Ag Journal: High hopes for reform as R-CALF convenes
Cody Jolly, a rancher from Hugo, president of the Colorado Independent Cattle Growers Association and R-CALF member, believes cheap imports are undercutting American ranchers. He’s concerned cattle prices raen’t keeping up with escalating feed and production costs.
[Photo Candace Krebs]
by Candace Krebs, Contributing Writer | Aug 22, 2018
Ranchers from Colorado and surrounding states are in Rapid City, S.D., this weekend for R-CALF USA’s 19th annual convention, buoyed by success intervening in beef check-off collections in Montana and by a presidential administration that wants to put America first in international trade negotiations.
“This is the first president in 25 or 30 years who understands that we aren’t benefiting from these trade deals that have given us a $500 billion trade deficit,” said Gerald Schreiber, of Woodrow, Colorado’s regional representative on the R-CALF board.
This year’s convention theme was inspired by a donated heifer calf that was severely injured by a predator, managed to survive and sold 16 months later at a rollover auction in Oakley, Kan., raising $18,000 for the organization. The calf’s miraculous tale inspired the convention theme, “against all odds.”
Likewise, as a minority voice in agriculture, R-CALF has managed to rattle the foundations of the industry by lodging a crippling legal blow against beef check-off operations in Montana.
A court injunction, upheld on appeal in April, now requires the Montana Beef Council to seek permission from each producer individually to retain half the money the state collects through the one-dollar-per-head check-off. Unless the producer signs a consent form, the entire dollar is being sent directly to the Cattlemen’s Beef Board to be allocated at the national level.
In their latest chess move, R-CALF asked the U.S. District Judge in Montana to extend the injunction to 13 additional beef councils, including those in Kansas, Nebraska and Texas. Those three councils together account for more than a third of the state collections remitted to the Beef Board in 2017, or around $12 million dollars.
R-CALF argues cattle producers’ free speech rights are infringed when they are compelled to pay for private speech that they don’t agree with and can’t influence and that federal oversight of what essentially constitutes a tax has been inadequate.
Earlier this year, R-CALF also backed an amendment to the farm bill that would have prohibited any agricultural commodity check-off from contracting with a producer organization, although the measure failed to make it into the final legislation.
Trade policy is the big dividing line that has riled up R-CALF members for years.
“All we ever hear from the biggest representatives of our business is that exports are our salvation. But that’s only half of the equation,” Schreiber said. “Exports do help the American producer, but you also have to factor in how much imported beef is coming in. Almost 20 percent of the supply of beef in this country is coming from abroad, and that’s a big influence on our domestic markets. I think we have to look at net figures.”
“If our industry was truly healthy, we would have a growing domestic cowherd,” he added. “These agreements have clearly favored other countries that can produce beef cheaper than we can.”
Take NAFTA. Under the 24-year deal, the U.S. runs a $32 billion trade deficit with Canada and Mexico, he said.
“They are big trading partners for us, but if you aren’t cutting black ink at the end of the equation, then how good is it,” he said.
The Trump Administration has signaled a preference for bilateral agreements rather than sweeping multilateral deals, another shift welcomed by R-CALF members.
“We’ve never been enamored with the World Trade Organization, because it secedes our American sovereignty,” Schreiber said. “Case in point: we lost mandatory country of origin labeling because two of our trading partners, Canada and Mexico, objected. We’d won at least four court cases in the U.S. under our constitution and yet that was thrown out and we were forced to go to an international body for arbitration.”
Schreiber acknowledged Trump has so far failed to produce any new bi-lateral trade deals. “We do need to start finalizing some agreements,” he said. “Talk is cheap, but you have to get results.”
Another disappointment has been Trump’s reluctance to crack down on monopolies in agriculture, he said. While Trump’s Justice Department has challenged some large technology mergers, the agency allowed Brazilian meatpacker Marfrig to purchase National Beef and Bayer to acquire Monsanto.
“We have to rejuvenate anti-trust enforcement in this country somehow,” Schreiber said. “But we can’t get anybody to carry the ball at the federal level. That’s an issue we will be talking about at our convention.”
As for the check-off, Schreiber said his biggest bone of contention is the failure to differentiate U.S. beef.
“I voted for it when we originally brought it in,” he said. “I think most people in the business thought we had to do something to stimulate demand and promote our product. But the downside is we didn’t realize we would be advertising imports.”
“As a third generation Colorado beef producer —and this goes back to President Trump’s agenda too — it’s about buying American beef, supporting the American producer and companies and communities first. If the check-off did that, I would feel a lot better about it,” he added.
Cody Jolly, a rancher from Hugo and president of the Colorado Independent Cattle Growers Association, R-CALF’s state affiliate in Colorado, said his group’s push for check-off reform is often misconstrued.
“People think R-CALF and CICA are anti-check-off, and that’s maybe a misnomer,” Jolly said. “It’s just that we don’t like how our dollars are being used. We’d rather have it promoting our own product.”
He also suggested too much check-off funding has gone to producer promotion, through industry trade publications and country radio stations, instead of consumer-facing ads and campaigns.
“I do think we need to come up with new beef cuts and items that are quicker and easier to fix. I think those are good things,” he said.
While cattle markets have proven relatively resilient over the past year, Schreiber and Jolly both think the cattle market could be stronger.
“It’s tough right now, especially for young farmers and ranchers who are struggling to make it work,” Jolly said. “You can’t be down in the dumps about it all the time, but whenever cattle prices go down, our input costs definitely don’t.”
High production costs and competition from cheap imports also fuels the group’s opposition to the Roundtable for Sustainable Beef, an industry-wide self-improvement effort.
“We have all these standards pushed on us, but what guarantees this imported product we’re getting is following the same protocol?” Jolly asked. “They are forcing all these stipulations on us and then bringing in a cheaper imported product that I guarantee you does not have things like a veterinary feed directive to follow.”
“Right now a lot of guys are getting premiums for third party verification,” he added. “If everybody does it, those premiums go away. Then what will our incentive be?”