The Organization for Competitive Marketing hosted a rally Oct.2 in Omaha to call on U.S. Department of Agriculture Secretary Sonny Perdue to take action and ensure fair prices for cattle producers.
Or, if he failed to do so, for President Trump to fire him.
“Perdue should get back on the side of fair practices,” said Vaughn Meyer, Organization for Competitive Markets vice president and North Dakota cattle rancher. “If he doesn’t President Trump should say those famous words: ‘You’re fired!’”
On hand to speak to the more than 250 attendees were representatives of OCM, Ranchers-Cattlemen Action Legal Fund United Stockgrowers of America and Family Farm Action. The event was sponsored by those organizations as well as Farm Aid, National Family Farm Coalition, American Grassfed Association and others.
Nebraska rancher and OCM member David Wright said he has lost all faith in Perdue and he believes Perdue shows partiality to corporations over independent producers. He called for protesters to speak with a single voice that was “so loud it shakes Congress and rocks the White House.”
Probably the most popular speaker of the day was Corbitt Wall of Texas. Wall is a fourth-generation cattleman, an auctioneer, livestock market analyst and the host of “Feeder Flash.”
He spoke in depth about what he believes are the challenges facing the independent cattle producers in today’s market. Among those challenges were lack of influence, cash trade, fake meat and government regulations.
The crux of the problem for independent producers was their lack of leverage, he said, because four major meat packing corporations that control 80% of the market.
“The packers work together,” Wall said. “While you producers will cut your neighbor’s throat for 5 cents a hundred weight.”
In the feeder cattle market he said he saw plenty of competitive bidding. In the beef markets he saw no problem with demand. But, in the fat cattle market he didn’t see any competitive bidding. The absence of any real competition resulted in producers having to take whatever price the corporate packers were offering, he said.
“That is what is wrong with our industry right now,” Wall said.
Another issue he focused on was the cash versus formula purchasing method. Wall said that the fact that only 25% of trades are actual packer-feeder negotiation and this benefits the packer. The rest are based on a formula – the average selling price plus 50 cents. He said big feed lots are cheering on the small sellers to drive up the price.
“What happened to haggling?” Wall said. “Back in the days of the Omaha Stockyards everything was 100% negotiated cash trade and there were rules.”
Wall showed a chart that broke down the negotiated cash trade as a percentage of area slaughter cattle sales in 2005. It showed Iowa at 75% and Nebraska at 65%. The next chart showed the same information for 2017. Iowa was about 50% and Nebraska was about 40%. Texas was at 10%.
“Does anyone here remember the Omaha hog market?” he asked. “Heck no you don’t. Because the same thing happened to them that is happening to the independent cattle producer now.”
He said the packers’ machinated hog-purchasing guidelines whereby they were only “allowed” to purchase from Level 3 hog producers. That would be the larger producers with concrete pens and other costly requisites, he said.
“Guys out there raising hogs on dirt couldn’t afford to operate as a Level 3 producer,” Wall said. “This resulted in fewer and fewer producers.”
Now, he said, all those Level 3 hog operations were tied to the packing companies in virtual serfdom. He said he sees a similar trend with cattle producers.
“Regional packers are the only reason this industry is still alive,” Wall said. “The Greater Omaha Packing Co., and Nebraska Beef are two of the best.”
A major sticking point for Wall was that, of the bloc of four packers, three of them are investing in what he called “fake meat” and using checkoff dollars to do it, according to Wall. The checkoff assesses $1 per head on the sale of live domestic and imported cattle. The checkoff website states that the program is “designed to stimulate beef sales and consumption through a combination of initiatives.”
He was perplexed how Beyond Meat qualified.
“Not only that, their logo is a steer head dressed in drag,” he said. “If that don’t offend you I don’t know what will.”
The last item on Wall’s grievance list was the government. He wanted the government to enforce the regulations of the Packers and Stockyards Act. Although he admitted he was conflicted.
“How sad is it that we are looking for government intervention to help us?” Wall said. “If you are looking to a P&S agent for fixing what’s wrong you’re in bad shape.”
Mike Callicrate, a founding member of OCM, R-CALF and the Kansas Cattlemen’s Association, also held the government accountable for the current producers’ situation.
“They drank the globalization Kool-Aid,” he said. “They say we need more big corporations to compete in the global economy.”
Since the repeal of mandatory Country of Origin Labeling for beef and pork in 2015, farmers and ranchers have seen the price they are paid for their cattle continually erode, Callicrate said.
“What happens when you buy in a more competitive market than you sell in?” he asked. “This past week, farmers and ranchers were losing over $200 per head while the monopoly meatpackers were making over $400.”
Former Missouri State Sen. Wes Shoemyer was also on hand to address the assembly.
“We need to take our rights back from the government, but also from big agribusiness and others with more money and more influence than us,” he said. “We need a Farmers’ Bill of Rights.”
Shoemyer said since the government took away COOL, fraud is being perpetrated on the American people.
“My grandparents would never believe this could have happened,” he said. “The American dream is equal opportunity.”
He stated that cattle producers weren’t “whining for payouts” like those in the Market Facilitation Program. Shoemyer said he just wanted the government to “undo the problems you allowed to happen.”
“Corporations don’t care about rural communities,” he said. “We have to convince the other 98% of the country that don’t realize that rural communities are vital to America.”
Based on the reaction of those gathered, the message of the speakers hit home. There were several shouts of agreement and other loud outpourings.
Kay Latham, a small Angus cattle producer and R-CALF member from Colorado, came to the rally because of depressed cattle prices and wanting to get something done.
“I’ve heard some good information, so far,” she said. “The enormity of what we face if we don’t fix what is wrong in the markets concerns me.”
Clark Mastel of South Dakota, a black Angus producer with no affiliations with the groups represented at the rally, said he also came because of the cattle markets and the way that he believes packers are stacking the deck against producers.
“The cattlemen have got to stick together,” he said. “We need to make a bigger sound and be heard.”
Payton Shanklin of Bassett, Nebraska, is another independent cattle producer. He is also a field hand at Bassett Livestock Auction. He and some others from BLA were adamantly in favor of stopping the alleged complicity of the packers in manipulating the market.
“They control us more than we control the cattle,” he said. “Right now, we may be breaking even financially.”
Reaction to the claims made at the rally came from other livestock producer organizations. The Texas and Southwestern Cattle Raisers Association, the National Cattlemen’s Beef Association and the U.S. Cattlemen’s Association were among them.
“The TSCRA opposes mandatory country of origin labeling,” said Jeremy Fuchs, TSCRA media relations for Austin, Texas. “We support voluntary, market-driven labeling programs to identify country of origin.”
USDA Food Safety and Inspection Service spokesperson Veronika Pfaeffle said that FSIS is currently considering the petition submitted by the OCM and the American Grassfed Association to amend the “Product of U.S.A.” entry in the FSIS Food Standards and Labeling Policy Book. Once the review process is complete, FSIS will publish the response on its website.
USCA Vice-President Brooke Miller of Virginia said his organization appreciates the efforts of the U.S. Department of Agriculture and Secretary Perdue to look into the issue of market manipulation. He also said ag producers need to stand together on finding solutions and advancing marketplace reform.
“Producers will keep looking for solutions and have been – before and after the fire – pre and post investigation,” he said.
Miller said the USCA also urges the White House, federal agencies and Congress to advance solutions that address concerns outlined by cattle producers in their request for fair cattle markets.
“Producers rallied,” Miller said. “USCA is focused on ensuring that Washington hears and responds to this unified message from across the country.”
“Give them credit for organizing. It can be frustrating,” said Pete McClymont, executive vice president and treasurer of the Nebraska Cattlemen Association. “There is a need to improve the market and more competition is needed. Continued follow-through is needed – when markets are up and when they are down.”
Jon Burleson can be reached at firstname.lastname@example.org.