|
             
|
By David Bowser LA JUNTA, Colo. — Governance, international markets, packers and organizational funding were among the questions faced by Bill Bullard of R-CALF USA and Terry Stokes of the National Cattlemen's Association in a debate here earlier this year. An NCBA member asked Stokes about representation, saying that as a member of the organization, he did not feel represented and that grassroots members do not have a vote that counts. The power lies in the executive committee, not the grassroots, he charged. But Stokes said that is changing. "You get one vote," Stokes replied. "I'll agree with you that in times past the voting took place on policy at the board of directors. Each of those directors was selected by their state organizations." Those directors, Stokes said, represented members through state affiliates. "Today, however, what we have done is we've changed our voting process," Stokes said. "The board of directors addresses policy, and then they recommend that policy to our membership at our annual meeting which occurs at the end of our convention. Each member who comes to that meeting has a vote. If you come to that meeting, you will have a vote on all policy." Stokes said that in addition to the meeting, ballots are sent out to members so they can vote on policy. "If you don't come to the meeting," he said, "we mail a ballot out to all of our members so all members can be counted. They don't need to come to the meeting to have an opportunity to vote on NCBA policy." Stokes said the new voting procedures are the result of members wanting a change. "We have listened," Stokes said. "In 1999, when R-CALF was formed," Bullard said, "the founders recognized the fact that the only way you keep a grassroots cattle producer continually directing the organization was to ensure every cattle producer has one vote, regardless of the number of cattle he has. There's no weighted vote. One member, one vote, whether you have one head or 20,000 head." Bullard said R-CALF thinks only cattle producers should be voting on policies that impact the cattle industry. "We adopted a policy that you must own cattle to vote in R-CALF," Bullard said. "We further recognized that folks are too busy to be able to come to a location that we designate on the day that we designate to hold our annual convention to form policy. We immediately adopted a policy that there will be a mail-out ballot for every voting member so every voting member has an opportunity to continue to direct this organization." Bullard said R-CALF also decided everybody needed to be able to afford to join the organization, so they set a low membership fee of $50 annually. Bullard encouraged those attending the debate to join either R-CALF or NCBA that night if they weren't already members. "Make your choice," Bullard said. "Make it known, because the issues need to be addressed right now. This is the defining moment in the U.S. cattle industry." International trade was another point of concern at the debate. The U.S. beef industry has had a $3.6 billion trade surplus over the last three years, Stoke said. "In 2002, for every pound of beef we exported, we received $1.66," he said. "For every pound of imported beef that we bought, it was $1.21 a pound. When you look at that balance, you see that we're selling a higher value product and netting 45 cents a pound." Stokes was also challenged concerning his use of the pronoun "we." One rancher told Stokes that his profits were dwindling, and he wanted to know which "we" was enjoying the trade surplus. The rancher said the positive trade development he saw was that when the border to Canada was closed, fat cattle prices went from the mid-$70 range to more than $100. Stokes said the "we" is the beef industry. He said the trade surplus can be readily seen in the price break after the export markets closed down. The drop in prices correlated to the $3.6 billion export market. "What we saw domestically is that our consumers continue to buy beef," Stokes said, "and continue to feel it is the safest in the world." But Bullard questioned the numbers being used by NCBA. "There's a real danger," Bullard said, "if you only look at half the equation on trade. How many people enjoyed the $3.6 billion surplus in 2002 with $67 cattle?" Bullard said no cattleman benefited because the profits were going to the packer. He claimed that imported supplies can be used to fill the packers' inventory and depress prices. "You have to look at the volume as well," Bullard said. "If you look at the volume, we have $2.4 billion deficit that has grown from about $1.6 billion in 1996 to $2.4 billion in 2002. It's that added volume that adds to the oversupply situation that depresses prices." Stokes and Bullard were also asked about the funding of their organizations. Stokes said audited financial statements are available concerning NCBA funding. "We have two divisions within NCBA," he continued. A portion of the organization’s $65 million budget is derived from contracting with the Cattlemen's Beef Board to conduct checkoff projects. "Those projects are clearly defined as to what legally we can do or not do," Stokes said. The projects he said NCBA is legally allowed to conduct include developing new products and national advertising. "That's what we do with funding that comes through the beef checkoff program," Stokes said. "We have state beef council partners who invest beef checkoff funds in those projects as well. We have to present those proposals to the beef promotion operating committee for approval." The committee must approve any project, as does the USDA, to see that the money is budgeted accordingly and is spent appropriately, Stokes said. NCBA receives $2.6 million from membership dues. "We also get a million dollars from our product council," Stokes said, "which are other allied industries that participate." They receive money as well through special projects, meetings and conventions. "R-CALF has five full-time employees in its national headquarters in Billings, Montana," Bullard said, "and one full-time lobbyist in its Washington, D.C., office. We had a $700,000 budget in 2003." The revenues were generated from dues paid by cattle producers. "We have about 8400 independent producers in 46 states," Bullard said. "We also receive memberships from 58 state and local cattle producer associations and affiliates which are aligning themselves with R-CALF." About one third of R-CALF's budget comes from cattle producers who give more than the $50 dues, Bullard added. They also put on calf sales to raise money. "The calf sales were begun, not by R-CALF, but by independent producers who realized the only way to have an effective national voice is for that organization to be funded," Bullard explained. "Our organizational funding comes exclusively from live cattle producers. We do not receive any funding from the packers. They do not participate in our policy development. Our organization has worked very hard and we continue to do so to be a pure representative of live cattle cow-calf producers, independent stockers and independent feeders." One of the broadest differences between the two organizations deals with public lands and the Endangered Species Act. "One of the reasons R-CALF was so effective on critical economic issues that affect the profitability of this industry," Bullard said, "is that we've been very focused. We are focused on marketing and trade issues." Bullard said R-CALF has calculated that cattlemen lost about $240 a head on fed cattle over the last 10 years. "If you had an additional $240 per head for every animal you sold for the last 10 years, how effective would you be in sustaining your interests against some of these environmentalists?" Bullard asked. "The number one issue facing this industry is the ability to earn a profit, the ability to have the means by which to address all the other factors that affect you." Yet, Bullard said R-CALF will expand its areas of concern. "I can assure you that as R-CALF continues to grow," Bullard said, "we will continue to expand in other areas, but there are other organizations that have been very effective along those lines. The Farm Bureau is very effective. You should be supporting them as well, but you need a strong national voice on key economic issues that affect your profitability. That's been our focus." NCBA represents all cattlemen in a variety of areas, Stokes said. "I think it's important for U.S. cattlemen to have the opportunity to have an organization that does that, because all that impacts the producers’ ability to pass their ranches on to the next generation. Just like the marketing issues. Just like the trade issues. We're all about fair trade. We're all about competitive markets. It's about a person's ability to market their cattle the way they want to, whether it's a cash market or they want to sell it on a contract. NCBA supports that position to market your cattle the way you want to." Despite repeated attacks on packers and their practices, Bullard said packers are not the enemy. "The packer is not our enemy," he insisted. "The packer is an integral part of the overall beef industry, but they have considerably more economic and political power." In response to why cattle prices went up last fall in the face of Bullard's assertion that packers have too much marketing power, Bullard said it was a combination of circumstances. On May 20, 2003, when Canada reported its case of BSE, the U.S. closed its borders to eight to nine percent of the pivotal volume of imports that came into the country, he pointed out. That decrease in supplies meant an increase in prices. "But that's not all that happened," Bullard continued. "When we closed the border to Canada, we effectively shut off the captive supply of cattle that are controlled and owned by IBP and Excel. We shut off captive supplies to two of the nation's largest packers." Bullard said the U.S. also effectively implemented country of origin labeling because Japan and South Korea, the United States' first and third largest export beef markets, demand the U.S. send only product exclusively from the USA and not containing any Canadian beef. "We implemented country of origin labeling, effectively cut off captive supplies, and we effectively managed the volume of imports coming into the U.S.," Bullard said. "That unleashed the competitive forces in the marketplace." He said cattlemen saw $79 cattle in the first quarter of 2003, but they couldn't sustain it because packers were able to manipulate the marketplace. "But when the border closed and the packers couldn't get those captive supplies," he continued, "your market functioned better than the market has functioned in the last 14 years." He said that’s why U.S. cattlemen saw dollar cattle. Stokes, too, said higher prices were the result of several things. "Number one," he said, "is the increase in beef demand came into play." Stokes said CattleFax reported that a large portion of the increase in price came from increase in demand for beef by consumers. He said there also was a difference in the cattle that were selling in 2002 and 2003. Cattle in 2002 were much heavier. "We were controlling the tonnage of product that we were putting into the marketplace," Stokes said. "It wasn't just about closing the border. It was a package." Today, the market for live cattle down from its peak but still strong. "What's driving that?" Stokes asked. "It's driven by consumer demand." |
|
 |
|
Questions? Comments? Suggestions? |