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Published December 17, 2012, 09:21 AM

Animal rights inroads

FARGO, N.D. — The top lobbyist for the National Turkey Federation thinks national standards for egg-laying cages won’t make it into a multi-year farm bill, and similar efforts may be “running out of steam.”

By: Mikkel Pates, Agweek

FARGO, N.D. — The top lobbyist for the National Turkey Federation thinks national standards for egg-laying cages won’t make it into a multi-year farm bill, and similar efforts may be “running out of steam.”

Damon Wells spoke at the North Dakota Poultry Industries convention in Fargo, N.D., on Dec. 13 and said he doesn’t see production mandates making it into the federal farm bill, currently stuck in Congress.

Wells said the “precedent-setting” of the farm bill cage restriction proposals is not likely to re-emerge. The proposals didn’t make it into either Senate or House versions of the bill.

“As more people see the realities of what it would do — you see in California all of the time what happens. It stifles business and creates difficulties for businesses in a tough economy. It does not mean that we should ever take any shortcuts when it comes to animal welfare.”

Wells likened the production practice mandates — a deal between United Egg Producers and the Humane Society of the United States — to the renewable fuel standard, which he said artificially requires production targets for ethanol from corn. The ethanol mandates drive up costs for corn, and turkey and chicken producers have to live with it.

Wells expects HSUS to continue state-by-state efforts. He said the livestock industry also will be working on laws, including prevention of surreptitious filming in farm operations. He said many of the undercover advocacy films are created on farms that have policies requiring employees to report any animal abuse. Instead, the advocates go public with films for the “shock factor” and to raise more money, he said.

Volatile grain markets

About 150 people attended the annual conference and trade show.

The event is run by chicken producers and Carl Wittenberg, turkey producer and long-time organizer of North Dakota Poultry Industries, which originated from the North Dakota Turkey Federation. The state produces about 1.2 million turkeys per year, compared with Minnesota, the country’s No. 1 producer, at 45 million per year.

One of the main issues entering 2013 is the volatility of grain markets, Wittenberg said at the conference.

Douglas R. Prohaska, commodity risk manager with FCStone, LLC, of Kansas City, Mo., predicts that volatility in the commodity markets will have a bigger impact on turkey and other livestock producers in 2013 because the costs of covering risks are greater in a volatile, high-priced market.

Old-crop corn, soybeans and meal are “hair-trigger tight,” so problems in South America or the United States next year could mean extreme volatility again, Prohaska said. He said projected production in South America and normal U.S. production would mean lower commodity prices.

“You need to break it down to the type of end-user,” Prohaska said. “The end-users that are pricing forward — pricing their output, whether it’s turkeys or whatever — if they price that with their customer and then the price of input commodities like corn and soy meal products go up, they obviously can turn themselves upside down very quickly.

“Typically in the past, if you’re an end-user and you can cap the price of your corn or meal for a year, it would take about 8 percent of the value of the commodity to do so,” Prohaska said. For a year’s worth of capping the futures price with some kind of option, it costs 40 cents at $5-per-bushel corn prices.

At a $7-per-bushel price of corn, people “don’t want to pay 60 cents a bushel to protect the price of corn for a year today,” Prohaska said. “It’s just not in the (profit) margin structure to do that.”

Most will simply take the risk, he said.

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