USDA Issues Notice On Scholarship Program

USDA’s Food Safety and Inspection Service (FSIS) today issued a notice providing instructions to agency personnel for administering a scholarship program seeking to recruit veterinarians amid an ongoing shortage of them at the federal level.

The Adel A. Malak Scholarship specifically seeks to recruit students enrolled in veterinary medicine to “critical” Public Health Veterinarian positions in FSIS’s Office of Field Operations, the agency said.

The scholarship program is structured as a 2-year pilot with the first group of scholars to be selected this summer. FSIS will reevaluate the pilot program in 2018.

FSIS has named this scholarship after Dr. Malak to honor his service in FSIS. Malak started his professional career with FSIS in 1985 as an in-plant PHV in Phoenix and moved up the ranks into managment positions. The agency said Malak was instrumental in recruiting and mentoring many students from the University of Fresno and the California Polytechnic State University. 

Beef Market Wrap-Up

By Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist

Beef and cattle prices bounced back sharply in the past ten days.  Choice boxed beef ended last week at $218.56/cwt., up $14.82cwt. from the recent low on May 6.

Wholesale prices were generally higher last week for end meats (round and chuck) as well as middle meats (rib and loin).  Five-market fed cattle prices ended the week of May 13 at $132.64/cwt., up $14.61/cwt. from the May 4 low.  Auction prices for feeder cattle in Oklahoma were mostly up four to six percent in the past one to two weeks.

Price improvement has occurred despite continuing year over year increases in beef production.

For the week ending May 14, estimated beef production was up 6.1 percent year over year, contributing to a ten week average increase of 5.3 percent compared to the same period last year.   Cattle slaughter was estimated at 601 thousand head last week, up 5.8 percent year over year.  Average cattle slaughter has been 4.1 percent higher than last year for the last ten weeks.

Carcass weights are still up year over year but have decreased dramatically in recent weeks.  Average steer carcass weights were 868 pounds last week, down 26 pounds from early March and just 3 pounds heavier than the same period last year.

The recent rally in cattle and beef prices provides a new base for seasonal price movements through the summer and the remainder of the year. Beef production is expected to increase seasonally through June but this will be tempered both by the recent acceleration in cattle marketings that is pulling cattle ahead of the seasonal peak combined with smaller year over year increases in carcass weights. 

Beef production will likely trend higher in the second half of the year but carcass weights may partially offset increased cattle slaughter.

The recent seasonal decline in carcass weights may not be done yet and carcass weight may drop below year earlier levels for much of the second half of the year.  Steer carcass weights have declined 62 pounds from the October peak last fall.  This compares to an average fall to spring seasonal decrease of 41 pounds the past five years.

A typical seasonal increase in carcass weights this fall from current levels would leave steer carcass weights ten to 20 pounds below the record carcass weights from the fall of 2015.  This will depend on whether feedlots continue to market cattle aggressively and maintain a faster turnover rate.

Bayer Makes Offer for Monsanto

(Dow Jones) -- It took only a year for Monsanto Co. Chief Executive Hugh Grant to go from pursuing an unsolicited takeover of a European company to being the target of one.

The St. Louis-based biotech seed giant confirmed that German rival Bayer AG made an unsolicited offer about a potential deal that would reshape global agriculture, combining Monsanto's number one position in crop seeds with Bayer's much broader pesticide portfolio.

It is a reversal from a year ago, when Mr. Grant led a public effort to woo Swiss pesticide and seed maker Syngenta AG with a $46 billion takeover proposal that would have achieved a similar combination.

But Syngenta repeatedly rebuffed Mr. Grant's efforts, arguing that Monsanto's offer undervalued its prospects and that antitrust authorities could reject that deal.

Monsanto abandoned the effort in August, refocusing on its core business in seeds, crop genetics and herbicides as a deepening slide in crop prices battered the agricultural sector, slowing sales of tractors and weighing on prices for seeds, sprays and fertilizer.

Analysts and investors describe Mr. Grant, 58 years old, as a pragmatic strategist who has steered Monsanto through a pesticide-market collapse and commodity crunches in his 13 years as CEO.

In a soft Scottish brogue, Mr. Grant calmly has debated critics of genetically modified crops at the company's annual shareholder meetings -- sometimes for hours. At times he has changed direction, reconsidering Monsanto's seed prices after farmers balked at rising costs or admitting the company waited too long to mount a spirited defense of genetically engineered crops, which Monsanto and others argue can help produce more food using fewer resources.

"He understands that you don't have to be right all the time to succeed," said James Carrington, president of the Danforth Plant Science Center, a suburban St. Louis nonprofit focused on plant genetics where Mr. Grant was a longtime board member.

"What you have to do is understand, admit when something needs to be changed, and then have courage to shift directions or pivot," Mr. Carrington told The Wall Street Journal last year.

In June, Mr. Grant -- who is also Monsanto's chairman -- traveled to Europe to pitch Monsanto and Syngenta investors on the virtues of a tie-up, which Monsanto said would create a farm-supply powerhouse with the ability to create new seed and pesticide combinations more quickly, providing a bigger array of products to make farmers more profitable.

Now, Mr. Grant and Monsanto's directors will have to decide on an offer that could achieve a similar result by combining Bayer's crop chemical portfolio with Monsanto's prowess in seeds and herbicides. Monsanto said late Wednesday that its board of directors was reviewing the proposal, though a deal wasn't guaranteed.

Monsanto's board is weighing the approach as tough times in the U.S. Farm Belt have pushed farm income to its lowest level in more than a decade, cutting into profits for companies that peddle seeds, sprays, fertilizers and equipment. Monsanto hasn't been immune, earlier this year issuing a profit warning and laying off about 16% of its world-wide staff.

The struggles also have affected Monsanto's shareholders. The company's stock lost nearly a quarter of its value in the 12 months before reports of Bayer's interest in a deal with Monsanto, and agriculture industry officials in the U.S. have warned not to expect a swift rebound in the farm economy.

Should Monsanto reject Bayer, Mr. Grant and his fellow directors may confront irate shareholders, as Syngenta's directors did last year after Monsanto walked away. Monsanto this year shifted to a nonclassified board structure, with each of its 13 directors up for election every year.

States Ask Eleventh Circuit to Proceed with WOTUS Arguments

Arguments should proceed in a challenge to the Environmental Protection Agency's waters of the U.S. (WOTUS) rule before the U.S. Court of Appeals for the Eleventh Circuit, even with previous decisions by the Sixth Circuit on the issue, according to a brief filed by a group of states led by Georgia that are challenging the rule.

The states argued that the Eleventh Circuit is not bound by the Sixth Circuit 1-1-1 ruling about the proper jurisdiction for challenges under the Clean Water Act (CWA) to rules such as WOTUS. The states' brief asserted that the court should instead rely on its own legal precedents on the question of court jurisdiction.

The Sixth Circuit decision was "fractured" the states said, again citing the 1-1-1 split. The different legal rationales presented for jurisdiction and review authority in the Sixth Circuit decision also indicate that there is a good chance the Sixth Circuit decision won't stand, the brief noted. Due to the vulnerable legal underpinnings of the Sixth Circuit decision, the states urged the Eleventh Circuit to address the issues themselves and not rely Sixth Circuit decision.

EPA Proposes Increase in Renewable Fuel Levels

The Environmental Protection Agency released a proposal Wednesday to increase renewable fuel volume requirements across all types of biofuels under the Renewable Fuel Standard. While agriculture and farm groups applaud the increase, industry groups say the increase is not enough. The proposal would increase total renewable fuel volumes by nearly 700 million gallons between 2016 and 2017. The conventional biofuel amount of 14.8 billion gallons is an increase from 14.5 billion gallons in 2016. The EPA says the increase will achieve 99 percent of the Congressional target of 15 billion gallons. Growth Energy CEO Emily Skor argues the ethanol industry is “fully capable” of meeting the 15 billion gallon target set by Congress. For biodiesel, the EPA proposal would establish a 2.1 billion gallon Biomass-based Diesel requirement in 2018, up from the 2.0 billion gallon requirement for 2017. However Ann Steckel of the National Biodiesel Board says the industry has “plenty of feedstock and production capacity to exceed 2.5 billion gallons today, and can certainly do so in 2018.” The EPA will accept comments on the proposal for 60 days.

Oil Industry Group Calls on EPA to Protect Consumers

Following the proposal to increase biofuel mandates by the Environmental Protection Agency, the American Petroleum Institute called on the EPA to protect consumers from fuels unsafe for their vehicles. A spokesperson for API says “consumers’ interest should come ahead of ethanol interests,” adding “EPA is pushing consumers to use high ethanol blends they don’t want.” API claims higher blends of ethanol, such as E15, are not compatible with most cars on the road today and can damage engines and fuel systems. The Institute wants the EPA to set the final ethanol mandate at no more than 9.7 percent of gasoline. Further, API says the EPA proposal shows the only solution is for Congress to repeal or significantly reform the Renewable Fuel Standard.

Weaker Farm Economy Could Squeeze Agriculture Lenders

Leading agriculture lenders could feel the squeeze of a weaker farm economy thanks to heavy portfolios in farmland. Fitch Ratings said this week in a report that farm lenders may see some assets deteriorate, but the relative strength of the Farm Credit System and a less volatile interest rate should ease the impact. Fitch does not expect the weaker farm economy to effect the ratings of the Farm Credit System or the individual banks in the system, according to Reuters. Fitch expects smaller banks with agricultural loan portfolios larger than five percent will begin increasing their loan provisioning in the coming months to help manage the agricultural slowdown, just as banks with larger exposure to the energy sector have done. Fitch also expects agricultural banks and lenders' loan portfolios to grow in the near to medium term, as farmers scramble to stay afloat.