by Steve Foglesong, National Cattlemen’s Beef Association President, 10-25-2010
There’s a reason U.S. beef is the best in the world. For decades, U.S. producers like me have invested in genetic improvements and herd-management practices that have allowed us to add value and enhance the quality and safety of our products for consumers in the United States and abroad. These investments allow producers to raise high-quality cattle that can then be sold for a premium through an alternative marketing arrangement to meet specific consumer demand. The U.S. Department of Agriculture’s (USDA) Grain Inspection, Packers and Stockyards Administration’s (GIPSA) proposal on livestock marketing jeopardizes our ability to accomplish these goals.
Unfortunately, a small minority of so-called “producer groups” in favor of this proposed rule are once again using dubious notions and ambiguous statistics to try to sell this rule as a positive thing for commerce. Most recently, the chief executive of R-CALF has engaged in an effort to damage the reputation of the beef industry – an industry he claims to represent – to undermine public confidence in the safety of beef. The public has no reason to be concerned about beef safety. Beyond the integrity of the nation’s 800,000 beef producers like me, the quality of beef is assured by numerous safeguards in place within the industry that are overseen by USDA, the Food and Drug Administration and other government authorities at the federal and state levels. R-CALF’s blatant attempt to misinform consumers by making misguided comments in an Associated Press article that was picked up by the USA Today (see USA Today article here) and other mainstream publications should outrage producers, consumers and anyone wanting to provide the world with safe and affordable beef.
As you listen to R-CALF’s rhetoric, please keep in mind that this organization has never done one single thing in their history to create any positive economic impact for beef producers. They are protectionists, and history has proven that protectionism is a failed business model. Always has been, always will be. Their co-conspirators are also highly suspect. Food and Water Watch, the Organization for Competitive Markets and elements of labor and consumer movements are strange bedfellows for actual honest-to-goodness beef producers. I can’t recall a time when such groups have ever lifted a finger to help beef producers be more profitable, and tigers like these don’t change stripes. What’s the real motivation of these groups, who thrive on litigation to perpetuate their existence, in absence of any cost-benefit analysis from these outfits or USDA? I can’t help but think the real question we all should be asking is, who are they going to sue, assuming this rule could ever one day override the marketplace?
The GIPSA rule infers that all cattle be valued on an average or standard price, regardless of quality. Any deviation from “standard price” must be justified to the government which could lead to litigation that buyers seek to avoid. This will result in a generic market and generic product. This flies in the face of decades of work by hundreds of thousands of beef producers like me to meet consumer demand via improving the quality of the beef that I produce. Where would the incentive be for producers to make investments in higher quality products if this rule penalizes any deviation from an average price? There wouldn’t be one, although those at the lower end of the quality spectrum would love it. Could this be what the proponents of this rule are actually after? What they fail to understand is that the net result will be huge losses for both producers and consumers. Consumers will pay more for what will very likely be a lower quality product; and producers will get paid less for the beef they produce.
Still not convinced this rule is a bad idea? Well don’t just take my word for it. Listen to several respected economists; nearly 150 members of Congress from both parties; leading agricultural organizations; one of the world’s most respected scientists Temple Grandin; and many more. The scope of the proposed rule goes well beyond the intent of Congress and even contradicts previous court decisions. It’s bad news for producers, bad news for consumers and will ultimately kill 104,000 jobs, according to a recent study by John Dunham and Associates. In the current economic climate, this is the last thing we need. There are no shortcuts to putting more money in producers’ pockets. You do it by building demand, not by putting the government in charge.
