ga.prime":114mblgs said:
Retaining each and every "perfectly good replacement heifer" is an economically destructive and unsustainable practice. Not the importation of hamburger but too many cows in production is the reason for downtrending feeder cattle prices over the last two years.
Yes GA prime it can hurt, but not so much a small guy like me selling 10-15 head a year. So let me say my company watches the commodity market on beef. What we pay in the restuarant is close to the same now as to what we paid 2 years ago. Who is making the money. Shady deals like this are what hurt more. Read below.
Open Letter to U.S. Cattle Producers
September 2016
Dear Cattle Producing Friend,
What does the rest of 2016 have in store for your U.S. cattle industry? The answer is up to us.
After 18 years of herd liquidation that started in 1996, cattle inventories fell to a 73-year low while over 171,000 beef cattle producers and 84,000 independent cattle feeders exited our industry. When the dust finally settled U.S. beef production fell to the lowest level in two decades. Responding to this incredible shortage of beef and cattle, prices for your cattle in 2014 climbed to the highest nominal levels in our history.
Amidst all of this, the National Cattlemen's Beef Association (NCBA), which represents large multinational meatpackers: Tyson, Cargill, JBS and National Beef, told a U.S. federal court that U.S. cattle producers don't want their beef labeled with a USA country of origin label.
The NCBA said: "beef is beef, whether the cattle were born in Montana, Manitoba, or Mazatlán." The NCBA claims there is no difference between beef produced from U.S. cattle and beef produced from Canadian or Mexican cattle. According to them, beef produced from cattle sourced from anywhere in the world is just the same as beef from your U.S. cattle.
With this message, the NCBA worked with Canada, Mexico and the World Trade Organization (WTO) to convince Congress to repeal country of origin labeling (COOL). And Congress did.
With COOL gone, there is now a worldwide effort to render the origins of U.S. cattle irrelevant on a global scale. The effort includes relegating U.S. farmers and ranchers to nothing more than raw-product suppliers to the multinational meatpackers' global supply chain.
The Trans-Pacific Partnership Free Trade Agreement (TPP) is being pushed by the NCBA and meatpackers. The TPP states the origin of beef is wherever the animal is slaughtered. This means when cattle are imported from Brazil, Argentina, Mexico, Canada or Nicaragua and slaughtered by JBS or Tyson in a U.S. packing plant, the meat will be labeled as "Product of the USA."
We were deceived. We now know the real reason COOL was repealed was to help multinational meatpackers steal the good name and reputation of U.S. cattle producers and put it on beef from foreign-sourced cattle for duty-free distribution to TPP countries, including the United States. Your reputation is worth billions of dollars. Our own USDA helped gift this incredibly valuable asset to the multinational meatpackers. You got nothing.
R-CALF USA is the only association that testified before the U.S. International Trade Commission (ITC) that the TPP should be rejected because it destroys competition between the U.S. live cattle industry and live cattle industries from around the world. The ITC's investigation reveals that even with the addition of Japan, and even after 15 years of operation, the TPP will not reverse the horrendous trade deficit the U.S. has with the 11 other TPP countries. The ITC found that the U.S. beef trade deficit with TPP countries was nearly $2.8 billion in 2015 alone. This ongoing deficit in the trade of beef is weakening the economic viability of our industry.
With both cattle supplies and beef production so low, and with steady beef demand, cattle prices were expected to remain at historical highs from 2015 until 2018, at which time herd rebuilding was projected to cause prices to gradually subside. But something went terribly wrong.
Recall June 2015 when the U.S. House of Representatives repealed COOL. Up until then fed cattle prices were steady and strong ($160.70 per cwt in May). But in June prices tumbled by more than $9 per cwt and kept tumbling through December. When the dust settled the market had lost an astounding $36 per cwt just since May. Fed cattle prices never fell so far or so fast at any other time in the history of our industry.
Calf prices fell just as hard, if not harder. In May 2015, feeder calves weighing 550 pounds were bringing $286.41 per cwt. By December, prices fell to $194.28, representing a loss of over $506 per head for U.S. cow/calf producers! This wasn't caused by competitive market fundamentals. No, this was the result of manipulation within our U.S. fed cattle market.
In early January, R-CALF USA asked the U.S. Senate Judiciary Committee to investigate the cause of the 2015 cattle price collapse so we can prevent it from ever happening again. In response to our request, the Judiciary Committee in April asked the United States Comptroller General to conduct the investigation through his agency, the Government Accountability Office (GAO). In addition, Senate Judiciary Committee Chairman Charles Grassley immediately introduced legislation to ban packer ownership of livestock, which will help reduce the control that multinational meatpackers presently have over our markets.
On May 26, the GAO accepted the request to investigate the cause of the 2015 price collapse. In fact, the U.S. Comptroller General is now investigating the changes that have occurred within our markets during the past 10 years. (2005 was the last year meatpackers purchased more than one-half of their cattle supplies in the competitive cash market. Today, the volume in the competitive cash market is below 22 percent.)
This unprecedented investigation is our last best chance to stop the multinational meatpackers from capturing control over our live cattle supply chain through vertical integration. They already accomplished this capture in both the poultry and hog industries. We call the processes of capturing control over livestock supply chains "chickenization."
