Out to Pasture: USDA’s Saggy Fence Has to Be Fixed

October 31, 2012 11:07 PM

I’m missing six cows. It’s because what I knew would probably happen did indeed happen. And, of course, it happened before I got around to fixing that sorry excuse for a fence. It reminds me of two lessons that the cattle industry should have learned during the last couple of years and apparently didn’t. Nothing earth-shattering, mind you, just some wire-tightening here and some steeplesteeping there.

In my case, the problem was on a leased place. It has a quarter-mile water gap fence. The whole span is knee-deep in trashy water maybe twice a year and dry sand the rest. I tried to get away with a solar-powered hot wire— and did for a long time. But then it happened: twenty four cow prints wandering off into public-owned brakes of the Prairie Dog Town Fork of the Red River.

So now I’ve got to hire a helicopter to find my cows. Common sense dictated a better preemptive movement, but I just didn’t get it done. (This is not, let me admit up front, the first time I have been caught "fixing to" fix something rather than actually fi xing it. But that is another story.)

We should fix it—now. Did you know that USDA has not gotten around to changing the bonding requirements for livestock dealers—despite the fallout from the Eastern Livestock bankruptcy a couple of years back? The state of Kentucky has sentenced owner Tommy Gibson and some of his employees to prison terms.

Many of those who sued Eastern, its bank and the bankruptcy trustee recovered some of their money. But USDA has failed to update its inadequate bonding requirements. Dealers are required to post bond covering the average of two days’ worth of business.

So, a dealer who buys a lot of cattle during the rush seasons and a few head of cattle the rest of the time is overbonded most of the time, but might be bonded for only a fraction of his exposure at the very time he is most likely to become overextended—and leave a bunch of cowboys hanging.

Here is a rule I wish the government would follow: If you’re going to brag that your bonding regulations protect me from a check-kiting buyer, then, by golly, enforce regulations that really do protect me. Otherwise, I’ll find another way to protect myself.

The other hole in the fence that USDA has done nothing about is getting the Animal and Plant Health Inspection Service (APHIS) to make a set of rules to protect market-sensitive animal health information. USDA is scrupulous about protecting such information as it wends its way through the crop and cattle population bureaucracy, but there are no such rules at APHIS.

Remember, this is how futures traders heard about that dairy cow diagnosed with BSE earlier this year. USDA had a nice, post-closing announcement all scheduled so we would all know at the same time—just like its Cattle on Feed reports. But somebody, apparently in California, let the cat out of the bag, so traders got the word first.

APHIS has a lot on its plate, I know. Still, this is not as trivial as USDA seems to think. It’s not hard to sign confi dentiality agreements with everyone who handles sensitive animal health news. No, neither issue is a big deal at the moment. But when you know the fence needs mending…well, as a wise man sort of said long ago, "A steeple in time saves nine."

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