Social media is buzzing with a handful of videos featuring a popular, conservative news host interviewing the spokesman of a cattle organization in an effort to “make the American ranch community great again.”
Tomi Lahren, a television host for the cable network TheBlaze, hosted Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America (R-CALF USA) CEO Bill Bullard on her program to discuss issues important to American beef producers. An initial 15-minute interview netted more than a half million views, while a shorter wrap up called “Final Thoughts with Tomi” has almost 2.6 million views.
The two talked about the increasing market consolidation within the beef industry in the first segment.
“We’re down to about 729,000 producers. Those hundreds of thousands of producers, however, market into one of the most highly concentrated marketing systems in our economy,” Bullard says.
He points out that the “meat cartel” – JBS, Tyson Foods, Cargill and National Beef – controls 85% of the market place.
“Those packers are working to suppress free competition in the industry which is lowering prices below what a competitive market would dictate,” Bullard says.
Bullard alleges this has forced beef producers out of business and those still in the industry lost 60% of the income they were making two years ago.
Lahren jumps on this by saying the meat packers are keeping the little guy down.
“The American cowboy and cattlemen have never had it easy, but these last two years have been brutal. The cost to operate has gone up while the cost of cattle has gone down, a lot,” Lahren says in her “Final Thoughts” video.
Missing from those talking points was a more complete analysis of the full story of what caused the drop in prices for cattle raisers the past two years. In 2014, cattle were bringing record prices almost week after week. It was fueled by an undersupply of finished cattle after drought throughout the country forced herds to cull cows and hold back fewer replacements. There was also less competition from pork and poultry as those industries dealt with disease outbreaks. Those markets reversed in 2015 and prices are coming back to more realistic levels seen in 2013.
The topic then shifts to trade and country of origin labeling (COOL).
Bullard says without COOL meat packers can source live cattle and beef from 20 different countries then sell it with a U.S. inspection sticker. This claim is partially true in regards to the sticker. However, according to USDA’s Food Safety and Inspection Service (FSIS) regulations, consumer ready packaging “must still bear the foreign country of origin.” It just can’t have the breakdown of where the animal was born, raised and harvested as originally mandated.
Bullard believes consumers are being deceived. “The meat packers don’t want consumers to know they are able to source the beef far cheaper in these foreign countries, bring it into the United States and sell it as if it was a domestic product.”
Economic studies determined COOL would have cost cattle raisers money, rather than generating more profit. An economic analysis from Kansas State University and the University of Missouri estimated that 2009’s COOL rule would cost the U.S. beef industry $405 million in the first year. In a long-term 10 year outlook the beef industry stood to lose $8.07 billion.
Lahren addresses COOL in her “Final Thoughts” asking viewers for help because Congress repealed the rule in 2015.
COOL was found to be out of compliance by the World Trade Organization opening up the U.S. to billions of dollars in retaliatory tariffs from Mexico and Canada. Both Canada and Mexico annually rank as top five destinations for U.S. beef exports, so COOL would have negatively impacted beef trade.
Beef can still be voluntarily labeled with a country of origin; it just can’t be mandated by the government.
“Where is your meat coming from? Do you know?,” she asks.
Lahren answers saying consumer beef is coming from cattle, “transported in crates for God only knows how long. Animal lovers, that means live cattle are smashed into shipping containers, and shipped into this country to be slaughtered for a discount rate.”
This is a major inaccuracy and it appears Lahren doesn’t understand the nuances of the global beef market after speaking with Bullard.
Cattle transported in shipping containers as Lahren incorrectly describes, happens only with U.S. breeding stock leaving for other countries, or weaned 400-500 lb. calves leaving Hawaii for the Mainland U.S. The overwhelming majority of cattle imported into the U.S. arrive from Mexico and Canada via a truck and trailer.
According to USDA’s latest data, from Jan.-Oct. 2016, approximately 1.35 million cattle were imported to the U.S. from Canada and Mexico. More than 476,000 of those cattle were between 400-700 lb. and will be fed to finish in U.S. feedlots. Canada sent 452,030 slaughter ready cattle, while Mexico sent just 2,016 head destined directly to packers.
Compared to the same time period in 2015 live cattle imports are down 19% overall.
Beef imports are also down in the U.S., while exports went up. From Jan.-Oct. 2016 slightly more than 2.6 billion lb. of beef came into the country, a drop of 13% since the same period in 2015. Exports rose 9% in that time to more than 2 billion lb.
Much of the beef imported into the U.S. is grinding meat used in hamburger. Beef exported from the U.S. tends to be well-marbled middle meats that demand a higher price, and offal cuts domestic consumers don’t eat. According to CattleFax, exports account for $300 in beef cutout value.
These were just a few of the facts and figures that were missed in this discussion on the beef industry. Other claims like the safety of imported beef, the impact of the Grain Inspection, Packers & Stockyards Administration (GIPSA) and industry lobbying are just a few areas that could have used additional voices from the industry.