Beef’s Big Year
Dec 27, 2010
It’s the last column of the year, so I sat me down and made a list of candidates for most important developments of the year. In the order in which they popped to mind, here they are:
1. Ethanol and corn prices—I get calls when I pick on ethanol, but I don’t mind. I’m right on this issue. It’s a boondoggle for tax payers and it makes grain cost more than it should. I admit that, boondoggle or not, it’s been good for land prices and the farm economy in general, but what happens when the country—or the tea party—wakes up and kills the programs?
2. Declining cattle numbers—We’re finally going to turn this corner. Maybe this will be the year. It sounds like the economy is improving. Exports are looking better. I remain convinced it will be like a light switch and we’ll move to new plateaus. The longer we put it off, the more violent the final market reaction will be. I hope.
3. GIPSA’s proposed rule—USDA’s Grain Inspection, Packers and Stockyards Administration introduced a set of proposed rules aimed at what they call “restoring competition” in the cattle market. This, despite their own studies indicating there is plenty of competition in the cattle markets. I’m thinking they’ll have to scale back some, but sometime next summer they’ll most likely impose most of the rules. This is part of the pattern of the Obama Administration using its regulatory powers to achieve goals that are unpopular in Congress. They’ve got the same idea on public lands and environmental policy. A Republican congress can slow them down, but there is enough populist sentiment in the GOP to make me suspect they’ll let the GIPSA rules go.
4. GIPSA/Department of Justice and their joint effort to “repopulate rural America”—The GIPSA rule is part of it, but the effort goes much, much deeper. The Obama Administration—perhaps the least farm-savvy administration in history—would like to de-commercialize agriculture.
5. Eastern livestock—The demise of the biggest order buyer in the country didn’t touch all of us—the markets hardly noticed—but it hit several thousand of us very hard. I notice that the National Cattlemen’s Beef Association is asking for some federal assistance for the producers caught in the mess. The more we learn, the more it sounds like Eastern’s owner, Tommy Gibson, had to know he was running a shell game. If so, they should put his dried up old carcass in jail until St. Peter knocks.
6. Korean free trade—We’ve given up on forcing them to take all our beef, and in return got a free trade agreement even the Senate can live with. This is all putting more pressure on producers to do more about animal I.D. Korea will be a significant market, but only for cattle with certified birth dates. Now that we’ve started rolling over for that <30 month rule, maybe we can make more progress with other traders as well. We’ve given up on an important principle here, but time will eventually heal the mad cow scare. Our specialty involves young fed cattle, anyhow. All it takes is some bookkeeping.
7. Chinese announcement—The Chinese have agreed to reopen talks on beef. The news of talks would be more exciting if it weren’t for the fact that I don’t trust them. You’ve got to wonder how serious they are. I doubt they’re going to be real serious without us reminding them of the size of our big stick and I’m not sure how they’ll take that. If we do get a shot at their market and their economy continues growing, it will be a big deal. Big enough to justify taking a chance on them.
8. The “shellacking”—Without that shot over Obama’s bow, who knows where the tax bill and estate taxes would have gone? It will be interesting to see how all those anti-pork, budget hawks approach the next farm bill. I’m no fan of where farm policy has brought us, but I’d sure hate to see a bunch of "Palinbrains" get too aggressive in dismantling things.
9. Estate tax—Speaking of which, how can that not be in the top 10? It applies to most beef producers. Since it’s just for another 2 years, I suppose it’s even more important for the estate lawyers who will get to redo all those wills this year and again two years from now.
10. Michelle’s “Let’s Move" kids food campaign—Ms. Obama’s chores involve getting kids to eat healthier food. Early on, that may not be too good for beef. But we’ve watched the government “do good” before, haven’t we? So it guess we should say “if” not “as”—the program impacts children’s eating habits, the sugars and inactivity that should get most of the blame for fat kids, should take the main blow and maybe more mothers will be made aware that beef is good for a young body.
11. Antibiotics for livestock—Their days are numbered. Beef cattle will fare better than the competition.
12. Missouri animal welfare bill—Hard to say if that silly bill passing is more important than the bills that didn’t pass. But it signifies that the animal rights army is still on the offensive.
13. Temple Grandin—So many people saw the movie and it did such a good job of showing what we’re about in the cattle industry that it has to be the most significant effort ever in the war for the public’s attitude about animal welfare
14. Humane watch—These guys are doing a lot to keep the Humane Society of the United States honest, and if the HSUS was honest about their goals and how they spend they wouldn’t be nearly the problem they are. Every year about this time, my wife drags me off to a bunch of parties and I get to talk more than usual to people outside agriculture. At such times, I get pretty morose about the future of the whole animal welfare movement. Most people don’t think like we think about the relationship of animals and humans.
I didn’t rank any of these top to bottom because so much depends on what happens next. But several of those are underlying big trends that you may not be able to predict, but you can’t ignore. These are times when change comes faster than any of us expects.