News Update
Dec. 24, 2008

Phoenix Registration Deadline is Approaching   

Early registration and housing for the 2009 Cattle Industry Annual Convention and NCBA Trade Show will close on Jan. 5. Don’t wait! The annual convention (Jan. 28-31) is one of the most important meetings for the cattle industry — and also a great way to take a vacation! Bring the family to Phoenix for a well-deserved break from the winter weather. Check out the great topics being offered at this year’s Cattlemen’s College®. For more information, including links to registration, visit www.4cattlemen.com.

Winning Video Announced in the Alpharma Student Video Contest

Alpharma Animal Health has announced that students from the University of Wisconsin-Madison are the $5,000 grand prizewinners of the 2008 Alpharma Student Video Contest. Second and third place was awarded to students from the University of Florida and the University of Arizona, each receiving $2,000 and $1,000, respectively, for their efforts.

 “We are extremely pleased with the outcome of the student video contest and the amount of participation we had from students,” says Jeff Mellinger, Global Leader, Sales & Marketing for Alpharma Animal Health. “I would like to congratulate the University of Wisconsin-Madison group for their video, ‘One and the Same’ (OatS), and the important message it delivered regarding the humane, ethical ways animals are treated on America’s farming operations.”

The video contest began earlier this fall as college agriculture students were asked to compile short video clips related to food production. Students received a $25 gift card for each video accepted, up to 10. More than 150 clips were uploaded to the contest Web site. In the second phase of the contest, students were asked to compile these clips, along with their own footage, to complete a video telling a story about how food is produced. Five videos were submitted to the contest and voted on by participants and the public. More than 7,000 votes were cast by the time voting ended Dec. 19.

The winning videos will be posted on the contest web site (www.meetwhatyoueat.com), YouTube and other social networking sites where visitors will be able to watch the videos and have a better understanding of how food is produced, as well as the care that is given to farm animals.

— Adapted from release provided by Alpharma Inc. Animal Health

Food prices show no sign of declining any time soon

2008 was an interesting economic year. Housing prices fell. The dollar weakened, strengthened a bit and then weakened again. Commodity prices soared, pulling fuel and grocery bills along with them. But in the fall, commodities began leveling off and oil dropped to around $40 a barrel. Gasoline prices followed, hitting a number many people thought they’d never see again. But food prices are still up there.

“Historically, retail food prices are ‘sticky,’ ” says Larry Jones, agricultural economist with the University of Kentucky (UK) College of Agriculture. “What that means is that retail prices increase very slowly as commodity prices go up, but at the same time retail prices are very slow to decline once commodity prices go down.”

Jones said U.S. retail food prices in 2008 increased at the fastest rate in nearly 30 years. And many analysts believe when all is said and done, the Consumer Price Index for food will have increased close to 7% in 2008, with a similar outcome in 2009.

It’s not just commodity prices that have pushed up the price of food. As global population expands, so does demand. China and India are among the rapidly developing nations that are responsible for increasing demand not just for food in general, but for meats and processed foods, specifically.

That would be well and good if supply were keeping up with demand. But Jones says that world production increases have been steadily slowing as a result of less available land and slowing increases in annual productivity.

Interest rates were kept low to stimulate economic growth, but the low rates contributed to the devaluation of the U.S. dollar. A weak dollar keeps the price of imported foods high. Jones said there is a tradeoff, however. Our food exports are less expensive to the rest of the world, which stimulates U.S. export markets.

For all of that, food prices did not rise as high as they could have, which also has an effect on how far they will eventually drop.

“Retail pricing of food appears to be predicated on the assumption that consumers dislike fluctuating prices on something as basic as food,” says Jones.

As an example, he gave the fact that wholesale food prices increased approximately 8% in each of the past two years. Yet the retail price of food increased less than 5% on average each year.

“As commodity prices increased, retailers absorbed the increase, but now as commodity prices decline, retailers are not following suit by lowering prices at the retail level,” he said.

“Remember, too, the farm share of a hypothetical retail food dollar is about 20 cents, meaning the other 80 cents goes for such things as transportation, utilities, packaging, processing, advertising and profits. In other words, agricultural commodities represent a relatively small portion of the cost of food at the retail level.”

— Release provided by UK College of Agriculture

Merry Christmas from Angus Productions Inc.!

— e-List compiled by Mathew Elliott, assistant editor, Angus Productions Inc.