Last December, one lone Holstein cow confirmed the presence of bovine spongiform encephalopathy (BSE), or mad cow disease, in the U.S.
While the potential for future cases is unknown, one thing is certain: Grain and beef producers are working more closely together to support their linked industries, both domestically and overseas.
“We realize it's going to require additional resources to reopen our international markets,” says Rodney Weinzierl, executive director for the Illinois Corn Growers Association. “In the meantime, if we can help educate consumers and sustain meat sales domestically, we'll all be better off.”
Within days of the confirmed BSE case, the Illinois Corn Marketing Board (ICMB) allocated $20,000 to the U.S. Meat Export Federation and $5,000 for the Illinois Beef Association (IBA) to support their efforts to emphasize the quality and safety of U.S. beef products.
The livestock industry is the largest market for corn and soybean growers. According to the National Corn Growers Association (NCGA), the livestock sector used 52.8% of the U.S. corn produced last year.
In addition, the livestock industry uses distillers' grains, a co-product from ethanol plants. As ethanol production has increased, so has the volume of distillers' grains being fed to livestock.
That's all good news for corn growers who will plant about 79 million acres of the crop this spring, according to NCGA. The corn pricing outlook is positive, with one association economist predicting a $3.25/bu. July futures market, according to Betsy Croker, director of public policy and production and stewardship team leader for NCGA.
Specific to BSE, Croker says she contacts her industry counterparts at the National Cattlemen's Beef Association (NCBA) at least once a week to monitor the issue and its potential impact on corn.
“We have a very good regulatory process in place, consumer confidence is strong, and we believe this is going to work itself out,” she says. “However, we would like our trading partners to be a bit more rational.”
To date, Japan, Mexico, South Korea, Canada, Russia, Taiwan, Hong Kong and China have banned imports of American beef and beef products. Japan alone buys about 32% of U.S. beef exports. The countries claim that human risk is their reason for shutting their trade doors.
USDA says animal parts from the infected Holstein most likely to carry the infection were not in the human food supply. For additional information, check NCBA's Web site at www.BSEinfo.org.
“Our export markets are tough right now,” says John Tibbits, a farmer-feeder and grain producer who has served as a grassroots liaison between NCBA and NCGA. “We're going to see a beef surplus soon if our export markets don't pick up.”
Tibbits' family operation, based near Minneapolis, KS, includes feeding 1,000 head of cattle annually, and farming 5,000 dryland and irrigated acres of wheat, corn and soybeans.
Tibbits says his family will stay the course with the cattle and cropping plans they have under way this spring. He encourages other grain producers and farmer-feeders to consider using risk-management tools, such as alliances and futures and forward contracts, to minimize risk and provide returns.
“We won't know until next fall, when we're ready to start another feeding cycle, whether we'll need to make some changes,” Tibbits says. He notes that cattle already contracted when BSE was confirmed in the U.S. helped the industry with price recovery. However, uncertainty about BSE contributes to increased market volatility.
Says Scott Merritt of the Nebraska Corn Growers Association: “We estimate that every pound of beef produced in Nebraska has about seven pounds of corn in it.”
In South Dakota, the Corn Utilization Council is the catalyst behind a new campaign under way. It encourages producers to keep homegrown corn in the state to feed beef and dairy cattle produced there.
Illinois Corn Growers' Weinzierl encourages producers to “fill your freezer with beef.” He says Canadian consumers supported their beef industry with the same tactic when BSE was confirmed there last year.