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Jolley: Five Minutes With Steve Dittmer

Today 5/5/2006 9:08:00 AM

Jolley: Five Minutes With Steve Dittmer

Steve Dittmer is the executive vice-president of the Agribusiness Freedom Foundation and an avowed, active conservative. He’s got beef business bona fides - he co-published CALF News magazine for nearly 20 years. He’s been beef council CEO, association communications director and a small-time rancher. Early in his career he was a member of Beef Industry Council Advertising Committee that developed the first-ever beef industry national television ad campaign, and the industry's first Long Range Planning Committee.

Today, as the head man at AFF, he pushes for free markets and against almost any kind of government intervention. Here’s a clip from the AFF web site that explains his position:

“Free market approaches, including free trade, free business structure options, free alliances, free competition, free marketing options and free scientific innovation best serve the food production chain, the country and the consumer. The limited economic and governmental restrictions on business set in place by our Founding Fathers has served America well. We wish to see that traditional constitutional framework continued, unfettered by short-term "fixes" or capitulations to narrow interests.”

That’s one of the strongest calls to the laissez-faire school of economic thought since Adam Smith wrote “The Wealth of Nations” 250 years ago. Dittmer truly believes that the free market is best left to its own devices and it will dispense with inefficient businesses more deliberately and quickly than any legislating body could. The basic idea is that the less government interferes in private economic decisions such as pricing, production, and distribution of goods and services, the better the economy. To take it to the inevitable bottom line, one does not get his dinner by appealing to the brotherly love of the butcher, the farmer or the baker. One appeals to their self interest, and pays them fairly for their labor.

It’s an attitude that puts organizations like R-CALF squarely in his gun sights and causes some interesting questions to be posed about the source of his funding.

I asked him about it when I recently spent five minutes with him.

How did you get into the cattle business?

I was born and raised on a small beef operation. My father began feeding out his own calves and selling them to customers for their freezer back in the ‘60s. He received some carcass data back and got quality feedback directly from his customers. So I got an early exposure to an integrated and customer-focused approach to the beef industry. I earned an animal science degree with an ag communications specialty at Ohio State. I spent a couple years with the Nebraska Stock Growers and then seven years with the beef council in Nebraska. We ranched on the side in Nebraska for about ten years. My wife, Deb, and I published CALF News Magazine for over 20 years. My heart and my profession has been centered on the beef industry since about fourth grade.

What keeps you amused during your free time?

I cut, split and haul wood, read history, historical fiction and westerns, landscape, cook and eat and follow the Denver Broncos, Colorado Rockies and Formula 1 racing.

Let’s go straight to an important question that goes to the heart of your credibility. It’s been said that you’re a one-man lobbying foundation financed by the American Meat Institute, Tyson and a few other major packers. Is that true and if it is, what impact does it have on your opinions?

Some folks deflect attention from their inability to fight facts by speculating on peripheral questions. Those who think a few packers are funding AFF are not correct. The people funding AFF are involved in multiple sectors of the beef production chain but are grounded in the cattle production end. This question goes to the heart of what AFF is about – we believe in preserving free market options for everyone in the chain. That list includes restaurant chains, retail chains and packers, as well as ranchers and feeders. Our Sentinel columns (our e-newsletter) are reviewed by an AFF Editorial Committee, so while they reflect my personal beliefs, they also reflect the thinking and judgment of key AFF industry participants and observers. Our goals and philosophy are set by a Board of Directors and Advisory Council made up of some of the beef industry’s leading participants and innovators. I find it perplexing that people who believe in the true free market system are automatically categorized by some folks as somehow being connected to packers. The free market system enables everyone in the food production chain to adapt and innovate to serve the consumer.

You were a member of the Beef Industry Council ad committee that developed the first ever TV ad campaign. With the hindsight offered by two decades, were the original marketing goals achieved and have the subsequent dollars been well-spent?

The initial goals were exceeded. The total reversal of a 20-year decline in the demand trend was a tremendous testament to the value of the entire chain working together towards the same goal – focusing on consumer needs and wants. It also demonstrated the wisdom of that check-off investment by people far from the consumer plate, like purebred breeders, cow/calf operators and feeders. The returns have been enormous. And while packer contributions were in collection and contributing for many years, the initial new product development and alliance research proved to them, as well as retailers and the whole rest of the chain – including many innovative auctions that provide collection services -- that the effort and investment in new products, alliances and branded beef programs would yield significant returns for everyone. But there is still much to be done in improving quality, consistency and new products. The issues management area, health and nutrition research and consumer education will become increasingly critical as beef industry adversaries become more aggressive and sophisticated in their efforts to convince the public, especially kids, that beef and beef production is bad for health, bad for the environment and a bad moral choice.

Let’s talk about Kelo vs. New London. For those readers that don’t follow Supreme Court decisions, it expanded the ability of government to seize property from a private citizen and give it to a private entity if it could be proven that the result would be for the public good. Farm lands can be seized for housing developments, for example. Its announced practical application is to allow blighted urban areas to be converted to better uses. Do you agree and what long-term effect might it have on rural property?

Now is the time in history that cattlemen and political conservatives must not let escape. Our farm and ranch organizations labored for years to get Congress to understand how devastating the estate (death) tax was to farmers and ranchers, with limited success. It was not until small business people and upper middle class citizens with sizable estates realized their businesses and fruits of their labors would go not to their sons and daughters but to the government, that coalitions of ag and small business interests could be formed that made Congress sit up and take notice. Similarly, when environmental and Endangered Species regulations thwarted enough small business expansions or community projects, citizens realized what agricultural interests had been complaining about for decades. We must take advantage of this political moment, of the outrage among ordinary citizens at governments’ redefining “public use” to be anything government officials want it to be. The very foundations of our free market system depend upon the ability of citizens to own and control their own property, except in extreme circumstances. That is the short term. The long-term lesson is that we must elect presidents and Senators that believe the Constitution is to protect American citizens from our government, not stretch government power as far as possible.

Poultry producers can contract their output and the result is an industry that has been vertically integrated for years. The cattle business is prohibited from making similar agreements. Does it put beef production at a disadvantage?

There are no prohibitions and it should stay that way. The AFF is about preserving options for innovation and adaptation. There are those in the industry – and among activist groups – who favor a big government, centrally planned and controlled beef production and processing system – and they are trying to implement such prohibitions. We do not believe that having some organization or some government agency in charge of deciding how big a packer, or retail chain, restaurant chain, feedyard or ranch can be or how they can cooperate is Constitutional or the best thing economically for consumers or for the food production chain. Nor should government decide who can own cattle and who can’t and when.

We already have sufficient antitrust legislation on the books and the high degree of overall competition for cattle, when supply and demand factors are somewhere near balance, is evidence of the system’s efficiency. Those who believe packers have vast pricing manipulation powers ignore the last few years of low or absent packer profits when the supply was tight and cattlemen had more pricing power.

We view the capitalist economy as a pyramid, with the consumer at the top of the pyramid. Under that consumer in the pyramid are all the various sectors in the production chain. They should be allowed to compete or cooperate as they see fit to provide what consumers want and will pay for. Any system or restriction that makes something other than the consumer the focus of the pyramid, is a false economy that puts focus on some other factor or player than the people who pay the bill -- consumers. Comparisons with the poultry industry are overblown. The absolutely insurmountable capital requirements involved (trillions), much broader geography involved, much more complex production systems and other factors make it impossible for the degree of integration in the beef industry that poultry has experienced.

Thousands of cattlemen read CattleNetwork. What would you like to say to them?

There are radical farm and ranch groups, consumer activist groups, liberal politicians, faith-based groups and activist judges who believe it is their mission to drastically “reform” the free market aspects of our food production system. They want more government control and limitation over all links in the chain. They want to wrest control of agriculture from farmers, ranchers and the processing and merchandising businesses between cattle producers and the consumer. They want that control to reside in Washington, under the watchful eye of Congress, a liberal judicial system and consumer activist attorneys and do-gooders. Cattlemen who wish to control their own destiny and who wish to be allowed to continually improve the free market, mainstream system we have today, are going to have to aggressively defend that right from those who feel they know better. Your state and national mainstream organizations, as well as smaller groups like AFF, need your participation and your contributions if our free market system is to be improved, not destroyed.
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