“I am so disappointed in Congress, and never dreamed it would ever become this bad.”
That’s a quote from an email a cattleman sent me, responding to my Agribusiness Freedom Foundation columns on the Inflation Reduction Act, or more appropriately, the inflation production act. A majority of any 535 people off the street would not be so clueless and so economically illiterate as to dump hundreds of billions of additional dollars onto our inflation bonfire while saddling the people and businesses with more taxes and regulations and surrendering billions to climate change.
A recent analysis by economists Steve Moore and Tomas Philipson noted Americans have awarded subsidies to the renewable energy sector of $200 billion over 40 years—and the sector still generates only 7 percent of our electricity—unreliably.
The Senate, for this seismic piece of “historic” legislation—Sen. Chuck Schumer’s (D-NY) term—has summoned a huge consensus: a one-vote margin. The House will have debated or voted on that bill or changed it enough to force a conference committee when you read this. The House was expected to pass it, but with only a four-vote margin and 435 members facing a verdict from the people in less than three months—who knows? We do know roughly half of Congress is economically illiterate—or knowingly complicit in national economic destruction.
The opinion polls show the overwhelming majority of people are not happy with our country’s direction nor President Joe Biden and the actions of the executive branch’s federal agencies. The Democrats and general mass media continually tell the American people that everything they know in their daily monetary struggles is imaginary, or Trump did it, or Putin did it. When it comes to gas prices and food prices and everyday necessities, people know what they know and know when they’re being lied to.
Meanwhile, the coal trains from Wyoming keep rumbling through Colorado as Germany and France found out the hard way in a very expensive and frightening experiment that renewables can’t carry the load. China never believed it for a minute.
Judging by markets and pricing, however, Americans are still eating, expecting and evidently will pay for high-quality beef. Boxed beef still trades in that $260-270 price range. Cash and contract fed prices have outpaced the futures because speculators are not as sanguine about the demand from consumers as packers, retailers and restaurants are proving. Steaks and burgers for grilling are selling at premium prices. Briskets for the smoker have backed off some, and chucks have been on special lately, but beef is still moving, even considering this is the “down” time for the market. The Choice/Select spread has been eye-popping, reinforcing the notion that consumers want high-quality beef.
No one lately has been complaining that beef exports are inconsequential, only benefit the packers or are not worth the effort. The figures at the National Cattlemen’s Beef Association’s recent summer meeting were $483/head added value from exports, accounting for 15 percent of production. Things were already humming along until you-know-who and Robert Lighthizer got China involved, and now things are really popping. Demand for our grain-fed beef is ever stronger globally.
Japan’s trigger level has been significantly raised, negotiated by the combined efforts of the last and current administration, so Japan, South Korea and now China are soaking up both high-quality beef and grain-fed variety meats at record paces. Canada and Mexico are still important customers, and a host of smaller markets in South America, Asia and Africa are chiming in.
Speaking of senators not understanding reality, one bill that would severely damage our high-quality beef production system and the other that would create a “Supreme Harassment and Prosecutorial Office” for the marketing system could fall victim to the congressional calendar, political ineptitude and election season pressures. The Deb Fischer (R-NE)/Chuck Grassley (R-IA) bill that would decree negotiated cash procurement targets regardless of season, fed cattle pools and alternatives cleared the committee. So did the special investigator office bill that would create an additional market cop office at Packers and Stockyards (P&S) but with its own subpoena and prosecutorial powers P&S hasn’t had. The best hope for quality beef and for cattlemen to control their own industry—with its flaws and benefits—is for this Congress to run out of time.
It still has a raft of appropriations bills to thrash out—yes, the $739 billion in the reconciliation bill would be just icing. They will likely pass two or three continuing resolutions to stave off government shutdowns before December. — Steve Dittmer,WLJ columnist
(Steve Dittmer is the author of the Agribusiness Freedom Foundation newsletter. Views in the column do not necessarily represent the views or opinions of WLJ or its editorial staff.)
