Want to hear some fighting words about Thomas Vilsack and mCOOL, those rascals at R-CALF, and recidivist Luddites? Listen to what Steve Dittmer has to say.He has nearly 30 years experience in putting up his dukes.Fighting for the cause.Rallying the most conservative of troops.Yeah, he’s that guy; the one that carries the free market flag into every battle.He’s the strictest of constructionists, whose bible is Adam Smith’s “Wealth of Nations.”His organization is Agribusiness Freedom Foundation and he regularly travels the country preaching the gospel of ‘no mas’ when it comes to government intervention.
When it comes to conservative issues and the ag industry, maybe he could pick up the tarnished Rush Limbaugh crown and put some polish back on it?I really can’t see Dittmer fronting for the folks at HSUS.
But seriously, folks, Dittmer does take some interesting positions on American agriculture and he’s never afraid to express his point-of-view.The ‘shy’ gene was never passed on to this guy.Picture him standing on an old crate in Trafalgar square with a bull horn in hand, exhorting the crowds to take action!Now that’s not a hard mental image to conjure up, is it?
The two years since I last interviewed him have been interesting times.I thought he might have a few things to get off his chest.So I asked…and he answered.
Q. Steve, it’s been two years since we’ve exchanged points of view. Let’s get right to some of the highlights of the last 24 months – some of them will probably still highlights 24 months from now. On the issue of mCOOL, we have a new boy on the block, Thomas Vilsack.With only a few days on the job, his most famous official position was a curious statement that mCOOL was going forward and if enough people didn’t voluntarily meet at least minimal standards, he would make the rule much stricter. Is he putting a whole new meaning to the word “voluntary?” And what can we expect from him in the near future?
A. Given the new administration’s demonstrated comfort level with changing positions or backtracking from one day to the next at the very highest decision making levels and on the most urgent issues the nation faces, it is extremely difficult to predict something even as important to livestock producers as mCOOL.The Vilsack/Obama Canadian cross-purposes fiasco looked worse to everyone in February because we were judging by past administrations’ abhorrence of appearing inconsistent.This administration either isn’t concerned about that or can’t get its act together and I’m not sure anyone knows which is which.
That said, there are two key factors to consider.The first is how susceptible the President or Sec. Vilsack will be to pressure from activists from the left and Congressional members who want further tightening of mCOOL regulations.Actually, since the administration has essentially already taken two positions on the issue, they can just select one and ignore the other.Obama told Canada’s Stephen Harper he didn’t believe in protectionism.Vilsack said he wanted not only origin information but wanted to add country of “raising” and country of slaughter as part of a consumer’s “right to know,” items that have not even been tracked or authorized to be tracked.Of course, many of those pushing for tighter regs have wide-ranging reasons for their positions for which mCOOL is just a means to an end – the spotted owl approach.They either relate to anti-trade positions or misguided food safety concerns.
Our position has been consumers have a right to know those things that have a bearing on food safety.They can ask for additional marketing information items for which they’re willing to pay but they are not “rights.”Knowing which third of a continent an animal was born in does not give a consumer food safety information.Consumers have not indicated COOL is anywhere near the top of the meat selection criteria list.Ironically, those who try to get people to believe COOL – knowing what third of a continent an animal is born in --is food safety information are often the same ones who oppose mandatory individual animal identification, which would indicate where the animal has been, which animals it has been with and which ones were across the fence.While that would tell you much more, that still has bearing mostly on animal health.Food safety comes from slaughter practices and inspection – until it gets into the hands of the consumer or foodservice operator.
The second factor to consider is how much U.S.-labeled beef will be enough to satisfy Sec. Vilsack.The major packers have mostly assigned one or two plants to accept Canadian fed cattle and the rest do not.
If they do the same for Mexican cattle, at least a substantial base of cattle that can and will be labeled U.S. will be in the beef supply.But if each packer has one plant that will take Canadian origin cattle and one plant that will take Mexican cattle added to the smaller packers that have to take one or the other to keep volume up and server their geographic region, there is a practical limit to how much U.S.-labeled beef we can get without packers incurring further costs, like limiting Canadian or Mexican cattle to certain days or shifts.Getting 50 percent of the supply labeled U.S. is one thing.Getting 75 percent could be much more difficult and expensive.All of this really hurts feeders and producers.Even in the best areas, taking out this plant’s bid from one packer and another plant’s bid from another packer could mean significant lost value for a pen of cattle.In many instances, it will also mean a much longer haul.
The question is how high a percentage will Sec. Vilsack be satisfied with?If he goes for too high a percentage, it will cost packers and livestock producers a lot more money.Ironically, we will end up with a lot fewer packages of beef labeled U.S. than is actually the case, probably 50 to 60 percent, when 90 percent plus is American-produced.But some folks have refused to acknowledge that some information is just not valuable enough to spend the money it takes to get that information, especially when it is not related to food safety.We could number and label every baby carrot in our stew but why would it be worth it?
The hog people have it even worse.U.S. hog finishers had been importing five million head of feeder pigs annually to feed U.S. corn and sell to U.S. packers.That has put them and their Canadian pig suppliers in a real bind, as hog packers have been reluctant to accommodate them.
Q. Vilsack had many groups – all the usual suspects - jockeying for positions of influence with him as he took office. You lobbed a verbal grenade at a few of them when you said you hoped he would “recognize some of (their) proposals as damagingto consumers, farmers and ranchersand not listen to recidivist Luddites masquerading as ‘reformers.’” Recidivist Luddites? Come on, don’t hold back. Tell us how you really feel.
A. A long-time Washington veteran told me the other day that one thing has become obvious about the Obama adminstration’s strategy is that his cabinet level appointments have been relatively moderate choices.The activists have been installed at sub-cabinet and deputy levels.
The problem for industry with that situation is that by the time a radical scheme gets to the secretary level, the activist groups have gotten the deputies to invest so much time, money and effort into these campaigns, that it is hard for any but a hard nosed secretary to turn them back and still keep his deputies on board.
We’ve already seen a flood of liberal causes that have been stalled in Congress or federal agencies for lack of rational support funded in the “stimulus” bill and the budget bill passed.Agriculture will see more than its share, because there are a large number of well-funded groups out there just itching to “reform” production, animal welfare and production chain infrastructure.
In the past, we have had key gatekeepers at USDA with real-world agriculture experience or at least the willingness to take producers and processors needs well into account.The last time the activists had free rein was under Carter with Carol Tucker Foreman on the inside working with people like Sen. George McGovern in Congress.We have never recovered from the damage done in the ‘70s regarding human health and nutrition policies based on faulty information hammering meat and dairy animal production.
We have a potentially worse situation brewing today.We have many more groups, with much more funding and more political savvy on that side of the fence.In addition, we have a huge “it’s what you know that isn’t so,” problem with activists, Congressmen and the public about agriculture in general and livestock production in particular.What “everyone knows” about the nutrient quality of foods, about animal handling, about animal products affect on human health, on what good nutrition is riddled with half-truths, misinformation and outright falsities.
And we apparently will have a Deputy Secretary of Agriculture whose background relative to all the above is quite frightening.Kathleen Merrigan has absolutely no real-world agricultural experience.Her career has been strictly in political (including Leahy and Kennedy), university or government positions.Her interface with agricultural producers has been in developing organic farming standards, hardly a place for even outside exposure to mainstream agricultural needs and problems.Her most recent position was a so-called “agricultural, food and nutrition” program at Tufts University in Boston, an institution that has provided more than a little nutrition philosophy difficulty for meat producers in the past.That program is charged with “social change” and generating “models of alternative systems.”It has been involved in showing city folks how to raise community gardens.Nothing wrong with that but hardly mainstream production agriculture.The alternative agriculture fanatics are euphoric over Merrigan’s appointment.
The bottom line is that the impetus for huge changes in agriculture and the receptivity in at least some of USDA’s key personnel is in place.Beyond receptivity, Merrigan labeled herself as a “provocateur.”
That is all too reminiscent of Foreman.That is not to mention Congress.Rep. Rosa DeLauro has an all-encompassing food industry overhaul bill already on the table and lots of other livestock industry restructuring and restricting bills are circulating again.
As for “recidivist Luddites,” these “40 acres and a mule” folks are dead serious.But taking American agriculture back to the 1940s or 1840s will not make Americans healthier or happier -- just lots poorer and less consistently supplied with a variety of foods.The cost increases that would accompany that kind of agriculture would be staggering.And our competitiveness would evaporate.Which would mean it would be cheaper for lots of foods to be imported than raised here.American agriculture makes decisions based on what consumers will buy and what producers can afford to do.That’s a capitalist system that has worked well for a long time.
Q. JBS entered the North American Market a few years ago, buying in big with their Swift acquisition and tried to buy in even bigger with a run at U.S. Premium Beef’s National Beef business. R-CALF fought a bitter battle against the Brazilian giants’ expansion efforts and the feds went to court to block the purchase. JBS spokesman Chandler Keys said the court case would go for naught – they would still move forward. Then the case went poorly for the Batista family and DOJ put National Beef off limits. National’s CEO Steve Hunt said no matter, we’re still a strong business and Keys merely shrugged his shoulders and said life would go on. All the legal maneuvering aside, what do you see as the real impact of JBS becoming a major factor in the North American Beef business?
A. First off, JBS’ judgment in trying to buy National continues to look smart.National and U.S. Premium Beef (USPB)– its producer-owners and suppliers -- reported good profits for 2008.While quite a few million dollars, it is still a two-three percent of sales profit range that characterizes the best slaughter packers can usually do but USPB posted additional profits and distributions.It all provides further confirmation of the soundness of National’s approach of more tightly coordinating production, harvesting and marketing of meat just like other businesses do.
The purchase deal went to naught for the simple reason that the non-economic, political position at Justice apparently boiled down to this:we’ll allow you to buy National if you give up the primary reason you wanted to buy National in the first place.That is, give up the two plants in western Kansas.The plant in Brawley is a great asset, as is the plant in Utah.But let’s face it, any major U.S. packer is at a disadvantage without a plant in western Kansas.Tyson and Excel have plants in Nebraska, the Texas Panhandle and western Kansas because those are the three key areas with high volumes of cattle.
Long-term, I would think JBS wants to find a way to fix that.They are driven by efficiency and hauling all purchased cattle to north Texas or Nebraska or Colorado is not the efficient way.There are no real palatable ways of accomplishing a fix, though.I can’t see Tyson or Cargill selling them a plant.For now, at least, National is going great guns so prying even one plant away from them looks unlikely.That leaves building a new plant and I’m not sure even the Batistas have the stomach for that under current conditions.The sad thing is the family was willing to pump hundreds of millions in capital into the U.S. slaughter infrastructure.Now, there are lots of opportunities for the family to consolidate holdings in Brazil, as the packing industry there is suffering greatly and companies are changing hands.So capital that could have been working here to step up the competition in the U.S. may go elsewhere.
Those that said JBS would bring international trade expertise to the table appear to have been right.JBS Swift appears to have stepped through the minefield of the Russian boom and collapse without serious damage and found other places to sell meat.No one seems to question their ability to operate plants efficiently and do it when the supply of cattle is tight.The question is not so much how will JBS do, but how the packing industry in general will do, given tight cattle supplies, the escalating and possibly worsening costs from mCOOL, a slow economy and an uncertain export future with a schizophrenic trade policy from the Obama administration.The entire meat industry infrastructure, from producers to packers, could be booming in two to four years when the global economy recovers and markets open up – if we can preserve enough of that infrastructure.
Q. Let’s talk about the Obama drama. He’s feeling his way around the contentious-as-usual North American trade issues, getting some bumps and bruises from his Canadian and Mexican counterparts. What’s the current condition of the NAFTA agreements and, with the current state of the economy, will the new president prove himself to be a free trade kind of guy or a protectionist?
A. I can’t find anyone in Washington who knows how to answer that last question. Obama’s own inexperience, the circling and backtracking within his own administration and the rabid trade agendas of some of his political allies like labor unions and liberal activist groups are like the energy gathering inside a tropical storm.But no one knows if Obama will pick around at the edges, bleed off some pressure and set up no real trend or suddenly choose a direction and take off.But the start has certainly been inauspicious.
I just attended a NAFTA conference in D.C. and two things are clear: 1) NAFTA has generated a huge amount of trade for all three countries and 2) there are still some things that could be improved to generate even more trade.And while the trade has been great for the U.S., we have more options elsewhere in the world just because of our size and diversity of industry.Canada and Mexico depend more on us and we can’t see them allowing any substantial re-working of the main NAFTA agreement.There may be some playing around with the old side agreements or with some new ones but it may be more semantics than anything else, so Obama can say he did something.Our trading partners around the world have so far played to Obama’s supposed charm but given him very little in substantial accomplishments.They can play the “charming diplomat, give away nothing” game better than he can.Obama may find out his technique of papering over problems with a speech may work even less overseas that it does here.
Q. A few months ago, you were ushered out of a Colorado Independent Cattlegrowers’s Association meeting where you were attempting to cover a speech by R-CALF’s Bill Bullard. We can safely assume you’re on friend Bill’s enemies list. Would you outline your points of disagreement with him that led to your banishment?
A. Mr. Bullard never even started his presentation while I was there.My memory tells me he was there to talk about trade so I wanted to hear what he had to say.R-CALF often interprets facts differently than AFF does.R-CALF also has a tendency to leave certain facts out of their arguments or cite irrelevant ones.Evidently, they don’t like us pointing out those differences.My guess is he was going to give a presentation similar to the one later posted on their website.Those positions in rather lengthy detail were analyzed pretty well by Nevil Speer and myself in the current issue of CALF News Cattle Feeder.We’ll also cover them in upcoming AFF Sentinel issues.
R-CALF opposes trade and goes to far ranging limits to try to justify that position without treading on dangerous ground – that it costs cattlemen money not to import and export.
R-CALF opposes free market solutions to food production chain issues.It prefers to limit the operating and marketing options of all sectors of the food production chain.It sides with the left-leaning, big government solutions to any problem the industry has.It prefers political solutions to economic problems.It would prefer to keep the production segment of the business as much like the past as possible while telling all the rest of the industry what it should be doing – or forcing them to do so through legislation or regulation.It really doesn’t want economics to make decisions – that is consumers voting with their dollars.It wants themselves or the government to be making the decisions for everyone.It sees nothing but ill coming out of all sectors of this industry working together to satisfy the consumer and we see nothing else but such coordination allowing the meat industry to survive
Q. At the risk of being trite, would you spend a few minutes ‘pointing with pride’and ‘viewing with alarm?’ What do you see as the most important issues – good and bad - shaping the cattle industry?
A. For the last 20 years, I have lived strictly out of the retail meat case vs. custom aged and cut beef from my freezer.The quality and consistency of our retail product has improved immensely.Consumers have more options at the case, from commodity to natural to branded, and it all tastes better more of the time than ever before.The innovators in all sectors of our business have done great work so far.
But we have new generations coming on the scene.They eat, think, live and shop differently. They have concepts of “good” and “bad” food built in.They have a large store of “everybody knows” knowledge – mostly false information -- in their data reference bank.We need to address those changes quickly.And these generations are not reached with the same messages or through the same channels.Ask the Republican Party or today’s retail market experts about that.
I think AFF is part of a newer generation of producers who realize that political involvement will be key to the survival of any industry in today’s world.Everyone in today’s society seems to have some cause or interest that affects us, be it food, nutrition and health, animal welfare, antibiotic and technology use, genetic technology, environmental factors, private property rights, trade, labor, energy, you name it.
We think our livestock trade groups have done well by the industry in the past and prepared us for the new scene.We think AFF has done, and is doing, an important part in putting the facts and rational analysis out in front of the industry and policymakers to use in forming opinions and making decisions.We have received kudos and thanks from many, many industry folks and earned acknowledgement of our impact from government officials.
The beef industry has come a long way on the basis of great flavor and general good will from the public.We can’t rely on those factors to carry us in the future without a lot of additional help.
Q. Thousands of people read Cattlenetwork. What would you like to say to them?
A. The forces allied against us are formidable, as the above has shown.You can view your contributions of time and money to addressing these issues as optional and voluntary or you can view them as an absolute necessity in the offense/defense we think animal agriculture needs to survive in the future.Keeping yourself apprised of the issues is alone a formidable task, especially in the current political environment.But we urge you to get involved.
My word, if you can’t find anything to motivate yourself in any of the above, you must be dead.Spend some time helping find solutions.Contact your Congressional members, their staffs and relevant government agencies.Regardless of what some would have you believe, we do not have a God-given guarantee to exist as livestock producers involved in harvesting meat and milk from animals.We will have to defend our industry more in the future than ever in the past.Please consider it part of your professional life to get involved.And if you want to help AFF work on these issues, give us a yell.