AFF Sentinel Vol.2,#14

Should We Fear Trade?

In the last edition, we explained the features of the CAFTA-DR treaty soon to be considered by Congress. The agreement would eliminate tariffs on U.S. Choice and Prime beef for the multi-billion dollar tourist trade. The countries involved - Nicaragua, Costa Rica, El Salvador, Honduras, Guatemala and the Dominican Republic have never even half filled the small quota of beef they are allowed to ship into the U.S.

R-CALF has stated that it opposes CAFTA-DR both in principle itself and because it fears setting a precedent for other future trade agreements. Do they fear reducing or eliminating tariffs on U.S. beef exports and increasing access for U.S. beef overseas? In effect, yes. Increased access, lower tariffs and growing exports is not as important to them as labeling any imports as to country-of-origin or better yet, keeping imports out entirely.

The people at R-CALF have a deep-rooted fear of imports but that fear is not borne out by the facts of the issue nor the free trade, free market principles the American culture is rooted in. No one but the U.S. and Canada produce any appreciable quantity of high quality grain-fed beef in the entire world. What are they afraid of?

The lean beef we import from other countries has quotas the countries are not even filling. We need more lean beef to serve our consumers, not less. Meeting the tremendous demand for the combination budget/convenience product we have in ground beef is critical for the survival of the entire beef chain. And cutting off all imports resulting in $5.00 ground beef eliminates it as a budget item and destroys the fast food industry.

And would sacrificing the ground beef market generate that much more cash for the cow/calf producer? Research shows prices for cull cows have much less impact on the profitability of a cow/calf operation than a whole list of other things. A ten percent improvement in four areas -- weaned calf crop, weaning weights and calf prices plus a ten percent savings in feed costs -- would, on average, improve returns in total over $150/cow vs. a little over $7 return for a ten percent improvement in cull cow prices (Brad Paisley, University of Wyoming Beef Cattle Extension Specialist, Tri-State Livestock News, 2/26/05).

R-CALF's strategy is to wrest control of basic trade agreements from the government and international trade agreements, through legal action or generating Congressional opposition to approving new trade agreements. By law, trade agreements can either be approved or disapproved by Congress. They must vote on an "as-is" basis, no amendments are allowed.

No trade agreements in recent memory have been turned down. Trade is generally regarded as too important to America to turn down the chance for more, even when compromises are involved. Compromises are not even involved here, as this is a win/win agreement for the U.S. beef industry, in fact nearly all industries , no compromises necessary. But R-CALF is opposed to most trade agreements, unless they call for U.S. exports only. Expressing displeasure with current trade approaches in general, they passed a resolution by a wide margin at their 2005 convention calling for the U.S. to withdraw from the World Trade Organization (WTO) entirely.

The export market is very valuable to us as a market for products the U.S. consumer is not interested in, as well as for the high quality top-end product not every American can afford every day. Tapping into the worldwide population growth and economic growth for the next 50 years is critical for the health of U.S. agriculture.

Attempting to outrage every possible trading partner in the world, to provoke a slammed door in the fact of U.S. beef exports at every turn, is not the way to ensure the future prosperity of America's farmers and ranchers -- nor any other sector of the beef production chain.

Next time: Beef Imports - Drag or Profit Boost for U.S. Cattlemen?

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