A nation cattle organization has expressed concern to the U.S. Department of Justice (Justice) and the U.S. Department of Agriculture (USDA) about a deal that would impact competitive cattle markets.

According to R-CALF USA, an agreement between National Beef Packing Co. (National Beef) and Hitch Enterprises (Hitch) “demonstrates the rapidity with which beef packers and concentrated feedlots are eliminating competition in the U.S. fed cattle market.”  

According to R-CALF USA, Hitch entered into an agreement in January to sell National Beef 100 percent of the cattle fed in Hitch’s feedlots. Hitch reportedly ranks among the 15 largest U.S. cattle feedlot operations with a 160,000 head one-time capacity, according to R-CALF USA.

 “The effect of this agreement is that the hundreds of thousands of cattle fed each year by Hitch will give National Beef the same anticompetitive market leverage that National Beef would have if all these cattle were owned and fed outright by National Beef,” said R-CALF USA Marketing Committee Chair Dennis Thornsberry. “Because National Beef knows that all of Hitch’s cattle are solely committed to it, National Beef will be able to further restrict the timely access to the marketplace by the remaining independent cattle feeders whose marketing options already are severely limited.

 Thornsberry also said that the agreement will mean there will be even fewer cattle in the ever-shrinking competitive fed cattle cash market, where the base price for the entire nation’s cattle is determined.

 R-CALF USA told government officials that “this fed cattle market is the final cattle market and is the portal through which reduced competition permeates the entire U.S. live cattle industry.”   

 “If the Packers and Stockyards Act and our antitrust laws are to mean anything, they must prohibit this type of market capture that directly eliminates competition in our cattle industry,” said Thornsberry.

 R-CALF USA is calling on Justice and USDA to “take immediate action to halt the swift, wholesale capture of our industry by the highly concentrated beef packers working in concert with the highly concentrated feedlot owners.”

According to R-CALF USA, “…time is of the essence if the new Administration is to reverse the wholesale contraction of the U.S. livestock industry before our industry loses the critical mass of participants necessary to maintain economic viability.”

 “Our industry is fast mimicking the U.S. hog industry that, just since 1980, lost 90 percent of its participants as a direct result of the corporate capture of their markets,” said Thornsberry. “The United States’ rural economy will continue its rapid decline if Justice and USDA don’t immediately intercede to preserve for U.S. cattle farmers and ranchers an open and competitive market for domestic cattle.”

Last week, the USDA reported that corn for grain production in Nebraska last year was estimated at 1.58 billion bushels, up 13 percent from last year and a record high. Yield of 178 bushels per acre is 15 bushels above last year and the highest on record. Farmers harvested 8.85 million acres  of corn for grain, up 4 percent from 2008.

According to the Nebraska Ethanol Board, last week’s announcement of a record-breaking corn harvest demonstrates the role ethanol plays as a backstop against plummeting corn prices.

 “Ethanol provides guaranteed demand for corn producers,” said Todd Sneller, Nebraska Ethanol Board administrator. “Ethanol is an ideal industry for Nebraska because of rural job growth and support of agriculture, the largest sector of Nebraska’s economy.”

Sneller points to a recent industry survey by Ethanol Producer Magazine found that 83 percent of ethanol plant employees make over $40,000 per year, and 99 percent have health insurance.  He said many of the 23 Nebraska ethanol plants are located in smaller communities where quality jobs are essential to economic stability.

Sneller said the “resiliency” of the ethanol sector was recently illustrated when Zeeland Farm Services bought the idle ethanol plant in Cambridge.  He said ZFS plans to resume production there during the first quarter of 2010, employing 30 full time workers.  

Aventine Renewable Energy announced it will resume construction at its Aurora West site, slated to begin production in 2011. 

“The combined production of the two plants is expected to exceed 150 million gallons of ethanol annually,” he said.  “Corn purchases at the two plants will increase demand by nearly 60 million bushels per year.”

 Sneller said Nebraska ethanol plants already create an annual demand for over half a billion bushels of corn, and have directly created over 1,000 jobs in Nebraska.

According to a 2009 study by the Nebraska Public Power District, Sneller said the study found that the indirect impact of the ethanol industry has created over 3,000 jobs and $3 billion in economic activity in Nebraska.  

“Ethanol production at the Cambridge and Aurora locations will add to the impact of ethanol production in Nebraska,” he said.  “A federal standard for renewable fuel use will further increase demand for ethanol during the next several years.”

“The Nebraska Legislature knew in 1971 that a strong ethanol industry would create good jobs, provide a market for corn growers and low-cost feed for livestock producers, and provide a cleaner, cheaper alternative fuel for drivers,” Sneller said.

The Nebraska Corn Board reported Tuesday that California’s low carbon fuels standards, given final approval by the state’s Office of Administrative Law last week, will have a major negative impact on Nebraska corn ethanol should the rules be rolled out as planned.

There are reasons for cautious optimism as groundwater levels over much of the eastern two-thirds of Nebraska rebounded slightly, due mainly to above-average precipitation in 2008 and 2009, according to a report recently released by the University of Nebraska-Lincoln.

“The long-term trend over much of the state is that groundwater levels have continued to decline from the period of predevelopment of irrigation to the present, but over the past year we have recorded widespread increases of one to five feet,” said Jesse Korus, a groundwater geologist in UNL’s School of Natural Resources. “A return to anywhere from average to well above-average precipitation in all but the western tip of the Panhandle is the main reason for these increases.”

The information is contained in the first comprehensive statewide groundwater level monitoring report UNL has published in 10 years. The 38-page report tracks changes in Nebraska groundwater levels from spring 2008 to spring 2009, over the past 10 years, from predevelopment of irrigation to spring 2009, as well as average daily streamflows in 2008 and other related information. Groundwater level change statistics for each of Nebraska’s 93 counties are recorded.

Korus co-authored the report with UNL geoscientist Mark Burbach, who long has published annual change-level maps for UNL’s Conservation and Survey Division.

“We have been publishing the change-level maps every year, but this is the first time a comprehensive annual and long-term narrative report on the overall state of Nebraska’s groundwater has been published since 1999, which summarized water level changes in 1996,” Burbach said.

The most recent data collected by the two groundwater researchers clearly note some good news across much of the state.

From 2008 to 2009, groundwater level increases of more than a foot occurred in a broad area of north central, northeast, south central and southeast Nebraska.

“Rises of greater than five feet occurred in large portions of Clay, Fillmore and York counties in the southeast, Buffalo County in the central and Platte County in the northeast,” Korus said, noting “There are several smaller areas with greater than five-foot rises in this region as well.”

Even some portions of western Nebraska, long plagued by severe drought, saw some relief, with small, scattered groundwater level increases in Red Willow, Frontier, Chase and Perkins counties in the southwest and Scotts Bluff, Morrill and Sheridan counties in the Panhandle.

Precipitation is the main reason.

Much of central Nebraska experienced greater than 130 percent of the 30-year average precipitation in 2008. In areas such as Buffalo, Dawson and Gosper counties, precipitation was as high as 180 percent of average. Even in typically rain-starved western Nebraska, some counties recorded precipitation of as high as 120 percent of average, while none were lower than 70 percent of average.

“The more abundant moisture likely resulted in reduced pumping for irrigation, and in areas of shallow water table and permeable soils it directly recharged the aquifer,” Korus said.

Despite the relatively good news, some parts of the state did see continuing groundwater level declines. In portions of Keith, Perkins, Dundy and Chase counties in southwest Nebraska, declines ranged from one to more than eight feet. Annual declines also were recorded in Box Butte, Sheridan and Cheyenne counties in the Panhandle, averaging one to five feet.

Groundwater levels also remain below spring 2000 levels over most of the state due to widespread drought conditions from 2000 to 2007. Large areas of groundwater level decline since predevelopment of irrigation remain present in the south central, southwest and Panhandle, Korus explained.

Predevelopment water levels are estimated, but generally occurred before the 1930s, 1940s or early to mid-1950s, depending on when intensive groundwater irrigation began.

From 2008 to 2009 large areas of the western Sandhills and the southwest showed little to no change in groundwater levels.

“These areas received near normal precipitation and are also areas of relatively low irrigation well density,” Korus said.

Average daily streamflow across the state somewhat mirrored increases in groundwater levels.

“Flows were well above the long-term average over much of the state due to above-average precipitation, but both streamflow and precipitation were below to near average in western parts of the state,” Korus said.

The groundwater level change maps can be downloaded free at the School of Natural Resources Web site at http://snr.unl.edu/data/water/groundwatermaps.asp. Maps from previous years are archived there, too, dating to 1954.

Data for the maps, graphs and reports are based on recorded measurements from more than 6,000 observation wells taken by 27 organizations, including each of Nebraska’s 23 Natural Resources Districts, U.S. Geological Survey, Central Nebraska Public Power and Irrigation District, U.S. Bureau of Reclamation, and UNL’s Conservation and Survey Division.

Groundwater level change maps rely on well readings recorded as close to April 1 as possible, before the start of the irrigation season.

The full, published report, “Nebraska Statewide Groundwater-Level Monitoring Report 2009,” (Nebraska Water Survey Paper Number 76) which explains and amplifies data presented on the maps, as well as other materials, can be purchased for $15 online at snrsales@unl.edu or at the Nebraska Maps and More store, first floor Hardin Hall, UNL East Campus, North 33rd and Holdrege streets, Lincoln.