<?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Billings, Mont.R-CALF USA recently met with members of the Senate Finance Committee Trade Team of Sen. Max Baucus, D-Mont., to discuss trade issues important to the U.S. cattle industry, as the trade team traveled throughout Montana to discuss trade issues of importance to Montana industries. R-CALFUSA presented the team with its "Overview of International Trade and the U.S. Cattle and Beef Industries." <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
R-CALF USA CEO Bill Bullard urged the trade team to first distinguish the needs of the U.S. cattle industry from the needs of the U.S. beef industry.
"In addition to about $36 billion generated each year from live cattle sales to the beef packing industry, the cattle industry generates an additional $14 billion annually from sales of live cattle to other live cattle segments, and states like Montana which have few beef packers but still generate over $1 billion from live cattle sales are dependent on the wellbeing of the live cattle industry explicitly," Bullard pointed out. "This is why it is fundamentally wrong to view the U.S. beef industry as representative of the interests of the U.S. cattle industry."
Bullard provided charts to the trade team to show that the live cattle market has been broken for the past two decades because of a distinct disconnect between live cattle prices and beef prices. He said the result of this disconnect is threefold: 1) a continued and substantial exodus of cattle producers from the industry; 2) a domestic cattle herd that is rapidly shrinking in size; and, 3) a 13-year stagnation in the production of USA beef derived exclusively from cattle born, raised and slaughtered in the United States.
"Trade policy must reflect and address the supply sensitive nature of our live cattle industry, or the unfavorable trends we are now seeing will accelerate," Bullard said. "Current trade policies reflect the interests of the beef packing industry while ignoring the interests of the cattle industry.
"There are no protections against import surges for cattle producers, no consideration for the perishable nature of fed cattle, no acknowledgement that beef is imported into the U.S. in two distinct forms: the form of the beef commodity itself and in the form of cattle that are converted to beef upon entry in the U.S.," he continued. "There also is no requirement that cattle and beef produced in foreign countries must meet health and safety standards that are at least equal to U.S. standards."
Bullard pointed out the U.S. cattle industry suffers from a substantial, long-run trade deficit measured in value that exceeded $1.5 billion in 2008, and that over half of the U.S. global trade deficit in cattle and beef as measured by volume is from trade with Canada and Mexico under the North American Free Trade Agreement (NAFTA).
"Under our current trade policies, cattle and beef imports are capturing the growth in domestic beef production," he said. "Our trade policies of the past 15 years have failed the U.S. cattle industry and must be fundamentally reformed."
Bullard outlined R-CALFUSA's 10-point plan to fundamentally reform U.S. trade policies so U.S. cattle producers can begin to benefit from trade, rather than be destroyed by it.
"We must develop a national trade strategy that will facilitate the restoration and rebuilding of the contracted U.S. cattle industry," he emphasized. "This can only be accomplished by achieving an equitable balance between the interests of the U.S. cattle industry and the interests of the U.S. beef industry."
The 10 specific reforms that R-CALF USA requested of the Baucus' trade team include:
- Specifically asses trade impacts on the live cattle industry.
- Address global market distortions that disadvantage U.S. cattle producers.
- Develop special rules to recognize the perishable nature of cattle and beef.
- Designate cattle and beef as like/kind products.
- Prevent transshipment of cattle in the production of foreign beef.
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