AFF Sentinel Vol.4#41

UFCW Union Wants to Cripple Beef Industry Like Auto Workers Did to U.S. Car Makers

Big Labor has thrown its support behind the U.S. Senate's attempts to take away rights and limit free market innovation. The United Food & Commercial Workers union (UFCW) has joined the attack on innovative, adaptive cattlemen and their allies, who have been evolving new tools to provide what modern consumers demand.

It took Big Labor decades, many closed auto plants and lost jobs, and huge carmaker market share declines to "get it." Forcing automakers to remain stuck in old production methods, in old plants under old labor cost structures stifled innovation and adaptation and made the industry unprofitable. Rather than change, unions forced confrontation until plants closed and jobs disappeared. Only recently have unions realized that they shared the blame for creating the Rust Belt. Foreign car makers happily provided what consumers wanted. Could American beef follow that path?

Now, the UFCW has resurrected the old union playbook, calling for "stability" and "job protection" at the expense of focusing on consumer wants. In a news release and an advertisement, they've called for passage of marketing and cattle ownership restrictions in the Senate's version of the Farm Bill.

R-CALF and the union share an outlook. They focus on the next participant in a long production chain (packers) as the enemy, rather than realizing the source of money and jobs for everyone is the consumer. Detroit's unions made the same mistake. The result was a product that fell short of consumer demands and a cost structure that failed, yielding lost jobs, lost market share and a shrinking U.S. auto industry.

Over 80 percent of UFCW members don't work in the meat packing industry, but in health care, garment, chemical, distillery and retail industries. It's not surprising they understand little about the beef industry. R-CALF should know better. If they had been paying attention years ago, they would know it was cattlemen who approached packers about contracting and marketing agreements. Had the old cash direct or auction market system just benefited packers, they could have refused and kept the old system. Nothing forced them to offer long-term contracts or marketing agreements.

However, they saw benefits in having some supply management tools, just as cattlemen saw benefits in having a market lined up for their cattle. Crucially, the benefits for consumers were clear - a more stable flow of cattle through a system that passed back their demands for higher quality, lower fat trim and more consistent eating. Packers and cattlemen got comfortable with longer-term contracting. Then national check-off consumer research showed consumers rated one in four steaks as unacceptable. Cattlemen, packers and retailers began working out the partnerships and alliances that share information and profits, and spread the risk of more accurately fulfilling consumer needs.

That intelligent, consumer-responsive system of marketing agreements is what the UCFW, R-CALF, National Farmer's Union (NFU) and their LAG* allies are trying to destroy. They want the simplistic past, when cow/calf operators had only one option -- take weaner calves to the auction market - and cattle feeders could haul fed cattle to auction or sell them live to the packer direct.

R-CALF and NFU are desperate to outlaw selling cattle through a system that transparently pays premiums for what consumers want and penalizes for what consumers don't want. They want cattle sold under the mystery package system -- no one knows for sure how nice the present is until too late. That satisfies their wishes. However, no customer wants to play roulette at the meat counter or in a restaurant. The overwhelming success of chain restaurants and the popularity of brand name meat products at the grocery store testify that customers want consistent, predictable quality.

Most unions prize stability and the preservation of yesterday's job descriptions over tomorrow's job descriptions meeting changing consumer lifestyles and demands. Today's consumer demands a higher quality product, more consistency, more convenience and advance preparation. Alliances between cattlemen, packers and retailers have been designed to pass information on consumer preferences back through the chain, spread out risk and share rewards. Such alliances speed up adaptation along the production chain and reduce inefficiency.

UFCW and R-CALF are fighting that adaptation to change. They do not want any system that focuses on the customer instead of them. They're concerned with their own lifestyles and jobs. They figure someone else can be concerned with what the customer is getting.

*Liberal Activist Groups like Public Citizen, Consumer Federation of America, R-CALF, Consumer's Union, Organization for Competitive Markets, National Farmer's Union and others.