The following articles and letters are expressed opinions of Stockgrower members and may or may not reflect the policy position of the Stockgrowers Association on a given topic. For information about Stockgrower policy, please contact our office at 605-342-0429.
Stockgrowers continues work on cattle markets
By Gary Deering
|The hopeless feeling of looking at the big red slash, showing the market is setting a new low, along with a cup of coffee, seem to be the way cattlemen are used to starting their day. The cattle market has been in a free-fall for some time, devastating balance sheets and putting a crunch on some local economies. With most of the commodities, such as corn, wheat, etc., also at lows, the cattle market was the one bright spot for agriculture a year ago. It will make it hard for anybody in the country to show much, if any profit.
Ft. Pierre Livestock Auction reported in October of 2014 the average 550 pound steer brought $293.50 per hundredweight or $1614.25. A year later the price had dropped to $223.61 per hundredweight, or $1229.86. Seeing an almost $400 (25%) drop in cattle prices, an unheard of amount, the South Dakota Stockgrowers joined R-CALF, and others, in calling for Government Accountability Office investigation, to find out what happened to the markets. Unfortunately no alarms were sounded, and the first week in October of 2016 the same 550 pound calf is only bringing $134.42 per hundredweight, or $739.31. Hopefully a $490.55 (40%) decrease, from one year to the next ($874.94 less than two years ago) will grab the attention of somebody before this is completely deflated.
It’s hard to understand why our agriculture markets have dropped so much when one walks through the aisle at the grocery stores, and sees retail beef prices at four year highs. It is also, probably, the only time in history a bushel of wheat will not buy a loaf of bread! With retailers reaping huge profits off the backs of American farmers and ranchers it shows there is still demand for the commodities we produce.
Exports typically account for approximately 10% of total beef produced in the United States. The strong dollar led to a 10% drop in exports from 2014 to 2015. That 10% drop in exports is only about 1% of the beef we produce in this country, showing us that although important, exports are not the sole reason for more than the 50% drop in the cattle markets the last two years.
Over the last two years the cattle futures market seems more like a roller coaster than something producers can use to protect their commodities. High speed trading from speculators, who may or may not know what a cow is, make markets volatile, and puts producers who want protect themselves at risk.
Although opposed by the South Dakota Stockgrowers, CME has implemented a seasonal discount on cattle delivered to Worthing, South Dakota to stabilize the futures markets. While that might help, we don’t believe it addresses the root cause of the volatility.
In July 2015 USDA announced that we will start importing beef from Brazil. That not only puts our domestic livestock herd at risk of foot and mouth disease, but is a slap in the face of the American cattlemen trying to make a living in this depressed market, with the threat of flooding our markets with Brazil’s massive cow herd.
There have been many events within the last two years in which makes it easy to become discouraged. Our markets certainly seem to be broken.
Being comprised of cattlemen South Dakota Stockgrowers grassroots policy and actions are derived solely from the minds that are depending on these markets for their livelihood. Recognizing that our industry is facing a challenge we will pledge to the cattlemen we will do all we can to make sure we fix this mess.
Our record stands strong. South Dakota Stockgrowers have and always will stand for what cattlemen believe in.
We have fought, never wavering, for Country of Origin Labeling, knowing our product is superior, and listening to the wants of some 90% of this nation’s consumers.
We are always pressing to get the GIPSA rules fully implemented, in order to address anti-competitive practices by packers, and remove unfair bidding activities that give packers a distinct advantage over independent producers.
We also believe we need to enforce our anti-trust laws that would stop the monopolistic behavior, from packers, and retailers, and not allow them to manipulate the prices, be enforced.
The South Dakota Stockgrowers know that we need reform within our livestock markets, and we cannot continue with the current trends in the cattle industry. We must restore confidence in our industry, work to bring about common sense reforms, and bring this free-falling market to its feet again.
Gary Deering is the Vice-President of the South Dakota Stockgrowers Association. He ranches with his wife Jessica and their three young sons near Hereford, SD.
The Last Frontier II
By: Vaughn Meyer, Reva, SD
Throughout history “The Last Frontier” has been associated with the settling of the West during the 19th century. As children this time frame of history was narrated through history books and multi generation family recollections. Probably some of the most vivid attributes to this period were the Louisiana Purchase, the Lewis and Clark Expedition, the Indian – Whiteman wars, the large cattle barons, huge cattle drives and our very own roughrider president, Teddy Roosevelt.
Near the end of the 1800s we witnessed a new policy of Homesteading which introduced the concept of family production agriculture. This introduction of family ownership and management of agriculture created more incentive for individual achievement and our industry flourished. As agriculture grew it stimulated creativity on the national level which economically and industrially established the U.S. as a world leader.
However as the number of family farms and livestock numbers increased and competition for our product decreased, Congress realizing the need for competition and fair markets for our livestock drafted the Packers and Stockyards Act of 1921. As the 20th century drew to a close it became apparent to livestock producers that without tools for the enforcement of the P&S Act we still remained at the mercy of the anti competitive practices of the packers.
However during the 2008 Farm Bill debate our Congressional leaders also became aware of the need for rules to enforce competition in the market place and the need to restore fairness within our industry. They commanded the USDA Grain Inspection, Packers and Stockyards Administration (GIPSA) under the leadership of GIPSA Administrator Mr. J Dudley Butler to draft rules to enforce the P&S Act. Nearly two years later Mr. Butler and his staff have addressed the congressional mandate and proposed new rules known as the GIPSA Rules.
As with all new game rules which are directed at leveling the playing field the opponents are those who possessed an unchecked advantage over other key players. In this case the packing industry, through its affiliated voices of the National Cattlemen’s Beef Association (NCBA) and the American Meat Institute (AMI), has realized a 90 year old reign over the production side of our industry. They are squealing louder than stuck hogs and labeling Administrator Butler and his GIPSA rules as the destruction of the industry.
In a recent attempt to degrade Mr. Butler’s motives they portray him as a litigation happy trial lawyer who is attempting to drum up business for his post GIPSA years. Mr. Butler and his boss, Secretary of Agriculture Tom Vilsack, have been accused of being indifferent for not considering the request by House Agriculture Committee Chairman Collin Peterson and 114 other congressmen to delay the GIPSA rule with another economic analysis study. They also connect him to a few so called “other liberal – leaning cattle organizations”.
What critics of Administrator Butler fail to mention is that similar to the other 955,000 livestock producers Mr. J. Dudley Butler is a producer from Mississippi and a former ranch partner from Wyoming. As a fellow producer from S.D. maybe we should look at the producer side of this GIPSA Administrator like:
MAYBE … Mr. J Dudley Butler possesses compassion for his fellow livestock producers as he has witnessed the individual sorrow and defeat of the 370,000 producers and their spouses and children as they lost their livelihoods!
MAYBE… J Dudley Butler has witnessed the hunger and suffering of children in other countries who have insufficient production agriculture!
MAYBE… J Dudley Butler has experienced first hand the destruction of family enterprise hog and poultry farming and wishes to prevent the same coercion and threats from raping the cattle industry!
MAYBE… Mr. J Dudley Butler foresees the 20% drop in producer carcass share over the past 20 years is correlated to the smallest U.S. cow herd since 1952 which will have a profound effect on the future safety and procurement of our nation’s food supply!
MAYBE… Mr. J Dudley Butler noticed that Senate Ag Chairman Collin Peterson and his 114 colleges were the recipients of over $48.6 million of Agri Pac campaign contributions!
MAYBE… Mr. J Dudley Butler has observed the past 90 years of unchecked pilfering of our industry by the packing industry and affiliates and he realizes a change to honest moral values is necessary for the survival of agriculture!
JUST MAYBE… Mr. J Dudley Butler notices the similarities of the “Last Frontier” of the 1800’s and the “Last Frontier” of the present beef industry which ironically is precipitated by the same packing industry. Possible he also recognizes that a United States without a viable livestock industry to spur prosperity in our cities may well become the “Last Frontier” of the world!
In summary, Mr. Paul Engler of Cactus Feeders testified in Ft. Collins that as a child he bought his first calves to feed and today he feeds millions annually. Just maybe Mr. J Dudley Butler, Agriculture Secretary Tom Vilsack, and US Attorney General Eric Holder realize that that would not be possible in today’s broken market system. Just maybe they and hundreds of thousands of fellow producers are attempting to salvage a market system that will provide similar opportunities for future generations!
As livestock producers we can restore U.S. family agriculture and rebuild our rural communities through comments of support for the GIPSA rule at email@example.com. Or, Fax to 202-690-2173, or at the Federal e-rulemaking portal http://www.regulations.gov
Vaughn Meyer, a concerned livestock producer
Testimony Presented at USDA/DOJ Hearing – Ft. Collins, CO
August 27, 2010
By: Vaughn Meyer
Secretary Vilsack, USDA APHIS personnel and fellow agriculture enthusiasts, I am Vaughn Meyer , a rancher from Reva , SD and Chairman of the SD Stockgrowers Marketing Committee. On behalf of South Dakota ‘s largest cattle producer organization, I would like to thank everyone here today for the great input into this controversial issue. Through today’s democratic discussion we are initiating the initial steps required for rebuilding our industry.
An overwhelming amount of facts and figures have been presented here today. However, I would like to [refer] briefly to that which will not be said here today. That which is as bone chilling and sobering as an Arctic Northerly in mid-December. The silence here today that is representative of the 370,000 producers who through the past 16 years have lost their hopes and dreams in production Agriculture. The silence of over half a million family members whose last view of their livelihood was in their rear view mirrors. A silence that is relative to the loss of 215,000 rural main street businesses throughout the past decade.
I witness this silence, only broken by the wind, as I pass daily through my home town of Sorum , SD, now zip code zero. Recently that silence has echoed again through the closure of two nearby family feedlots. An eerie silence broken only by the wind blowing through empty pipe corrals. Again this silence is present as one turns into the abandoned parking lot of Black Hills Packing Co. in Rapid City , SD. A parking lot that once accommodated autos of nearly 200 employees.
My point here today is this issue is not about organizations against organizations or producers versus feeders versus packers and retailers. We are here today to strengthen previous rules in order to rebuild America ‘s largest industry, Family Agriculture. A rebuilding which once again will instill voices, laughter and prosperity in our rural towns. A prosperity that will transcend to our cities and the steps of our nation’s capitol. A prosperity which will rebuild the agriculture foundation of this great country. An agricultural foundation which is prerequisite for the national security and industrial superiority of the United States of America .
Mr. Secretary Vilsack and Mr. J.W. Butler on behalf of my Grandfather and late Father, I thank you for giving me the opportunity of a lifetime to be present today and witness this rebirth of family agriculture. On behalf of the South Dakota Stockgrowers, thank you and we proudly support your endeavors.
Who’s the Boss Regarding the Federation of State Beef Councils?
Written By: Gary Deering, Sturgis, SD
Fuel, to a seemingly ever eternal fire, between producers and producer groups has been added recently with an arrogant proposal to changes in the structure of the Federation of State Beef Councils. The group making such a proposal, The National Cattlemen’s Beef Association, which has housed the Federation since the merger of the National Cattlemen’s Association and The National Livestock and Meat Board/Beef Industry Council in 1996, seems to think it should all be “business as usual”. One thing NCBA appears to forget, is that, although they represent more cattlemen than any other organization, boasting membership at somewhere around 30,000 producers, the Federation of State Beef Councils, is paid for, and funded by, some 956,000 cattle producing men and women, many of which are not affiliated with any policy run organization. Unless an NCBA member, I do not feel it is right to comment on how they want to structure their organization, or on the day to day business that they conduct, and although I would respect and hope NCBA would have comments and opinions toward the Federation’s structure, I do not feel it is right, nor fair, that they have assumed that they are the only voice that speaks towards that structure.
Often times our loyalty toward political and policy decisions, block our view of what really matters. The cattle producing sector is in a crisis, according to data compiled by the USDA-NASS there were 1.35 million producers in 1988, compared with 956,500 today. Controls due to environmental groups, government regulations, and simply undervalued products that we sell, have producers wondering if and when their time will come. One thing each and every producer will agree on, regardless of organizational loyalty, is we need to keep the beef industry profitable. The Beef Checkoff, which was conceived through a Congressional act and order in 1986, brings forth the idea of building beef demand worldwide, through promotion, and research. Although opinions on the effectiveness, and legality, of the checkoff differ it was set up with the premise of building beef demand without letting politics get in the way. Every cattle producer pays the same one dollar per head, regardless if they sell one or thousands of cattle every year, beef importers pay one dollar per beef equivalent. It is not supposed to be owned, nor represented, by any one organization, or group of individuals, but rather the entire beef industry. When an animal is sold the seller remits one dollar, the state beef council, in which the producer sells the animal, collects the dollar, sends fifty cents on to the Cattlemen’s Beef Board, and keeps fifty cents for themselves. The fifty cents, that the state keeps, is what has recently come into debate. The state beef councils decide what they want to do with the fifty cents, of which a lot goes into the Federation, toward seats on the board, international promotion, etc. The states can also keep the money for themselves in order to promote various beef promotion and research projects within their state, nationally, or internationally. This brief lesson, on the one dollar, may not be needed with the exception that it appears NCBA needs to learn that the producers, through their State Beef Councils, not policy organizations, control and have the final say on the Federation of State Beef Councils.
In a survey conducted in 2006 by the Gallop Organization, and funded by USDA, producers were asked, “how, if at all, does NCBA’s involvement in the program affect your opinion of the checkoff?”, only 29.7% of the producers answered that they had a more positive opinion of NCBA’s involvement. With this bold attempt to single handedly take the State Beef Council’s authority away, by restructuring the Federation; it will be interesting to see how producer’s attitudes may change.
It appears very safe to say that most agricultural organizations have a great deal of concern about NCBA’s proposed governance structure. Several areas of concern were expressed in a joint letter to Secretary of Agriculture Tom Vilsak, from several agricultural organizations including; American Farm Bureau, National Farmers Union, Livestock Marketing Association, National Livestock Producers Association, National Milk Producers Association, and US Cattleman’s Association. As a follow up to the letter, Mary Kay Thatcher, director of ag policy for the American Farm Bureau Association, was quoted as saying, “that the structure is problematic from the perspective of policy having too much influence, and problematic from the perspective that not every producer is a member of NCBA”. In an editorial, by Alan Guebert, R-Calf USA ceo Bill Bullard was quoted as saying, “the proposed changes will give it more access to checkoff dollars and without those extra dollars NCBA probably can’t exist,” he goes on to say, “this is all about the future of NCBA, not the future of the checkoff.”
NCBA responded to these questions by unnecessarily defending the checkoff and their effectiveness to be a contractor. This was unnecessary since the checkoff and their contracting status is not in question. The only apparent thing they tried to clear up, towards the proposed task forces recommendation, was the statement that everybody within the House of Delegates does not have to be an NCBA member, but rather members would consist of, “all individual members of NCBA, members of the Federation of State Beef Councils, Breed Association Affiliates, and invited guests, like members of the Cattlemen’s Beef Board”. Within their proposal, the House of Delegates holds several important responsibilities, including election of the board of directors (who must be an individual NCBA member), and electing the operating committee (who oversees and approves most checkoff contracts), so their own defense made it even clearer that they do not want others meddling in the checkoff, since the only chance anybody, but someone who is an NCBA member, or a member of an affiliated organization, could belong is if they were one of the few State Beef Council Directors who is not an NCBA member.
The Beef Checkoff has witnessed many things to be proud of through the years; it has many new cuts of beef that has been developed to meet the fast paced lifestyle in which we live, it has handled crises such as BSE hitting the United States in December of 2003, there are countless hours devoted to promoting United States Beef internationally, and I have yet to meet anybody whether they live in the city or country that does not know the saying “Beef Its What’s For Dinner”. To effectively promote beef it will take an industry wide effort, and I feel the checkoff has, and can deliver results.
With this new proposal from NCBA (which is the largest contractor of the checkoff receiving over 90% of checkoff funds) come many questions. First of all NCBA must ask themselves if they have a right, as a contractor, to tell the State Beef Councils how to structure their organization. Secondly the State Beef Councils must ask if they want to continue funding a contractor who apparently can tell them how to spend their producers money, or should they invest in other programs such as; the Northeast Initiative, which promotes beef on the east coast of the United States where checkoff funds are limited, but millions of people live; international programs such as US Meat Export Federation; or simply keep money within their state for promotion, or research at their local universities. As NCBA has stated, it is up to the State Beef Councils to voluntarily invest their money, so it may be time to see who really runs the Federation of State Beef Councils, the producers or their contractor.