AFF Sentinel Vol.3 #24

Don't Be Deceived!

With the industry's somewhat successful efforts to de-bunk R-CALF's frustrated distortions, outbursts and courtroom losses, some folks assumed R-CALF's relatively quiet demeanor was lasting. They've complimented AFF for doing our small part in cooling off some of their overheated rhetoric, and wondered if R-CALF was finished.

We've warned that the Farm Bill would be a bandwagon not only R-CALF but dozens of activist groups were going to jump on to push their agendas. Perhaps never before have so many groups with so many lawyers, dollars and causes been awaiting a Farm Bill.

Leo McDonnell recently confirmed the list of causes we expected from R-CALF in testimony before a Senate Ag Committee field hearing in Billings. Rather than devoting the Farm Bill to commodities and conservation -- the goal of mainstream farm and ranch organizations -- Liberal Activist Groups (LAG) like R-CALF, OCM and their Washington, D.C. activist cronies plan on using it to attack beef industry management and innovation.

McDonnell called for a whole new "competition chapter," addressing "price-distorting practices such as captive supplies, non-price-negotiated forward contracts, exclusive marketing and purchasing agreements, and maybe even packer ownership."

Translation: McDonnell wants to outlaw many of the best innovations forged by the industry to identify and reward characteristics important to beef- eating consumers - as opposed to meat-denigrating activists. R-CALF opposes alliances and branded beef programs, value-based grid and contract selling and shared ownership, risk and profit ventures between segments trying to deliver the best product to the customer. They oppose anything attempting to match up real dollars paid to real value realized by the beef chain.

What do they favor? Keeping product quality hidden and forcing packers, retailers or foodservice people to scramble to fill orders at the last minute with product of sometimes less-than-optimal specifications. Hobble the production chain to make it a lottery for customers. After all, as they pointedly remind everyone, they sell live cattle not beef, so what do they care?

McDonnell called for reexamining industry concentration. This subject has recently been studied in increasing detail, with no wrongdoing found. A new exhaustive government and university study is due out soon. Concentration is occurring in nearly all segments of all businesses around the world, as competitive pressures force efficiencies, economies of scale and higher productivity from capital and assets. R-CALF wants to stop that.

McDonnell testified that so-called "captive" supply practices "push risks of price instability onto cattle producers and hold down cattle prices." In fact, the contracts, grids and alliance agreements pay producers premiums for higher quality cattle, lock in a market for their cattle in advance, and provide packer interest in cattle far from plants and/or in smaller, independent feedlots that might otherwise be overlooked. McDonnell claims practices that reward smaller and bigger feeders -- and cow/calf operators in turn -- for producing better beef lead to "artificially depressed" prices. What seems to be ignored is that packers need cattle to turn into beef, and better cattle (identified as such) to turn into better beef. As such, factors like unknown quality and oversupply are things that allow them to pay less.

Here is the irony: McDonnell's family has run a bull test station that helped cattlemen identify better genetics, yet he opposes practices that would allow cattlemen to take advantage of better genetics and receive premiums for better cattle.

Regarding COOL, McDonnell complains that "we are unable to differentiate our product." However, nothing prevents anyone from labeling products with country of origin. Since, on average, about 93-95 percent of fresh beef in U.S. meat cases is American beef anyway, no one has seen fit to spend the huge amounts of money necessary to label it.

Finally, McDonnell testified that "A free and competitive enterprise is a founding value in this country...Let's not lose it." Yet R-CALF wants to prohibit some people from owning cattle, forbid companies from expanding, make normal business supply management illegal, outlaw innovation beyond the 1950s, and force the entire beef production chain to answer only to the needs of cow/calf producers instead of consumers first and foremost.

That's "free and competitive enterprise?"

Email your comments to the author

{mos_sb_discuss:08}