AFF Sentinel Vol.5#6

We understand some people have not grasped changes in American food production. We cannot understand demagogues who purport to lead ignoring the facts or, worse, know better and submerge their knowledge under political urges.

Such is the setting as the fur flies over Section 10207 of the Farm Bill. Will it stay or go? R-CALF is one group hoping to keep facts and reality submerged under emotional demagoguery long enough for it to stay. The section would restrict livestock ownership and ban livestock contracting over 14 days before slaughter.
They argue for a livestock production system in which "control is distributed" among America's livestock producers. That's ridiculous. Ultimate control of the system is wielded by those who pay for that right - the consumers who make buying decisions and provide the cash that fuels the whole system - not any industry sector. Ignored fact.

Neither is the whole system "controlled" by the large meatpackers. If they did, they'd wave their magic "control" wand and there would be more cattle, lower cattle prices, more Choice and Prime cattle, more margin and lots of black ink. They don't "control" the system -- and the above hasn't happened. Ignored facts.

R-CALF contends the number of livestock producers has dropped over the last 25 years. Correct. But if we needed the same number of farmers and animals to meet the relatively small increases in domestic demand and population growth over three decades, they would be terrible producers. Cattle-Fax addressed this very issue in their 2008 Outlook, plotting cow inventory and beef production on the same graph. We're now producing more beef (about 27 billion lbs.) than ever in history with the same number of cows as we had in the early 1950s - 25% fewer cows today. The story is the same for pork, poultry, corn, etc. Are we into efficient meat production or are we trying to make the industry inefficient (and unprofitable) so that we need more farmers and ranchers? Ignored facts.

If packers were making big profits, as the demagogues contend packers have the control to do, wouldn't they be running two shifts, six days a week and building new plants? Somehow the demagogues interpret shortened shifts and plant closings as a sign of good times and "control" of the system by packers. The packers the demagogues claim wish to put cattlemen out of business - eliminating their production supply - have been so pressed to stay in business until times get better that they have been paying more for cattle than they could afford to. Thus the flow of red ink. That has delayed the day of reckoning regarding packing and feedyard overcapacity. Had R-CALF not been hampering industry efforts to get export markets open, our overcapacity problems would not be so severe. Ignored facts.

R-CALF contends packers are using contracts as "restrictions on market access" that allow them to "control" and "manipulate" prices. The truth is, packers will buy good cattle any way a feeder will price them. The alliances and branded programs Section 10207 would disable are run by the coordinated efforts of ranchers, feeders, packers and retailers aiming towards a common goal - customer satisfaction. They are not a market restriction tool but rather a market opening tool, for cattlemen to access new high quality and natural/organic markets. The demagogues would force the industry back to selling commodity beef only. Cattle-Fax research has established that alliances and branded beef programs have been adding over $500 million a year to cattlemen. Ignored facts.

Alliances, natural/organic programs and many branded programs were conceived and started by cattlemen, who then secured packer, retailer and/or foodservice partners to carry their product through. Cattlemen voluntarily join these programs. They were not invented by nor are they run by packers. Section 10207 would wreck programs cattlemen devised to increase their own competitiveness, attack products consumers have voted for. Why should Congress force the meat industry to do without supply management other industries use? Ignored facts.

"People who ... don't want to be confused with the facts are a danger to the whole society. Since the votes of such people count just as much as the votes of people who know what they're talking about, politicians have every incentive to pass laws and create policies that pander to ignorant notions, if those notions are widespread." Thomas Sowell said it perfectly.

Congress needs to acknowledge the facts, ignore hollow emotional appeals and let the free market evolve the best ways to serve consumer/voters.

Email your comments to the author

{mos_sb_discuss:08}