Farmers and ranchers from across the country converge on Fort Collins today for a rare opportunity to meet with top federal officials and air long-standing concerns over the state of the country’s beef business.
Attorney General Eric Holder and Agriculture Secretary Tom Vilsack are hosting a day-long public meeting at Colorado State University — the fourth of five workshops around the country — to discuss competition in the cattle industry, a contentious issue that has divided Colorado’s 12,000 cattle producers.
To drum up support for reform, Bill Bullard, president of Montana’s Ranchers-Cattlemen Action Legal Fund, or R-CALF, has spent months crossing the country prodding small-town residents to make the trip to Fort Collins.
Bullard said he hopes today’s attendance hits 25,000. But while Fort Collins hotels are expecting a spike in overnight visitors, only 1,300 people have registered for the workshop, said Tyler James of the Fort Collins Convention and Visitors Bureau.
Cattlemen nationwide agree that business is down. But the reasons behind the declining number of cattle producers, dwindling profits and smaller domestic herds have divided the industry. Such opposing views will take center stage today.
One camp will argue for more government help in reversing what they see as a monopolistic takeover of the cattle industry. Those ranchers say the four cattle-market giants — JBS of Brazil, Tyson Foods, Cargill and National Beef — have forced 40 percent of the nation’s cattle producers out of business since 1980.
The industry needs government to act as a “referee” and restore fairness and profitability to the market, said Gerald Schreiber, who raises cattle on land near Last Chance that his grandfather homesteaded 100 years ago.
“We’ve got to have some reversal because we’ve had a hollowing-out of rural America,” Schreiber said. “There are fears in the beef business that we are on the precipice of significant structural change.”
The other side argues that increased regulation could further injure cattle producers already pinched by a variety of factors that do not include corporate consolidation.
“Losing their voice”
Both sides are hoping to tip the scales as U.S. Department of Agriculture officials consider new rules proposed by the Grain Inspection, Packers & Stockyards Administration, or GIPSA. Those proposed regulations were designed to bolster industry competition by requiring big meatpackers to explain contracted prices they pay for cattle. The rules also give smaller producers more opportunity to contest potentially unfair pricing strategies by those big companies.
Deals between large packers and producers have pushed producer profits to record lows, about 46 cents for every dollar spent on beef, said Mike Callicrate, a Kansas rancher and entrepreneur who sells his beef through his direct-to-consumer Farm Fresh Meats, near Colorado Springs.
“The independent producers are losing their voice. There are so few people left in agriculture today that we are essentially not represented, but that does not make us any less important to this country,” Callicrate said.
Callicrate’s perspective is not shared by all cattlemen. Stephen Koontz, an agricultural economist at CSU, suggests there is no proof large-scale contracts between meatpackers and producers hurt cash-market prices for slaughter-ready cattle .
Instead, he said, several factors are conspiring against smaller cattle producers. Demand for beef is about half what it was in 1980, efficient feeding provides more beef from fewer cows, droughts are spiking the cost of corn feed and banks are limiting credit.
“It’s a long way down that list before you hit packers or even retailers negatively impacting the beef and cattle industry,” he said. So targeting big meatpacking tactics with new regulations may not do much to help an ailing industry, Koontz said, noting it may even add to the pain.
The proposed rules need “more intensive review,” said Robbie LeValley, a Hotchkiss rancher and president of the Colorado Cattlemen’s Association.
She said the vaguely worded rules could hobble Homestead Meats, the cooperative she owns with six other ranching families who sell their cattle directly to consumers.
“We do not need increased government intervention or increased litigation. With those increases, we’ll get increased losses for producers,” LeValley said. “The government shouldn’t get involved in contracts entered into by willing buyers and sellers.”
How the government ends up addressing competition in the beef business will ultimately influence costs at the grocery. Whether that impact moves prices up or down is another point of contention in the industry. Increased costs from more regulatory hurdles could drive prices up. Busting the corporate grip on beef could push prices down. Depends on whom you ask.
“The cost of meat is driven by the fact that you have a near monopoly controlling the meat market,” said Mick McAllister of the Rocky Mountain Farmers Union. “We are feeling this is a consumer issue. It’s great to talk about fairness and whether cattlemen can make a living doing this, but ultimately it does affect the bottom line for everybody. Without small markets being viable markets, there isn’t going to be local food.”
Jason Blevins: 303-954-1374 or jblevins@denverpost.com
Livestock industry workshop
Today: 8:30 a.m.
Site: Main ballroom of the Lory Student Center at Colorado State University in Fort Collins
Key speakers: Attorney General Eric Holder and Agriculture Secretary Tom Vilsack, who are also to participate in a roundtable with Gov. Bill Ritter, U.S. Rep. Betsy Markey, Colorado Attorney General John Suthers, Colorado Commissioner of Agriculture John Stulp and Montana Attorney General Steve Bullock
Registration: justice.gov/atr/public/workshops/ag2010/index.htm#da
