March 28, 2005

"BOVINE MARCH MADNESS"

Lincoln Journal Star "Local View". 3-28-05 (et al)

Written by Al Davis, Hyannis
David J Wright, Neligh
FOR: Independent Cattlemen of Nebraska

Late in the game, the self-proclaimed #1 seed struggles to stay alive. The Cinderella team controls the ball. An upset appears imminent. Frustration builds on the side of the #1 seed as Cinderella passes the ball, looking for a game-winning shot. Desperate times call for desperate measures, and an intentional foul by the #1 seed throws the game into doubt. The gamblers are nervous---there’s a lot of money on the table if an upset occurs.

March madness, yes, but not basketball. It’s March madness on America’s ranches, as the calving season begins. The Cinderella team has its hands full managing the enormous spring workload. But there is more to ranching today than just calving. A war is being waged between factions with differing ideas about the future of the beef industry.

The uneasy alliance between packers, feeders, and producers is in ruin. The producer’s share of every beef dollar generated has fallen steadily over the past decade. Meanwhile, three packers now control 80% of the beef slaughtered in the United States. With the passage of NAFTA, packers have been able to control cattle prices by buying abroad, and there has been a resulting dearth of profitability for the American rancher. Nebraska’s heavily cow-dependent counties are among the nation’s poorest. But producers regained some leverage when BSE broke out in Canada and we stopped importing their cattle. Since then, US producers have seen a period of sustained profitability, while profits lag in the packing industry. The packers have put intense pressure on the administration to reopen the border and return “to more normal marketing conditions.”

Since the Canadian border closed in 2003, the government’s discussion about re-opening it has centered on “sound science”. But what “sound science” is remains a vague, murky, and changing line. Protocols developed by international bodies and adopted by our government in 1989 that were implemented to protect the health of the American consumer are being dispensed with by the Bush Administration to appease the packing industry. Despite the fact that Canada has had two infected cows discovered in the past 90 days, the Bush administration insists that the border be opened. Bush has even threatened to veto a “Resolution of Disapproval” (essentially, a vote of no confidence in the USDA) if the House and Senate pass it—his first veto ever. Our government insists that we institute special rules for Canadian beef; rules which, if enacted, could leave the US with the lowest meat import safety standards in the developed world.

A native-born case of BSE has never occurred in the United States. Canada has had four cases of BSE. The US beef industry paid a steep price for the single Canadian cow exported to the US with the disease. Because if it, our largest export markets were lost. These losses were estimated at $175 per head.

This week, Secretary Johanns expressed frustration over the hypothetical loss of meat packing jobs to Canada if the border is not opened. Johanns stated, "Can anyone doubt that Canada is not going to grow their [packing] industry? This is a classic example of outsourcing jobs into Canada.” Secretary Johanns, our former governor, doesn’t seem to worry about the jobs held by hardworking ranch families in Nebraska. Aren’t their jobs also being outsourced by low profitability? Johanns has stated that trade is like an eight-lane superhighway. So, if trade goes both ways, why must the American rancher accept low returns, while the packing industry does not? Apparently those in positions of power have relegated the rancher to the slow lane.

To further muddy the waters, the National Cattleman’s Beef Association argues that the US must reopen its borders with Canada to pressure Japan into reopening its border with the US. The two borders are not linked, and the concept makes little sense. Relaxing standards with Canada won’t build confidence in our product in Japan. Why would Japan want to trade with a nation which ignores its own protocols in dealing with BSE-infected herds in other countries?

Senator Chuck Hagel recently stated that he supported the re-opening of the Canadian border again invoking the “sound science” mantra. Hagel’s statement indicated we should not cater to “special interests” by keeping the border closed. These special interests are his own constituents-- the American cattle producer and the American beef consumer---the very special interests he was elected to “cater to”!

There’s no question who the underdogs are in this game. They’re America’s cattle producers. These aren’t politically-connected individuals--they’re hardworking families focused on day-to-day responsibilities. Study the game statistics yourself before you let someone else make up your mind for you. Ignore the rhetoric but study the facts. If our elected officials and our American consumers can filter the truth from the roar of the crowd, the Cinderella team might just pull off a victory. It will be a victory for small operators, for the consumer, and ultimately for the industry itself.