UFCW Union Wants to Cripple Beef Industry

[ivbinconned]

R-CALF United Stockgrowers of America


“Fighting for the U.S. Cattle Producer”



For Immediate Release Contact: Shae Dodson, Communications Coordinator
November 14, 2007 Phone: 406-672-8969; e-mail: sdodson@r-calfusa.com



Op-Ed



NCBA’s Queen Flatly Misleads Producers, Public

About Proposed Competition Reforms in 2007 Farm Bill



Note: R-CALF USA Vice President/Region II Director Randy Stevenson authored this rebuttal to a recent op-ed by NCBA President John Queen, titled “Government Meddling Threatens Cattle Industry’s Future.” Stevenson also co-chairs R-CALF USA’s Marketing Committee and represents the group on the agriculture advisory board for the Commodity Futures Trading Commission. For a photo of Stevenson, contact R-CALF USA Communications Coordinator Shae Dodson.



Mr. Queen has expressed chagrin over some proposed market reforms that may be included in the 2007 Farm Bill. The proposals he opposes would free the market from its limited access, thus encouraging young people to participate, invigorating rural development, and helping small business agriculture – without government expenditure.



His complaint about government meddling rings a little hollow, somewhat like the speeder stopped by the highway patrol. The proposed reforms have kindred restrictions that exist in other markets, and have existed for a very long time. Like traffic laws that make travel safe and efficient, those restrictions are in place because they make the free market work properly.



Mr. Queen raises an objection to the prohibition of packer ownership of cattle, but the prohibition of packer ownership of cattle is like the prohibition of insider trading. Mr. Queen says, “In over 58 million cattle transactions studied between 2002 and 2005, only 5 percent involved any type of direct packer ownership.” In the interest of accuracy, it should be noted that the study covered 590,000 transactions on 58 million cattle. But it doesn't matter what the packer ownership volume is, it’s an issue of market timing. Employees of companies traded on Wall Street own even less than 5 percent of the stock traded, yet insider trading is against the law. When packers own their own cattle, they can use the timing of their slaughter to affect the market. Their timing increases the market access risk endured by cash market sellers. By contrast, no one on Wall Street suffers market access risk.



The independent study Mr. Queen mentions – the Livestock and Meat Marketing Study (LMMS) – acknowledges market access risk and indicates that producers accept a discount on their cattle in order to guarantee market access. The Captive Supply Reform Act (CSRA) addresses the market access problem as well. While the focus of the CSRA is on making sure contracts are tied to a firm price when they are made, it would, in concert with the cattle ownership prohibition for packers, modify current captive supply practices so that market access risk would not exist in the slaughter cattle market.



Mr. Queen also suggests that cattlemen who have made large investments and commitments will be penalized. In contrast, the LMMS indicates that small producers do not widely participate in alternative marketing agreements such as captive supply contracts. They are, therefore, in the group with the greatest likelihood of suffering from the lack of market access. Small production is where young people who are new entrants into the market begin. It is no wonder their numbers are few.



It is important to note that the LMMS clarifies whom Mr. Queen is defending. The study differentiates between “small” cattle producers and “large” cattle producers by stating, “Large beef producers are defined as the 25 largest feedlots and 25 largest cow/calf operations in the United States, and small beef producers are the remainder.” So Mr. Queen's defense of the status quo helps only the 25 largest producers in the U.S. and the rest are left with a market access problem.



Contrary to the suggestion of Mr. Queen that these reforms would move the market in the direction of inordinate government control, they would, in fact, make the livestock markets work more like the old-fashioned capitalism of Wall Street. It’s not socialism. It’s not government meddling. It’s just the enforcement of time-proven free access to a market that is honest and competitive. And without free access, honesty and competition, capitalism is just an illusion.

[grassfarmer]

I don't quite follow you IB'N, do you just post random speeches or do you have an opinion on them?
The last article from R-CaLF makes perfect sense to me, really nothing I would object to in there - it's the kind of thing Canadian producer groups should be writing. This seems to contrast with your first post that showed an Alberta based "packer backer" pointing out concerns about the US beef industry turning into a Detroit. ***Newsflash*** the Alberta/Canadian beef industry at producer level is a lot closer to being a rust belt than the US one, how about concentrating on the home front first Joyce?

[farmers_son]

Grassfarmer: Re the ABP Chairman standing beside the Alberta Ag Minister. As I recall the Alberta government has just come up with $400 million for Alberta cattle producers so that kind of money will get someone from ABP to be there for photo ops just like if the Province comes up with lots of cash for hog producers someone from the hog board will be there too with a big smile on their face even if they are not 100% happy with how the Province is going about it.

As it seems we are going down memory lane we should not forget the countless hours cattle producers, representing a number of cattle organizations, put in going to endless meetings on both sides of the 49th parallel over a period of nearly five years to see live cattle trade resume with the United States. Yes mistakes undoubtedly were made but when you consider what the Canadian live cattle industry was up against, R-Calf, a U.S. government that was looking to punish Canada for not going to war in Iraq and finding more BSE positives even positives born after the feed ban, we are fortunate to have come to this point. Some will say that just supported the status quo but it was a pretty good status quo with access to the world’s number one beef and cattle importer.

[grassfarmer]

Unfortunately the smell of victory doesn't seem to be spreading through the Alberta sky. I think it would be fair to say cow calf producers are in a more severe crises now than at any point during the "BSE" crises.

[rkaiser]

Countless hours farmer_son? I think that even the delegates, let alone the staff and of course the lawyers hired were all counting their hours and sending a bill to the producers and taxpayers of this country.

If you think that that money was well spent to get the border open, fine. Another opinion and reason for forums like this.

I think that just like the money spent by Rcalf, our money was wasted. The border issue was decided every step of the way by the USDA and the most powerful lobby in the western world --- big business.

If the smiley faces of those who gladly spent public money on this farce and applauded the minor handouts to primary producers attached to major handouts to big business would have focused on something different from the start - the BSE situation which everyone seems to want of talk of in the past would not have affected our industry today like it has. Talk about the dollar and feed costs all you like but BSEconomics is still the reason for our huge basis with our "most lucrative market" --- which is still enjoying near record cattle and beef prices.

I noticed on the other thread farmer_son, how you did some math on the cull cow situation and how the price for cull cows in Canada should be affected by the new border opening. Maybe you could share with our readers, a comparison in fed cattle prices. Other than preg testing heifers - the border has been open to fed cattle for a good while now. If your suggestions of American ass kissing are correct - why the huge discrepancy?

[rkaiser]

You know farmer_son - while we are on the subject of the past ----- "the past" and the fact that those in the ABP/CCA who will not admit to have taken the wrong road in "the past" is exactly why ABP/CCA need new faces or needs to be dismantled.

When this BSEconomic crisis began the leadership of this country ---- which was led by the "producers voice" of ABP/CCA chose to suck the American tit over the suggestions of groups like BIG C to focus on offshore markets. To the point of ignoring Japanese re4quests to come to Cananda and take a look at the situation. Had we invited the Japanese and other trading nations and asked them how they would like to continue to trade with Canada rather than simply ask the Americans to come up and show us how to do things - we would not be stuck trading with a nation that is suffering an economic disaster today.

Of course we can all argue that no one saw the American dollar dropping like it did - or the biofuel industry causing such a ruckas --- however we all had the opportunity to see that focusing on one basket for all of our eggs was and is a simply recipe for disaster in even simple business dealings.

Keep bragging about getting that border open farmer_son it only reminds me and most of the rest of producers of this country of the dismal job done by our ABP/CCA dealing with BSEconomics. If you want a future with ABP/CCA I think that bragging about the past may be about the last thing to do.

We have a lot of work to do old buddy and non of that includes slapping each others backs about the US border. It all has to do with what we should have been dealing with for the last four years. Non NAFTA trading partners.

[farmers_son]

Grassfarmer: I agree again. However I would add that I have been in this business long enough to have gone through periods of high grain prices low cattle prices before and have come out the other end. And before BSE, my father came through the foot and mouth outbreak in 1952. So there are good times and there are bad times, certainly we have had our share of challenges.

Rkaiser: Obviously we disagree on which was the right road. Before BSE the Asian market was mostly offal, tongues and anal sphincters. I have never believed that Asia could replace the United States as our primary beef export market and of course Asia could never be a market for our live cattle which is what we really needed. Before BSE the vast majority of Canadian beef shipped to Japan first when through the U.S. and had a USDA label on it. To suggest that Canada could overnight take over the Asian market when we now were carrying the leprosy of BSE was very optimistic. Work will continue to see trade resume with Asia and the normalization of trade with the U.S. will help to see that happen. The best way to increase returns to Canadian cattle producers is to reduce the basis between U.S. and Canadian live cattle prices, my opinion.

And I do think it is time to say thank you to all the people who took up the challenge after BSE hit in 2003. Yes we face new challenges but we have live cows and cow beef entering the U.S. As Forest Gump would say, one less thing.

[rkaiser]

Simple economics farmer_son. No point in arguing the potential of Cananda to take a share of the Asian or E.U. market with you.

Lots of work today working with people who do believe the potential.


Why not ask our minister what the Japanese told him about dealing with the "leprosy of BSE" when it first raised it's ugly head.


Reduce the basis?????? Who you working on with that idea. LOL

[rkaiser]

One last thing before I head out farmer_son. Quit worrying about the American Market. Cargill and Tyson are looking after it just fine -- always have. Nothing you and ABP/CCA have done or will do will affect the American Market in the same way. They are looking after it bud and will continue. Only problem is they could give a shit about you and me. You and me need to either work on other markets or start SELLING BEEF TO AMERICAN IMPORTERS OURSELVES.

[farmers_son]

Yes we need to sell beef ourselves. That is certainly a future I look forward to. But tens of thousands of cattle producers could not hold out for that future to come true. Status quo or not, live cattle trade has resumed with the U.S.

Yes, we can have a share of the
Asian and EU market but it would only be a small share, that is all it ever was. 2% of Japan's beef exports came from Canada.

You say simple economics... right now the economics say that cattle should be fed in the U.S. Feeders are going to the U.S by the thousands where in the good old days we were bringing U.S. feeders up here. If we send most of our feeders and possibly 50% of our cull cows south where is Canada's beef export potential?

Economics, cost of gain, may dictate that Canada will be a live cattle exporting nation not a beef exporting nation. You can do the math on where that would leave any Canadian packing plant.