AFF Sentinel Vol.4#38

Citizens of foreign countries can do it. Illegal aliens can do it. Felons can do it. Virtually any U.S. citizen or company can do it. Except for a couple of classes of citizen the Senate is attempting to strip of constitutional rights.

Newspapers can own trees or paper companies. Paving companies can own gravel pits. Car companies can own steel companies. Builders can own timber or lumber companies. A vintner can own vineyards. Nearly anyone can own the raw material from which they fashion a product. Or, to save capital and preserve long-term flexibility, they can sign contracts or long-term agreements or fashion joint ventures with suppliers. It's a way to guarantee quality, insure supply, control integrity and safety and control costs.

But if you are a cattleman or pig producer or meat packer, you do not have the rights other U.S. citizens have. Your business cannot operate like other U.S. businesses. You don't even have the rights foreign companies have. At least under an amendment to the Farm Bill in the Senate this week*, rights to contract livestock would be stripped from livestock producers and to contract or own livestock from packers. Cattlemen who have shared ownership of cattle or hogs in joint ventures to supply high quality beef, "organic beef" or "natural" beef would be stripped of the right to associate in business with the one class of business to which they can sell slaughter cattle or hogs.

As a result, livestock producers would become dependent on marketing channels crippled by Congress, deprived of the right to join in business ventures other food producers can. According to the most recent Congressionally mandated research - fully 29 percent of the cattle on feed, for example, would become illegal because they would have been produced under marketing agreements. Another four to five percent forward contracted could be, depending on the number of days from slaughter when they were contracted. Incredibly, cattlemen who own packing plants or wanted to build one, would become illegal.

Shoppers who have become devoted customers of brands like "Rancher's Reserve," various Angus brands and dozens of "natural" brands, could find themselves unable to buy their special beef. Pork customers could see some favorite brands disappear because the company guaranteed quality and supply by contracting or owning pig operations. Those business models would now be banned.

Why? Supposedly, to stop alleged "manipulation" of livestock prices Congress' own research - extensive studies by respected business and livestock economists and costing millions - have conclusively proved does not exist. Other studies have concurred.

The real reason: some livestock producers' fear: fear of competition, fear of change, fear of the higher standard of quality and safety consumers are demanding. And maybe some jealousy, jealousy that some cattlemen and pig producers have figured out a way to make a little more money -- by using their thinking caps devising ways to satisfy the consumer better. Horrors!

Meeting 21st century consumer demand requires livestock producers to work harder, hunt for ways to increase quality, reduce product variation, eliminate inefficiencies in the system and participate in sectors with higher margins. Dairy producers for years have been using their check-off money to buy into cheese making and ice cream processors, to participate in business sectors with higher margins than milk production. That reduced their exposure to the production phase, where biology, weather, fluctuating costs and prices hurt profitability. They shared in higher-margin, more stable sectors of the production chain.

The Senate is attacking the efforts of producers to join with packers and retailers to improve quality, lock in a market, reduce risk, get premium prices for improved genetics and management and become more intelligent and efficient producers and marketers. What has happened to our country? How could Congress sink to attacking hardworking cattlemen -- and the packers and retailers willing to work with them, share the risk and share information so that the meat production chain can serve consumers better?

Consumers should be very angry. Voters should be very angry. Congress has no business pandering to lagging producers trying to turn emotional fears - not facts and certainly not the interests of consumers - into vindictive legislation taking away the rights of livestock producers and packers. Anyone's business or manufacturing plant could be next, stripped of the rights to own or contract for raw materials.