The voice of agriculture often struggles to be heard, but industry representatives sounded it loud and clear at a recent Senate hearing.
Livestock industry leaders testified at a Senate Agriculture Committee hearing on Sept. 25 to share industry perspectives and current statuses on topics ranging from the Tyson beef plant fire to regulating meat and competing products. Members representing the beef industry included: Jennifer Houston, president of the National Cattlemen’s association (NCBA); Shane Eaton, representative for the United States Cattlemen’s Association (USCA); and Jayson Lusk, professor and head of Department of Agricultural Economics at Purdue University.
The hearing was held by Sen. Pat Roberts (R-KS), chairman of the Senate Committee on Agriculture, Nutrition and Forestry, in preparation for the consideration of reauthorizing the Livestock Mandatory Reporting Act, currently set to expire in 2020. The 2015 bipartisan act was established in order to provide transparency on current market conditions.
“…A single event—such as a hurricane, a wildfire, a disease outbreak, the loss of a processing plant or an export market—can have a ripple effect that sends shock waves throughout the industry,” Roberts said in his opening statement.
He continued: “When onerous regulatory burdens that often confront this sector are added to the mix, growers and ranchers can find it difficult to simply do what they love—raise livestock and care for their land.”
Staying competitive
Houston stressed the importance of foreign trade, better access to lucrative markets, and the urgency in passing the U.S.-Mexico-Canada Agreement (USMCA) in her testimony.
“The future success of the U.S. beef industry relies on competitive market access to a growing consumer base in Asia,” Houston testified. She backed this up by saying 2018 saw a total of $8 billion of U.S. beef sold to foreign consumers, with one-quarter of the sales coming from Japan.
Houston also encouraged the committee to continue to push for a reauthorized Commodity Futures Trading Commission and Mandatory Price Reporting Reauthorization.
Eaton’s testimony highlighted recent market changes.
“The livestock industry is a historically up and down, ever-changing marketplace due to its dependence on consumer trends, domestic and international policies, and foreign market factors; however, today’s marketplace lacks the transparency and true price discovery indicative of a healthy industry,” he said.
“While the fire in Holcomb, KS is a unique event, it paints an accurate illustration of the importance of the futures board to the cattle marketplace.”
Eaton cited a Sept. 16 report by Kansas State University, which detailed the packer margins spike to nearly four times more than finished steers’ annual average, at $549.
Lusk also testified about an unexpected reduction in processing capacity, referring to the Tyson fire, that reduced demand for cattle, thereby depressing cattle prices. The extra labor needed to increase Saturday processing, and repurposing cow plants for steers and heifers added additional costs to the price of wholesale beef, he said.
“These price dynamics are not surprising and are generally what would be expected from the fundamental workings of supply and demand,” he testified.
Lusk also identified the nearing expiration of the Livestock Mandatory Reporting (LMR) and the importance for LMR to continue to modernize and respond to the pace of change in the industry.
Where’s the beef (from)?
A hot topic for all three industry witnesses was identifying and pressing for meat regulations.
Houston testified that NCBA believed the word “beef” should be reserved for products derived from animals and wanted to ensure “sensible regulatory oversight” so that “all protein products can compete on a fair and even playing field,” regarding meat-alternative proteins.
Eaton stressed the importance of revitalizing country-of-origin labeling (COOL) as there are “no clear definitions for what constitutes a U.S. beef product.
“Congress should close this loophole and clearly define the phrase ‘Product of the U.S.A.’ to mean cattle that are born, raised, and harvested within our borders,” Eaton said. He further elaborated that the current labeling system deprives U.S. cattle producers of product differentiation and allows packers to take advantage of the market.
“Alternative proteins are attempting to ride the coattails of [the Beef Checkoff] by capitalizing on consumer confusion,” he said.
Lusk, in contrast, testified that mandatory COOL (mCOOL) was repealed for beef and pork in 2015 in order to avoid more than $1 billion in retaliatory tariffs after a legal battle with countries before the World Trade Organization.
Meat demand has also indicated that if anything, beef and pork demand increased after the repeal of mCOOL, he said. Cattle prices may have fallen shortly after its repeal, but Lusk explained this was due to an increase in cattle inventory that happened to coincide with the labeling change.
Maintaining a healthy herd
An additional concern that each testifier voiced was protecting animal health across the U.S. against foreign disease.
Houston testified that cattle producers appreciated Congress’ support in the 2018 farm bill for creating a foot-and-mouth disease vaccine bank in the event of an outbreak, but stressed that it’s been a year since the bill’s implementation, and it’s important to have the bank up and running soon.
Lusk expressed concerns with the spread of African swine fever, and said although it doesn’t affect cattle, there are diseases that could have similar devastating effects. Thus, there is a need for additional funding for research to combat foreign animal disease, he said.
Eaton seconded the above concerns, but also said with the growth of a global marketplace, the U.S.’s trading partners will begin to expect a more transparent animal identification system. He recommended a national animal disease traceability system to be carried out on a state-by-state basis, with no single private organization housing the data, and streamlined technology to maximize efficiency. — Anna Miller, WLJ editor
