November 14, 2016
By Stephen Lee stephen.lee
About 160 people filled most of the seats in the Fort Pierre Livestock Auction sales barn on Sunday, not to deal cattle but to organize ways to protect their end of the industry.
They came to hear Bill Bullard.
He’s CEO of R-CALF USA, the Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America. It’s based in Billings, Montana, but has members in 46 states and promotes the interests of cattle producers.
In an hour-long, fast-paced, powerful presentation, Bullard told the crowd that consolidation in the packing plant industry and unfair free trade deals with countries competing in cattle raising, such as Brazil and Canada, are to blame for plummeting prices the past two years.
While U.S officials, including U.S. Sec. of Agriculture Tom Vilsack, tout the fact that U.S. ag exports, including beef, have set records the past seven years, that’s deceptive, Bullard said.
At the same time, imports of foreign beef into the United States have far outstripped exports of U.S. beef, pressuring prices down to ranchers selling their calves in the fall of South Dakota pastures. Bullard said.
President-elect Donald Trump, was part of the discussion Sunday.
Bullard said U.S. trade policy in the past 20 years or more has been “stupid trade,” not smart trade or free trade. It opens U.S. markets to beef produced in third-world countries that raise it for much lower costs, hurting U.S. ranchers, Bullard said.
But with the new administration of Donald Trump,who has criticized free trade agreements, being assembled, there is “a window of opportunity,” to foment changes in federal policies affecting the cattle industry, Bullard said.
Bryan Hanson, an owner of Fort Pierre Livestock, is president of R-CALF USA and opened the special meeting on Sunday. Similar meetings were held at other sales barns last week and more will be held this week across the state.
Hanson told the crowd that R-CALF USA and the sales barn generally avoids party politics.
“But it appears the new administration coming in . . . is as favorable to the cattle industry as we have seen in a long, long time,” Hanson said.
Trump’s criticism of free trade agreements, saying they hurt U.S. industries and employment, lines up well with R-CALF USA’s concerns, Hanson told the Capital Journal.
“We definitely think that it’s the free trade agreements that killed us,” Hanson said. “They basically opened up our market to imports of beef from third-world countries where they can operate on shoestring budgets,” Hanson said.
Brazill’s cowboys, for example, get paid the equivalent of a dollar a day, Hanson said. That makes it impossible for U.S. ranchers to compete with such low costs of production as more Brazilian beef is coming into the U.S. market, Hanson said.
“Our taxes are higher than their whole input costs.”
Kenny Fox, a Belvidere, South Dakota rancher who is a leader in R-CALF USA, told the group that a cattle industry official told him “he could sell their ideas to Donald Trump.”
Those attending the meeting asked several questions about how Trump views the cattle industry.
The immediate motivation that brought so many cattle producers to a Sunday meeting at a sales barn when the auction ring was empty of cattle, was the big price swoon the past two years.
At the main fall calf sale on Friday at the Fort Pierre Livestock Auction, about 3,500 steers and heifers born last spring, mostly, were sold. It was lower than the 10,000 head sold a week earlier and the 9,000 expected this coming Friday, Bryan Hanson said.
“I think because of the (presidential) election, a lot of people didn’t bring their calves, expecting prices to be lower,” he said.
Actually prices were up for the second week in a row, with the benchmark 550-pound steer bringing about $1.45 a pound. That’s a dime or two better than earlier this fall. But it’s about half the price such calves were bringing in the fall of 2014. So prices have fallen 50 percent in those two years, to cattle producers.
But the $3 per pound prices seen two years ago also was a record, extension cattle market experts say.
But it’s still a concern, as the big crowd showed.
“A lot of people were interested to see what they can do to try to help our cattle market,” Hanson told the Capital Journal. “It’s definitely under siege, with these multi-national corporations that have taken over the agencies that regulate our business.”
Bullard told the crowd that only four companies do 85 percent of all the cattle slaughter and beef processing in the United States and collude to keep prices paid to cattle producers low.
Even though cattle prices have fallen drastically the past two years, retail beef prices at supermarkets have not declined that much, said Delia Johnson.
“That’ might be something in our corner,” Johnson told the Capital Journal. She meant that meant that non-ranchers who eat beef might join in the cause of R-CALF when they see that retail beef prices on the supermarket shelf haven’t fallen as much as cattle prices have, said Johnson, who with her husband, Dean, drove over Sunday from their ranch near Fairburn, east of Rapid City.
“Why have our prices fallen 50 percent the past two years,” she said of prices for beef calves. “Beef should be cheaper at the food counter than it is.”
The Johnsons are attuned to beef consumers. They raise grass-fed calves, eschewing heavy grain diets for them, or antibiotics. They keep their calves for a year after they are born, selling them in June, getting some premium prices for the special product, usually.
Consumers want more information about where food comes from, Johnson said. And that fits with R-CALF’s push to restore a strict “Country Of Origin Labeling” (COOL) law, Johnson said. That would give U.S. cattle producers a leg up in selling beef because a lot of beef sold in the United States comes from other countries, she said.
Bullard said the cattle producers in South Dakota are the last of a breed, still individual operations raising their own cattle, selliing them at local cash markets such as Fort Pierre Livestock Auction.
In the past 40 years, the poultry, pork and sheep markets all have changed, from competition from foreign producers and huge corporations taking over production, Bullard said. The cattle industry could see the same changes if producers don’t join together to stop it, Bullard said.
“You are the last frontier.”