Trump Should End Ag. Dept. Program Hurting U.S. Beef Producers

Trump Should End Ag. Dept. Program Hurting U.S. Beef Producers

President wants to encourage Buy American meat, but this obscure bureaucratic program favors foreign growers

By Bill Bullard | Sunday, August 19, 2018

President Trump signed an executive order last year to Buy American and Hire American. Its purpose is to encourage American consumers to help rebuild America’s economy so our nation can begin producing more of what we consume.

At its heart, the initiative encourages federal agencies to help consumers identify and purchase American-made products.

Running counter to Buy American and Hire American is a major program administered by the U.S. Department of Agriculture that thwarts the initiative by prohibiting the promotion of beef produced exclusively in the United States.

Known as the “National Beef Checkoff Program,” it requires all cattle producers and importers of cattle and beef to pay a $1 per head tax on every head of cattle sold in America.

It raises about $80 million each year. These tax proceeds are then used to promote beef—any beef, regardless of the country where it born, raised, or harvested. In other words, the program is part of a bygone era when America was purposely inviting more imports of goods and encouraging more offshoring of domestic production.

Because the beef checkoff program allows promotion of only generic beef, undifferentiated as to its origin, it empowers multinational meatpackers to source beef from around the world and to sell it to unsuspecting Americans with an attached U.S. inspection sticker—implying that the foreign beef was produced domestically.

As a result, multinational meatpackers are offshoring beef production and their imports are now capturing a greater share of the U.S. beef market, which harms family farmers and ranchers that raise cattle.

This is no small matter. The cattle industry is widely distributed across America and is America’s largest agricultural segment, generating about $70 billion each year. With its widespread distribution and unparalleled revenue generation, the cattle industry is, arguably, the most important economic cornerstone for rural America.

Because of its steel consumption through equipment, machinery, and vehicle purchases, it is vitally important to domestic manufacturers as well.

However, the same year Trump issued his Buy American and Hire American initiative, the Secretary of Agriculture reapportioned the representation on the beef checkoff program based on who controls what market share in the U.S. cattle industry.

Domestic cattle producers lost two representatives and importers gained one. This is proof that undifferentiated imported beef is taking market share away from America’s family farmers and ranchers.

Another indicator of ongoing market-share loss is that imported beef accounted for about 10 percent of U.S. beef supplies in 1985, when the beef checkoff program was implemented.

Today that share has nearly doubled to 18 percent. In an industry where even small changes in supplies have a substantial inverse relationship to domestic cattle prices, the impending harm to America’s cattle farmers and ranchers is clear.

Alarmingly, this market-share loss is facilitated by the agriculture secretary’s insistence that the checkoff program should continue encouraging Americans to eat any beef, regardless of whether it was born, raised, and harvested in Nicaragua, Honduras, Uruguay, Brazil, Mexico, or any one of the 18 countries from which multinational meatpackers now source their beef, or if it was born, raised, and harvested in America.

The U.S. cattle industry has already lost over half a million cattle-producing farmers and ranchers in less than half a lifetime. It’s time to rebuild our cattle industry.

The solution is straightforward: The president must stop taxing America’s cattle producers through a beef checkoff program that prohibits them from promoting beef produced exclusively in the United States of America.

Then, the president must assist cattle producers in distinguishing their exclusively domestic beef with a country-of-origin label, so they can partake in the president’s call to encourage American consumers to begin buying American beef.

Bill Bullard is the CEO of R-CALF USA, a non-profit trade association representing the U.S. cattle industry.