTR Defends U.S. Beef from European Mistreatment

Today, the Office of the United States Trade Representative announced it will start the process of reinstating retaliatory tariffs on goods and products from the European Union due to the E.U.’s unfair treatment of U.S. beef. National Cattlemen’s Beef Association President Tracy Brunner applauds USTR Ambassador Michael Froman for standing up for the U.S. beef industry and taking action in defense of U.S. beef producers.

“The European Union has left us no choice but to seek compensation for the long-standing mistreatment of U.S. beef exports,” said Brunner. “Our temporary agreement with the E.U. was meant to be an opportunity to build a bridge of trust between U.S. beef producers and E.U. consumers, and to compensate the United States for the losses we have suffered as a result of the E.U.’s hormone ban. The E.U. has violated the spirit of that agreement and caused U.S. beef exports to become a minority interest in a quota meant to compensate U.S. beef producers.”

In 2009 the U.S. and the E.U. signed a Memorandum of Understanding under which the E.U. agreed to create a new duty-free quota for imports of specially-produced beef to compensate the United States for losses arising from the E.U.’s ban on the use of hormones in beef production. Imports under the quota have grown steadily since then, and for the past two years, the entire 45,000 metric ton quota has been filled, though from countries other than the U.S.

Over the past two years the U.S. government has attempted, without success, to engage the European Commission in discussions about ways to rectify this situation.

“While this is not our preferred choice, retaliation is the only way cattle producers are going to secure our rights for the losses we have incurred over the years due to the E.U.’s hormone ban,” said Brunner. “If the E.U. is unwilling to honor the terms of the agreement then we have no alternative but to seek restitution. We will not continue to be subjected to such trade agreement abuse.”

While initially imports from the United States accounted for the majority of the business done under the quota, over time imports from Australia, Uruguay and Argentina increased rapidly, taking a greater share of the quota. Neither Australia, Uruguay, nor Argentina was a party to the hormone dispute or the 2009 MOU that created the quota intended for the United States. The United States now has a minority and declining share of the quota, and imports so far this year point to a continuation of this trend.

NCBA Announces CME Scholarship Recipients

Montana brought home not one but two of the scholarships! A big Congratulations to Taylre Sitz for winning the overall essay! Taylre attends Montana State University and is active with the Collegiate Stockgrowers at Montana State University. Dan Johnson of Dillon, MT also received a scholarship; he is attending Kansas State University. Congratulations to these two stand-outs from Montana!

 

Ten top-notch college students, who are pursuing careers in the beef industry, have been chosen for the 2017-2018 $1,500 CME Beef Industry Scholarships. The scholarship is sponsored by the CME Group and administered by the National Cattlemen’s Foundation (NCF). Taylre Sitz of Bozeman, Mont., is the overall essay winner.

“We’re pleased continue our support of the CME Beef Industry Scholarships, which provides education to future beef industry leaders,” said Tim Andriesen, CME Group managing director of agricultural products. “Our partnership with NCF enables us to continue investing in accomplished university students who represent the next generation of food producers here in the U.S.”

The CME Beef Industry Scholarship was introduced in 1989 in partnership with the Chicago Mercantile Exchange. Today this scholarship tradition remains strong by recognizing and encouraging talented college students who will one day be industry leaders. The National Cattlemen’s Foundation and the CME Group are committed to the future of the cattle industry and continue to support outstanding youth in the beef community.

“We cannot emphasize enough how grateful we are for the continuous support from CME for Beef Industry Scholarships to provide financial assistance for future beef leaders,” said John Lacey, chair of NCF Board of Trustees. “Each year we are impressed with the caliber of students that apply for these scholarships.”

In addition to the $1,500 scholarship, Taylre Sitz receives a trip to Nashville, Tenn., for the 2017 Cattle Industry Convention & NCBA Trade Show where she will be recognized at the Best of Beef Awards Breakfast. Sitz currently attends Montana State University where she is pursuing a Bachelor’s Degree in Animal Science, as well as a minor in Business Administration. She is currently enrolled in the pre-veterinary program with plans to become a large animal veterinarian.

“Growing up on a ranch, I developed a commitment to the beef industry at an early age,” Sitz said. “I am interested in becoming a large animal veterinarian, and through ranch life I have been able to see and visit as they doctored cut horses or lame cattle. These experiences only furthered my desire to pursue the large animal veterinary career.”

In her essay, Sitz tackled the question of describing a risk confronting the beef industry and a solution to that risk by describing the risk of decreasing consumer confidence. Sitz wrote about the importance of using education through social media as a tool to improve consumer confidence in the beef industry.

Other $1,500 CME Scholarship winners are:
Thor Burnside, Fort Hays State University, Talala, Okla.
Cole Grisham, West Texas A&M University, Van Vleck, Texas
Emily Ivey, Land Lake College, Loudon, Tenn.
Abby Marion, University of Florida, Deltona, Fla.
Garrett Nichols, Iowa State University, Marshalltown, Iowa
Dan Johnson, Kansas State University, Dillion, Mont.
Shelby Schiefelbein, Texas A&M University, Kimball, Minn.
Madison Slaven, Virginia Tech, Blacksburg, Va.
Rachel Waggie, Kansas State University, Manhattan, Kan.

To learn more about scholarship opportunities and additional youth support from the NFC visit: www.nationalcattlemensfoundation.org/

CME Working Group Update

Jim Fryer

Written by Jim Fryer | Hobson, MT

Our cattle industry is going through one of the most dramatic price declines in decades. Similar events are also occurring across many different commodities, from wheat to oil. Several years of record high prices building upon momentum from the previous decade have led to a surge in supplies. At the same time, macroeconomic conditions throughout the world face challenges we have yet to fully grasp. We know full well, in our industry, that it takes longer for our biological process to ramp production. This has left many reeling from overall deflation while the expansion of the cowherd has only just begun.

Lying in the middle of this malaise are the futures markets where a variety of firms anticipate forward prices for our commodity products. Price volatility is running higher than the last 30-40 years and many cattle buyers struggle with 5-10% price changes, both up and down, in short timeframes. Price bids in the country reflect the same uncertainty. This action incited the NCBA to expand their Cattle Marketing and International Trade Committee to identify problems and advocate changes with the CME’s live cattle futures contract. The NCBA accepted Montana Stockgrowers’ recommendation that I join the CME Working Group. It is an honor to be chosen to represent our industry in such a significant endeavor.

Our group assembled in early August with 26 members including Craig Uden, NCBA President-elect, as the chair. We divided into three subgroups: 1) Contract Specifications, 2) Price Discovery and 3) Price Volatility. Each subgroup conferenced several times to organize and prioritize issues within each component. I joined the Price Volatility subcommittee tasked with evaluating short-term price change and identifying pitfalls.
Following remote efforts and teleconferencing, our entire working group met in Washington D.C. during the first week of October. Our goal was to present our concerns and requests to the Commodity Futures Trading Commission (CFTC) and the U.S. House Committee on Agriculture. The CFTC is the self-regulating agency supervising the CME while the Committee on Agriculture oversees the CFTC. The CME also traveled to D.C. to present price action data and information that the NCBA requested earlier this year.

Intention is one major theme that my subcommittee and I carried to D.C. Of the approximate 50,000 semi loads of fat cattle that trade daily in Chicago, there are many more bids to buy and offers to sell (quotes). The intention of honoring that specific bid or offer at that precise price is unknown.
Often, the bid-offer will disappear in microseconds. We want a clear answer from the CME that each bid-offer has the intention to fulfill true price discovery. Lack of intention (spoofing) is an illegal practice used by malign entities to disrupt real prices. I agree the CME must effectively enforce current spoofing rules and increase the punishment for illegal actions.

The contract specifications group is working to balance quality grades of the futures contract with industry standards. Evolution in feeding practices and technology in general has slowly pushed beef production into more choice grade carcasses. This group will be working with the CME to increase the number of choice cattle per semi load while advocating for a dynamic contract that will further reflect industry changes in a more timely fashion.

Another major component of our economic condition is price discovery. This theme runs in every current of our beef and cattle industries. The subcommittee tasked with this topic is pushing for more transparency and frequency of negotiated cash trade. As more cattle go on formula and industry average base contracts, the number of cattle setting the price foundation is dwindling. Several key players throughout the Midwest will be listing their cattle on Superior Livestock’s new Fed Cattle Exchange. This venue allows sellers of fat cattle to interact real-time with packers bidding on showlists in a public domain.

Currently, the auction is held mid morning on Wednesday to avoid a last minute rush to price cattle late on Friday after the futures market is closed for the week. As participation increases, it is likely another auction will be held on Tuesday or Thursday. That threshold is within reach following this week’s record participation.

From our meeting in Washington D.C., it is clear that our industry is getting attention. The CFTC stated our comments reflect similar conversations with other industries and that we should continue pushing for resolve with the CME. It is also encouraging to see more fat cattle going on a transparent showlist that has active packer bids. This is perhaps the single greatest opportunity. Let’s ensure we are setting the best price possible for all our formula and base contracts. We must dedicate more volume to the price setting process. At the same time, we will keep pressure on the CME to ensure malignant participants cannot place orders with no intention of honoring. I will have more information on our progress in the coming months.

In response to the recent market volatility, MSGA nominated Jim Fryer of Hobson, MT to serve on the National Cattlemen’s Beef Association (NCBA) / Chicago Mercantile Exchange (CME) working group. This working group has been tasked with investigating inconsistencies in the cash cattle market and ensuring a level playing field for all market participants. Jim Fryer lives in Hobson, MT with his wife, Heather, and their three children. Jim has decades of experience working in cattle and beef cash markets. For five years he handled global trading for Cargill including direct interaction with major hedge funds and exchanges. He has years of risk management and futures trading experience which makes him a key asset to discovering the cause behind the market volatility. For any questions about the NCBA/CME working group, please contact the MSGA office.

NCBA Takes Stand Against HSUS Attempt to Weaken Beef Checkoff

WASHINGTON (Sept. 16, 2016) – The National Cattlemen’s Beef Association was recently notified that Humane Society of the United States (HSUS) attorneys have filed a lawsuit against USDA’s Office of Inspector General (OIG) on behalf of the Organization for Competitive Markets (OCM). This lawsuit seeks to divide the beef industry against itself by opening old wounds and weakening the beef checkoff as HSUS drives toward its ultimate goal of ending animal agriculture.

The lawsuit, filed by HSUS lawyers, seeks the release of documents related to two OIG audits of the beef checkoff and its contractors, including NCBA. Both audits found that producer investments in the checkoff are protected by the firewall, which prevents beef checkoff dollars from being used for policy activities. Two OIG full audits and multiple random audits by USDA have found contractors, including NCBA, to be in full compliance with the laws which protect checkoff funds.

“Those findings haven’t satisfied the extremist animal rights activists at HSUS or its partners at OCM,” said NCBA CEO Kendal Frazier. “Instead of working to better our industry, these two organizations and a small handful of cattlemen have chosen a devil’s pact in an effort to weaken the checkoff, which will in turn, weaken beef demand and our entire industry.”

The lawsuit is another attempt by HSUS to drive a political agenda. It diverts attention from beef promotion activities and wastes precious resources at a time when cattle prices and the profitability of the beef industry are under tremendous pressure. As part of an effort to protect the beef industry and stop the frivolous and divisive work of HSUS, NCBA will seek intervenor status in the lawsuit against OIG.

“There’s no doubt that HSUS stands against rural America. Their attacks on the beef and pork checkoff programs weaken promotion efforts. HSUS and its allies have clearly demonstrated they have no interest in the livestock business beyond ending it,” said Frazier. “They will attempt to make this about transparency and say they’re undertaking this effort on behalf of producers. But let’s be clear: HSUS intends to put every cattleman and woman in America out of business. By weakening checkoff programs and damaging producer-directed marketing and promotion efforts, they can cause economic harm to our industry and force us out of production agriculture.”

HSUS and OCM are working to rehash questions that were asked and answered long ago. Since then, multiple audits have demonstrated full and ongoing contractor compliance with regulations governing beef checkoff expenditures. Furthermore, NCBA has demonstrated that it remains committed to transparency and its role as a contractor to the beef checkoff.

“We have nothing to hide. We have, and will continue to fully cooperate with all reviews and audits of our contracting activities,” said Frazier. “However, we will not stand idly by and allow HSUS to kill the checkoff. This isn’t the first attempt to weaken our industry and it won’t be the last, but this is where we must draw a line in the sand and protect the interests of American cattlemen and women.”

Top Policy Initiatives in Washington D.C. for the Week of September 12, 2016

House Agriculture Committee Addresses Outdated Packers and Stockyards Act

This week, the House Agriculture Committee approved H.R. 5883, legislation to modernize the Packers and Stockyards Act. Enacted in 1921, the Packers and Stockyards Act is intended to protect buyers and sellers of livestock from unfair, deceptive, and discriminatory practices.

Having not been revised in decades, Rep. David Rouzer (R-NC), chairman of the Livestock and Foreign Agriculture Subcommittee, introduced H.R. 5883, to expand the definition of “marketing agency” to include video and online auctions and update acceptable payment methods to include electronic transfer of funds, ensuring the legislation keeps up with the latest technologies available as our industry and modern banking continues to evolve.


Sage Grouse Provision Key for Western Producers

Work continues in Washington, D.C., on the National Defense Authorization Act (NDAA) for FY17. The House-passed version of the bill includes a provision blocking implementation of Federal management plans for the greater sage grouse over ongoing successful management of the species by Western states, livestock producers, and others. As the conferees work through the various issues contained in this year’s version of the “must pass” legislation, it’s clear that House leadership is working hard to keep the provisions in place and protect producers.

Efforts are now focused on the Senate, and in particular Senator John McCain (R-AZ), the Chairman of the Senate Armed Services Committee.  Despite documented impacts to military training exercises at installations like Yakima Training Center in Washington State, not to mention the impact of the plans on rural western economies, Senator McCain continues to resist inclusion of this critical language. Senators from around the West will continue to press this case with McCain through the fall in order to ensure this important legislation crosses the finish line intact.


Senate Agriculture Committee Holds Hearing on CFTC Commissioner Nominations

Today the Senate Committee on Agriculture, Nutrition, and Forestry held a hearing to consider the nominations of Dr. Christopher Brummer and Brian Quintenz to serve as Commissioners of the Commodity Futures Trading Commission.

The CFTC is charged with fostering open, transparent, competitive, and financially sound markets, to avoid systemic risk, and to protect the market users and their funds, consumers, and the public from fraud, manipulation, and abusive practices related to derivatives and other products that are subject to the Commodity Exchange Act. The Commission is comprised of five Commissioners nominated by the President, with the advice and consent of the Senate. Currently, there are two Commissioner vacancies at the CFTC. Senator Pat Roberts, chairman on the Senate Agriculture Committee, opened the hearing by stressing the charge of the CFTC Commissioner.

“As noted by the CFTC’s own mission statement:  Farmers, ranchers, producers, commercial companies (or end-users), municipalities, pension funds and others use markets to lock in a price or a rate and focus on what they do best – innovating, producing goods and services for the economy, and creating jobs,” said Roberts. “It is essential that the CFTC have individuals in charge that truly take that mission statement to heart, as the innovation and hard work of our farmers and ranchers seems to have been forgotten in recent years.”

Chairman Roberts continued and highlighted the impact the CFTC has on the agriculture industry.

“Many of us here raised concerns when Dodd-Frank was being considered and insisted that the legislation should not negatively impact those who had nothing to do with the causes of the 2008 crisis, and it is important to note that this was a bipartisan concern. Yet, when Dodd-Frank became law, and the CFTC began writing new regulations, it is in fact our farmers, our ranchers, our county grain elevator managers who felt the heavy hand of over-regulation come down on them,” said Roberts. “It is clear that Congress should not withhold needed regulatory relief for our farmers, ranchers, and risk management service providers any longer. Nor should the CFTC. The CFTC must look through the lens of regulatory practicality – not the lens of regulatory irrationality.”

Now that the CFTC is close to being fully staffed, the Commission will have the man-power and time to investigate critical issues that impact the cattle industry, like volatility in the marketplace.


Eighth Circuit Court of Appeals Sides with Producers in EPA Release of Information

The Eighth Circuit Court of Appeals ruled Friday that the Environmental Protection Agency abused its discretion in disclosing farm information from producers across the country. In a long running dispute, EPA in early 2013 released the names, addresses, telephone numbers, and GPS coordinates of concentrated animal feeding operations from more than 30 states to environmental activist groups through a Freedom of Information Request. These groups included Earth Justice, the Pew Charitable Trusts and the Natural Resources

Defense Council.

Following objections by NCBA and other producer groups, EPA reviewed the information on over 80,000 facilities and concluded they had released too much information and requested the return of the electronic documents. Despite this effort, the harm had already been done and the farm information had been disseminated to many activist groups beyond the three groups that made the FOIA request.

In the case brought against EPA by American Farm Bureau and National Pork Producers Council, the Court validated the concerns of producers across the country by determining that EPA abused its discretion in releasing personal information of farmers and ranchers and directed the Agency to refrain from future releases of such information. The Court concluded that “the EPA’s disclosure of spreadsheets containing personal information about owners of CAFOs would invade a substantial privacy interest of the owners while furthering little in the way of public interest that is cognizable under FOIA.”

While this decision cannot recapture the information already released, it does effectively prevent EPA from releasing further private producer information. The case will be remanded to the district court for further proceedings.


Senate Passes Water Resources Development Act with Key Provisions for Agriculture

The U.S. Senate passed the Water Resources Development Act today with an amendment containing an exemption for animal feed products regulated by the EPA’s Spill Prevention Control and Countermeasure rule. The bill passed by the Senate will bring much-needed regulatory relief for small and medium sized farms and livestock producers across the country who store oil, or oil products, at their operations.

The amendment to the bill championed by Senator Deb Fischer (R-Neb.) would wholly exempt animal feed storage tanks from the SPCC rule, both in terms of aggregate storage and single-tank storage. Additionally, it exempts up to 2,000 gallons of storage capacity on remote or separate parcels of land as long as those tanks are not larger than 1,000 gallons each.

“When it comes to preventing spills from on-farm fuel storage, producers already have every incentive in the world,” said Senator Fischer. “We live on this land. Our families drink this water.”

In May 2014, Congress acted to ease the burden by exempting producers who had up to 6,000 gallons of aboveground storage and no single tank with a capacity of 10,000 gallons or more. However, that legislation neglected to fully exempt animal feed storage from the SPCC rule. Senator Fischer’s amendment provides that critical relief to our nation’s livestock producers.

The legislation must now be considered and passed by the U.S. House of Representatives.

 

Beltway Beef is a weekly report from Washington, D.C., giving an up-to-date summary of top policy initiatives; direct from the National Cattlemen’s Beef Association

NCBA Works to Address Market Volatility

Colin Woodall, NCBA Vice President of Government Affairs, discusses NCBA’s efforts to ensure the futures markets work for risk management. MSGA member Jim Fryer of Hobson, MT was appointed to the NCBA/CME Working Group this summer. This group has been engaged on many levels to address the market volatility. Check out the podcast below to learn more.

 

MSGA Member Selected for CME Working Group

Heather Fryer 2In response to the recent market volatility, MSGA nominated Jim Fryer of Hobson, MT to serve on the National Cattlemen’s Beef Association (NCBA) / Chicago Mercantile Exchange (CME) working group. This working group has been tasked with investigating inconsistencies in the cash cattle market and ensuring a level playing field for all market participants.

MSGA is proud to announce that Jim has been selected to serve on the working group. He is an excellent representative of Montana Stockgrowers and we are thrilled that he will be representing Montana’s cattle industry on this working group. Jim has decades of experience working in cattle and beef cash markets. For five years he handled global trading for Cargill including direct interaction with major hedge funds and exchanges. He has years of risk management and futures trading experience which makes him a key asset to discovering the cause behind the market volatility. For any questions about the NCBA/CME working group, please contact the MSGA office.