AFF Sentinel Vol.4#37

Colorado Springs, CO Oct. 24, 2007 Elements of the legislation discussed below could be voted on in the Senate this week. They would have devastating effects on livestock alliances, branded programs and prices and premiums for cattle and pigs.

The scene you are about to observe did not happen in a smoke-filled room. More likely, given that this was a strategy session attacking the livestock and meat industry, the side tables contained organic carrot and celery sticks and rice cakes, with soy milk and carrot juice chasers.

The problem? Beef demand was good, prices to producers were far above 1990 levels. Something had to be done.

Here were the goals:

• To support the vegetarian lifestyle and boost fruit and vegetable consumption, ways must be found to make livestock producers less profitable, to marginalize them by hurting their prices.
  
• Meat quality has improved significantly. Ways must be found to make producing high quality meat more difficult and make meat more expensive, relative to fruits, vegetables and meat substitutes.
  
• To weaken meat processors financially. This would facilitate a return to the days of bounced livestock checks (can you say American Beef Packers) -- that would thin out livestock feeders. Weaker packers would have less margin for food safety upgrades and innovations so product recalls would increase, hurting demand and making one- plant firms more likely to be destroyed from a recall.
  
• To squeeze the feeders in "fringe" areas like the Northwest, Southwest, and California. Livestock ought to be fed where the corn is raised (like Iowa- where two of the Senators hatching this plot are from).
  
• Create opportunities for overseas meat customers to buy packing plants at fire sale prices so they can source their meat direct and by-pass the U.S.-owned processing and distribution channels. Maybe this would generate great foreign relations if some Japanese, South Korean, British and Canadian importers wanted to own U.S. packing plants cheap.

How would these goals be achieved by the Fruit & Vegetable Cabal?

Through an interlocking set of legislative fiats.

First, meat quality has improved through research and development of new products, using the cheaper carcass cuts more efficiently and through marketing agreements and contracts to guarantee a constant supply of cattle that meet the requirements of contracting customers like retailers and food chains. That must be destroyed. The Cabal needs livestock feeding, and consequently livestock raising, to be less profitable. Producers need to be dependent on second-class, disadvantaged business channels, companies that cannot utilize the economies of scale other industries use to cut costs, improve products and customer service and boost profitability. Livestock packers must be boxed into a corner, so if they want to use the tools other industries use to produce quality products on time, like contracting and long-term marketing agreements and alliances, then they have to give up the economies of scale, the financial stability and strength and distribution capabilities that "real" businesses use.
The packing industry then would be forced in one of two directions. Some processors will either have to go back to being larger commodity companies where all the pressure is on cost cutting and paying the producer less because the returns are lower on generic, commodity, lower quality, less consistent beef. Others will become small boutique beef companies turning out more expensive beef through contracts and alliances at significantly higher prices for the more affluent customer. Average returns for livestock feeders will go down.

And the average consumer, now enjoying a significant supply of high quality beef at moderate, premium prices will find themselves priced out of the better quality beef. Total demand will decrease, just as it did in the 1970s and 1980s, when declining quality and palatability turned off consumers to beef at much lower prices than today's levels.

Neither commodity plants which need high volume to survive nor single-plant companies who wouldn't be strong enough to survive down cycles in marginal areas will locate in the so-called "fringe" feeding areas like the Northwest and Southwest. Feeders and the ranchers who supply them will wither.

Compressing these changes into a short time, (outright confiscation of private busineses, though more efficient, creates messy public relations) further weakens the entire livestock production chain and sets the table for foreign ownership. Knowing U.S. plants have just a few months to sell or get thrown in jail, foreign capital, with access to markets where U.S. beef sells at higher prices than domestically, will be in a great position to gain ownership cheap and generate profits and happy customers overseas.

Leaving no stone unturned, the Cabal decided it would also attack the five percent of the cattle the packers owned themselves, as a last attack on the livestock production chain.

Senate Bill 305 finished, the Cabal then broke for lunch at their favorite D.C. vegetarian restaurant.

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