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May 2011 Archive for Out to Pasture

RSS By: Steve Cornett, Beef Today

Read the latest blog from Steve Cornett.

Packers' Congressional “Minions” vs. USDA

May 27, 2011

USDA and APHIS must be wondering where they went wrong. They seemed to have so much momentum.

Yet, somewhere in the halls of USDA lingers a rule that a year ago Secretary Vilsack promised  “would provide significant new protections for producers against unfair, fraudulent or retaliatory practices.”

Yes, I’m talking about the GIPSA rule from last year that touched off a firestorm of protest and counter protest and drew 2,000 producers and union boosters to Colorado for a much-ballyhooed “listening” session featuring two members of President Obama’s cabinet and a not-inconsiderable dose of rhetorical histrionics on both sides and then dropped off the radar.

Yes, the GIPSA rule from last year is baaaack. And it’s apparently in trouble. But who knows where it stands? Certainly not those of us outside USDA. Whatever they’re thinking, they don’t want us to know about it.

What brought it back onto my agenda was the animosity toward the rule expressed recently from the House of Representatives.

First, some 147 House members sent Vilsack a letter asking him to withdraw the rule pending the results of an economic impact statement they had demanded. Then, the agricultural subcommittee of the House appropriations committee included wording in its 2012 budget expressly prohibiting USDA from using any funds to “write, prepare, develop, or publish a final rule or an interim final rule …”

With so many members of Congress so put out with it, USDA has to be wondering how far it can go with the rule. I called and was promised a call back—I’m always promised a call back by a polite receptionist when I call USDA these days—but got none such. I guess I’m not the only one. As one congressional aide told me last week, “if we knew what was going on, we wouldn’t have sent the letter” to Secretary Vilsack.

I’d sure like to know. We have here a most interesting political situation revolving around what and how the government should do about evolving beef industry structure. (It’s not just beef, of course, but that’s all I want to talk about.)

Help me think through what it all means. Here’s how I see the current situation: The industry is divided. While my reading is that most professional cattle producers have doubts about the rule, there is a significant and vocal minority who deem it crucial to their survival. We’ve got a GIPSA headed by a lawyer steeped in the fetid intra-industry relationships of the poultry business, convinced that beef is bound for the same fate if he doesn’t intervene. You’ve got a House Ag committee with bipartisan opposition to his agenda. You’ve got a Congressional majority determined to “slow the growth of government.” So it’s Senate vs. House vs. USDA?

It strikes me as a battle not of wills but of priorities. This is a back burner issue for most of those congressmen. It is anything but for GIPSA and supporters of the proposed rule.

This whole idea of how government should—to the extent it can—try to direct the evolution of agricultural structure just keeps plugging itself into the political dialog. Just last week, a bipartisan group of Senators introduced a new version of their “marketing fairness” bill that would outlaw many of the forward contracts offered by beef packers.

This is all about how two different camps  want to see agriculture develop.

U.S. Rep. Reid Ribble (R-WI) was the lead author of the Congressional letter. "We all agree that transparent and efficient markets benefit producers, processors, retailers and consumers – and I believe that our laws governing market practices should be strictly enforced,” he said. “However, producers I talk with express concerns that this far reaching rule will create economic uncertainty for them and prove highly disruptive to our nation’s livestock sector….While this (GIPSA)  rule was prompted by the 2008 Farm Bill, troublesome provisions go far beyond Congressional intent.”

To whom retorted R-Calf’s Bill Bullard in his usual effort to catch flies with rhetorical vinegar:”The meatpackers have lined up their minions in Congress .…It’s business as usual in Congress – corporate greed trumping the well being of the people.

Bullard has better access to USDA than most of us. He and his volunteer leadership have a lot of history with GIPSA head Dudley Butler. I’m guessing his anger stems from realizing just how much trouble the GIPSA rule has brought on itself. I’m supposing what I’ve heard others suggest: Butler’s higher-ups were blindsided by the reaction of the producers they had been led to believe they were helping.

I don’t know if USDA is really going to do a cost-benefit analysis. I don’t know what it would show if they did, but a lot of people think it would show considerable cost balanced primarily by a benefit of being what some producers think is more “fair” to them.

There are parts of the rule I’d sure support. From the outside, it sounds to me like power in the poultry business is pretty concentrated on the top side. As I’ve argued before, competition from that business model has had far more effect on beef’s four decades of declining demand than anything the packers have done.

If I’m right, all the damage GIPSA can do to poultry processors will help beef’s market. And all the damage done to beef’s marketing efficiency will help poultry continue its long successful assault on beef’s market.

Revisiting Oprah's Beef with Beef

May 24, 2011

One hates to brag on one’s local newspaper, but Chip Chandler did a very nice story http://amarillo.com/news/local-news/2011-05-22/we-cleaned-her-act recounting the Oprah Winfrey mad cow debacle of 1996.

It’s history I suppose. But you still see the occasional bumper sticker around town that says “The only mad cow in America is Oprah.”

At the time of the incident, I was thinking a couple of the smartest cattlemen I’ve ever known had made a mistake in taking on Oprah, who at the time polled as the most respected woman in the world.

Paul Engler apparently disagrees to this day. And he makes some good points.

I remain convinced that the bigger mistake was on the part of Ms. Winfrey and her producers for airing such a biased and --as subsequent history proves—inaccurate show. She bought into a panic and scared her viewers needlessly.

Which is not to say I’d have found her guilty of causing the market crash. That honor goes to the traders. They’re like a herd of baby calves, sniffing up to the pickup just hoping something scares them enough they can throw their tails in the air and start bucking and running. Traders love a stampede. All Oprah did was give them an excuse.

The Conservation Reserve Program's Future

May 16, 2011

One more Peru story: We were with a fishing guide whose folks had a mostly-subsistence farm on the Madre de Dios River. We had lots of questions of him, of course. Finally, he posed some to us.

“Does the government help farmers,” was his general question.

"Well, yes," said one of my friends. "I get direct payments every year on my land."

“So the government pays you to farm in America,” said the young man, his eyebrows raised a bit. "And you," he asked me, “does the government pay you to farm cows?”

"Well, no," I said. But they do pay me not to farm some Conservation Reserve Program acres I bought a few years ago.”

Fishing guides and farm boys ain’t dumb. His eyebrows got higher still.

“So the government pays you to farm,” he said to my friend, “and it pays you not to farm,” he said to me.

He thought about that a while. “That is very interesting,” he said. And then, later still, he asked a question we couldn’t quite answer to his satisfaction: “Why?”

I should be able to answer the guy. I can tell him the history of each part of the farm program. I can explain the justification behind each part. But, now that he asked, my explanation reminds me of an artist trying to get me to understand what he was “saying” with some batch of paint blots holding tissues on a trash can lid. “That is very interesting. But….why?”

What brings that up is the creaking slow efforts to create a 2012 farm bill. It occurs to me I’ve no idea what form it will take. You’ve got the New York Times convinced that our old programs have created a system that makes people fat, wastes energy, fouls the air and water and drives small producers out of the business.  You’ve got a Tea Party with an anti-spending soul. And an Administration that likes to be perceived as populist on rural issues.

But, you also have the farm lobby. It’s historically unwise to bet against the New York Yankees or the farm lobby. They can argue, convincingly if you ask me, that drastic reductions in farm support programs would decrease productivity, increase food prices and lead to further erosion of rural communities.

To me the logical outcome has to be a reduction in commitment to food-based ethanol programs for starters. And redirecting some largesse into what the Times considers “good” crops. But logic isn’t always the most logical predictor of political outcomes.

At any rate, one of the skirmishes in this war will be over the Conservation Reserve Program, and there, cattle people have a pretty important stake.

National Cattlemen’s Beef Association joined a host of groups the media dismissed as “agribusiness” to fire a letter on Fort Sumter last week, urging Congress to provide more “flexibility” to holders of Conservation Reserve Programs “so that we have the ability to respond to market signals and grow adequate grain and oilseeds to provide basic foodstuffs to the world consumers.”

Their point is solid. They note that the world’s food demand is outpacing the growth in production and warn that a crop failure could exacerbate the problem. They want land now in CRP to come out of the program and grow more crops.

The idea is for Congress for force USDA to allow unpenalized early outs for folks with existing CRP contracts.  Ironically, the letter was mailed two days after Secretary Vilsack sent out a news release bragging on how important CRP has been in government efforts to enhance wildlife habitat.

CRP “allows farmers to help safeguard environmentally sensitive land by planting long-term resource-conserving covers to improve the quality of water, control soil erosion and enhance wildlife habitat. With continuous sign-ups to improve habitat for quail and ducks, and with the commitment of acreage under the SAFE program (State Acres for Wildlife Enhancement) to restore habitat for sage grouse, lesser prairie chickens and other birds, the CRP is improving bird habitat,” said USDA.

So, on the face of it, we have a side with hungry children represented by the National Cattlemen’s Beef Association and grain buying allies and on the other we have wildlife, represented by USDA, conservationists, environmentalists, environmental extremists, wildlife lovers and hunters. If any important human rights or “feed the hungry” activist groups have come out against CRP, I’m not on their mailing list and they’re not in my Google results.

I’m not sure how fair that fight would be in normal times. But these seem hardly normal times. As one of my favorite D.C. lobbyists said on his Facebook the other day, “Not to shock anyone but Congress won’t pass a budget, immigration reform, financial services reform or a farm bill this year…so go back to your regularly scheduled programming.”

None of his mostly DC-savvy friends expressed shock.

His point is that our government is too divided—and both sides too concerned about “pleasing the base” in the face of crucial 2012 election—to find the sort of common ground it takes to produce important legislation. Indeed, it is hard to imagine how this congress could write a farm bill or what it would look like. If they do, the big issues will revolve around the major crop subsidies and the expense of it. CRP will be dealt with as a bargaining chip and little else.

I’m not sure even how I’d lean on the issue. These feed prices are sure not helping the cattle industry save itself, and at first thought, it doesn’t make much sense for the government to be paying us not to grow more feed. But, then, I remember when CRP was started. I had neighbors who put their land into the program for a fraction of the subsidies the government had been paying them to lose money growing surplus crops. I’m sure that if the government must be mama sow to agriculture, CRP is cheaper than paying farmers to produce crops nobody wants. Much of the land in CRP is sorry stuff. I doubt that even if they cancelled CRP completely we’d see much reaction in corn prices.

For another, speaking from the perspective of a guy in the darkest red part of that U.S. Drought Monitor this year, I kind of like having it in reserve. In past droughts, USDA has let us graze some CRP and that saves cows and range conditions when it happens. I can’t imagine they won’t open it up again this year, given this drought overlaid on the crying need for herd replacement.

All of that said, what NCBA and friends are asking for is “flexibility.” If I had one of the thousands of places that went into CRP because the owner wanted to quit farming and the country committee felt sorry for him and accepted decent land, I’d probably like to take it out, and I think maybe I’d be the best judge of whether that land was worth taking out.

But that’s just what I think. I also think this government is not as much inclined to trust individual judgment on resource utilization as it used to be. I won’t bet on the farm bill. But I believe I will bet against a lot of that “flexibility.” My bet goes that if land is allowed out, it won’t be at the sole discretion of the owner.

 

                               

Beef: The Safest Meat

May 02, 2011

Which foodborne pathogen do you think, off the top of your head, does the most damage to the American public?

If you’re like me (and, I suspect 98% of the news reporters in the world) you’ll think Beef. E. coli O157H7. That’s the one we hear so much about.

Somehow, it seems beef is top of mind for food safety. A recent survey at (access it by following this link) indicates fresh meats are consumer’s biggest food safety concern.

But beef and E. coli were well down the list when the Emerging Pathogens Institute of the University of Florida released a report “The 10 Pathogen-Food Combinations With The Greatest Burden on Public Health.

In fact, 0157 ranked sixth on the list of annual disease burdens.  Five pathogens did more damage, most of them much more. The report estimated their total monetary damage in 2009 at more than $12 billions, resulting in more than 50,000 hospitalizations and about 1,200 deaths. In contrast, the toll of  E. coli O157:E7 was $272 million, 2138 hospitalizations and 20 deaths.

That is, of course, too many deaths. I’m not suggested the beef industry needs to rest on its food safety laurels. But there are laurels. As the study points out, O157 is a serious problem, but, “there are other pathogens with less public awareness which warrant increased attention, both by the public and by the government.”

Beef was way down the list of food safety threats behind poultry, pork and produce. The way the study authors calculated things, in fact, beef is responsible for less than 10% of the $14 billion annual costs of food borne illness.

Who’d a thought it?

The most dangerous food-pathogen combination? Campylobacter in poultry, affecting more than 600,000 people and resulting in a calculated cost of $1.27 billion. Toxoplasma in pork added another $1.2 billion in costs, followed by listeria in deli meats at $1.1 billion and salmonellas in poultry adding $712 million. The biggest problem they found in beef was toxoplasma, at just over 1,000 hospitalizations and $689 million.

I’m not here to vouch for the report’s math or methodology. But their point is well taken. Regulators—and the news media—should pay more attention to the bigger problems. Poultry’s foodborne challenges dwarf those of beef.

I don’t know if beef has always been this safe. I doubt it ever was. It doesn’t, however, seem that way. We’ve got better ways of finding outbreaks, so somebody just reading headlines would get the impression things are worse than ever.

In fact, however, the post-mortem segments of the beef industry have made tremendous strides in getting O157 out of the beef supply. The incidence of the pathogen being found in ground beef samples fell by more than 60% during the last decade. Spurred by governmental oversight, trial lawyers and common business sense, processors continue to improve their systems. I’ve no doubt that our food supply overall—and beef in particular—is the safest it’s ever been. And I’ll give credit to those big packers.

One clue as to why is included in the report: “Listeria monocytogenes in deli meats ranks as the pathogen-food pair with the third highest disease burden, and recent studies suggest that the majority of these illnesses are due to retail-sliced deli meats rather than those that are prepackaged.”

The fact is that those big packers have good systems. All the talk, blogs and editorials about the risks of high-production facilities are mostly hooey. Quality control is easier in a big plant than in 100 grocery cutting areas or in 100 smaller plants. Mistakes are easier to identify and trace to one big plant than to one of 100 smaller ones. Prophylactic measures are more efficiently used in large plants.

I’m not one to suggest that beef is “safe enough,” mind you. We can do more and the industry’s beef safety summits strike me as important not only in the progress already made but in progress to come. That said, beef is pretty darned safe. A lot safer than the headlines might lead you to believe. The reason beef safety failures are so newsworthy is precisely because they are so uncommon.

Speaking of beef safety and how it is impacted by processing techniques, let me devote some space to the argument that plant “line speed” is THE food safety challenge. I was in Peru a few weeks back and got a photo of a really, really slow “line speed” in the Cuzco central market. I’m not sure how safe it is, but for those of you who want to get back to earlier times, It goes like this:

peru2
Meat cutter picks the head up off the floor.

 

peru
Meat cutter trims, carefully, and removes the muzzle.

 

peru3
Meat cutter arranged individual cuts in an attractive display

 

       

 

 

 

 

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