Photo courtesy Rapid City Journal, Deb Holland, Meade County Times-Tribune staff
Q: What do you think are the major issues standing in the way of fair cattle markets?
Our industry has seen consolidation of the packing industry for years, and it has finally gotten to the point where competition has all but disappeared.
The packers’ ability to contract cattle well in advance has given them an upper hand because when the market moves contrary to where they want to be, they have a supply of cattle on hand and no urgency to bid on cattle. This captive supply serves as a significant shock absorber.
Q: What are your thoughts on the petition circulating to bring about a beef checkoff referendum?
Our industry needs the beef checkoff in order to promote beef. This program also works to convince consumers that the U.S. beef producer is still the guy that wears the white hat.
We often see anti-agriculture groups attack the beef industry. These attacks on beef have the potential to cause our industry to lose a substantial amount of ground quickly. The checkoff is able to respond to these attacks in a timely, professional manner.
Q: What are your thoughts on cattle and beef imports?
Trade is a two-way street. The ramifications and unintended consequences of cutting off imports need to be considered. Here in the U.S., we seem to have an issue coming up with enough trimmings to add to our hamburger to bring the fat content to a level that the American consumer desires. Because of this, we have a need to import beef.
Whether it is the offal or the lining of the stomach, there are beef products that have very little value here in the U.S., however, there are markets for these products in other countries. We need to keep that door open for trade so we can export these products and take advantage of the full value of a beef carcass.
Q: What are your thoughts on the DOJ investigation into our four big beef processors?
It’s good to see the DOJ looking into our packers, however, the chance of anything surfacing that shows illegal activity is unlikely. We’ve seen the packers sell beef at record high prices, while cattle producers continue to lose money. This equation clearly doesn’t make any sense, and a person has to wonder how these two situations go together.
Q: Do you think our industry is in danger of becoming vertically integrated?
The threat of vertical integration is always there, however it isn’t very attractive to the packers because of the amount of capital required and the small return involved with cattle production.
Q: Do you have any closing statements?
As an industry, we need to be careful about the information and opinions that we put out there to the public. Regardless of your market, all beef products have a niche. While we work to promote our own niche, we need to be sure not to tear down any other part of the business.