MEATPACKERS OPPOSITION to GIPSA RULE SHUTS OUT SMALL LIVESTOCK PRODUCERS

Fair, open and transparent markets are essential to rural economic recovery.  We need strong rules to curb corporate control over livestock and poultry markets and to foster a livestock industry in which small and mid-sized farmers and ranchers can thrive. - Sustainable Agriculture Coalition




House blocks GIPSA* rule, defeats income limit
Friday, June 17, 2011 

The U.S. House on Thursday knocked down proposals to set new income limits for farm program recipients and slash funds for an important export promotion program.... The House scrapped Rep. Jeff Flake’s (R-Ariz.) proposal to set an $250,000 annual adjusted gross income (AGI) limit for farm program eligibility. The current limit is $500,000 in AGI from off-farm sources or $750,000 in on-farm income...Flake also lost a bid to eliminate funding for the popular Market Access Program, which helps producer groups promote products overseas.
 (Read the Article here)

THREE YEARS AGO, Candidate Barack Obama promised to stand up for open andfair markets for family farm livestock producers.

THREE YEARS AGO, Congress passed a farm bill directing USDA to write rules to end price discrimination against small and mid-sized farmers by corporate meatpackers and processors and to ensure fair production contracts for poultry and hog producers.

ONE YEAR AGO, USDA issued a proposed rule that would reign in some of the worst abuses of giant meat packers and poultry companies

THREE WEEKS AGO, Our congress caved in to large special interests (Meatpackers and Integrators) and stripped any meaningful legislation out of the Proposal that could help the small farmer and rancher.

The proposal to set a lower annual AGI (Adjusted Gross Income) would have channeled more money to the small agricultural producer. Instead, by "stripping" the lower AGI proposal, the majority of subsidy dollars will continue to go to large corporate agricultural operations.

The Market Access Program that was also scrapped would have opened up avenues for small livestock producers and groups to overseas markets...these markets are currently almost impossible to enter without the clout of large enterprise. 

The following best explains what this means to livestock producers:

The Case for Competition

By: 

 John Crabtree

Livestock markets don't work. I should say they don't work for family farmers and ranchers - meatpackers don't have any complaints.

If you raise cattle, hogs or sheep then you sell into a largely dysfunctional market where packers hold all the cards and routinely discriminate against smaller producers by offering massive, volume-based premiums to large, industrial producers (and deep discounts to smaller farmers and ranchers).

How massive? Take a small hog farmer with a 150 sow farrow-to-finish operation that receives a small-volume discount of 6 cents per pound for his market hogs - a conservative estimate for volume discounts. At 250 pounds for each of 3,500 hogs marketed, that would mean an annual loss of $52,500 for that producer, simply for being small.

USDA is poised to propose a new rule under the Packers and Stockyards Act that will, hopefully, help address this price discrimination against smaller producers. The rule will define the term "unreasonable preference," the granting of which is prohibited under the Act but has not been well enforced absent a definition of what constitutes an "unreasonable preference."

The packers will hate whatever they come up with. But, honestly, USDA has given the packers a pass on competition laws for decades, so why should we listen to them on this one? Family farmers and ranchers want, need and deserve competitive markets in which to sell their livestock. Agriculture Secretary Tom Vilsack should end the volume-based discrimination against small volume producers and breathe some life into their livestock markets. - Center for Rural Affairs

What does this mean to the average consumer? Higher prices, fewer choices, and the continued decline of an American Icon...the Family Farm








*Grain Inspection and Packers and Stockyards Administration - Part of the U.S.D.A

TEXAS DROUGHT THREATENS NATIONAL BEEF SUPPLY

AUTHOR'S NOTE - All of the premises presented in this series of posts are solely based on personal experience as a livestock producer and strictly as a cattleman (I have a basic understanding of farm commodities markets, but no real experience with such, and cannot speak with much authority from the farm side of things; Though I would think there are going to be some similarities). The information represents my opinion and is based on personal experiences. Any factual information may or may not be referenced, but be aware, the majority of the content is personal conjecture. Dialogue and comment are welcome.


Beef is the No.1 selling protein in the United States. Last year, consumer spending on beef totaled $74.3 billion. Per capita consumption of beef in 2010 was 59.6 pounds while per capita spending for beef was $240, according to industry research firm CattleFax.

 In the state that gave birth to the cowboy and spawned the culture of cattle drives, modern-day ranchers are fighting for survival. Severe drought (the worst in 44 years) and several million charred acres from wildfires have delivered a devastating "gut" punch, forcing ranchers to take drastic measures to save ranches across Texas. The state's livestock industry has lost $1.2 billion under withering conditions, according to the Texas Agrilife Extension Service, a service branch of Texas A&M University.

In Texas and other states with large cattle herds, the beef supply chain starts at the ranch. Ranchers own a herd of beef cows, each of which gives birth to a calf once a year. The mother nurses the calf and the pair graze on grass through the summer and into the fall, whereupon the fattened calf is sent to market.

This year, ranchers should be reaping the benefits of high prices, low supplies and high demand for their beef. The demand for calves from feedlots, where cattle add hundreds of pounds before slaughter, seems insatiable. Without rangelands full of nutritional forage, cows will struggle for nutrients. The herd will lose interest in breeding and cows may not provide enough milk for their calves, bringing the critical first step of America's beef cycle to a halt.

Among all meat production, beef producers typically incur some of the highest production costs. For example, costs for raising cattle are much higher than for poultry farming. Cattle producers pay more for each animal, grazing lands, fertilizers, feed and processing systems versus poultry farmers. Also the time it takes to prepare cattle for sale is much longer compared to other meats. It takes just 46 days for chicken to be market ready, but can take up to two years for beef.

Exacerbating the situation further is the shrinking number of cattle available for consumption. As beef producers struggle with the escalating drought, rising business costs, and mounting debt, more of them are selling their heifers for meat production, instead of breeding them to expand the herd. In Texas, the largest producer of cattle in the U.S., the "state herd" is down nearly 18% since 2008. In fact, ranchers and farmers across the country are shrinking their herd sizes bringing the nation's cattle herd count to it's lowest since 1958.


ADDING SALT TO THE WOUND:

The outlook for more rain looks grim. The National Weather Service's Climate Prediction Center forecast below-normal rainfall for Texas over the next month at least.

The WACKY WORLD OF CATTLE and COMMODITY PRICES

AUTHOR'S NOTE - All of the premises presented in this series of posts are solely based on personal experience as a livestock producer and strictly as a cattleman (I have a basic understanding of farm commodities markets, but no real experience with such, and cannot speak with much authority from the farm side of things; Though I would think there are going to be some similarities). The information represents my opinion and is based on personal experiences. Any factual information may or may not be referenced, but be aware, the majority of the content is personal conjecture. Dialogue and comment are welcome.


Well...several months of research and data down the drain! 


Here I was, all set to show you how the retail price to the customer was going to sky rocket this summer, how the price of corn and feed grains were too high for cattle producers to profit and, in general complain about how the cattle producer was being squeezed. 


Then, last week (June 30, to be exact), The USDA released "The Crop Report". 


Let me set this up...
In a nutshell, I was going to show:


1. Based on the late spring flooding of hundreds of thousands of acres of corn through the Midwest to Arkansas and Louisiana, the persistent cool weather and rains across the farm belt that have delayed annual plantings, and the devastating effects of storms and tornados across the mid-section of our country as well as through the South would drive the prices of corn and grains to all time highs. 


2. Because these commodities were the back bone of "grain fed" beef, the price of consumer prices for beef would rise, while the cattle producer would struggle to make a profit DUE to the higher costs associated with feeding cattle grain. 


AND, I was right (ever so briefly) ...corn and soybean prices were soaring and cattle producers, who are currently reaping very high prices for their cattle, were having their profit squeezed by the high cost of feeding corn...


Which brings me back to "The Crop Report"......

Turns out, the expected 2011 corn harvest will be much higher than expected and the harvest of other important food grains are also going to be well above average......This caused both corn and soybeans to back off of their "highs" by more than 10%. Grain commodities will continue to trend down over the next few weeks to very manageable cost levels for the beef industry.

GRAINS-U.S. corn extends losses after USDA report
                                                                                        Reuters News Service

So, what we have, currently, is the most rare of events in the cattle markets. The producer is actually receiving record prices for cattle while also enjoying "cheap feed"!! In other words, cattle producers are in a position to maximize profits not only through "lower input costs", but also while receiving historically high prices for their livestock.

"

Compared to last week’s sharply higher market, yearling feeder cattle 

continued their momentum and sold firm to 5.00 higher.  Steer and heifer calf 

demand improved on the heels of last week’s gains and traded from steady to 

6.00 higher with instances as much as 10.00 higher.  The most impressive 

signal of this week’s higher trade was the fact that it took place on fairly 

heavy receipts for this time of year with no help from the CME futures or fed 

cattle trade until the tail-end of the week." - USDA CATTLE AUCTION REPORT, JULY 1, 2011

Meanwhile, consumer prices for retail beef are still going up due to the inverse relationship with the above financial factors...the record high prices paid to producers are being "passed along" to the consumer.


"...higher corn costs—all higher costs—ultimately wend their way through the system and wind up in the retail price of the product..."  Burt Rutherford, Senior Editor, Beef Magazine

MERRY CHRISTMAS!

I'll be back the first week of January...2011!

UNDERSTANDING CATTLE MARKETING

PART 1 of The Series: A LIVING WAGE FROM COMMERCIAL CATTLE

AUTHOR'S NOTE - All of the premises presented in this series of posts are solely based on personal experience as a livestock producer and strictly as a cattleman (I have a basic understanding of farm commodities markets, but no real experience with such, and cannot speak with much authority from the farm side of things; Though I would think there are going to be some similarities). The information represents my opinion and is based on personal experiences. Any factual information may or may not be referenced, but be aware, the majority of the content is personal conjecture. Dialogue and comment are welcome.

 "A cattle auction is a place where honorable men try to swindle each other out of their herd." (an observation from my late Grandfather, who was an agricultural commodities buyer)


 An Introduction to the Various Methods for Selling Cattle

The marketing of livestock in the United States is conducted by a variety of businesses and individuals. The participants range from the order buyer who operates out of the seat of a pickup truck, cattle "buying stations" or "auction barns", and now video auctions that sell cattle via satellite television. The livestock marketing business has changed dramatically from the days when stock producers would send their livestock to a terminal market and totally blind of the price they might receive for their stock. Terminal markets and commission agents are still major players, but they now compete with modern day merchants who use computers, video broadcasts, fax machines, and cellular phones to market livestock. The current participants involved in the wholesale marketing of cattle include such diverse operations as feedlots, auction barns, order buyers, dealers, brokers, and video auction companies.

TERMINAL MARKETS and COMMISSION AGENTS

The term "Terminal Market" comes from the days when cattle were taken to the nearest train stop, or terminal, via trail drives and later by truck. Terminal markets usually provided a large area of livestock pens, also known as stockyards. The large meat packing firms would have buyers present to purchase the "meat on the hoof" and then arrange to ship the animals by train to the packing plants located in large metropolitan areas "back east."

 The use of commission agents dates back to the early days of trail drives when ranchers would send their livestock to an agent located at any of the larger stockyards, such as those located in  Chicago, Kansas City, and Fort Worth. These agents would then be responsible for the care and feeding of the livestock and the selling of them once they reached the yard. The agent was paid a commission, by the cattleman, based on how much the animals brought at market.

The Auction Barn
Livestock are consigned to auctions by ranchers, to be sold by an auctioneer. Because transprtation is a major expense, most often the producer will send their livestock to the nearest auction market. These auction markets are usually individually owned, though a few are owned by large food conglomerates. The owner of the auction receives a commission or a per head fee for selling the livestock in addition to charging for the feed consumed while the livestock are in the auction yard. 

In an auction livestock are typically sold by the pound except in the case of animals being sold strictly for breeding. Breed stock are usually sold by the individual head. For example, a breeding bull may bring as much as $2500 or more, whereas a steer destined for the feedlot is sold by weight "on the hoof". Simply put, a buyer  purchases the animal by the pound.

Sitting in the auction arena are the" buyers". They make their living attending  auction sales throughout the week. They may be order buyers working for  a single rancher or a buying syndicate, or they may be employees of a feedlot or a packing house. Order buyers are very knowledgeable and highly skilled at what they do. They are paid on a commission basis, and are responsible for purchasing hundreds (sometimes thousands) of head of cattle each week.


CUSTOM FEEDERS
A growing trend in the beef business in the last 30 years is the custom feeding of cattle. This means that a rancher contracts to have his cattle placed in a feedlot. He then pays for daily feed and yardage (cost of using the facilities) expenses. He then sells the cattle to a packer when they reach the weight required for processing. This method allows the rancher to retain ownership of the cattle all the way through the feeding phase. The cattle are then sold on the projected grade of the beef as well as on a weight basis. Simply put, the price per pound is determined by the expected quality of the meat.

PRIVATE TREATY SALES 
Some cattle producers like to sell their livestock through private treaty or "in the country," which simply means that buyers come to the ranch or farm to purchase the animals directly from the owner rather than from an auction market. 


SATELLITE VIDEO AUCTIONS
This relatively new tool allows cattlemen to offer their livestock for sale to buyers all over the country through the use satellite television technology. A video of a group of cattle pictures of  a particular

ranch's consignments of livestock are broadcast on the scheduled day, and buyers can view the livestock on their  television, via a broadcast subscription service. While they are viewing the livestock, they can make bids by telephone or internet to purchase cattle through this high tech version of an auction.  


PART 2: A Living Wage From Commercial Cattle
Life at the "Craps Table".

I'd Like to Buy the World A...Glucose Meter

The 1971 Soda Pop commercial filled our hearts with love and made the makers of diabetic supplies rich.

So, what are you drinking right now? Did you know that recent studies show that the average person drinks 50 gallons of soda a year? That is a little more than 533 twelve ounce cans per year and comes out to a daily average of nearly 18 ounces per day. Soft drinks are one of the largest single sources of calories in the diet of every American accounting for up to 7 percent and for teenagers, even higher at approximately 13%. What does this mean? To put into perspective, these numbers reflect roughly 60,000 EMPTY calories per year...calories that provide little or no nutritional value, but are often stored as sugars in our bodies.

Soda is one of the largest contributors of caloric intake in society today. As we all know, extra calories mean extra weight and that leads to health problems. Problems related to the heart, tooth decay, and Type 2 Diabetes (formerly called "Adult Onset").

OK, so nobody ever said that soft drinks were a health food. But a highly debated 2004 Harvard study concluded that in addition to the bad things we already know about sodas, they may be directly contributing to the nation's increase in diabetes. Since 1980, the incidence of type-2 diabetes has more than doubled  according to the federal Centers for Disease Control and Prevention, and now represents about 6% of the total population. AND,  about the majority of that increase has come in just the last 10 years.

No one is saying that our thirst for the carbonated "sugar shots" are the sole cause of the nation's growing number of jello butts and spare tire bellies. But, it is hard not to correlate the huge increase in diabetic incidence to the rise in obesity.

The bottom line here is that you need to analyze everything you eat and drink. You do not have to give up sodas entirely, but enjoy them responsibly and save them as a rare treat...as they were originally intended.

SOME EXTRA INFO ON SODAS, OBESITY, and DIABETES:
Diet Sodas Linked with Health Risks  

Zero calories, same great taste (and heart risks)

And a Companion Piece from the Wellness Tips Blog
Diet Intervention for Overweight and Obese Kids 
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MAD AS HELL!

AND I'M NOT GOING TO TAKE IT, ANYMORE!
WARNING! A "SMOKEY UNPLUGGED" RANT 

AUTHORS NOTE: If this article strikes a chord, PLEASE pass this website and article on to as many as you can. Change comes from knowledge. The more who know, the more who will become aware that there are other, viable, options for food shopping and maybe, just maybe, we can start to make a difference.

ENOUGH!
It is no longer something I can ignore....time to "take the blinders off" and quit pretending. The commercial livestock industry is just plain sick and deranged. For too long I have stood by, ignoring how these gentle animals are treated...in the feedlot, at the sale barn, on the dairy farm, and at the packing plant...I convinced myself that most producers were like me. We love our livestock and treat them with grace and dignity.  I have never witnessed any of the many cattlemen I know and work with, subject their animals to cruelty or abuse.  I assumed that if your livelyhood depends on these animals it is in your best interests to treat them, at the very least, with respect and with as little stress as possible. 

Well, "The Truth Shall Set You Free"!

I recently watched the film FOOD, INC. and it was an eye opening experience, even for a livestock producer, like me. I am over 50 years old, a one time college athlete, a proud cowboy. But, during the segments on livestock, I had tears in my eyes. Both from sadness and anger. Then, tonight, I watched a segment on cruelty to dairy cows on the ABC WORLD NEWS with Diane Sawyer.  I'm not going into the gory details, just suffice it to say the callous indifference to the infliction of pain and suffering on these animals is absolutely mind blowing. AND, most of it perpetrated by the dairy operator...( it has created a feeling of betrayal, those who I trusted) sigh(!)...(click on the Diane Sawyer link above for the details). The full story can be found on ABC's NIGHTLINE as well (be warned, some of it is very graphic).

The question now is how to effect change. It is obvious that each of us, on our own, cannot change an entire industrial culture.  After all, well organized and funded organizations that operate both nationally as well as internationally have had little effect except to make these industrial complexes dig their heels in deeper. But as individuals, we can, ever so slightly, create change and it starts with what has been the focus of this website...buy local, know who you are buying from, and always ask questions...whether it is about fruit, produce, or meat...if the producer is truly a craftsman (and make no mistake, we are craftsmen) then he or she will show it by the way they answer. Those of us who truly care about the product we produce, have an unmistakably sincere enthusiasm, passion, and love for the land and especially our animals. This passion, this love, cannot be faked.

Here is one thing I can promise. The cattle that I am responsible for are, and will always be, raised and cared for in the most humane and gentle ways possible. We do not brand, de-horn, or "tail-bob". Not a single animal I own will ever set foot in a feedlot. That they will never want for nutritious forage or water and that when the time comes, "it" will be in the most humane way possible...PERIOD!

These are pics of our animals with our Foreman. As you can see they are gentle and curious.

                                                                          

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