Independent cattle producers have a problem with the proposed U.S.-Mexico-Canada AgreementIt’s the same old NAFTA rules with a new name. Ranchers will still be fighting relentless vertical integration pressure. The fix is still in for the financial interests of the multinational packers and processors.
And consumers will still be denied access to information about where the beef on their plate was born and raised. According to past World Trade Organization rulings, NAFTA blocks Country of Origin labeling. USMCA doesn’t change those provisions. Rewrap imported raw beef and it’s magically transformed into a “Product of USA.”
Final comments have been submitted to the International Trade Commission (ITC) for a required report to the President evaluating the economic impact of adopting the USMCA. Bill Bullard, CEO of R-CALF USA, provided both oral and written testimony on behalf of the Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America. He acknowledged the successful negotiation of changes to remove pressure on U.S. auto and truck manufacturing as well as the textiles and apparel industries that was pushing basic production and jobs offshore.
But Bullard pointed out the USMCA adopts “the destructive provisions in the original NAFTA that will accelerate the contraction of our U.S. cattle industry.” It’s a critical hit to the largest commodity sector of American agriculture based on annual cash receipts of about $70 billion annually, according to Bullard. As packers and processors share of the consumer dollar has increased, the men and women who take the risks and raise the beef have seen their returns per cow decline by over 25 percent since 1994.
Like most of our food production, the big bucks don’t accrue to the farmer or rancher but to the processor and distributor. You may see a variety of branded labels in the meat case, but 85 percent of those beef brands are owned by the big four corporations – Tyson Foods, JBS, Cargill and Smithfield Foods. Their end game is increased control through vertical integration. The big four absorb every step except the riskiest one, but why own what you can outsource.
First they came for the chicken farmers. The big four corporations developed branded products and demanded consistency to meet the consumer expectations which they created. They consolidated ownership from processing through wholesaling until all that was left was actually raising the birds. Now more than 90 percent of all chickens are raised on contract, with the “independent” farmer taking the majority of the risk for a capped profit, subject to demands for investments in infrastructure in order to keep the business. As captive producers, they have little recourse.
Pork lagged about 20 years behind chicken, but is increasingly dominated by contract production. Cattle ranchers don’t want to follow the pig and poultry path.
That’s why the disappointment in the USMCA from the organizations representing independent producers over corporate giants. The big four have used increased imports plus their control of processing facilities to squeeze U.S. producers into accepting lower prices. According to Bullard’s testimony to the International Trade Commission, “nearly 20 percent of U.S. beef cattle operations in existence when NAFTA was implemented are gone today, further causing a hollowing out of our rural communities.”
It’s not just an economic impact, although that is the ITC focus. University based research is tuning in to the benefits of well-managed and planned grazing to reduce wildfire risk and return beneficial nutrients to the soil. Regenerative agriculture is the new buzzword in carbon sequestration. Healthy environments require human minds and hearts interacting daily with the land and the animals, and impersonally controlled contract operations can’t do it.
While the beef industry and its corporate lobbyists may benefit from the USMCA, producer groups like R-CALF will continue to protest on behalf of the men and women who raise and sell cattle.
“The USMCA will do to the U.S. cattle industry exactly what NAFTA was designed to do: It will reduce economic opportunities for U.S. cattle farmers and ranchers who exclusively produce cattle born, raised, and slaughtered in the United States, while simultaneously maximizing profit margins for multinational beef packers and their contractually-aligned feedlots.”
R-CALF’s Bullard and the producers he represents aren’t going to let USMCA go forward without a fight.
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