VB RANCH
Well-known member
It was in Western Ag Reporter, Letters to the Editor, January 17th 2013
The third-party audit...
It seemed harmless
Linda, if my name is printed, it would really put me out of the potato business. This is, however, the truth of what goes on with a third-party audit. You can print this or not, but it does need to be continually addressed. Linda, you and your paper are very trusted. To print the truth, I sure hope you can reach your readers to inform them. It's the Wal-Marts, the McDonald's, the Burger Kings that are pushing this on the packers, but the packers are the ones that are going to reap the profits at the expense of the independent cattlemen.
I read Lee Pitts' article The Auditor Part II in the December 6, 2012, issue, and this is the first I had heard about the third-party audit going into effect.
About 5-6 years ago, the potato industry, out of the blue, informed the contract producers that, in order to process potatoes for use, we would need to become GAP certified. GAP stands for Good Agricultural Practices. It seemed harmless.
The first audit was the introduction phase. It consisted of doing a few things here and there to comply. Now, it is half a million dollars in updates to facilities, pivots, extra help to record records, and the thousands of dollars to conduct the third-party audit.
The only thing I have gained from this is the right to grow potatoes and contract them IF I am able to pass the audit, of which there is no guarantee.
What happens when there are too many potatoes? When the price of potatoes drops below the contract price, there will be some who do not pass the audit just because the price of the contract is higher than the open market.
What will happen when there are too many calves in the U.S.? It will happen when they can get cattle cheaper out of foreign countries, and they could be infected with BSE or Foot and Mouth Disease without the price of the audit. The WTO has already stolen our COOL.
Most potato audits are done by State Seed Departments, what a lift in revenue! I envision state organizations will want to do the conducting of audits, the so-called cattle industry associates, to make more revenue and put a feather in their nest.
God help you if you are a member of some independent state cattle organization or US Cattleman's or R-Calf.
There is an old cattle rancher I respect a lot who he told me, "The bigger the hat, the less under it." Cowboys, wake up and put your farmer hat on. We know firsthand what is going to happen to us.
The first year they won't do much... come out and look at your ranch and ask questions. They will ask if you have a premises ID or are you a registered feedlot; you say no. They will ask if you tag or brand; you say why do you need to tag or brand? The next year, it will be their requirements.
They will go over your vaccination program. They will want your records, receipts, how many did you vaccinate, what day, was there any sickness when you vaccinated, did you treat anything else, did you separate the sick calves or did they die, and if they did, how did you dispose of them. They will want documentation of removal. They will want to know if you band or castrate, and if you are certified to do this or do you get a vet; if so, provide documentation. Then there is how many acres in this pasture, and how often do you move cows so you don't destroy the grass, and is it environmentally friendly; documents, please.
They will want to know how many employees you have, or if it is family run, and are the employees cattle certified? They will want names to interview them to see if they know every aspect of their job on the ranch, how they are treated, do you abuse them? If they don't speak English, is there someone to supervise them, and are they legal citizens?
They will go over facilities to see if they are cow and worker friendly. If you are to pass the audit, they will require you to update and remodel.
In the feeding program, they will want to know how many you feed, what you feed, do you have enough equipment, do you have bunks or feed in mud, where do you buy your mineral and supplements, do you mix it, or does it meet the areas needs. Tractors and trailers will be checked to see if they are in good shape, require rubber floor mat and better tires. They have ways of funding all kinds of things you need to purchase to pass the audit.
Then there is animal health, fly sprays, pinkeye, foot rot: how, when, where? documentation and receipts. They will go into testing for trich, johnes, etc.; if not, that will become part of the audit the next year.
Riparian area will be in question. Do you keep your cows out of the river, where is your conservation plan, and are you implementing it.
These are just examples of where this will go. The first year, it will just be a scheduled audit; the second year it will be an unannounced audit. It is no big deal because you guys with the big hats do everything right. You never get mad at all the good help. Your records will always be up to date, you can prove your neighbors were all certified to work cattle, and they would never say anything bad about your ranch when they interview them to see what kind of operation you run.
By now you get the picture. I'm convinced the only way to get this thing killed is to work through the breed associations and the two cattle organizations that care about the independent cattlemen. It is going to affect us the most.
My advice to you is to talk to your bull supplier and see where he stands. He is the only one who can put pressure on these breed associations. I predict we will lose 50% of the ranchers the third year of the audit when the ranch is fewer than 100 cows and 25% of the guys who have 500 cows or more. I will be in the 25% group, and my boys will have to exit the business because they will look at the bottom line and say it is not worth it.
All packers will soon follow with their own audit. Good luck and may you have a good audit!
Name withheld with Editor's permission
The third-party audit...
It seemed harmless
Linda, if my name is printed, it would really put me out of the potato business. This is, however, the truth of what goes on with a third-party audit. You can print this or not, but it does need to be continually addressed. Linda, you and your paper are very trusted. To print the truth, I sure hope you can reach your readers to inform them. It's the Wal-Marts, the McDonald's, the Burger Kings that are pushing this on the packers, but the packers are the ones that are going to reap the profits at the expense of the independent cattlemen.
I read Lee Pitts' article The Auditor Part II in the December 6, 2012, issue, and this is the first I had heard about the third-party audit going into effect.
About 5-6 years ago, the potato industry, out of the blue, informed the contract producers that, in order to process potatoes for use, we would need to become GAP certified. GAP stands for Good Agricultural Practices. It seemed harmless.
The first audit was the introduction phase. It consisted of doing a few things here and there to comply. Now, it is half a million dollars in updates to facilities, pivots, extra help to record records, and the thousands of dollars to conduct the third-party audit.
The only thing I have gained from this is the right to grow potatoes and contract them IF I am able to pass the audit, of which there is no guarantee.
What happens when there are too many potatoes? When the price of potatoes drops below the contract price, there will be some who do not pass the audit just because the price of the contract is higher than the open market.
What will happen when there are too many calves in the U.S.? It will happen when they can get cattle cheaper out of foreign countries, and they could be infected with BSE or Foot and Mouth Disease without the price of the audit. The WTO has already stolen our COOL.
Most potato audits are done by State Seed Departments, what a lift in revenue! I envision state organizations will want to do the conducting of audits, the so-called cattle industry associates, to make more revenue and put a feather in their nest.
God help you if you are a member of some independent state cattle organization or US Cattleman's or R-Calf.
There is an old cattle rancher I respect a lot who he told me, "The bigger the hat, the less under it." Cowboys, wake up and put your farmer hat on. We know firsthand what is going to happen to us.
The first year they won't do much... come out and look at your ranch and ask questions. They will ask if you have a premises ID or are you a registered feedlot; you say no. They will ask if you tag or brand; you say why do you need to tag or brand? The next year, it will be their requirements.
They will go over your vaccination program. They will want your records, receipts, how many did you vaccinate, what day, was there any sickness when you vaccinated, did you treat anything else, did you separate the sick calves or did they die, and if they did, how did you dispose of them. They will want documentation of removal. They will want to know if you band or castrate, and if you are certified to do this or do you get a vet; if so, provide documentation. Then there is how many acres in this pasture, and how often do you move cows so you don't destroy the grass, and is it environmentally friendly; documents, please.
They will want to know how many employees you have, or if it is family run, and are the employees cattle certified? They will want names to interview them to see if they know every aspect of their job on the ranch, how they are treated, do you abuse them? If they don't speak English, is there someone to supervise them, and are they legal citizens?
They will go over facilities to see if they are cow and worker friendly. If you are to pass the audit, they will require you to update and remodel.
In the feeding program, they will want to know how many you feed, what you feed, do you have enough equipment, do you have bunks or feed in mud, where do you buy your mineral and supplements, do you mix it, or does it meet the areas needs. Tractors and trailers will be checked to see if they are in good shape, require rubber floor mat and better tires. They have ways of funding all kinds of things you need to purchase to pass the audit.
Then there is animal health, fly sprays, pinkeye, foot rot: how, when, where? documentation and receipts. They will go into testing for trich, johnes, etc.; if not, that will become part of the audit the next year.
Riparian area will be in question. Do you keep your cows out of the river, where is your conservation plan, and are you implementing it.
These are just examples of where this will go. The first year, it will just be a scheduled audit; the second year it will be an unannounced audit. It is no big deal because you guys with the big hats do everything right. You never get mad at all the good help. Your records will always be up to date, you can prove your neighbors were all certified to work cattle, and they would never say anything bad about your ranch when they interview them to see what kind of operation you run.
By now you get the picture. I'm convinced the only way to get this thing killed is to work through the breed associations and the two cattle organizations that care about the independent cattlemen. It is going to affect us the most.
My advice to you is to talk to your bull supplier and see where he stands. He is the only one who can put pressure on these breed associations. I predict we will lose 50% of the ranchers the third year of the audit when the ranch is fewer than 100 cows and 25% of the guys who have 500 cows or more. I will be in the 25% group, and my boys will have to exit the business because they will look at the bottom line and say it is not worth it.
All packers will soon follow with their own audit. Good luck and may you have a good audit!
Name withheld with Editor's permission
