R-CALF USA warns congress of catastrophic consequences unless farm bill includes meaningful reforms
BILLINGS, Mont. — The largest cattle industry trade group that exclusively represents U.S. cattle producers recently submitted its comprehensive 2023 Farm Bill Platform to both the Senate and House agriculture committees. The group, R-CALF USA, warned congress of catastrophic consequences if the 2023 farm bill does not include meaningful reforms to restore competition to U.S. cattle markets and profitable opportunities for independent cattle producers.
Referencing the upcoming farm bill as a narrow window of opportunity for congress to reverse the disastrous decline of the U.S. cattle industry before it reaches the point of no return, the group states the highly concentrated and vertically integrated U.S. hog and poultry industries have already reached that point and the U.S. sheep industry has already been gutted by the same forces now destroying the cattle industry.
The group describes those industry-destroying forces as a combination of decades of unrestrained industry concentration and globalization.
Using a series of industry charts, the group illustrates prolonged and steep declines in the cattle industry’s competitive infrastructure, including its number of participants, size of its cattle herd, and availability of marketing outlets and opportunities. It further illustrates prolonged downward trajectories for financial returns earned by cow/calf producers and cattle feeders.
The group asserts its industry charts can portend the future by extending their respective long-term trendlines: “That future will be marked by even further erosion to both the industry’s competitive market infrastructure and the economic viability of its participants. When the critical mass of competitive market infrastructure disappears …the U.S. cattle industry will become unrecognizable. It will become another corporate-controlled, vertically integrated industry from birth to plate, and rural America will lose tens of thousands more, if not hundreds of thousands more of its critical economic cornerstones.
“Whatever incremental reforms Congress has implemented to address U.S. cattle markets over the past several decades has done nothing to curb the industry’s systemic decline, putting in peril the viability of the very heart of the U.S. cattle industry,” wrote the group.
R-CALF USA RECOMMENDATIONS
Some of the group’s recommendations for reversing the cattle industry’s negative trajectory, along with the expected impact of those recommendations include:
- Ignite competitive forces in the beef supply chain by enacting the American Beef Labeling Act (S.52) that restores mandatory country of origin labeling for beef, which will empower consumers to competitively choose from which country they want their beef produced.
- Force the packers to competitively bid for domestic cattle in the domestic market by requiring the largest packers to purchase at least half their weekly needs in the competitive cash market.
- End the market power disparity between disaggregated producers and highly concentrated packers by prohibiting certain anti-competitive cattle procurement practices known to cause market distortions. These include alternative marketing arrangements (AMAs) that are tied to the residual cash market; bonuses, financial arrangements, and risk-sharing contracts offered only to select cattle feeders but not to all feeders; packer ownership, feeding, or control of cattle for more than seven days prior to slaughter; and top-of-the-market pricing schemes.
- Provide market transparency by requiring all cattle purchasing agreements to be in writing and publicly disclosed.
- Make the beef checkoff program accountable to cattle producers by enacting the Opportunities for Fairness in Farming Act (OFF Act) (S.557; H.R. 1249) that will prohibit farm advocacy groups from receiving checkoff funding and grant producers the right to a periodic vote.
- Address price-distorting trade deficits by requiring all federal beef expenditures, including food stamp purchases, to be for beef exclusively produced in the United States.
The group urges Congress to adopt its recommendations following Congress’ decades-long adherence to the status quo — described as the combination of no market structure reforms and reliance on globalization to cure market ills. The group asserts the status quo has wrought severe damage to the integrity of the U.S. live cattle industry and the economic viability of its participants.