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Bullard takes shots at packers in Iowa appearance
Tuesday, January 17, 2006
By Jean Caspers-Simmet
Agri News staff writer
WAVERLY, Iowa -- Bill Bullard, R-CALF USA CEO, told Iowa State Dairy Association delegates last week that while he doesn't pretend to understand the dairy industry, he does understand the beef industry and they are a part of it.
Dairy accounts for 21 percent of the adult cattle herd in the United States.
R-CALF USA was formed seven years ago to represent the interests of live cattle producers, Bullard said.
While the industry has tried to convince cattle producers that what's good for the packer is also good for the producer, history has shown otherwise. Bullard said that in order to determine what live cattle producers need to do to advance their interests, they need to understand the goals of major meatpackers.
One of their goals is to minimize the financial risk associated with the cyclical nature of the U.S. cattle industry. When U.S. supplies tighten, cattle prices increase, which increases meatpackers' risk and reduces profits.
"To reduce this risk meatpackers expand their supplies of cattle by melding together the herds of Canada, the United States and Mexico into one seamless North American herd," Bullard said.
Packers want to harmonize U.S. animal health and food safety standards to match the lower standards in other countries, Bullard said.
"Meatpackers don't want consumers to perceive any difference in beef, no matter what country the cattle come from,'' he said.
Meatpackers label their products with house brands, but they don't want country-of-origin labels, Bullard said. They want consumers to seek out their label, regardless of where the cattle originated.
Packers also lobby Congress to restrict producer access to trade-remedy laws because packers don't want independent cattle producers to restrict their access to inventories that are less costly than U.S. cattle, Bullard said.
"The guiding light has been that we're all in this together and that if we increase demand it will increase profitability for everyone, but these strategies do not increase profitability for cattle producers,'' Bullard said.
The past three years, producers have received historically high cattle prices, triggered not only by tight supplies, but also increased demand, a reduction in imports, and the packers' reduced access to captive-supply cattle held in Canada, Bullard said.
"The dramatic increase in prices revealed that packers were not keeping their promise to pass profits back to U.S. producers when beef demand increased,'' Bullard said. "Beef demand had actually been on the rise for a full six years before live cattle prices were finally able to respond without the interference from Canadian captive supplies and Canadian imports."
Bullard said the goal of R-CALF USA is to insure that independent cattle producers can continue to set the terms of their production, the terms for their marketing, and receive their competitive share of the consumers' beef dollar from the competitive marketplace.
"Only live cattle producers share the desire to maximize the profitability of the live-cattle segment of our industry," Bullard said. "If producers won't step up to compete to maximize their profitability, no one else in the industry will either."
R-CALF USA, which is based in Montana, has 442 members in Minnesota and 718 in Iowa. Nationwide, there are 18,192 members in 47 states. The organization is the fastest growing cattle organization in the country, Bullard said.
Tuesday, January 17, 2006
By Jean Caspers-Simmet
Agri News staff writer
WAVERLY, Iowa -- Bill Bullard, R-CALF USA CEO, told Iowa State Dairy Association delegates last week that while he doesn't pretend to understand the dairy industry, he does understand the beef industry and they are a part of it.
Dairy accounts for 21 percent of the adult cattle herd in the United States.
R-CALF USA was formed seven years ago to represent the interests of live cattle producers, Bullard said.
While the industry has tried to convince cattle producers that what's good for the packer is also good for the producer, history has shown otherwise. Bullard said that in order to determine what live cattle producers need to do to advance their interests, they need to understand the goals of major meatpackers.
One of their goals is to minimize the financial risk associated with the cyclical nature of the U.S. cattle industry. When U.S. supplies tighten, cattle prices increase, which increases meatpackers' risk and reduces profits.
"To reduce this risk meatpackers expand their supplies of cattle by melding together the herds of Canada, the United States and Mexico into one seamless North American herd," Bullard said.
Packers want to harmonize U.S. animal health and food safety standards to match the lower standards in other countries, Bullard said.
"Meatpackers don't want consumers to perceive any difference in beef, no matter what country the cattle come from,'' he said.
Meatpackers label their products with house brands, but they don't want country-of-origin labels, Bullard said. They want consumers to seek out their label, regardless of where the cattle originated.
Packers also lobby Congress to restrict producer access to trade-remedy laws because packers don't want independent cattle producers to restrict their access to inventories that are less costly than U.S. cattle, Bullard said.
"The guiding light has been that we're all in this together and that if we increase demand it will increase profitability for everyone, but these strategies do not increase profitability for cattle producers,'' Bullard said.
The past three years, producers have received historically high cattle prices, triggered not only by tight supplies, but also increased demand, a reduction in imports, and the packers' reduced access to captive-supply cattle held in Canada, Bullard said.
"The dramatic increase in prices revealed that packers were not keeping their promise to pass profits back to U.S. producers when beef demand increased,'' Bullard said. "Beef demand had actually been on the rise for a full six years before live cattle prices were finally able to respond without the interference from Canadian captive supplies and Canadian imports."
Bullard said the goal of R-CALF USA is to insure that independent cattle producers can continue to set the terms of their production, the terms for their marketing, and receive their competitive share of the consumers' beef dollar from the competitive marketplace.
"Only live cattle producers share the desire to maximize the profitability of the live-cattle segment of our industry," Bullard said. "If producers won't step up to compete to maximize their profitability, no one else in the industry will either."
R-CALF USA, which is based in Montana, has 442 members in Minnesota and 718 in Iowa. Nationwide, there are 18,192 members in 47 states. The organization is the fastest growing cattle organization in the country, Bullard said.
