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June 2009 Archive for Out to Pasture

RSS By: Steve Cornett, Beef Today

Read the latest blog from Steve Cornett.

Ohio Fights Back Against HSUS

Jun 30, 2009

By Steve Cornett

Without predicting a lot of success for their efforts, let’s congratulate Ohio agricultural leaders and legislators for at least taking a stand against the Humane Society of the United States. 
Both houses of the legislature rushed through a proposed constitutional amendment which would create a Livestock Care Standards Board that one would hope could serve as something of a Solomon board to finally apply science and common sense to the animal rights juggernaut. 

Now, just how much common sense can be injected into the culture that we watched mourn Michael Jackson last week, I don’t know. I’m apparently from another time. Or another place or something. 

But we’ve talked about the problem before. You’ve got us over here trying to make a living with $1 feeders and $83 fats, and then you’ve got a set of animal rights groups with big bucks from Hollywood and Bank of America credit cards selling their agenda to the American public the same way marketers sell tooth whiteners and deodorants—by promising they’ll make consumers feel good about themselves.

The HSUS, which tries to be the good cop to PETA’s bad cop, had set their sights on Ohio, hoping to use the threat of their ballot successes in places like California and Florida to squeeze a “voluntary” agreement with Ohio agriculture. The state National Farmers Union affiliate bit, if only because the NFU tends to share the HSUS disdain for “corporate” agriculture.

Their argument was that if the state didn’t voluntarily do what HSUS demanded, that HSUS might get it pushed through in a referendum.

So, faced with the choice of jumping off the cliff or being pushed off, the Farmers Union agreed to jump. But they were in the minority. The Ohio Farm Bureau and others united behind the legislative push for a new board, and it happened quickly. The governor has promised to sign it. It would then go the voters in November, and you can bet the animal rights groups will spend liberally in hopes of defeating it.

And, in fact, that is exactly what the HSUS promises to do, with a spokesman also predicting a referendum on their issues come 2010.

We should hope that A) the voters approve this new board and B) the board takes the steps to establish credibility. That should include a solid look at the issues of animal care and--if they feel science warrants new, more intrusive regulations--establishing new rules. 

That would provide other states with something of a framework they can use to move some of the emotion out of animal care issues and replace it with hard facts. There’s cause for optimism in that approach.

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.


Update to Food Activism, Inc.

Jun 17, 2009

By Steve Cornett

So all the news coverage on this Food, Inc., thing has your town buddies and your teenagers asking questions.  A consortium of companies with oxen gored by what even CNN reporters admit is a one-sided take on food production has put together a web site with lots of answers.

You can see it at: http://www.safefoodinc.org/.

You might also drop by the Animal Agriculture Alliance site to see their statement on the matter.

Their statement is about what I’d say if I were more eloquent. Except their affordability argument misses the fact that underlying the Pollan Principle touted by the film is a belief that cheap food is a problem. These guys think the fact that poor people are fatter than rich people in the U.S. is proof that food is too cheap. It’s hard to argue with that.

But maybe the rest of the public won’t agree. From the Animal Ag Alliance statement:

“The filmmaker promotes the organic and local niches to become the dominant way of producing food, but he completely fails to disclose the impact this vision would have on worldwide food supplies and on farmers' and ranchers' ability to grow ample food supplies. Worse yet, the film suggests that affordable food is nothing to brag about, and consumers should be willing to pay more for food that is produced in systems that the film advocates.

“Especially in today's economic climate, we consider that approach to food affordability incredibly elitist. Such elitism may appeal to those who can afford it, but for the vast number of Americans, the approaches advocated in the movie will further ratchet up the financial stresses they already feel in their everyday lives, with no proven benefits to their overall well-being. What's more, most American families are on very tight budgets, especially as the unemployment rate swells to nearly 10%. Now, more than ever, it is important for food to remain affordable.

“Consumers who wish to buy the organic or local foods like those featured in the film should have that choice, but safe, nutritious and affordable food for everyone should remain the most important feature of our nation's food system. The Animal Agriculture Alliance finds the movie's misleading information about how today's wholesome, nutritious and abundant food supply is produced offensive.

“Today's farmers and ranchers have a responsibility to feed our nation's 300 million people. Fortunately, American farmers and ranchers are able to produce enough food to feed not only the population of the U.S. - and do so at the lowest cost of any developed nation - but they are also able to export food to many other nations which are unable to feed their growing populations.”

Makes sense to me.

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


Food Activism, Inc.

Jun 15, 2009

By Steve Cornett

There was a time when the bromide “there oughta be a law” was a joke. It applied to some trivial something that kind of bugged you and so, ha, ha, it should be outlawed. Get it?

It’s not such a joke anymore. Congress has given the Food and Drug Administration (FDA) authority to “regulate” tobacco products. They won’t outlaw tobacco, mind you. Just “regulate” a product that we’ve all known was dangerous since at least 1947, when Tex Williams sang:

Smoke, smoke, smoke that cigarette
Puff, puff, puff and if you smoke yourself to death
Tell St. Peter at the Golden Gate
That you hate to make him wait
But you just gotta have another cigarette

I’m not here to defend tobacco. I’m glad to see the stuff gone from my part of the world. But I would like you to think of how fast that change in American culture took place. Just a few years ago, we assumed that if you wanted to smoke, you might be dumb, but—this is a quote people used to say—“it’s a free country.” Really. They did say that.

Or sometimes they would say, “That’s pretty stupid, but it’s his business.”

Nowadays when somebody says there ought to be a law, Congress is listening.

That is important because the onslaught against beef production continues. I’d not argue this localvore, vegetarian thing has had a lot of impact on beef producers yet. But there are a lot of folks who think there “oughta be a law” against the way beef is produced. And they are some pretty important folks in the government and the media.

Food, Inc., a documentary promising to change the way viewers “look at dinner,” is now showing in a theater near you. Assuming you live in a metro area, anyhow. Eric Schlosser, the “food activist” who wrote Fast Food Nation, is coproducer of the film. It is, apparently—I haven’t seen it and probably won’t get the chance in my part of rural America—an entertaining indictment of all the stuff Schlosser finds offensive about American agriculture, and that list—follow this link to see it —is long.

It’s a list you should look at, but knowing how busy you are, let me sum up for you: Food in the U.S. is too cheap because it is “factory farmed” by “profit-oriented corporations” who don’t care how they treat workers or animals. It uses too much energy to transport, not to mention pesticides and genetically engineered products. Because food is cheap, Americans are fatter than people who walk and work for a living, and that is why health care is so expensive.

Plus, if you eat something made in America you’ll probably die, because the Centers for Disease Control estimates that 0.002% of the deaths reported in the U.S. in 2006 may have been related to food poisoning.

Ipso facto, we have a dysfunctional food system and it’s the corporations’ fault because government has let them run roughshod over “the people.”

I suspect, having read as much as I can about the film, that it is a pretty picture-book version of what you’d see if you read all the stuff written by Michael Pollan, who is sort of the Billy Sunday of the “don’t let them eat cake” food reform movement.

And as we speak, Congress is moving quickly to give the same FDA that is taking over tobacco total control over food safety with what the Senate calls the Food Safety Enhancement Act. So now FDA will be in charge of tobacco and food, I guess. Because they are both so dangerous. 

It’s hard for those of us who’ve spent our lives in agriculture to believe that the Pollan principles even oughta, much less will, become law. Ten years ago, who would have guessed the cigarette lobby would go down in smoke so soon? Or, 25 years ago, who would have thought mandatory seat belts would be so thoroughly accepted? 

Cultural attitudes change more quickly than we realize. There are strong forces pushing change on agriculture, and beef producers, especially. Are you fighting back?

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.


Biting Back at "Big Packers Face Obamanomics"

Jun 01, 2009

By Steve Cornett

After the last blog about the political leanings of the new head of the Grain Inspection, Packers and Stockyards Administration (GIPSA), I got a note from Randy Stevenson, current president and founding member of the Organization for Competitive Markets (OCM), saying I had misquoted him by suggesting that he blamed inaction by the "Bushies" for what he and his fellow thinkers regard as inadequate oversight of beef industry consolidation and integration by GIPSA.

He said that he has never used the term "Bushies." I bet that’s true. Let me toss in the caveat that I didn’t put "Bushies" in quotes, so I didn’t misquote him, technically. I was using the term "Bushies"—myself—as a shorthand reference to all the officials in Justice and GIPSA that OCM thinkers think didn’t do enough to stop packers from getting bigger on their watch. I didn't mean to attribute use of the phrase to Mr. Stevenson, but the wording made it unclear. You’ll note below that there are reasons why Randy wouldn’t want folks to think he calls Republicans “Bushies” in that he actually is one his own self.

That said, when I review my notes, I agree that I oversimplified his arguments, and in fact, in my zeal to make my own point about the structure of the fowl industry being the real cause behind beef’s problem, may have used his argument, oversimplified as I summarized it, as something of a straw man.

That’s easy to do when you don’t agree with somebody because even if you try hard to listen and think you’ve succeeded, sometimes maybe you were really listening for weak spots to attack.

For that matter, knocking down straw men can be an effective debating tool. Alas, it is neither honest nor fair for bloggers whose companies buy bytes by the barrel to treat sources like that. So I want to apologize to Randy. I suggested he put his rebuttal in his own words, and I will keep my mouth shut. For now, anyhow.

Mr. Stevenson's rebuttal:

It’s not right versus left

By Randy Stevenson

Steve Cornett is with a majority of people who tend to see the debate about livestock market reform as an ideologically based debate. They think that liberals want reform and conservatives want things to stay as they are. It is true that this perspective afflicts not only conservatives, but also liberals. Steve, along with the majority, is wrong. This is not a right versus left debate.

I am the current president of the Organization for Competitive Markets (OCM), a national organization dedicated to work toward making and keeping agriculture markets competitive. OCM is made up of a mix of people from various backgrounds who may disagree on anything else, but agree on the need for competitive markets. We have liberals and conservatives and while we are focused on our mission, we are compatible.

I am a conservative. I am a registered Republican. I have been the county party chairman. I am a member of the Republican state central committee in Wyoming. In 2007, I submitted my name as a candidate for the U.S. Senate seat left vacant upon the death of Craig Thomas. Ultimately, John Barrasso was selected to fill the vacancy. Among Wyoming Republicans, my home county has a reputation for being one of the most conservative in the state. I do not promote liberal points of view. I promote livestock market reform.

Livestock market reform has been supported by Wyoming’s entire Congressional delegation for a number of years. Senator Enzi began working on captive supply issues at least ten years ago. Former members Senator Craig Thomas, now deceased, and Barbara Cubin, now retired, sponsored or co-sponsored market reform bills. Newer member Senator John Barrasso and Congresswoman Cynthia Lummis are also on board. These are all conservative Republicans without exception.

My major complaint with most conservatives when it comes to economic issues is that they take a view that is not conservative, but libertarian. Libertarian economics is based on the philosophy of Ayn Rand, an atheistic anti-communist. Unfortunately, being against something doesn’t make you right. Rand’s key failure, shared by modern economic libertarians, many of whom call themselves conservative, is the utter failure to understand human nature. 

Alexander Hamilton observed that, “A fondness for power is implanted, in most men, and it is natural to abuse it, when acquired.” The founders of our country, all of whom agreed with Hamilton on this point, structured the federal government with divisions of power in order to accommodate this human failing and to prevent the abuse of power they were certain would occur if the authority of individuals in government were not limited. Most conservatives recognize this necessity in terms of limiting the power of government, but somehow fail to realize that the same human frailty prevails in the private world as well. A person who leaves the world of government and takes a job in the private sector, takes his human nature with him. Abuse of power is not limited to government officials and employees. Reform minded leaders of the late 19th and early 20th centuries recognized that. That’s why they instituted antitrust laws.

Antitrust laws did for private enterprise what the Constitution did for government. They limited the power of certain human beings who would be naturally inclined to abuse it when they acquired it. 

There are two sources of inappropriate power in private enterprise, dishonesty and market power. The remedy for these two is the enforcement of honesty and competition. It is the appropriate role of government to do so. What the government does in these areas is generally referred to as “regulation.” Senator Charles Grassley (R-IA) recently stated that he did not consider antitrust laws to be regulation. He said, "I consider them being a referee in the free market system to make sure that there’s competition, so we don’t need government regulation.” While Grassley’s definition may not stand up to strict dictionary scrutiny, the fact is that there is a difference between antitrust legislation and other kinds of governmental regulations. Antitrust laws are the economic equivalent of the divisions of powers written into the Constitution. Both are a reflection of structures necessitated by human nature. 

The primary author of the Constitution, James Madison, explained the division of power in the Constitution in Federalist 51, “This policy of supplying, by opposite and rival interests, the defect of better motives, might be traced through the whole system of human affairs, private as well as public. We see it particularly displayed in all the subordinate distributions of power, where the constant aim is to divide and arrange the several offices in such a manner as that each may be a check on the other.” Note that he observed this division of power “through the whole system of human affairs, private as well as public.” Antitrust laws enshrined this approach into our legal system so that, like Constitutional limits on political power, economic power would also be limited. The same human fondness for power necessitates both; else, we would lose our freedom and our free market.

An athletic contest can illustrate the elements necessary for a free market. There are three essentials, a balance of power, appropriate rules, and consistent enforcement of the rules. These three elements exist in most professional sports. The National Football League demonstrates it well. A system of parity makes sure that the championship team gets the last pick in the draft. On the stock exchanges of Wall Street, all traders have an equal footing on the floor. There is a balance of power maintained by rule, and it works well.

In a football game there are appropriate rules. All of the rules are laid out to assure competitiveness. No player may deliberately injure a player from the other team in order to gain a competitive advantage. If he does, he is severely penalized.

The rules must also be properly enforced. The effect of the failure to enforce consistently is that it affects the outcome of the game. Referees are not supposed to do that. They are supposed to be impartial arbiters. In socialism, the government picks winners and losers. Under antitrust law, properly enforced, power is limited so that all enter the market on an equal footing, just like in a stock exchange. There is no market power exerted by any participant.

A study contracted by GIPSA and released in early 2007 indicates that there is a problem of market access in the livestock market. Market access is the right to participate in bids and offers. It provides no guarantee of price. The study also says that some producers take a discount on their sale price in order to gain market access. That is a clear exercise of market power on the part of meatpackers. It has no place in a free market. When someone has to pay just for the right to participate, the market isn’t free.

But packers aren’t the only big players that affect cattle producers. Not many years ago it became a practice of giant retailers to insist on long-term fixed price contracts with packers. Possessing even more market power than the packers, these retailers could insist and the packers would have to comply. The problem with long-term fixed price contracts in a commodity like beef is that it disrupts the supply/demand signals from the consumer to the producer. It has the same effect as the Nixon era government price controls did. Price controls, whether imposed by the government or a powerful player in the market, have two significant detrimental effects. One, there is no “trickle down.” Trickle down is a feature unique to a free and competitive market. When there is no trickle down, you can be assured that the market is broken. Two, in response to disrupted supply/demand signals the underlying commodity cycle will no longer operate. Most producers are familiar with commodity cycles. When a commodity cycle disappears, it is an indication of a broken market.

Free markets do not develop in a vacuum any more than free governments do. Anarchy leads to tyranny. The absence of antitrust enforcement leads to monopoly or oligopoly. Either the government or the private sector can damage market integrity. Conservatives tend to recognize one while liberals tend to recognize the other. The market requires limitations in both areas, and a clear understanding of the role of each. The government must be the impartial referee. No competitive game has ever been self-refereed.

(Follow this link to read more rebuttals to "Big Packers Face Obamanomics.")

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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