Ag Talk 9-6-10
September 7, 2010
A goal of creating a fair and competitive market for the livestock industry.
That was the intent of a meeting at Colorado State University, Aug. 27, hosted by the U.S. Department of Justice and the Department of Agriculture, but by mid-day it became apparent that the livestock industry is a highly complicated one and finding a one-fit solution will not work.
The meeting drew about 2,000 people to CSU’s Lory Student Center ballroom and overflow rooms. The day-long session drew ranchers, cattlemen and processors from across the nation and almost all of them had a different idea of solutions to the topic of the meeting which was to explore competition issues facing producers in livestock marketplaces.
During the first of two public comment sessions, which focused on new rules proposed by USDA’s Grain Inspection and Packers and Stockyards Administration – GIPSA – speakers from California to North Carolina offered suggestions. They were either for the rules as proposed June 18, for them with adjustments to some areas, or were vigorously opposed to them.
“Producers need to know there is an open, competitive market for their product,” said Agriculture Secretary Tom Vilsack at the start of the meeting.
Vilsack said a common theme he has heard in three previous meetings is one of concern and worry about access to a free market.
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U.S. Attorney General Eric Holder said that while the Justice Department is not in the regulation business, “We enforce anti-trust laws, we are the voice for competition to make sure competition is not stifled.”
And Gov. Bill Ritter said “the health of rural America is at risk,” and he and others on the first panel stressed that while regulations may be needed, care had to be made to not over-regulate the agriculture industry.
The first panel featured a producer presentation of issues and included Mike Harper of Harper Livestock of Eaton, Colo., which markets more than 200,000 head of lambs a year. Harper said that operation, which he runs with his father, Harold, is fortunate in that there are two packers, JBS USA of Greeley and Superior in Denver, Colo., to sell lambs.
Harper told officials the biggest problem he is currently facing is finding lambs to put in the feedlot as there are fewer and fewer producers running flocks. At least part of that is due to government regulations, he said, noting a long-time suppler of lambs in Montana is being forced out of business because the government claims their sheep are spreading disease to Rocky Mountain Bighorn sheep.
“This is a family operation in business since 1928 and there is no real evidence of disease being spread to the Bighorns,” Harper said.
Dr. Taylor Haynes is a rancher and urologist from Cheyenne, Wyo., who specializes in grassfed beef and he said he has seen a “tremendous loss in buyers” because all the small family feeding operations have gone by the wayside, due to consolidation and a takeover the majority of beef slaughter by three companies, JBS USA, Tyson Foods and Cargill. He said Wyoming does not have a USDA approved meat packing facility which he said makes it difficult to ship retail market across the state line.
“Bring the small and mid-size packers back and you will bring back the small family feeders back,” Haynes said.
Robbie LeValley is a cow-calf producer from Hotchkiss, Colo., and she and her family, along with five other ranching families, own Homestead Meats, which sells meat directly to consumers, retailers, and restaurants.
She said implementation of rules proposed under GIPSA would drive her out of business because as a packer, she wouldn’t be allowed to own the cattle she processes. Those rules, she said, need to take those kind of situations into consideration before they are implemented.
“We don’t need more government regulation,” she said, but more importantly, she stressed, was the general populace needs to recognize “that we are all cattle producers and all good people. We don’t need external people who tell us we are bad,” saying regulations on clean air, clean water and those proposed are doing more harm than good.
“We in this room shouldn’t be circling the wagons and shooting inside,” she said of the process.
During the public comment period several speakers said the proposed GIPSA rules are too vague, or they are perfect and should be instituted immediately, especially when it came to packer owned cattle, with several using JBS USA owning Five Rivers Cattle Feeding as an example. Others said the new rules shouldn’t even be considered.
Bill Bullard, CEO of Ranchers-Cattlemen Action Legal Fund, or R-CALF, called for the immediate implementation of the new rules and got a round of applause from several supporters in the crowd, most from his home state of Montana, the Dakotas and Nebraska.
Paul Engler, 81, owner of Cactus Feeders of Texas which markets 1 million head of cattle a year, had the exact opposite opinion, noting “I couldn’t believe what I was reading” when he went over the proposed rules several times. “I’d be very, very careful of what you wish for,” he said to a mix of applause and boos from the crowd.
During the market structure panel, Mark Lauritsen, international vice president, director of food processing, packing and manufacturing division of the United Food and Commercial Workers Union, said the 250,000 union members he represents “needs producers, needs packers,” but what the meeting forgot to look at was the food supply chain, and in particular the effect Wal-Mart has on the food chain.
He said that $1 of every $5 is now spent in Wal-Mart stores, and that retailers now get more from the beef and pork produced than to those who are producing them or those who work in the packing plants.
Libby Cook, co-founder of Wild Oats Markets and Sunflower Farmers Markets, questioned those figures.
“Supermarkets are now operating on a 2-3 percent net profit margin, so I would take issue with those margins,” Cook said. “We are in the business to help the vendor succeed.”