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RSS By: Steve Cornett, Beef Today

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The Trouble with NCBA

Jul 13, 2009

By Steve Cornett
 

It is a sour time in the cattle business as the National Cattlemen’s Beef Association prepares to gather for its midyear meeting in Denver this week. This economy bodes to keep beef demand—and, of course, cattle prices—low at the same time the federal government is on something of a stampede toward more expensive regulations concerning everything from the environment to energy to food safety, all financed with higher taxes.

I suppose I’ve been to every NCBA summer meeting since the mid-80s. I can’t think of a time when that was scarier with less cause for short-term optimism. Hard times make for interesting meetings, though. My favorite part of NCBA has always been the committee meetings, where you get to hear both from specialists and from producers with every shade of opinion you can imagine. That’s how a big-tent organization should work. It’s what is missing from the policy development process at places like R-Calf, where folks belong because they agree with the leadership on a couple of issues.

It is a messy way to make policy, all that debate, and nobody agrees with every decision. The founders of R-Calf dropped out of NCBA you’ll recall because votes didn’t go to suit them. That’s partly a result of personalities—you noticed that many of them were finally driven out of R-Calf and had to start yet another new organization because they couldn’t get along with themselves, either.
 

But they also had a point. These guys are downright convinced that beef imports and beef packers are driving them out of business. They’re wrong. They’ve got the blame placed wrong and thus advocate policies that will speed the industry’s decline, but it’s hard to blame them for starting their own movement. They weren’t all that outvoted on most of the issues that drove them away. Those were close votes. But they resulted in 100% NCBA policy.
 

If NCBA is to be the “umbrella” organization for the beef industry, it should devise a system that would respect minority opinion. If I thought, for instance, that NAFTA was the reason my calves are so cheap, you’d have to forgive me for not supporting an NCBA that is fully committed to free trade. If I were an Iowa corn farmer, you’d have to forgive me for resenting an NCBA that opposes federal ethanol subsidies.
 

So what if NCBA only adopted policy that is agreed upon by a supermajority? Maybe two-thirds? If you can’t get that supermajority on an issue, then drop it and concentrate on the issues in which do have an industry consensus. They could get consensus on things like estate taxes and public lands issues and animal rights. Put the lobbying team to work on those issues and don’t drive off half your members because 49% of them think you’re working against their best interests.    
 

That way, the guys in South Dakota could support NCBA and work with Texas and Kansas feeders on 90% of the issues threatening them, and if they still want the government to save them from packers and Canucks, they could continue to pour money into R-Calf’s lawsuits. It wouldn’t take long before a separate group, devoted to free enterprise and sharing the NCBA majority’s distaste for government intervention would coalesce.
 

Let them fight over those issues separately. When it comes to the bread-and-butter issues, keep them all at the big table under the big umbrella.
 

NCBA leadership has been trying to find a way to keep everybody happy for years. They create segment councils. They reallocate votes. They add mail-in ballots. They’re trying again now. But so long as the association policy requires them to put 100% effort behind a 51% consensus, somebody is going to be unhappy—and that lack of a united front is killing the industry.
 

Steve Cornett is editor emeritus at Beef Today. You can reach him via e-mail at scornett@farmjournal.com.

This column is part of the Beef Today Cattle Drive e-newsletter, which is delivered to subscribers biweekly and includes beef industry analysis, market information as well as the latest beef headline news. Click here to subscribe.


 

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COMMENTS (8 Comments)

Fred
I have some very good friends that want the packer legally restricted to own cattle and prevent imports and decrease the supply of cattle to raise the price of cattle to profitable levels. Just as it made no sense to have the Clinton administration negotiate with Tyson concerning anti-trust violations, it makes no sense to artificially raise the price of beef outside of normal supply and demand functions. Yes, that is old news but the point is still valid concerning packing plant capacities, cattle numbers and imports and all of the related issues. We all want more for our product at every level of the beef production business and having everyone profitable enough of the time to earn a return on our equity or at least above our operating costs and cover our fixed costs would be nice and is necessary in the long term. Excessively restricting imports and the supply of beef makes no sense without looking at the demand side of things. Believe me, the long term demand for beef will drop like a rock when hamburgers increase in price to $20. Young children and young adults learn to love beef because it is the best meat and it's somewhat competitive -- when the price goes too high their favorite meat they grow up with will be somewhat paler and not as nutritous. As they get older and earn good family incomes (we better hope), a smaller and smallser percentage will buy hamburger and higher priced cuts for their family because beef will not be a strong part of their culture and they will be purchasing other products elsewhere. Our industry must continue to work hard on the demand side and not get too side tracked concerning policies for short term fixes or government intervention. At the same time, our industry must come together concerning health and safety issues such as BSE.
12:50 PM Jul 14th
 
Delbert Moore
I've been an NCBA member for forty years and expect to remain one until I die. We cannot ignore the most important issues facing the industry because they are divisive. The cattle industry has been built on choice beef. It can change over time but the all out more and more subsidized drive for ethanol regardless of feed availability is causing devastation in the industry. Corn use for livestock has declined by one billion bushels since 2006. For the first time USDA estimates corn use for seed, food, and industrial will exceed that for feed. Ethanol should not be subsidized at all; but at least subsidies should be related to feed availability. The cattle industry cannot be profitable over time unless all segments are profitable including packing. Mexico and Canada are our two largest beef export customers and exports are vital to the beef industry. This is especially true of by products which have declined from $12.cwt live cattle to $6. since last August. The people who maintain we can oppose all trade agreements are wrong. Finally, it is wrong to tell cattle feeders they cannot reduce risk by marketing cattle to packers until seven days before slaughter. These type of restrictions threaten the production of premium products and make packer marketing to super market chains much more difficult. The Obama Administration is going to make things difficult by increased regulation especially since Obama's choice to be in charge of regulation is an animal rights activist. We don't need to make times tougher by giving up on trade and and profitability for the entire industry.
8:23 AM Jul 14th
 
 
 
 
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