You Be The Judge

You Be The Judge
— by Lee Pitts

With at least three serious challenges to the beef checkoff currently in the works the NCBA could soon experience a nearly 90% reduction in its budget. Then it would have to go back to earning its money the old fashioned way: by selling memberships. When they do they´ll find a new competitor in the neighborhood also vying to become the official mouthpiece of this nation´s cattlemen.

R-CALF USA, or Ranchers Cattleman Action Legal Fund, United Stockgrowers of America, came from humble beginnings. Formed in 1998 by a group of disgruntled ranchers in Montana, South Dakota and Colorado, its first headquarters were at the Midland Bull Test Center because that happened to be the home and business of R-CALF´s guiding light, Leo McDonnell. R-CALF USA didn´t set out to be all things to all cattlemen. Initially their sole reason for existence was to do something about what they perceived to be the dumping of live cattle from Canada and Mexico into the US market. In the process of initiating several trade investigations R-CALF gained support from 25,000 cattle producers and over 125 producer organizations.

At the same time this was happening there was growing unrest in the country with the NCBA, who many cattlemen felt had sold out to big packers and feeders and was living a comfortable life on their checkoff dollars. So when R-CALF USA held its first annual convention in February of 2000 many in the group wanted it to assume an ever widening leadership role in the cattle industry.

No Vote For Buick

R-CALF USA became a membership-based organization in 1999 and distinguished itself as the only beef industry group that reserves voting rights exclusively for cattle producers. No feedlot members, packers, drug salesmen or car companies can vote unless they are ranchers. Membership is $50 annually and each person has one vote.

Compare R-CALF´s position to the NCBA whose leaders, you may recall, told us it was too late to allow a vote by mail on the merger of the old NCA and National Livestock and Meat Board. Common sense would suggest that any organization that can send out statements and a weekly newsletter could have allowed their members to vote by mail, but Paul Hitch summed up NCBA´s attitude when he said at the now infamous San Antonio convention, “The world is run by those who show up.”

Not necessarily so, says R-CALF. “Producers have told us they cannot always attend national conventions far from home, but they want their opinions recognized and acted upon. That is just what R-CALF is giving them,” says current R-CALF President Leo McDonnell. “Careful thought was given to the way members could participate in forming R-CALF´s agenda. Mail out ballots have enabled R-CALF members from across the country to participate and have their voices heard. We are really proud that our producer members lead and direct our association.”

Fast Track to Where?

To listen to R-CALF and NCBA members argue you´d think they were from warring camps: like the NRA and PETA. No question there is a deep divide, as evidenced in their positions on world trade. R-CALF is against the U.S. President being given fast track authority to make more trade agreements like NAFTA. NCBA, on the other hand, supports fast track and NAFTA. On June 18 NCBA President Lynn Cornwell met with George Bush to express the cattle industry´s support for Trade Promotion Authority which would give Bush the fast track he desires. Cornwell said, “Exports are the lifeblood of American agriculture. We may lose our existing share of foreign markets to other competitors if we are not an active player in new trade agreements.”

NCBA joined Cargill, Con Agra, Continental Grain, Farmland, General Mills, Nestle and Dreyfus as members in the Ag For Fast Track Coalition that would allow our domestic beef market to be further inundated with beef from around the world. One of Cornwell´s predecessors as NCBA President, George Swan, testified before the U.S. Senate Committee on Agriculture that his organization represented one million cattle ranchers and that the NCBA supported the World Trade Organization and its funding, and the authority given to the International Monetary Fund which is helping other countries expand their beef exports to this country.

The next trade agreement that NCBA is telling Washington politicians that one million cattlemen support is the Free Trade of the Americas agreement. FTAA was conceived at the 1994 Summit of the Americas where the leaders of 34 nations agreed to a hemisphere-wide trade pact that would be the most far-reaching trade and investment agreement ever signed. It would create the largest free-trade zone in the world and would grant big beef producing countries like Brazil and Argentina the same rights to ship their beef to this country that Canada and Mexico currently enjoy.

R-CALF USA vehemently opposes FTAA, as it does NAFTA, and points out that the United States has not produced enough beef to meet its own demand since the 1950´s. Today imports represent nearly 16% of total U.S. supplies. R-CALF USA has continually warned about the dangers of artificially cheap imports on the domestic market and has raised issues of food safety with imported beef. One of the resolutions passed by R-CALF USA at this year´s convention was their support for a moratorium on all imports of live cattle, beef, precooked beef and all beef products for three years: Until importers can prove the cattle and beef are free of Mad Cow disease and foot and mouth disease for the protection of the American consumer.

As Different As Black And White

The NCBA faces a daunting task: trying to be all things to all people. Their dilemma is trying to satisfy packers, feeders and ranchers at the same time while their objectives and needs are so different. “It is time for cattle producers to step to the plate and direct their own future through a national organization that concentrates only on market issues and trade,” says McDonnell. “The fact we haven´t had representation is not a good guy/bad guy issue. It is the realities of business. The major cost for packers and large formula feedlots is cattle. Why would any rational business support the cost of their major input going up? Once people understand that, then they understand why it´s critical the cattle industry has a strong independent national voice, separate from the beef industry on these issues.”

Here are a few more major differences between the two organizations:

  • R-CALF USA supports aggressive action against any further concentration in the beef processing and retail sales sectors. NCBA opposed legislation that would have halted temporarily the biggest agricultural mergers.
  • R-CALF USA supports a ban on the packer ownership cattle for more than 14 days prior to slaughter, with the exception of plants that slaughter less than 100 head per day. It is official NCBA policy that they oppose any legislation that would restrict packer ownership of livestock. After a vote at their Shareholder´s Congress that included a total of 191 votes the NCBA advised Congress that the million cattlemen represented by the NCBA are AGAINST any legislation that would prevent packers from controlling the market through direct ownership of cattle.
  • R-CALF USA wants stricter enforcement of anti-trust laws and more transparency in the market place. They are in favor of the interstate shipment of state inspected beef. NCBA chief economist, Chuck Lambert, wrote a memo to the House and Senate and committees opposing a proposal from the Western Organization of Resource Councils that sought to restore some competition into the pricing of fed livestock. Lambert advised that no action should be taken to alter or halt current trends because that is the direction where NCBA´s a long-range plan said the industry must go. That direction is dramatically clear: Beef producers received 70% of the retail beef dollar in 1970. In 1996 it was below 50% and falling.
  • R-CALF USA supported the actions of state attorney generals against the Tyson/IBP merger and supports further actions by them in opposing any further mergers in the ag business and food retail sectors. The NCBA did not support the cattlemen´s lawsuit against IBP and teamed up with them in developing new products financed in part by the checkoff. The NCBA is also on record as favoring a grid pricing structure, much like the way 90 percent of the poultry is raised and sold today.

The Right To Vote

With its plate already full R-CALF USA tried to stay out of the checkoff fight. Although they were asked, they took no position in the court cases seeking to have the checkoff declared unconstitutional. They are on record as favoring a periodic referendum on the checkoff. “It is unfortunate that as an industry that is losing its private property rights, water rights, public land use rights, it is also compromised in its right to vote,” says McDonnell. “Whether one supported the referendum or not, is not the point. What is important is that we not trade off certain rights that are dear to this country. When the right to vote is compromised to a privilege to vote, it only serves those who master it. R-CALF memberships supports a periodic vote and we appreciate the dedication the LMA has shown to the U.S. cattle industry.”

McDonnell has said that he does not think that most cattle producers had a problem with the original intent of the checkoff. “However, they do have a legitimate concern when the primary contracting agent, NCBA, who has opposed or compromised cattle producers in political arenas in addressing cattle market issues such as concentration, packer feeding, international trade, and country of origin issues that may, or are, suppressing their cattle prices. These are not just political differences, but they are agendas that are in direct conflict to hundreds of thousands of cattle producers. There is something ethically wrong when those who oversee these funds continue to channel these funds through a contract agent who has, and is, working against U.S. cattle producers.”

“To merge the checkoff with any association whose political agenda is in conflict to so many producers, compromises the potential goodness of the checkoff,” says McDonnell. “Whether the Cattlemen´s Beef Board is truly concerned with pulling this industry back together or not, will depend on their willingness to allow producers to vote on the continued merger. That´s really the problem I keep hearing, and it´s not going to go away. Some will say we did vote through the Beef Board representatives. But I did not, and as a producer I have never been allowed to participate in the nomination or election of our state and national representatives.”

Until R-CALF USA came along, that is.

A New Chapter

R-CALF USA became the first cattle organization in history to propose a comprehensive Cattle Chapter for the nation´s farm bill. Their proposal includes a market oriented safety net that would NOT require any federal expenditures. The safety net provision recommends the use of variable import quotas that would be triggered when imports exceed a preestablished, market depressing level. During those times when domestic beef producers are hurt by the dumping of foreign beef, tariffs on imports would be filtered back to ranchers whose market was hurt.

R-CALF USA´s proposed Cattle Chapter in the Farm Bill also includes an eight-step plan for the enforcement of antitrust laws. But R-CALF´s highest priority for the farm bill is a country of origin labeling law that requires an animal to be born and raised in this country in order to carry such a label. They also support restrictions on the use of the USDA grade stamp for imported beef.

Other public stances taken by R-CALF USA include support for legislation which would prohibit slotting allowances, display fees, presentation fees, pay-to-stay fees and failure fees in the retail grocery business. Or kickbacks, as you and I might call them. They believe our government should encourage the U.S. cattle industry to provide hormone-free beef to those countries that oppose the importation of hormone produced beef and they support government incentives for improving the environment. One reason you always hear for not abandoning the NCBA in favor of R-CALF USA is the NCBA´s more established presence in Washington DC. But listen to what U.S. Senator Tom Johnson had to say about that: “We in Washington D.C. need the vision and passion that comes from R-CALF to get things done. R-CALF is widely respected in DC and across party lines. More Congressmen are looking to R-CALF for direction.”

Evidently so are more cattlemen. New affiliates like the Wyoming Stockgrowers, Kansas Cattlemen´s Association, South Dakota Stockgrowers and Missouri Stockgrowers Association have all joined up. “A lot of people think R-CALF just represents Montana, Wyoming and the Dakotas. It doesn´t,” says John Lockie, executive Director of R-CALF USA. “The group now has members in 38 states and affiliate organizations that include local state cattle associations and general farm organizations. R-CALF USA represents producers from Hawaii to New York and has tremendous support from Southern States like Texas, Florida and New Mexico,” says Lockie. “More people are signing on all the time. This is a bunch of fiercely independent people. They know something has to be done.”

If you are a cattleman and like what you have just read you can join up by sending $50 to R-CALF USA, P.O. Box 30715, Billings, MT 59107.