I can think of few things more exciting and, at the same time, more frustrating than being elected to head up the National Cattlemen’s Beef Association. Seems like most of the past presidents I’ve talked with start off their term with unbounded enthusiasm. Toward the end of their year at the top, though, they spend more time scratching their heads and wondering what the h*^l is going on?
It’s the nature of things. NCBA’s presidents are at the center of cattle industry history and they are in a perfect position to help change things for the better. They are quick to identify the problems we face, roll up their sleeves and start to work. Fixing problems, after all, is the main part of their regular job so they’re pretty good at it. Reacting quickly and developing common-sense solutions that attract a general consensus is their stock-in-trade.
But, too often, American animal agriculture seems like an international game of whack-a-mole; knock down one problem and two more pop up. It’s a tribute to farming and ranching that so many men and women in ag are willing to pick up that big sledge hammer and keep swinging away at first one issue and then another.
Scott George is the latest ‘John Henry’ to pick up the hammer and he comes from a long line of battle-tested people. No doubt he will be adept at whacking those moles and keeping the Association moving forward. I asked him a few questions about his plans and the critical issues that he sees as ‘up first’ during his term in office. What I got was an interesting blue print of the future of the cattle industry.
Q. You are a Wyoming cattleman and dairyman who says the two are very similar. Tell me about your ranch and how it has developed over the years.
A. My parents homesteaded on a tract of land located between Cody and Powell, Wyoming in 1947. At the time, an irrigation system had been previously built, and the government was interested in seeing that land be put into production. Located in the midst of the homestead land was a World War 2 Japanese Relocation Camp. Each of the homesteaders was given two 20’ X 120’ buildings for their use.
My parents literally had to start from scratch, clearing the sage brush from the land; digging ditches and a well; and building their home and barns from those relocation buildings. After struggling for several years to make a go of it by simply farming, they decided to purchase a few milk cows to help supplement their income. We have been milking cows ever since.
Today three of their eight children, me, Lynn, and Arley, continue to operate the original homestead plus additional owned and rented acreage. We also have 5 nephews who have returned to the operation.
We currently are milking 550 cows twice daily. We have a beef cow/calf operation of around 100 head. We raise all our replacement heifers for both herds. We raise and sell breeding dairy bulls; and most of our steer calves to about 700 – 900 lbs. We farm 2,500 acres raising alfalfa hay; corn silage; corn grain; some barley, and also have 4 farms divided into rotational grazing plots. Cattle are our entire livelihood. And all cattle, irrespective of their breeding, are part of the nation’s beef supply.
Q. The incoming NCBA president always faces a mountain of issues five seconds after he accepts the gavel. Which do you see as the most critical in the coming year (and why)?
A. All NCBA presidents do face challenges as they represent the cattle producers of the nation. It is the very nature of the job. As always, the president takes his cues from the membership. They have identified five major issues that we will be focusing on, plus other issues as they arise. Our top five concerns are:
- Getting an effective farm bill passed. Congress only passed an extension of the 2008 Farm Bill through September 30, 2013, so we need a new one this year. With the recent comments by Secretary Vilsack stating that perhaps agriculture has become irrelevant, we see this as a top priority. With less than 2% of our nation’s population being involved in agriculture production, and a smaller subset of that group being cattle/beef producers, we don’t have a very large voice.
Stand-alone bills to support certain agriculture practices would become very difficult to get passed. So we see the need to keep a farm bill that includes conservation programs such as EQUIP; disaster insurance programs; and agriculture research programs as critical to helping our producers stay in business.
- Limiting the EPA’s attempt to expand their authority under the Clean Water Act. The EPA is in the process of attempting through guidance documents to circumvent congress’s charge to enforce the Clean Water Act. Currently the EPA is charged with overseeing all “navigable waters of the United States”. They are attempting to remove the word “navigable”, which would allow them to oversee “all waters” of the US.
This could mean that agriculture producers may have to obtain permits to dig ditches; clean ponds; repair small stream banks; or even put in water tanks. Water in borrow ditches and puddles could even come under scrutiny. This would threaten not only all agriculture producers, but every city, county, and state.
- Border security and Immigration Reform. Do you realize that there are parts of our border with Mexico that are federal lands, and that border patrol agents and local law enforcement are prohibited by our own Federal Government from using motorized vehicles to patrol? Those lands have become basically highways for drug smugglers and illegal aliens to use to illegally enter this country.
Those lands open onto farm and ranch land where our own US citizens are increasingly being threatened, and their property being destroyed; damaged; or stolen. This needs to be stopped.
Once we secure our borders, we recognize that there needs to be a more workable “year round” worker program instituted so that those folks who want to come to the US to work could do so legally. Some of agriculture relies on “seasonal” workers”, and there is the H2A program for that. But parts of agriculture, many in the cattle sector, need workers who could work “year round” for a limited number of years. If we had a legal system that would allow this, perhaps we could then remove the need for those same workers to enter the country illegally.
- Trade Expansion: Last year we were very fortunate to finally get passed and implemented free trade agreements with South Korea, Columbia, and Panama. We have also just recently seen Japan move their acceptance of beef products from cattle 20 months of age to 30. These agreements will allow opportunities to export more US produced beef.
Currently, Cattle Fax estimates that exports are adding $240 to every animal coming out of our feed yards. With many feeders today losing money due to record high feed prices, and record high feeder cattle prices, it is imperative that we keep working to expand access for our products. This affects all segments of the beef community.
If the exporters; processors; and feeders do not turn a profit, they will begin backing off the price they pay. This comes home even to the cow/calf, stocker, and even dairy producers who are the end of the supply chain! We need a strong export market, as well as a strong domestic market.
- Reauthorization of the Animal Drug User Fee Act (ADUFA): Many producers may not even be aware of this act, and its importance to them. Pharmaceutical companies work for years to develop new RX products for cattle use. The USDA requires extensive paperwork to validate all their work and all this paper work must be reviewed by the government. But the FDA cannot hire sufficient personnel to facilitate this review process. Thus the paperwork languishes for extended periods of time, delaying the offering of these new products to the producers.
ADUFA allows the drug companies to pay a fee to FDA in order to get their products reviewed, approved and out in the market. This is a great program that we support and it helps facilitate the approval of new veterinary drugs. Each time this act is reauthorized (every 5 years) we see attacks from the activist community that wants to take antibiotics away from us. ADUFA must be reauthorized by September 30, 2013. So we will spend most of the spring with Beef 101s to educate congressional staff on this issue and then push for a clean reauthorization of the act.
And we do not want to rest on our Laurels with these successes. We continue to work to find a fix to the recent nonscientific Russian ban; get passage of the Trans Pacific Partnership; and gain access to the market in China. Our efforts will also be focused on getting an acceptable solution to Country of Origin so that we can continue to have good trade with Canada and Mexico.
Q. Lets try to talk politics without getting anyone too riled up. What effect will sequestration have on the beef community?
Sequestration is taking on many forms as to how it will affect beef producers. Originally Secretary Vilsack announced that USDA would furlough Food Safety Inspection Service employees (federal inspectors) for 15 days in an effort to “save” money. As more details became available, it was announced that starting in July, all FSIS inspectors would be furloughed for 1 day each week thru September.
Under the Federal Meat Inspection Act, the Poultry Products Inspection Act and the Egg Products Inspection Act the production, processing or interstate distribution of meat, poultry and egg products is prohibited absent federal inspection. This move would have impacted approximately 6,290 establishments nationwide and the agency estimates the move would have cost over $10 billion in production losses. Because the plants would have been forced to stop production, it is estimated that industry workers would have experience over $400 million in lost wages. USDA inspectors are required for import inspection as well. So the potential end result was that consumers could have experience limited meat and poultry supplies and potentially higher prices, and food safety could have been compromised.
Fortunately, this action was stopped when Senators Roy Blunt of Missouri and Mark Pryor of Arkansas proposed an amendment to the recent “continuing resolution” discussion that would shift $55 million from the USDA accounts to pay Food Safety Inspection Service (FSIS) inspectors through Oct. 1, 2013, when the new fiscal year begins. Both the House and the Senate approved the amendment.
That bill now heads to the President’s desk for his signature. This is great news for every segment of American agriculture. With this shift of finances, Congress was able to avoid the crisis created by the administration and keep FSIS inspectors in the plants where they belong.
But that is not the end of sequestration’s pain to the beef industry. It has now been announced that the USDA will require farmers to pay back $151 million under the sequester and will get that money mostly by reducing the direct payments that crop farmers get whether prices are high or low. The agency will require farmers to pay back money they have received under the Milk Income Loss Contract Program, the Supplemental Revenue Assistance Payments program known as SURE and the Noninsured Crop Disaster Assistance program. Secretary Vilsack said that about 350,000 producers will be asked to pay back small amounts of money. But since more than 90% of them get direct payments, the agency will simply reduce those payments rather than send the farmers notices to pay the money back to USDA. Details are still sketchy at this time, but this action will impact cattle producers.
And the USDA’s National Agricultural Statistics Service (NASS) announced it is suspending a number of statistical surveys and reports for the remained of the fiscal year due to reduced funding caused by sequestration. These reports are used by producers and investors alike, and their loss could affect the futures market trading.
Where will sequestration strike next? Only time will answer that question.
Q. A few weeks ago USDA Secretary Tom Vilsack expressed a concern that farming, specifically rural America, was in danger of becoming less politically relevant. He suggested greater outreach might help. Was he right about rural America's place at the political table?
A. Many people forget that while there is a very small segment of the population (less than 2%) engaged in food production, 100% of the population is involved in agriculture about 3 times a day…every time they sit down to eat! We in this country would do well to look to the example set by Europe. Europe used to be the bread basket of that part of the world. But because there have been so many regulations, and restrictions placed on their producers, Europe is no longer able to even feed themselves. They now compete with the poor countries of the world for a dwindling food supply! They have the technology, resources, and ability to feed themselves, but choose not to. Is this socially responsible?
We in the United States need to recognize that we are blessed with an abundant, safe, and affordable food supply thanks to the efforts of rural American farmers and ranchers. The agriculture community does need to speak up! We need to spread the word about the great job that we enjoy doing every day, and the great benefit it is to our citizenry. And it is not just the food we provide. We also protect the open spaces of the country, provide great habitat for wild life, and grow crops that help sequester carbon. We care about the animals we are responsible for. We need to open our doors, and welcome our urban neighbors to witness, firsthand, what and how we produce this food.
Q. High cattle prices, historically low herd size - we're hearing a lot about those two facts. The herd size seems to be largely controlled by one of the worst droughts since the Dust Bowl of the 1930's. Good prices for cattle are always an incentive to rebuild but we're seeing an aging population among ranchers who might not want to take the risk, especially if the drought continues for much longer. Looking forward, will we enter a rebuilding stage soon or are we looking at a 'new normal'?
A. I wish I had a crystal ball to help answer this question. But I do not. Recent information by Cattle Fax indicates that we are seeing a slight upward tick in retained heifers, which would indicate that some producers are trying to rebuild their cow herd. But drought continues to pressure others to sell down. It is difficult to be optimistic in light of the drought which has limited grass for the cow/calf operator, and caused feed prices for the feeder to reach new highs. But those involved in agriculture are eternal optimists! We continue to hope for an easing of the drought, and easing of feed prices. The economic signals to rebuild are in place - record high calf and feeder prices. We can only hope and pray that needed moisture will come; that young producers will see the opportunity and reach to embrace the lifestyle of cattle rearing; and that aging producers will take an interest in helping new producers get a start. And we at NCBA will continue to try to help all, both young and old alike, to be successful in their business endeavors.
Q. Let's end this interview on a high note or two. Tell me a few things about the future of this industry that should get a cattleman excited every morning.
A. Spring is around the corner! Cows are giving birth to bright, new calves! Consumers in the U.S. and around the world continue to desire the beef we produce. The sun comes up each day, and we in the cattle/beef business have an opportunity to once again enjoy this tremendous lifestyle with its attendant challenges, and rewards. We thrive on the opportunity. We revel in the great outdoors; the beauty of nature we experience each day; and the opportunity to work alongside our families. Everyone in the world faces challenges, but few get to enjoy life like we, cattle producers, do! Remember to be thankful, and be happy!
The opinions expressed in this commentary are solely those of Chuck Jolley, a veteran food-industry journalist and commentator.