The Buzz

News and notes from the Kansas Livestock Association convention.

Despite 5-inches of snow falling upon Wichita Wednesday and Thursday of last week, about 1,000 KLA members attended the annual Kansas Livestock Association Convention. Profitability in the cattle sector was the big topic at the meeting – specifically, how high grain prices impact producers' bottom lines.

  • Demand for corn has increased dramatically as the ethanol industry has grown. For every $1 increase in the cash price of corn, cattle producers can expect profitability of a 550-pound calf to decrease $20-25, Cattle-Fax economist Randy Blach told the audience during a seminar Thursday…
  • Blach says higher corn prices will become the rule, rather than the exception, for the next several years at least…
  • Corn prices now hover between $3.50 to $4.00 throughout Kansas. Bill Holbrook, analyst with Holbrook Consulting Services, says most ethanol plants can pay $5 for corn and still be profitable…
  • Grain sorghum will not be a cheaper option for cattle producers, as sorghum yields the same amount of ethanol per bushel as corn and can be utilized in grain-based ethanol plants, Holbrook says…
  • The by-product of the grain ethanol process, wet distillers grains, can be used as cattle feed. But, because the product is wet, it has a short life span and the cost to dry is too high to be an economic alternative, KLA officials say…
  • Kansas Livestock Association leaders – including new president David Cross of Lewis – says the organization must push for research that determines more feasible ways of using wet distillers grains in cattle feeding rations…
  • Other news centered around exports, specifically, the refusal of Korea to accept a shipment of beef from Creekstone Farms, Arkansas City, that contained a small piece of bone. National Cattlemen's Beef Association President Mike John, who spoke to the KLA crowd, told me after his speech that the U.S. must push for fair, science-based trade agreements with Asian countries that now have very stringent rules on what's acceptable from the U.S…
  • Meanwhile, U.S. Senator Pat Roberts (R-KS) sent a letter to Korea's ambassador to the U.S. condemning Korea's refusal of the beef shipments. Roberts said in the letter to Ambassador Lee Tae-sik, "This rejection seems to be based on nothing more than a continued effort by Korea to build false barriers to trade between our two countries. This is not how two allies, with many mutual interests, should conduct business …"
  • Kansas Congressman Jerry Moran, too, made news. He sent a letter to new current House Minority Leader Nancy Pelosi calling for swift passage of a agriculture disaster bill within the first 100 hours of the new Congress, which begins session in January…
  • Pelosi has said she will create a list of priority initiatives the House will consider during that first 100 hours; Moran says disaster assistance is needed in order to help farmers and ranchers overcome long-term drought…
  • In other beef-related news, Lincolnville native John Stika, Creston, Ohio, has been named president of the Certified Angus Beef, LLC. Stika earned bachelor's and master's degrees from Kansas State University and a doctorate from the University of Kentucky. He is just the third president in CAB's 28-year history.
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