R-CALF CEO Informs USDA of Urgent Beef Trouble

US - In a meeting held last week in the office of the U.S. Department of Agriculture (USDA), R-CALF USA CEO Bill Bullard informed USDA officials that urgent action is needed to restore the viability of the U.S. cattle industry.
calendar icon 10 June 2009
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“The U.S. cattle industry needs USDA to take two immediate actions,” Bullard said in his remarks to the agency. “In order to preserve the viability of the hundreds of thousands of remaining independent U.S. cattle producers, USDA must first restore the integrity of the U.S. cattle industry by restoring the health of our domestic cattle herd and the safety of the beef produced from our cattle.

“Second, USDA must restore the competitiveness of our industry by enforcing antitrust laws, prohibiting anticompetitive practices and including protections in trade policy that recognize the supply sensitive nature of the U.S. cattle industry,” he said.

Bullard presented USDA with 35 pages of charts and graphs that show the urgency of the group’s request. One chart showed that the U.S. cattle feeding industry experienced 22 consecutive months of financial losses, from June 2007 through March 2009, with losses exceeding $300 per animal for several of those months. During the same timeframe, however, the chart showed that retail beef prices remained at or near record levels throughout this period.

“The marketplace has become inefficient and inequitable both for cattle producers and beef consumers,” Bullard explained. “Our industry is shrinking and shrinking fast. U.S. cattle operations have been exiting our industry at the rate of 19,000 per year since 1996. Our U.S. cattle herd continues in its 13th year of liquidation. And, the amount of beef produced from U.S. cattle has remained stagnant for 13 years.

“Unless USDA makes the immediate fundamental changes that we are requesting, our cattle industry will lose its critical mass as has already happened in the U.S. dairy industry where 80 percent of U.S. dairy farms that were in operation in 1980 have exited the industry, leaving only 67,000 dairies in the entire U.S. in 2009,” he pointed out. “The same has happened in our domestic hog industry where 90 percent of the hog operations in existence in 1980 are gone today, leaving fewer than 65,000 hog operations in the entire U.S. today.”

Bullard told USDA that the U.S. cattle industry is on the same path toward corporate industrialization that devastated the independent structure of the hog and dairy industries, turning them into highly concentrated and highly vulnerable corporate production systems.

“Much of Rural America depends on the economic viability of our present cattle industry structure that is based on hundreds of thousands of independent businesses, and this structure must be preserved,” Bullard emphasized.

“USDA can begin to accomplish these two critical goals by taking three immediate steps: 1) reverse the agency’s over-30-month rule (OTM Rule) that allows older cattle from Canada – where outbreaks of mad cow disease continue to be reported – to freely enter the United States; 2) initiate a rulemaking to prohibit the anticompetitive use of captive supply cattle by the major meatpackers; and, 3) abandon its misguided plan to require cattle producers to register their property and livestock under a National Animal Identification System (NAIS).

“We pledged our organizational resources to assist USDA in accomplishing these goals, and given the current economic condition of our industry, we hope the agency will immediately begin to carry them out,” Bullard stated.

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