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Friday, January 31, 2014

No respect

by Pete Crow - Publisher

The 2014 Farm Bill was, for the most part, completed last week and it appears that there was something in it for everyone, except for the meat business. After a huge legislative effort from major groups representing the cattle and meat industry, they were ignored at the end of the day. The conference committee reconciling the farm bill decided not to act on Country of Origin Labeling (COOL) or the prohibition on Grain Inspection Packers and Stockyards Act (GIPSA)—the two main issues that the National Cattlemen’s Beef Association (NCBA), the National Meat Association, and other producer and meat groups saw as a priority issue in this farm bill.

 

COOL has been a very contentious issue that has consumed a great deal of time and treasure over the past 12 years. Packers have always said that if COOL is allowed to stand, it will be a great cost to the livestock and meat processing industry and will do nothing to add any value to meat products.

During conference committee debates, it appeared that the industry was going to have a real chance of changing the language of COOL, which would have taken the definition of U.S. beef back to the 1990s, when any livestock processed in a USDA-inspected packing plant was considered product of the U.S. Any fresh or frozen product coming into the U.S. would be labeled to the country of origin. As it stands, the industry will have to use the born, raised, harvested label.

Ironically, during the conference Sen. Michael Bennett, (D-CO) was prepared to propose a compromise in the legislation. Sen. Debby Stabenow (D- MI), Senate Chairman of Ag, said no to the compromise, then the proposal was carried by Sen. Thad Cochran (R-MS) and he was told the same. House Ag Committee Chairman Frank Lucas (R-OK) was also asked to deliver the proposal and Sen. Stabenow said no again. Apparently, Stabenow had no intention of allowing any adjustments to the COOL language. Sources tell us that she also communicated with Secretary of Agriculture Tom Vilsack and the White House about the issue. No reason for the cold shoulder was given.

Sources at NCBA said that Sen. Stabenow was in NCBA offices during their legislative conference last fall and said she and her staff were willing to work with them to find a compromise to fix the COOL language. And Rep. Lucas wasn’t about to slow down the progress they had made on the bill. He is from Oklahoma, which is a huge Farmers Union state. Farmers Union was very active in opposing the changes to COOL.

Scott George, President of NCBA, said after the conference committee released the bill that “The livestock and meat industries were just thrown under the bus by Congress.” He also said that fixing COOL and removing the GIPSA language from the farm bill were top priorities at NCBA.

At this point, NCBA doesn’t support the farm bill and will attempt to kill it in the Senate and send it back to conference to fix COOL and remove the GIPSA language. That doesn’t seem likely at this point, but stranger things have happened.

On Feb. 18, the World Trade Organization will meet to determine if the U.S. has complied with their complaint about COOL, which they determined was discriminatory to both Canada and Mexico. Then we will find out if the current COOL language will satisfy the WTO. Most people we’ve talked with assume that the WTO will not support the current language and then the U.S. will appeal their decision.

Then we will go into the retaliation rounds and figure out what products Canada and Mexico can impose retaliatory tariffs on. If this deal goes that far, it is assumed that they will impose tariffs sometime in the spring of 2016. Canada can impose up to a billion dollars and Mexico can impose up to $800 million in retaliatory tariffs on American goods. And they are two of our largest meat customers.

What’s always bugged me about this deal is that this whole issue was started by a few small cattle groups that thought cattle imports were hurting their market for feeder cattle and the large meat packers were evil. Although without Mexican and Canadian feeder cattle and finished cattle from Canada, we could start to lose feeding and packing capacity—elements that are essential to make a market for cattle.

Apparently, the Obama Administration decided that Farmers Union, R-Calf and U.S. Cattlemen’s Association were the end all, tell all organizations that represented the entire cattle industry. Lawmakers received a very biased perspective of the North American cattle and meat complex. Isn’t it amazing what bad information from a handful of people can do? — PETE CROW

 
 


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