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More R-CALF Policy - Self-Inflicted Wounds & "Declining Industry" PDF Print E-mail
Written by Steve Dittmer   
Saturday, 14 April 2007
AFF Sentinel Vol.4#11

Quotes from

While R-CALF members were in Washington D.C. in February to lobby, a story detailing the dissension within R-CALF ran in the Congressional Daily. It was not a great credibility builder. One R-CALF member called the story "priceless [for the packers.]"

Typically, R-CALF insisted on training its guns on the industry's initial customers, like they have dozens of alternative buyers besides packers lined up to buy fed cattle.

The irony is that most hardcore R-CALF members, as cow-calf operators, have never met a fed cattle packer buyer. They've never run a feedyard or sold fed cattle, never retained ownership on their own cattle, never had to find a buyer for a pen. Yet they are convinced that packers are bad people and are conspiring to put cow-calf operators out of business.

The conundrum here is obvious to everyone but them; so obvious, that many in the rest of the industry don't fully comprehend that the R-CALF guys really don't get it - if cow-calf guys no longer raised calves, feeders would have nothing to feed and nothing to sell to packers who would have nothing to process. Packers have no long- term interest in killing the goose.

To ice the cake, the few R-CALF members who have actually fed cattle lead the charge, attributing evil intent and nefarious conspiratorial misdeeds to their customers, some even suing packers (is there a gene for litigiousness?). They've found only a couple of ag economists in America who support their charges. They have proven none of their conspiracy theories. They have unearthed no business practices other than ones most other industries use regularly to optimize their supply chain and production efficiency to satisfy customers and profit. In the decades of packer lawsuits, about the only thing proven is that a talented lawyer could (once) get a jury of average citizens, with no beef industry experience and little knowledge of free market big business, to believe that a big corporation should be punished for some reason or another.

Awhile back, The Economist ran an 18- page section on supply-chain management. They examined the lengths businesses employ to know where every component of every product they are assembling is at any hour of the day in supply and production chains stretching around the world. They know who their qualified suppliers are for months or years in advance. They contract with those suppliers to have specific components in a certain plant on a certain day and hour range, weeks and months ahead.

Yet R-CALF and OCM* members expect packers to buy - perishable - cattle only cash direct or at auctions; to sort through seasonal supplies of cattle of all grades, yields, genetic backgrounds, nutrition and health planes and fulfill retail and foodservice contracts signed months and years in advance for portion control cuts of a certain grade, size, trim and aging. These people are truly from another time, raising cattle for the customers of decades past.

In a fascinating exchange between Bill Bullard and Chuck Kiker, Bullard shares a telling commentary on the industry: "More than any other man, he's given a declining industry hope," Bullard said about Leo McDonnell.

True to their contrary - or clueless - view, R-CALF's CEO looks at the most dynamic period of improvement and prosperity for the beef industry in decades and characterized it as a hopeless, declining situation. With the increase in beef demand, record retail prices, record prices for fed cattle and feeder cattle, how can R-CALF regard this as a bad time? Because they are rebelling against changing demands the market - consumers - demands of them.

Most cattlemen cannot survive and prosper by only doing what their grandfathers did. Most family operations will have to be bigger, better and faster than decades ago, which means there won't be as many cattlemen around. Just as it doesn't require as many cows weaning off 600-lb. calves as it did when they weaned 350-lb. calves, it won't take as many ranch families running 500-cow outfits as it did when they could live off 250 cows. R-CALF members want only to do things the old way, ban the new ways, keep out competition and preserve their place, their jobs. No wonder R-CALF's getting along with the United Steelworkers and OCM with the AFL-CIO.

*Organization for Competitive Markets

Next time: Too Rich For Words

Last Updated ( Saturday, 26 May 2007 )
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