R-CALF USA testimony: TPP will hurt cattle industry
February 4, 2016
During a formal hearing held recently by the U.S. International Trade Commission (ITC), representatives of the world's largest multinational meatpackers praised the proposed Trans-Pacific Partnership (TPP) free trade agreement. Hearing witnesses representing U.S. livestock and meat industries included R-CALF USA, National Cattlemen's Beef Association (NCBA), Cargill, Inc., U.S. Dairy Export Council, and U.S. Hide, Skin and Leather Association, an affiliate of the North American Meat Institute (NAMI, formally AMI).
R-CALF USA was the only livestock industry representative that opposed the TPP during the hearing.
"I don't represent the beef industry," said R-CALF USA CEO Bill Bullard adding, "I represent the cattle industry. Our members sell cattle to beef industry packers. The TPP will impact the cattle industry very differently than it impacts the beef industry."
Among the many pro-TPP claims made by the NCBA, which represents large multinational meatpackers as well as some producers, was that beef exports in 2014 accounted for nearly $350 per head in overall sales of fed cattle, with similar benefits expected from the proposed TPP.
But R-CALF USA explains in its post-hearing brief, that if the meatpackers' claim was true, then U.S. cattle feeders would have received an additional $8.3 billion in export-generated revenues from the sale of the 23.8 million fed cattle marketed in 2014. However, even the meatpackers testified that total beef export revenues in 2014 were only $7.1 billion.
"It is not possible; rather it is impossible, that exports had conferred more value on U.S. finished steers and heifers than the total value received for all exports during the 2014 record year for exports," wrote R-CALF USA.
Recommended Stories For You
Another NCBA claim was that TPP countries Australia, New Zealand, Canada and Mexico cannot compete with grain-fed U.S. beef because those countries primarily export beef from grass-fed cattle.
But R-CALF USA explains the TPP lasts for perpetuity and countries around the world are emulating the U.S. grain-fed industry, which is being made very easy because multinational meatpackers now have both feedlots and packing plants in two or more TPP countries.
The group's brief states that 40 percent of Australia's total beef supply and 80 percent of the beef sold in Australia's domestic market is now grain fed, that the Mexican government is now making investments to expand cattle feeding in its country, and Canada's feedlot inventory for the month of December has averaged about 1 million head during the past 5 years.
"The knowledge, technology, genetics and managerial skills that once made the United States the exclusive supplier of high-quality grain fed beef has now been transferred around the world," the group wrote.
A related NCBA claim was that the $1.2 billion deficit in the trade of cattle, beef, beef variety meats and processed beef in 2014 was not harmful because lean beef from TPP countries Australia and New Zealand are needed to mix with U.S. trimmings to make ever-popular ground beef.
R-CALF USA's brief asserts that the NCBA argument that imports compliment U.S. production rather than compete against it has contributed to the exodus of over half a million cattle producers since 1980.
The group's brief explains that meatpackers import large volumes of lean beef to depress the United States' cull cow and bull market. This, the group states, reduces a significant portion of U.S. farmer and rancher income because about 20 percent of their income is derived from the sale of cull cattle.
Yet another NCBA claim was a refutation of R-CALF USA's assertion that meatpackers will likely begin shipping cattle from Australia to be slaughtered in the U.S., where the resulting beef would be eligible for a "Product of the USA" label under the overly liberal rules-of-origin contained in the TPP.
That is "purely speculative," stated Kevin Kester, Policy Division Chair for the NCBA, who asserted it was "cost-prohibitive" to ship cattle across the Pacific Ocean, including from Hawaii.
R-CALF USA's brief, however, cites recent articles published in Drovers Cattlenetwork that describes how a large U.S. cattle feeder was recently approached by a shipper who could ship up to 20,000 cattle at one time and who claimed that cattle actually gain weight during the shipping. The other article explains how about 68,000 calves from Hawaii are shipped to the mainland each year in "cowtainers" that are unloaded directly from ships and onto waiting trucks for delivery to Texas cattle feedlots.
"It can no longer be denied that the technology, infrastructure and equipment are already in place to economically and safely transport live cattle from anywhere in the world to anywhere in the world," states the group.
During a particularly heated moment during the hearing, Kester accused Bullard of falsely claiming the highly concentrated structure of the U.S. meatpacking industry allows multinational meatpackers to capture for themselves the profits that a competitive market should be allocating to cattle producers.
R-CALF USA's statement is "conjecture," Kester told the ITC.
But R-CALF USA retorted that the evidence is in U.S. Department of Agriculture (USDA) data that show the producers' share of the consumers' beef dollar declined significantly since the 80s, falling to the lowest level in history in 2009. The group's brief additionally cites a study indicating that fed cattle prices are likely being reduced between $136.25 and $272.50 per head as a result of the meatpackers' cattle procurement practices that are extinguishing the negotiated cash market.