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NCBA, NPPC Help Packers Capture U.S. Cattle Supply Chain

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Billings, MT " In its 72-page formal comments (comments) filed Nov. 22, 2010, with the U.S. Department of Agriculture's (USDA's) Grain Inspection, Packers and Stockyards Administration (GIPSA) regarding the agency's proposed competition rule (GIPSA rule), R-CALF USA accuses the National Cattlemen's Beef Association (NCBA) of deceiving and misleading the public regarding the condition of the U.S. cattle industry in an effort to help multinational meatpackers capture "control of the live cattle supply chain away from the nation's independent cattle farmers and ranchers."

The group's comments quote a statement by the meatpacker trade association American Meat Institute (AMI), which the group states is evidence of the packers' intention to capture the live cattle supply chain:

"The entire U.S. economy - from manufacturers to service providers - has moved towards both vertical and horizontal integration as a means of survival and striving for excellence. Barring one sector of the economy, meatpackers, from utilizing this model is unfair, punitive and lacking in any credible evidence."

"By definition, the vertical integration of the cattle industry requires beef packers to capture control of their supply chain, which is the U.S. live cattle industry, and as such, the packers' intentions could not be any clearer than this," said R-CALF USA CEO Bill Bullard of AMI's quote.

The group accuses NCBA of opposing the GIPSA rule because NCBA represents meatpackers that would be subject to the rule's competition provisions, and specifically named NCBA board member Ken Bull, who also is vice president for cattle procurement for meatpacker Cargill Beef, as an example of packer control over NCBA. Throughout its comments, R-CALF USA collectively refers to the meatpackers' trade associations, NCBA, AMI and the National Pork Producers Council (NPPC) as "NCBA et al."

R-CALF USA 's comments call the GIPSA rule "an absolutely essential first step to prevent dominant beef packers from unlawfully capturing control of the live cattle supply chain away from the nation's independent cattle farmers and ranchers" and state that cattle producers need only look at the concentration in the hog industry "to comprehend the cattle industry's destiny should no action be taken to alter the industry's current trajectory."

Using copies of numerous NCBA charts within its comprehensive comments, R-CALF USA charges that NCBA et al are masking the true condition of the cattle industry by disseminating only partial and ambiguous industry data and omitting relevant data. R-CALF USA states that NCBA et al's actions "have effectively misled many cattle producers by deflecting their attention away from the serious crisis presently facing the U.S. cattle industry."

R-CALF USA also ridiculed NCBA et al's study completed by Informa Economics that claims packers likely would avoid the cost of keeping records on premiums as required by the GIPSA rule by paying only a standard price for animals, which would eliminate premiums and cause producers to begin producing poorer quality beef.

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R-CALF USA, Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America, represents thousands of U.S. cattle producers on domestic and international trade and marketing issues. R-CALF USA, a national, non-profit organization, is dedicated (more...)

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