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Published October 03, 2011, 07:53 PM

Leaders seek unity to grow beef industry

BISMARCK, N.D. — The National Cattlemen’s Beef Association is walking the halls of Congress and regulatory agencies, working to make sure government doesn’t shove beef off the center of the food plate, two of the organization’s top leaders said in addressing the recent North Dakota Stockmen’s Association annual meeting in Bismarck, N.D.

By: Mikkel Pates, Agweek

BISMARCK, N.D. — The National Cattlemen’s Beef Association is walking the halls of Congress and regulatory agencies, working to make sure government doesn’t shove beef off the center of the food plate, two of the organization’s top leaders said in addressing the recent North Dakota Stockmen’s Association annual meeting in Bismarck, N.D.

NCBA President Bill Donald of Melville, Mont., and Forrest Roberts, chief executive officer, both talked on the theme of “unity” between state and national groups, and between the NCBA and such national groups as the Cattlemen’s Beef Board.

The NCBA has 247 members on its board, and an “executive committee” of about 32 people. The policy organization is separated from promotion activities by an “accounting firewall,” Roberts says.

National Cattlemen’s Association was the second-largest contractor and the NCBA was the largest. Now they’ve merged and are the largest contractor, Roberts says. On the promotions side, the Federation of State Beef Council and the Cattlemen’s Beef Board each provide 10 members to a Beef Operating Committee, which decides where checkoff dollars are spent on promotion

Roberts says the overall goal is to have “more people enjoy beef more often.”

He says the cattle industry has to do its part in feeding another 3 billion people that are expected to populate the earth by the years 2040 to 2050. Only 4 percent of the world population lives in the U.S., and food production must increase 100 percent, or double. Seventy percent of that increase in production will come from “advancements” in technology, production practices and efficiencies.

Major retailers and food service operators today are concerned about the beef supply — not promotion, brand differentiation or differentiation of proteins, Roberts says. He says there have been four straight years of declines in global production, driven by drought in the southern part of the U.S. That region represents about 35 percent of U.S. beef cows, but about 30 percent have been removed because of drought.

Roberts says it would take 4.9 million cows to go back to a 2004 level of 65 pounds per capita net beef supply.

“Is the demand there to be back to that 2004 level? Absolutely. It’s there in spades. That’s why I’m looking at this as a glass half-full and not half-empty,” he says.

Donald says his organization is a “servant of the beef industry and not a master of the beef industry.”

He says the NCBA is looking at how to implement a long-range plan of defining who the cattle industry is and creating a better bond with consumers.

Initially, the NCBA completed Cattlemen’s Stewardship Review, which Donald says is used to communicate who cattlemen are, what the beef industry is and how it works. The review includes issues such as environmental stewardship, animal husbandry and beef safety.

“We tell that story to consumers in our own words, and that’s been very positive,” he says.

Against GIPSA rule

The NCBA opposes a proposed Grain Inspection, Packers and Stockyards Administration rule, to regulate cattle marketing.

Donald says he “despises” the rule because it is vague.

The NCBA opposes it because it uses “fairness as the measuring stick for lawsuits and not injury,” Donald says.

Instead of having to prove that a marketing agreement harms the whole industry, someone would have to prove that the marketing agreement isn’t fair because “Joe gets more than John.” All “alternative marketing agreements” will go away because they are “by nature not fair” because a cattleman breeds for a certain market for a certain premium, Donald says.

“I think it’s trial lawyer’s dream and the producers’ nightmare,” Donald says.

Roberts says “the value that’s been put into this industry in the past 20 to 30 years” could be erased “with the simple stroke of a pen.”

The GIPSA rule, to be sent to the Office of Management and Budget in the near future, will include 30,000 “meaningful” comments that were submitted by cattlemen across the country will influence the U.S. Department of Agriculture to modify the rule.

“We’re hopeful that they will,” Donald says. “What’s at stake is the very way we market cattle.”

He says marketing agreements have grown through the years and evolved in which cattle producers can get a premium for raising the “right kind of cattle for the right kind of program.”

Donald says those marketing programs are a “good bond between the consumer and the cattleman.”

He says that is a good program when the consumer sees something they like and are willing to pay more for it.

“That’s the kind of thing we want to encourage, not discourage,” he says.

Donald says the NCBA also is concerned about the U.S. Environmental Protection Agency “running roughshod” over the cattle industry.

“They’re trying to do with regulations what they couldn’t get done legislatively,” he says.

EPA’s influence

The NCBA is involved in such issues as the EPA changing standards for dust and particulate matter, or the Clean Water Restoration Act or declaring greenhouse gas a pollutant. These initiatives have “all been discussed in Congress and have been rejected” but the EPA administrator has implemented changes with the stroke of a pen, Donald says.

Roberts noted that 1,100 rules have been brought forth through EPA in the past three years. “About 450 have stuck; the other 650 we’ve been able to push back on,” he says. “This is an area of the federal government that is really going for that overreach like we’ve never seen before.”

Donald praises U.S. Agriculture Secretary Tom Vilsack for informing EPA Administrator Lisa Jackson that these rules would harm agriculture. But Donald acknowledges some accusations against the EPA have been overblown. One example is that the EPA hasn’t declared hay a pollutant. The issue there was whether a Confined Animal Feeding Operation was out of compliance with rules for storing hay on its facility.

On the other hand, the Clean Water Restoration Act would — among other things — take the word “navigable” out of the definition of the waters the EPA governs. If that were to go away, that would put the EPA in control of all waters, even if it were a ditch or a pond or a pool. That isn’t the intent of that law,” he says.

The EPA also wants to lower the level of dust (particulate matter) in the area, so that driving a pickup down a road in summer, or a farmer in a field could put a farmer out of compliance.

“Those are things where common sense has not been taken into consideration,” Donald says. “Those are things that we’re very diligent in finding out that our common practices are acceptable.”

He says the EPA will start enforcing dust rules “only where we have monitoring stations” but it will still create an important precedent.

“There could be a monitor in a city the size of Bismarck and a farmer adjacent to that would be out of compliance,” he says.

He says the NCBA’s “only recourse” has been cutting funding of the implementation of the rules, with some success.

Beef trade issues

On trade, Donald says Free Trade Agreements with countries such as South Korea are important, especially with agreements that restore “all beef from all ages” into that country, but he says the Obama administration added Trade Adjustment Assistance that added $9 billion in spending. That has passed the U.S. Senate and appears likely to pass the House.

“At that point — hopefully, before the election fever sets in — we’ll get these free trade agreements passed,” he says.

Donald says some NCBA leaders think it’s time to increase the beef checkoff to develop demand for beef. He says with more cattlemen retaining ownership of beef in the marketing chain, there are fewer dollars going into the checkoffs. Also, the value of the dollar has diminished. Groups only are beginning to look at how the check-off might be “enhanced.” Roberts says checkoffs and other sources may be needed to have the promotions effort “resourced properly.”

Roberts says it could take $1 million to $4 million “just to change the stream of resources,” or the checkoff in the next six to 12 months. The NCBA policy already supports an increase in the checkoff, but doesn’t say when or how much.

If the GIPSA rule is implemented by USDA, the NCBA likely would sue the agency, Donald says. That legal effort could cost the organization as much as it would need to spend to increase the checkoff to promote beef.

Donald has a cow-calf yearling operation with two of his sons, as well as Donald’s sister and her husband, and a niece and her husband.

At one time, he was allied with the R-CALF USA organization, started in Montana. Donald was involved in the Montana Stockgrowers Association and got on the board of the state organization and in the officer’s rotation. That put him on the board of the National Cattlemen’s Beef Association. Donald was appointed chairman of the NCBA’s cow-calf council, then into an officer’s rotation. Meanwhile, Donald’s friend, Leo McDonald, started R-CALF for help in fighting beef import policies in the late 1990s.

“We had all of those trucks coming by, and it was a big issue to get to the bottom of import issues,” Donald recalls.

So Donald was on the executive committee of R-CALF, and the group was successful in taking petitions to the International Trade Commission. The ITC said the imports indeed had an impact, but not great enough to require a remedy.

At that point, Donald moved to other issues and R-CALF started a membership organization, which Donald didn’t favor. Donald says R-CALF at the time had a $600,000 debt to a lawyer and part of R-CALF’s presentation, when it was sponsored by groups such as the North Dakota Stockmen’s Association, was that they were not there to start a new membership organization.

Today, NCBA endeavors to be the “go-to organization for the entire industry,” while R-CALF focuses more on trade and marketing issues.