Why Prices Are Down

[HDRider]

None of us cow/calf producers would have liked COOL the way it was written. We have used and depended on cattle from Mexico and Canada for 100 years. U.S. stocker operations have grazed Mexican calves since the west was won. At some point those calves should have more rights than an illegal immigrant. All of our calves would have had to been permanently marked to identify them as U.S. born. The explanation to me was we needed to micro chip our calves so they could be traced each step of the way to slaughter. Feeder yearlings from Canada and stocker calves from Mexico could not co-mingle with U.S. born calves.
The label should should have been North American beef.
COOL was designed to intentionally fail and allow cheaper fresh beef imports.
Congress defunded the enforcement branch of the USDA on November18, 2011.
U.S. meat packers began closing slaughter facilities. It is cheaper to import beef than pay union wages to process them.
It is illegal to import fresh beef from Brazil. They have Foot and Mouth Disease, which is an airborne disease.
Brazil (JBS) is now allowed to import 250 tons of fresh beef into the U.S. each month. Next year the number increases to 2,500 tons a month.
Since COOL was repealed and the USDA unable to enforce current laws, the American people will never know where their beef was raised and processed. Until recently all Brazil could export to us was canned beef.

The other side of the coin is that the meat packing industry controls the raising of pork and chicken. They profit from the farm to the store. Much more profit for them in pork and chicken. Our kids were raised on chicken fingers and we did not see this coming.
Not so with beef. The only way to price control is to import cheaper beef, reduce U.S. slaughter numbers and make fat cattle back up on the feed lots.
We are currently processing around 600,000 a week. That is probably close to our capicity. We would need to reopen slaughter facilities to get back to the 650,000 weeks of old.
Packers are sending the trimmings from U.S. beef to their over seas facilities and mixing in the grind to add flavor. Some claim this makes at least part of the beef U.S.

We were set up from day one with the way COOL was worded.

A very good reason for small processors to become viable again by removing the overly burdensome regulation (passed at the behest of large food processors) that have regulated them to near extinction.

 

[pdfangus]

well the guys producing beef around here for private treaty are still in a tough spot.

there are plenty of state inspected processors available.

but the upscale customers want their meat processed in USDA inspected plants and there are only a couple in the state....gettin apointments and the hauling both ways are the big obstacles.

for processors to get the usda inspection is expensive and difficult because of the additional regulations.

The market is there but the processing is the roadblock.

 

[HDRider]

well the guys producing beef around here for private treaty are still in a tough spot.

there are plenty of state inspected processors available.

but the upscale customers want their meat processed in USDA inspected plants and there are only a couple in the state....gettin apointments and the hauling both ways are the big obstacles.

for processors to get the usda inspection is expensive and difficult because of the additional regulations.

The market is there but the processing is the roadblock.

My point exactly...

 

[js1234]

You guys definitely did your part to help. But at least y'all have way better beef than Mexico.

The typical pen of #1 Mexicans are better cattle than #1 Okies. Healthier and feed better than them too. Owned more than a few of both over the years. I've got no particular affinity to running Mexicans, we would run all Watusi if they were the most profitable use of our ranches.
We've seen our operation ebb and flow in terms of Mexican cattle. At times from the 1940's through mid 1980's, our yearling segment ran a varying percentage of our 2 season stocker inventory as Mexicans most every season. Our largest Mexican year, we crossed 25,000 Mexican steers to run on our ranches. We ran a much smaller number of Mexican steers through the back half of the 1980's up through the early 2000's, a year or two, not buying any. The reason for this was that light Nevada calves improved and were a better two season grass option for our needs. Over the last decade, that has started to change. More and more of these Nevada/Utah/Oregon/Arizona desert ranches wean bigger and bigger calves that don't work as well for our 2 season program and in more than a few instances, while the cattle are getting prettier, they are losing some of that toughness that those desert ranches bred and our med costs and treat rates for the cowboys riding through them are rising and their overall utilization of our country has declined somewhat. No to mention, the good light native calves that can be bought are a narrowing pool. While I buy a lot of them, and the ones that are around really are superior cattle, I'm not comfortable or certain that I can buy enough of them to meet our 2 season yearling needs every season. This has led to the pendulum swinging back and us buying a greater percentage of our 2 season stocker inventory as Mexicans every season. The heavier stockers, that go to grass for one season then to the feedyard, still is the domain of native cattle for us as we elect not to bang up against the wheat guys who buy 5x6 weight Mexicans.

Canadian cattle I just don't have a whole lot to do with any consistency. After their beef business melted down back in 2004 or 2005 after that whole mad cow thing, we bought a tremendous amount of Canadian feeders when they were hammered down unbelievably cheap based purely on non market factors and panic selling and it was obvious that there was a good profit to be made if one had cash, a marketing avenue and was willing to stick a capable guy up there for 18 months like we did. While we have owned some on feed several times since, that was really our one big Canadian cattle endeavor.

I guess I'm the enemy as it were.

Funny thing, I'm not Tyson or JBS. Just the fourth generation rancher on a family operation trying to grow and preserve it for the fifth generation. No multinational conglomerate here. I won't deny we've been blessed and have expanded to multiple States and are pretty vertically integrated but the current ownership of our company isn't some nefarious board shrouded in mystery but rather my parents, myself and my wife, my sister and her husband and hopefully someday, our respective kids.
I also won't deny that R-Calf over the last 20 odd years its been beating it's drum has raised some legitimate concerns and COOL has some value on multiple levels but accepting the broad brush strokes that makes not being for COOL in it's entirety bad or it's detractors unAmerican no matter what or some such nonsense is just as silly.

Thank you for posting I really appreciate all your advice and knowledge on this issue.

It's not worth much but I don't charge much either.

 

[WalnutCrest]

well the guys producing beef around here for private treaty are still in a tough spot.

there are plenty of state inspected processors available.

but the upscale customers want their meat processed in USDA inspected plants and there are only a couple in the state....gettin apointments and the hauling both ways are the big obstacles.

for processors to get the usda inspection is expensive and difficult because of the additional regulations.

The market is there but the processing is the roadblock.

My point exactly...

Another downside is it seems the guys who are best at cutting meat (at least around here) don't have a USDA stamp. It's made me wonder if it it is their willingness to pay the extra fees and deal with the extra regulations so the can get that stamp is what allows lower quality butchers to stay in business!

I don't know, but it is something I've wondered ...

 

[dieselbeef]

guys that are good cant keep up so the extra biz they get from being usda is irrelevant...at least our guy is. but there wont be anyone to take his place when hes done

 

[Tim/South]

You could be right or you could be tied in with ACA which is controlled by NCBA. We don't need Mexican or Canadian beef in this country is my feeling. Didn't Canada have mad cow awhile back?

Sounds like a reply from a female running for higher office. Create innuendo and run with it.
If ACA stands for Alabama Cattlemen's Association then I do belong. I have no idea what NCBA is an acronym for.
The U.S. has had at least 2 cases of Mad Cow since the dairy cow from Canada instance. The U.S. just does not make it an issue when it comes from within.
We grazed and fed cattle from Mexico and Canada. We processed that beef and exported that and more back to them. It was a good deal for both sides.

Have you personally tried to comply with COOL?
I volunteered by checking a box on a USDA survey years ago. It took them 18 months to get back to me. During that time the game had changed. I was required to purchase a lap top and scanner. They were going to supply the micro chips. Everything done to a cow or calf on our farm had to be entered and uploaded. I believe it can be done from a smart phone now.

The COOL bill that finally passed was far more intrusive than the one originally suggested under the guise of tracking Mad Cow.