Alan Guebert: Flying for 79 floors
November 26, 2010
Twice a week, New York Times columnist Thomas L. Friedman drives political and economic policymakers into full rant on topics as opposite as global free trade (he loves it) and national industrial policy (he loves it, too).
Kiss him or kick him, Friedman can turn a phrase. A current Friedmanism notes that “If you jump off the top of an 80-story building, for 79 floors you think you’re flying. It’s the sudden stop at the end that tells you you’re not.”
That very hard reality has many parallels in today’s agriculture. The cattle sector, for example, fits nicely into this I-can-fly… splat world.
According to the U.S. Department of Agriculture, America’s beef cow herd has fallen from 35.3 million head in 1996 to 31.3 million in Jan. 2010. That’s the smallest number of beef cows in the U.S. since 1963.
Fewer cows mean fewer calves. According to Derrell Peel, an Oklahoma State University extension marketing specialist, this year’s calf production – even when dairy calves are folded in – will be 35.4 million head, the smallest since 1950.
Why does the U.S. have the smallest calf herd in 60 years and the smallest beef cow herd almost 40 years when it has more than twice as many bellies – America’s population in 1950 was 152 million; it’s 310 million now – and twice the real (deflated) per capita income?
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Part of the answer is science; part of it is jumping off an 80-story building.
Cattle, like their owners, have benefited from 50 years of better biology and chemistry. As a result, fat cattle slaughter weights are much greater today than 1950, mama cows deliver bigger, healthier calves and many of the old diseases have been defeated with new cures and vaccines.
All things being equal, that means more productive, and fewer, cows.
But all things aren’t equal; cowboys certainly aren’t better off. Tens of thousands of ranchers, feeders and feedyards, as well as the rural infrastructure that rode along with ’em, have been sold, merged or erased.
In 1950, the caring and feeding of cattle was valued at $6.6 billion, or 30 percent of all U.S. ag receipts that year. That made it the largest component of American ag. Today it retains that spot. The latest Ag Census data from 2007 shows U.S. cattle and calves valued at $61.2 billion, or 21 percent of all American ag sales.
Over all those years, however, the high-flying sector has made little real progress. If you convert that fat 2007 number to 1950 purchasing power, the $61.2 billion drops to $7.1 billion, or a skinny half-billion more than nearly 60 years later.
The cowboys know what this means by simply looking up and down the road. From 1980 to today, the number of U.S. cattle operations fell from 1.3 million to 950,000.
So, after making no real money in 60 years, seeing producer numbers and local communities shrink for 30 years and – insult to injury – blowing an estimated $1.7 billion of their own checkoff money as per capita beef consumption fell from 72 pounds in 1988 to 65 pounds in 2008, the cattle industry is now about 75 floors into their flight.
Worse, this entire downward slide has occurred as the U.S. population doubled since 1950 and climbed by 60 million since the checkoff became law.
In short, the folks running the cattle sector have pushed it off an 80-floor building and now the giant meatpackers and their big-hatted lackeys see the pavement rising fast. Without cows some, maybe most, are out of business, too.
And after a 60-year, 79-floor flight these geniuses have finally figured it out. Little wonder they’re fighting new USDA rules to level the marketplace: they want you to break their fall.
© 2010 ag comm