To: R-CALF USA Members and Affiliates
From: CEO Bill Bullard
Date: April 17, 2020
***REVISED***
Summary: On behalf of its members, In January 2020 R-CALF USA introduced a comprehensive market reform plan in Congress incorporating R-CALF USA-member’s policy goals. That reform plan specifically includes an immediate increase in cash market volumes to 50% and provides a 4-year phase in for individual packers whose captive supply volumes were already above 60% in 2018, requiring those high-volume captive-supply packers to reach the 50% floor by Jan. 1, 2024. The reason we did it this rather than a simple across-the-board increase was to ensure the cash market would not be skewed by the different types and quality of cattle sold in the north versus the south. That’s why packers in the northern states would immediately increase to at least 50% while some packers in the south would be increased more gradually.
Today, a handful of people have taken R-CALF USA’s already introduced plan, watered it down, called it their own, and are now whipping the industry into a frenzy in an effort to ensure that R-CALF USA members’ goals will not be achieved. Why?
This same handful of people did the exact same thing when R-CALF USA was working with our U.S. Trade Ambassador to urge him to engage in post WTO ruling diplomatic negotiations to preserve Mandatory Country-of-Origin Labeling (MCOOL) for beef, just as the Ambassador had successfully done in response to many other adverse WTO rulings such as the Brazil sugar case and dolphin-safe tuna case. But, this same handful of people worked the industry into a frenzy to support a voluntary COOL bill. When the Ambassador saw that Congress was introducing a voluntary COOL bill, this sent an immediate signal to the Ambassador to back away from a diplomatic solution, which resulted in a quick end to MCOOL.
Background: In 2015 R-CALF USA’s members knew our industry was quickly heading for a crash. In 2016 we called for an investigation of the cattle markets. In 2018 we called for an investigation into the cattle futures market. In early 2019 we filed a national class-action lawsuit against the Big 4 packers.
In the fall of 2019 we began working with a national coalition of organizations representing poultry, hog, and dairy producers. After months of work we crafted a comprehensive proposal that included all the critical reforms that R-CALF USA members have been seeking. It also included reforms for poultry, hog and dairy producers.
At that time, before the crisis, Senator Cory Booker was the only U.S. Senator expressing an interest in the cattle industry. And he introduced our reform package in January 2020. Unfortunately, along with our comprehensive reform package, Senator Booker included language in his Senate Bill 3221 that we absolutely do not support. So, we began looking for Senate sponsors to either amend S.3221 to take out the bad language, or to simply take the already drafted competition reforms and place them in a stand-alone bill.
However, the presidential impeachment process began and no one in Congress was interested in talking cattle issues. We then began scheduling meetings toward the end of March with several congressional offices that had expressed an interest in our proposal. But, COVID-19 forced us to cancel those meetings.
Since then, and during this crisis, we’ve been meeting with Senators and House members alike and we’re asking them to consider our entire reform package, but because of the crisis, we’re asking them to take the two things out of the reform package that hold promise to immediately begin improving our industry’s crisis piled on a crisis. Importantly, these two things will help improve, but will not fix, all the serious problems in our marketplace.
Those two things are: 1) restore MCOOL for beef, and 2) require packers to purchase a majority of cattle in the cash market. Once we get their support for these then we will ask them to support the entire package.
The entire package is absolutely critical as it represents the structural reforms we must make to genuinely fix the broken legal framework for our industry. The entire Competition Reform Package consists of the following (the page numbers correspond to S.3221 linked here):
Beginning on Page 12: Prohibits unpriced contracts (formula contracts without a firm base price).
Beginning on Page 15: Bans packer ownership and control of livestock for more than 7 days before slaughter.
Beginning on Page 18: Makes it unlawful for packers to not provide carcass data used to compute price and it eliminates the “business justification” packers have used to avoid prosecution.
Beginning on Page 20: Prohibits retaliation by packers
Beginning on Page 24: Clarifies that farmers need not show harm to competition to show a violation of Packers and Stockyards Act.
Beginning on Page 25: Requires packers to immediately increase cash market sales to 50%, but with a phase-in for packers that currently buy very small volumes in the cash market. All packing plants to reach 50% by Jan. 1, 2024.
Beginning on Page 32: Restores Mandatory COOL for beef and pork and includes mandatory COOL for dairy products.
This COVID-19 crisis has completely changed America. Congress is searching for permanent solutions so that our nation never goes through this again. That is what our comprehensive reform package does. And now is the best opportunity we’ve ever had and likely ever will have to get it passed.
But, instead of forging ahead with these critical reforms, and gaining more and more industry support to do it (so far the Nebraska Cattlemen and Cattle Producers of Washington are supporting a 50% cash market), we have a group of people who are deceiving you in an effort to ensure R-CALF USA’s member policies will not be enacted.
These people are being deceptive when they tell you this is their idea and R-CALF USA is jealous because it didn’t come up with it on its own. These people are also being deceptive when they tell you the industry won’t accept the phased-in 50% proposal we’ve already introduced. These people, who have already undercut our MCOOL efforts and are now undercutting our market reform efforts have an ulterior motive. What is it other than to prevent the cattle industry from getting done what needs to be done?
I don’t know? But, I do know we need to stop it before they do even more damage to our industry.
This is extremely serious. All of you have worked too hard to develop the meaningful reforms needed so the cattle industry can begin rebuilding America to let a handful of people undercut your efforts.
Action: Don’t be deterred by this handful of detractors. Please continue making your calls to each of your Congressional members to find those willing to discuss how they can help us pass our cattle industry reform package. We can’t overwhelm them so start with these two issues:
- Ask them to pass legislation to require all beef sold in America to be labeled as to where it was born, raised, and harvested. This will reignite competition and allow American consumers to begin supporting American farmers and ranchers.
- Ask them to pass legislation to require beef packers to purchase a majority of their cattle needs from the competitive cash market. This will restore our industry’s most important price discovery market.
As your Senator or Representative if they would agree to have a conference call with you and R-CALF USA. If they agree, please let us know and we will participate on the call with you.
Thanks for our continuing support and we’ll be in touch.
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R-CALF USA (Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America) is the largest producer-only lobbying and trade association representing U.S. cattle producers. It is a national, nonprofit organization dedicated to ensuring the continued profitability and viability of the U.S. cattle industry. Visit www.r-calfusa.com or, call 406-252-2516 for more information.
