General chaos is one thing. The beef industry being abused politically is typical. We’ve all appreciated that President Donald Trump’s policies have usually benefitted our industry. But undercurrents circulating now could not only discourage any herd rebuilding but damage the very foundations of the production and marketing chain that’s achieved record success.
If those with very narrow vision from within our industry convince politicians, in an election year, to implement the radical views they’re espousing, there are serious pitfalls. While Trump and his team have accomplished great things, he understandably has little experience with the complex beef production chain. He appreciates the importance of the cattle industry. But some folks he listens to are not free market people. The within-industry radicals savvy little about economics and nothing about processing beef at tremendous scale.
Trump’s intentions are good but attacking the big packers through the Department of Justice or attempting to negotiate discounts on beef prices will not help cattlemen or hasten herd rebuilding. The big packers represent 80% of the capacity of an industry that involves quickly processing fresh food with a limited shelf-life and tremendous volume. Our 26 billion pounds annually comes to over 70 million lbs. a day. That’s not easily modified.
Allowing ranchers to process their own meat sounds good to those who don’t understand food safety. But USDA inspection is the cornerstone of food safety and beef consumer confidence. We cannot allow amateur butchers to sell uninspected beef into commerce, as the president seems to think. Archaic. Dangerous.
Tracing outbreaks through recalls and investigation—under one of the world’s safest beef production system—is hard enough now. Adding thousands of amateur suppliers to the system would be untenable.
For mandatory country-of-origin labeling (MCOOL), the issue is both simple and complex. We do not have the capacity to produce as much ground beef as consumers demand. The product’s taste, versatility and the marketing power of American grocers, cattlemen’s beef promotion and the fast food industry have resulted in a great success story. Plus, U.S. population has nearly doubled since 1960 (179 million people) to now (estimated 343 million people). We can’t keep up.
Those who say MCOOL is not expensive and would boost beef prices should reflect that our record cattle and beef prices have occurred without MCOOL—because it is not a primary concern of most consumers. Our industry has managed to satisfy the tremendous demand for ground beef using properly inspected, imported lean beef to supply our customers who depend on us and make our Choice trim worth much more money.
When we gas up our car, do we know what fraction of it came from Canada, Venezuela, Nigeria or Texas? Was the sugar cane in your soda pop grown in Brazil, India, Thailand or Louisiana? Is all beer brewed or whiskey distilled in America?
Trade is often a two-way street. We secure and retain access to foreign markets by allowing access to them. Recall Congress rescinded MCOOL the last time because Canada had billions of dollars of retaliatory prohibitions ready, carefully calibrated to hit certain congressional districts whose constituents exported to Canada.
Forcing the major packers to track every one of hundreds of cuts from each carcass would cost plenty. It would not only raise costs to packers, reduce returns to cattlemen and increase prices to consumers, it would also affect supply chains. Packers coped the last time by limiting what plants could buy from feedyards in certain regions on certain days in assure compliance. We get beef and sell beef to Canada and Mexico every day.
It is ironic that the same cattlemen who want MCOOL are the same people who have fought RFID tooth and nail. They don’t want cattle traced but they want every piece of beef traced?
Retail ground beef labeled 80/20 lean-to-fat ratio is not really 80/20. The penalties are draconian for retailers missing the mark. That 80/20 is more like 82/18. Safety margin. No one risks penalties or consumer confidence. Much ground beef comes in chubs processed at the packing plant, with the most sophisticated equipment for achieving that ratio.
Ground beef is processed under rigid sanitation conditions at processing plants to avoid pathogen problems. Processing plants have testing labs right on site to prevent contaminated ground beef from entering the market. How many ranchers would have a testing lab on the ranch for test-and-hold before shipping ground beef to customers?
Yes, this is a pivotal election year, but these ideas would drastically hurt consumers and the beef industry. — 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.)
