Cattle politics threatened by packing industry – Bismark Tribune
Bismarck Tribune
December 16, 2014 7:00 pm • By Lauren Donovan
Cattle politics threatened by packing industry
Bill Bullard, of Ranchers Cattlemen Action Legal Fund, a cattlemen’s activist group, says beef growers need to guard against what he calls "chickenization" of the cattle industry.
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RICHARDTON — Growers don’t let your beef cows turn into chickens.
That was the basic message from Bill Bullard, director of Ranchers Cattlemen Action Legal Fund, a beef growers’ activist organization, at meetings around the region.
Bullard stopped Thursday at Richardton, where about 15 growers gathered in the American Legion Hall to talk cattle politics.
Bullard, who talks faster than the bullets on his PowerPoint presentation, said "chickenization" is the major threat to the beef industry, the country’s largest agricultural sector with 730,000 operators.
He said the top end of the industry is shrinking with 40,000 fewer feedlots than 15 years ago, less than 100 slaughter plants compared to 500 in years past and four major packers that process 85 percent of all beef. He said the beef industry is in danger of becoming this generation’s chicken industry as competition is squeezed out of the supply-and-distribution chain.
"It’s the road to chickenization — loss of independence is what happened to chicken and hog producers," Bullard said. "They want full control of the cattle supply market."
Contracting cattle
One way packers take control is by coaxing the cattle feeder out of the cash market into the contract market and Bullard said cash sales out of feedlots were only one-quarter of sales in 2013, compared to half of sales in 2005.
He said Country of Origin Labeling is needed to promote competition, especially from imported cattle, by allowing consumers to distinguish USA beef in the grocery store cooler.
Chester Brandt, of Hebron, said it’s important to give consumers a choice — especially with prices so high.
"We want to give them the option of picking a product that we produced that’s the best in all the world," Brandt said. "People do care; they do want to know where their meat comes from."
Bullard said he expects cattle prices, now at record highs, will remain at these levels for another two to three years. He said there are fewer than 29 million mother cows in the nation, the lowest number in seven years, resulting in the tightest supply in seven years.
"Along with steady consumption, there’s a serious imbalance that’s driving prices up," he said.
While Bullard said he does not give advice to cattlemen, he is breaking that silence.
"I’m telling operators don’t buy that yacht. This income means operators can recover from years of loss based on the real costs of production, but do not expect these prices to last for perpetuity," said Bullard, pointing out that the supply side will recover and imported cattle will remain a threat.
He said a new USDA rule could expand Argentinan and Brazilian imports, from basically one region in each country, to the entire countries’ production, vastly changing the dynamics of available beef.
Cattlemen shouldn’t buy a yacht, but Bullard does have suggestions for how to spend this fall’s cattle check.
"Now’s the time to make investments in their operations that they weren’t able to make before," said Bullard, whose appearance was sponsored by IBAND, the Independent Beef Association of North Dakota.
Reach reporter Lauren Donovan at 701-220-5511 or lauren.
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