Focus and globalization are the core issues inflicting the disaster within the cattle markets, says R-CALF USA
Bills, Mont. ?? In comments submitted to the U.S. Department of Agriculture (USDA) yesterday, R-CALF USA identified the concentration of the beef packaging sector and the globalization of inbound supply chains as the key structural problems causing today’s crisis in the U.S. beef industry. In April, the USDA called for public statements to help the government transform the American food system by increasing shelf life and resilience within US food supply chains.
The group’s comments claim that these fundamental structural problems stem from misguided public policies that served the self-interest of agribusinesses to remove the forces of competition from both livestock and beef supply chains. According to R-CALF USA, this happened because policy makers “used biased economic models that predicted a large scale would create market efficiencies that would, in turn, increase consumer welfare by offering more and cheaper food to consumers.”
But diagrams in the comments show that consumers have received neither more nor cheaper food. Instead, they show steadily rising consumer prices for beef, falling beef prices paid to America’s ranchers and ranchers, and a chronic inability of the U.S. beef industry to produce enough beef to meet domestic beef consumption.
The comments stated that four multinational beef packers control 85% of the fodder cattle market and 80% of the packaged beef market, and that they now exercise their control on both the supply side (livestock input) and the demand side (beef and beef products output side ) the packaging industry. ??
The comments also explain that the globalization of input supply chains ??? both beef and beef supply chains ?? has caused significant damage to the domestic cattle industry. The comments stated that the resulting trade policy encourages lower cost, undifferentiated imports of cattle and beef, which are a direct substitute for domestically produced beef and beef. As such, the group said they are a major contributor to underproduction and the decline in the domestic cattle industry.
To address this, R-CALF USA’s first recommendation to reverse the damaging effects of globalization is to require that all beef sold in America be labeled with a country of origin label so that consumers can choose between foreign beef and domestic beef when buying.
R-CALF USA’s comments put the reader on a trail that explains how the focused beef packers are successfully leveraging the competitive forces of nearly every transaction point and industry segment along the supply chain on both the supply and demand sides of the packaging industry. They then do the same for globalization, identifying the precise areas into which the adjusted competitive forces of the market now need to be reintroduced by either government and / or Congress.
Along these paths, the comments make no fewer than 28 recommendations on how the supply chains for domestic cattle and beef can be strengthened, made more resilient and the American food system positively changed.
In its final recommendation, R-CALF USA urges the government to reverse the decision to introduce live foot and mouth disease virus (FMD) to the National Bio- and Agro-Defense Facility (NBAF) currently under construction in the heart of the United States do the cattle belt ?? in Manhattan, Kans.
R-CALF USA (Ranchers-Cattlemen Action Legal Fund United Stockgrowers of America) is the largest producer-only lobbying and trade association representing US cattle producers. It is a national, not-for-profit organization committed to ensuring the profitability and viability of the US cattle industry. Visit www.r-calfusa.com or call 406-252-2516 for more information.