POLITICAL RANCHER

Special National Update

political rancher jan. 2015

edited by Tim O’Byrne

Editor: Every December we invite the three national beef cattle associations to enlighten us on their adventures of the past year, and expound on their vision for the year to come. Without further ado, I turn the apple box over to our esteemed colleagues, but not before first thanking them for their selfless dedication to protecting the sustainability of the industry and lifestyle we love so dearly.

USCA 2014 WRAP-UP

The United States Cattlemen’s Association has wrapped up yet another successful year representing U.S. cattle
producers from across the country. Whether it be in the courtroom, the halls of Congress or at the table serving
as a voice for producers within industry- wide discussions, USCA is now, more than ever, the voice of the U.S.
cattle producer.

As we head into 2015, the issues of focus for USCA and the industry will remain Country of Origin Labeling (COOL) and Beef Checkoff reform. You will also see us addressing EPA overreach and additional concerns as they arise. USCA will remain the leader in representing the U.S. cattle producer. During the recent annual meeting, USCA members elected a new President to lead USCA into 2015 and to continue on the path blazed by former President Jon Wooster. Danni Beer (Keldron, SD) will serve as the new USCA president and in her role will represent the organization in upcoming industry discussions.

2014 has seen a number of victories on the COOL front. The U.S. Court of Appeals for the District of Columbia has ruled twice now in the span of 12 months in favor of U.S. cattle producers in the suit brought against the rule and the USDA by a group of packer-processor based groups including National Cattlemen’s Beef Association (NCBA), the American Meat Institute (AMI), National Pork Producers Council (NPPC), North American Meat Association (NAMA), Canadian Cattlemen’s Association, Canadian Pork Council, Mexico’s National Confederation of Livestock Organizations, Southwest Meat Association and the American Association of Meat Processors. USCA, with the support of producers like WR readers has continued to lead the defense of COOL in this arena. With multiple victories now under our belt on this issue, USCA is confident that the rulings passed down have served to reaffirm
the legitimacy and constitutionality of the current law.

The most recent decision handed down by the World Trade Organization (WTO) on this issue has served to
further USCA’s stance that COOL is a program vital to our industry and the producers it represents. USCA will work
with the Administration in addressing the ruling to ensure that COOL remains the law of the land.

Checkoff reform has been elusive and frustrating in 2014. Finally, this past September, Secretary Tom Vilsack stepped in and provided an opportunity to not only increase funds for the promotion, education, and research of beef products, but to also write a new order for a new beef Checkoff under the Commodity Promotion Act of 1996. The
Secretary’s idea would not disturb the controversial beef Checkoff, written under the 1985 Beef Promotion Act.
Producers will have the opportunity to help develop a new beef Checkoff that better fits today’s marketing environment, increases efficiencies, and gives producers more control of the program by allowing for periodic referendums instead of relying upon an act of Congress to make changes to the program.

While some issues have proved divisive within our industry, there were also issues which brought consensus.
USCA and other agriculture groups were able to work as a collective group representing all of those within the
agricultural industry. 2014 saw the exaggerated use of government agency overreach by the EPA in the proposed
changes to the Waters of the U.S. (WOTUS) rule. The agricultural industry came out in opposition to the rule,
and USCA and a broad coalition of stakeholders submitted extensive comments against the rule representing the beliefs of those ranchers and farmers whose private land and operations would be unduly impacted by the rule.
In 2015 USCA will continue to look for opportunities to make the voice of the US cattle producer heard.

As USCA looks to expand on issues impacting our industry in 2015, it will continue to provide producers with
an effective voice in DC. USCA, as a bipartisan association, will continue to work with Members of Congress on
both sides of the aisle during the new session and in doing so will be able to seamlessly work on those issues affecting
you—the producer. USCA has led on issues important to you in the past and we will continue to do so in the
year ahead. Your voice is being represented by USCA, the question now is—-are you a member of the one group representing those issues most concerning YOU as a producer and your bottom line? Go to uscattlemen.org to learn more about joining the association looking out for ranchers from California to Texas to the Dakotas and Virginia and everywhere in between.

R-CALF USA’s 2014 UPDATEAND A GLIMPSE INTO 2015

Four years ago industry pundits downplayed our disrupted cattle cycle. They claimed the five million cows already liquidated were unwanted because better genetics were producing bigger carcasses. Soon, however, those same pundits began panicking over a severe cattle shortage.

By 2014 cattle supplies were tighter than ever, driving cattle and beef prices to new highs, even though beef demand hovered around 2007 levels. Pundits quickly claimed that widespread droughts caused the unprecedented herd decline.

But, the national herd began shrinking in 1996 and the U.S. was not drought-stricken for all those 18 years. So, what caused our shrinking industry?

Another livestock sector provides insight: Hog prices hit near records from 1995-1997, but nose-dived in 1998 to the lowest levels in the 20th century. Iowa State University reported operating losses of $73,857 for the average hog farm.

Experts said a 10% production increase and record Canadian live hog imports helped drive the 1998 collapse.
Hog producers exited the industry in droves. What remained is a meatpacker-controlled, vertically integrated
industry.

Achieving vertical integration is a process we call “chickenization.” It is achieved by reducing competitive markets and industry participants. The cattle industry is the last to be chickenized, but the process is underway.

In 2014 R-CALF USA championed competition, defended pro-competitive policies and property rights, and
blocked chickenization efforts in the cattle industry by:

• Forcing the U.S. Department of Agriculture (USDA) to admit it did not know if Beef Checkoff Program dollars were being spent in accordance with the law, thus triggering needed reform efforts.

• Intervening in the lawsuit filed by the National Cattlemen’s Beef Association and its Canadian and Mexican counterparts against our pro-competitive country of origin labeling (COOL) law, thus preserving COOL.

• Submitting comments and building a coalition to oppose USDA’s efforts to import fresh meat and livestock from Brazil and Argentina, which are affected by foot-and-mouth disease.

• Lobbying Congress to rescind legislative language that insulates meatpackers from the producer protections
in the Packers and Stockyards Act.

• Supporting the lawsuit to help a packing plant resume horse slaughter in the United States.

• Blocking efforts to repeal COOL and weaken enforcement of the Packers and Stockyards Act in the 2014 Farm Bill.

• Blocking an effort by multinational corporations to suspend our “Buy American” laws.

• Making presentations to cattlemen’s associations and the American Bar Association to explain the impacts of lax antitrust enforcement and illconceived free trade agreements.

• Urging the U.S. Air Force to change its plans to increase low-level military flights over prime ranching areas in North Dakota, South Dakota, Montana and Wyoming.

• Submitting comments to the Environmental Protection Agency in opposition to its proposed rule, Waters of the United States. In 2015 we will continue to: 1) give ranchers the tools they need to compete in today’s global marketplace; 2) take from multinational meatpackers the tools they are using to chickenize the cattle industry; and, 3) reform trade policies to reflect the need to generate net exports, not trade at any cost.

Check us out and join with us at www.r-calfusa.com.

NCBA 2014 – A YEAR OF GREATER REGULATORY CREEP

While 2014 turned out to be a strong rebuilding year for much of the cattle industry, we saw a number of our policy priorities stalled due largely to the build up to the election and the regulatory zeal of this administration.

On the regulatory front, much of this year was spent combating EPA over their “waters of the United States” proposed rule and urging our membership, and landowners nationwide, to submit comments. This is not only a mammoth land grab by the agencies but an immense increase in their administrative authority. With a new Congress seated, we will look for revived and bi-partisan interest in legislation to address the concerns of landowners.

We have again had a great year for trade, with strong beef demand, as we are poised to top last year’s record
export value. Our largest trading partners for U.S. beef remain Japan, Mexico and Canada with exports adding in excess of $300 per head in value for U.S. cattle producers. Unfortunately, despite strong support and continued adherence to tariff elimination by our trade negotiators, the Trans-Pacific Partnership has seen very limited movement.

We have spent much of this year reviewing and working on comments for two proposed rules to allow the
importation of fresh and frozen beef from Brazil and Argentina. With a long history of Foot and Mouth Disease in
these areas, it is vital that we carefully review these rules. No trade is worth sacrificing the health of our herd, and we
do not believe APHIS has adequately assessed these risks, or that Argentina or Brazil have shown the ability or commitment to adhere to our standards.

As expected, the World Trade Organization ruled in favor of Canada and Mexico that the amended U.S. COOL rule violates our international trade obligations and discriminates against Canadian and Mexican livestock. This brings our economy one step closer to retaliatory tariffs and we continue to call on Congress to fix COOL before we further damage these trading relationships.

We continue to urge Congress to pass key tax extenders and give producers and small businesses certainty in the current tax year. And we will continue to work this next year, to encourage Secretary Vilsack and the Administration, not to move forward with their plans for a duplicate beef checkoff, which would give the Administration unprecedented control over beef promotion, research and education, and jeopardize the work of the current Beef Checkoff Program.

In this next year, we look forward to working with the new Congress to ensure our policy goals remain a priority.

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