Input on Beef Exports and Public Relations Predicament

Readers respond to Steve Cornett’s blog: Beefing Up the World’s Platter Steve,

You evidently have done no research on exports of beef and their relationship to fat cattle prices. During the six years I was president of the Tri County Fair Board during the late 1990s and early 2000s when we had the highest volumes of U.S. beef exports in the history of this nation, I could not get a floor price for fed steers and heifers over about $65.00 the entire six years. The highest cattle prices received by U.S. cattle producers occurred when we had almost no beef exports, from 2003 to 2005. We were told by the National Cattlemen’s Beef Association (NCBA) during the time of rising beef exports that exports were responsible for adding $8.00 per hundredweight to our fat cattle prices. If this were true, it meant that our prices prior to 2003 would have been only about $57.00 per hundredweight for fats had it not been for rising exports. My Lord, exports really saved the bacon for beef producers? I visited Japan twice during this period of rising exports and U.S. ribeyes were selling in Japanese grocery stores for over $25.00 per pound. Someone was profiting from our tremendous exports of beef, but it certainly wasn’t those kids investing a whole summer raising a show steer or heifer, and it wasn’t me either.

I think a trip to a Latin American country would give you a proper education. A one-world economy seeks materials and products at the cheapest price. Gaining access, anywhere in the world, to the cheapest products is the goal behind free trade and the one-world government that is necessary to sustain it. Review the numbers. Brazil has 180 million cattle, and that number represents the cattle they can count. Production costs for cattle are about $49.9 per hundredweight U.S. with an average daily wage for cowboys of $5.00 to $7.00 per day U.S. We cannot compete with those countries on a cost-per-pound of beef basis. The U.S. will never be the least cost producer, and that is what a one-world economy seeks. The U.S. dairy industry is in the shape it is in currently because of its dependence on exports. The highest diary prices in the history of the U.S. occurred in 2007 due to tremendous demand for quality milk proteins. But then, exports dried up and prices tanked. Your worry about dependency on exports is correct. Just ask Canadian cattle producers.

Since we have not produced enough beef to feed the U.S. population for over 40 years, why would we emphasize exports over the importance of our domestic market the market every low-cost beef producing country covets? You mention BSE. It is because the USDA will not allow packers to test cattle for BSE that we continue having difficulty in exporting beef to countries that actually seek high quality beef from the U.S.

Man, get on the USDA web site and look at the cattle and beef statistics and quit comparing beef to milk. We reduced our U.S. beef production in the first half of 2009 by over 3 percent compared to the same period last year, yet we increased the volume of beef imports from Australia alone by 48 percent during this same period. Free trade agreements have disrupted our cattle cycle. Now, when we liquidate our herd to reduce supplies, U.S. packers merely increase imports to keep supplies high and cattle prices low. In addition to the significant increase in Australian imports so far in 2009, imports increased significantly from other South American countries as well imports volumes from Costa Rica were up 30 percent and import volumes from Uruguay were up 56 percent. Many South American countries have no significant natural resources except beef to export, and they know how to raise beef because everyone I met there had a U.S. land grant university education, which they received free of cost on some type of foreign student exchange program. You can certainly raise beef in those South American countries where grass grows 365 days a year. They have had cattle on those ranches since Columbus landed with the first set of Spanish cattle on Hispaniola in 1492.

Your plan will eventually lead to the consolidation of beef production into the hands of a few, with the complete collapse of rural communities. Beef Today and Farm Journal are out of touch with their readers. Farm Journal risks becoming like Pork Magazine, which is now only about 10 pages thick, and sent to the few producers left feeding pigs for a corporation. Pork Magazine is a joke.

This simple graph demonstrates, year to year, the impact of exports on beef prices in the U.S., to document what I have told you is true. These data for the graph is available from the USDA Economic Research Service. The U.S. producer had the lowest prices for fed cattle as exports increased, and the highest prices for fed cattle as exports diminished. You will find that during the nine-year timeframe when we had the highest volume of beef exports in the history of our nation, we could not get fat cattle prices to average much above $65.00 per hundredweight. That blows your theory all to heck. Increasing exports will not save us. Most of those millions of beef eaters you describe that are out there in this one-world economy, either cannot afford beef priced to them at our break even cost of production, or, like Europe, China, Russia, and most of Asia, they intend to produce enough beef to satisfy their own demand. They sure don’t have the long run plan to import beef from us.

One trip to China or Asia, and one late dinner where beef production is the topic of discussion, and you will find, Steve, that most of these beef consuming countries don’t desire to import our beef over the long haul, they desire to produce their own.

Without fair trade, and some sort of parity, U.S. cattle producers cannot survive in the market system you espouse. Just a very short term evaluation of our dairy and pork industries import and export numbers will illustrate that a dependence upon export markets will lead to severely depressed prices and tremendous over production.

Just because I disagree with you, doesn’t mean we cannot communicate our differences.

Reader Responds to Steve Cornett’s column: Public Relations Predicament.

Dear Mr. Cornett,

I enjoy your articles and insights in the Farm Journal. The latest, Public Relations Predicament was interesting, and I think points one of the great challenges facing our industry. For the entire 27 years I have been raising cattle, the mantra of agriculture has been to become more efficient and lower costs. At this point we – meaning farmers and ranchers – need to truly consider whether this has actually help make farming a better business. I’m not against progress, but some practices that have become commonplace and acceptable, have lead to consumer mistrust and horror. The chicken story is just one example. Much of the industrialization of animal agriculture involves practices which the consumer finds distasteful – from caged layers to confined pigs etc. – why don’t we?

With beef cattle the major concern is the use of implants and antibiotics (ionophores) . My question is why haven’t we asked ourselves have these products really helped us? Is anyone making more money raising beef cattle now than before these products were available? Cattle grow faster gain more, but the cattle business is less profitable than before. In the end we have sacrificed some of the wholesomeness of our product for little more than profits for the makers of these products.

It seems like it is time for farmers and ranchers to reevaluate some of our practices. The top concerns should be good animal husbandry and a wholesome quality product. We should question whether cheap food at any cost is really the best goal for us, the producers. We should be at the forefront of any movement to ensure quality food and the welfare of animals. Large or small farms should be able to open our doors to the public without the fear that our common practices will revolt them. If they do, then we need to question them.

Let us know what you think. E-mail comments to beeftoday@farmjournal.com.