author unknown
Creekstone Farms is filing suit against USDA for refusing to allow them
to privately test animals for BSE for beef shipments to Japan. They invested
in the infrastructure to do the testing, had Japanese customers willing to pay
significant premiums for ID'd BSE tested beef, but were denied the right to
tests and licenses to export such beef to Japan. Other 2nd tier packers such
as Harris Ranch were willing to fill this market niche as well, if approved.
Japanese consumers want ID BSE tested beef. Not only was a segment of the U.S.
beef industry ready and willing and able to fill this demand but Creekstone
was forced to curtail kills and lay off workers as a result of USDA refusal.
Had we listened to Japanese consumers and provided them the product they
wanted, we'd have been selling a significant quantity of beef to Japan nearly
two years ago and trade would have likely built to large tonnage by now.
Instead we sell them nothing. Japanese consumers and the USDA are at
loggerheads, and the cattle market is suffering loss from the lack of export
market access to Asia.
This USDA decision cost the U.S. beef industry literally hundreds of
millions of dollars. Whatever Creekstone sues them for, it will not have been
enough. Why did USDA say, "No?" Their public reason is that testing is not
science based. This wasn't a science based decision or shouldn't have been. I
haven't been to a meeting of 20 or more cattlemen when someone doesn't tout
the need to give consumers what they want. Japanese consumers told the U.S.
beef industry what they want. They demand testing of all their own cattle,
asking the U.S. beef industry nothing more. We told them no. The Japanese
government, despite knowing their consumers didn't like it and it would shrink
the market there for U.S. beef conceded to accept un-tested beef from animals
younger than 21 months of age.
The USDA screwed that up to. A contaminated shipment containing banned
SRM burned Japanese retailers and U.S. packers with millions of dollars of
beef in transit that had to be disposed of and cemented the idea of U.S. beef
not being safe in Japanese consumer's minds, a disaster. Some want to hit
Japanese consumers in the nose, putting trade sanctions on Japan for not
reopening trade our way. I feel more like hitting the USDA and the real
players in this decision behind the scenes, the AMI and NCBA, in the nose for
this obstinate mistake. USDA argues testing all cattle for BSE is not
supported by science. Neither is selling hormone free beef to the EU which
USDA allows. There is no science based support for Certified Angus, Natural or
organic beef, but USDA allows their sale. The Japanese consumer wanted beef
from BSE tested animals, adding $200/head to animal's value and the USDA
discriminating arbitrarily decided "No, we won't trade beef to Japan."
Why? Because major packers feared large demand for BSE tested beef would
threaten their market share dominance. As they are commodity beef producers,
processing profitability depends on chain speed. Their operations are
unsuitable to accommodate a "Burger King, Have it Your Way" request from
Japanese consumers who requested BSE tested beef so they used their dominant
influence at USDA to kill Creekstone's request. If they weren't positioned to
sell Japanese consumers the beef they asked for, major packers weren?t going
to let their competition, Creekstone, Harris Beef or others, fill that niche
market either.
Instead, they spun the contention that if Japanese consumers get access
to U.S. tested beef, U.S. consumers may want it too and this "Burger King
giving consumers what they want market" would get entirely out of hand and out
of their control.
That's bunk. Few U.S. consumers would have wanted to pay for BSE tested
beef anymore than pay for Hormone free beef. The idea that all U.S. consumers
would have demanded BSE tested beef was a red herring - a smelly fish. This is
in part a competition issue. The USDA denied small packers an opportunity to
complete against big packers in a concentrated industry. It ties right in with
the USDA failure to enforce the Packers and Stockyards Act as confirmed by the
recent Inspector General's report on GIPSA. The AMI/NCBA runs USDA
politically, Creekstone should be suing them. U.S. Cattlemen should be suing
USDA/AMI/NCBA over the USDA's choice not to trade beef with Japan. We could
have restored beef trade with Japan long ago. It was our choice not to sell
Japanese consumers the product they wanted - An enormously expensive mistake
that we all should seek damages for.
Creekstone Farms is filing suit against USDA for refusing to allow them
to privately test animals for BSE for beef shipments to Japan. They invested
in the infrastructure to do the testing, had Japanese customers willing to pay
significant premiums for ID'd BSE tested beef, but were denied the right to
tests and licenses to export such beef to Japan. Other 2nd tier packers such
as Harris Ranch were willing to fill this market niche as well, if approved.
Japanese consumers want ID BSE tested beef. Not only was a segment of the U.S.
beef industry ready and willing and able to fill this demand but Creekstone
was forced to curtail kills and lay off workers as a result of USDA refusal.
Had we listened to Japanese consumers and provided them the product they
wanted, we'd have been selling a significant quantity of beef to Japan nearly
two years ago and trade would have likely built to large tonnage by now.
Instead we sell them nothing. Japanese consumers and the USDA are at
loggerheads, and the cattle market is suffering loss from the lack of export
market access to Asia.
This USDA decision cost the U.S. beef industry literally hundreds of
millions of dollars. Whatever Creekstone sues them for, it will not have been
enough. Why did USDA say, "No?" Their public reason is that testing is not
science based. This wasn't a science based decision or shouldn't have been. I
haven't been to a meeting of 20 or more cattlemen when someone doesn't tout
the need to give consumers what they want. Japanese consumers told the U.S.
beef industry what they want. They demand testing of all their own cattle,
asking the U.S. beef industry nothing more. We told them no. The Japanese
government, despite knowing their consumers didn't like it and it would shrink
the market there for U.S. beef conceded to accept un-tested beef from animals
younger than 21 months of age.
The USDA screwed that up to. A contaminated shipment containing banned
SRM burned Japanese retailers and U.S. packers with millions of dollars of
beef in transit that had to be disposed of and cemented the idea of U.S. beef
not being safe in Japanese consumer's minds, a disaster. Some want to hit
Japanese consumers in the nose, putting trade sanctions on Japan for not
reopening trade our way. I feel more like hitting the USDA and the real
players in this decision behind the scenes, the AMI and NCBA, in the nose for
this obstinate mistake. USDA argues testing all cattle for BSE is not
supported by science. Neither is selling hormone free beef to the EU which
USDA allows. There is no science based support for Certified Angus, Natural or
organic beef, but USDA allows their sale. The Japanese consumer wanted beef
from BSE tested animals, adding $200/head to animal's value and the USDA
discriminating arbitrarily decided "No, we won't trade beef to Japan."
Why? Because major packers feared large demand for BSE tested beef would
threaten their market share dominance. As they are commodity beef producers,
processing profitability depends on chain speed. Their operations are
unsuitable to accommodate a "Burger King, Have it Your Way" request from
Japanese consumers who requested BSE tested beef so they used their dominant
influence at USDA to kill Creekstone's request. If they weren't positioned to
sell Japanese consumers the beef they asked for, major packers weren?t going
to let their competition, Creekstone, Harris Beef or others, fill that niche
market either.
Instead, they spun the contention that if Japanese consumers get access
to U.S. tested beef, U.S. consumers may want it too and this "Burger King
giving consumers what they want market" would get entirely out of hand and out
of their control.
That's bunk. Few U.S. consumers would have wanted to pay for BSE tested
beef anymore than pay for Hormone free beef. The idea that all U.S. consumers
would have demanded BSE tested beef was a red herring - a smelly fish. This is
in part a competition issue. The USDA denied small packers an opportunity to
complete against big packers in a concentrated industry. It ties right in with
the USDA failure to enforce the Packers and Stockyards Act as confirmed by the
recent Inspector General's report on GIPSA. The AMI/NCBA runs USDA
politically, Creekstone should be suing them. U.S. Cattlemen should be suing
USDA/AMI/NCBA over the USDA's choice not to trade beef with Japan. We could
have restored beef trade with Japan long ago. It was our choice not to sell
Japanese consumers the product they wanted - An enormously expensive mistake
that we all should seek damages for.
