Cattle producers call for fair prices to save future of state and nation’s cattle industry
By Contributed posted to Ag Journal (CO)
Nov 26, 2019
Every year, Aberdeen cow/calf producers Jeff and Rachel Kippley visit their local Kessler’s grocery store and pick up prime rib for Christmas dinner.
Since they began the tradition four years ago, the couple has paid the same price per pound for this holiday delicacy – $10.99. However, the price they receive for the 1,000-pound calves they raise, who eventually become someone’s prime rib dinner, has dropped considerably since 2014.
“In 2014, we averaged $2,000 a head. This fall we’re looking at $850. And it costs roughly $800 to raise a calf,” explains Jeff Kippley, 40, a fourth-generation cattle producer.
So, what happened in the last five years to trigger a nearly 60 percent decrease in the price U.S. cattle producers receive? The 2015 repeal of country of origin labeling (COOL).
“COOL is the only way I can compete with foreign meat. It’s the only way,” says Brett Kenzy, a fourth-generation Gregory cattle producer. Kenzy explains that when the House and Senate repealed COOL, they made it easy for processors to blend lower-quality, lower-priced meat from other countries with U.S. raised beef because without labeling regulations, the consumer is none the wiser.
In fact, without labeling regulations, meat processors began applying “Product of the U.S.A.” labels to meat packaged in the U.S., whether the steak came from a cow raised in the U.S., Canada, Mexico, Brazil or Australia – or the burger was a blended mix of meat from all five countries.
“One excuse we were given was that no one cares where their meat comes from,” Kenzy, 47, says. “But if that were true, then why do the processors label it Product of the U.S.A? God bless America. If a consumer wants to support me and my rural community by buying U.S. raised beef, they should be able to. But without COOL, there is no one to enforce true labeling.”
Beyond supporting U.S. cattle producers, there’s also the safety factor. Not all bovines are treated equally. “Foreign meat is cheaper because their producers can grow it cheaper because they are not required to follow the same safety standards U.S. cattle producers are required by law to follow,” Kenzy says.
For example, laws require all U.S. cattle producers to get a prescription from their veterinarian before purchasing or giving antibiotics. And if medications are given to cattle, stringent regulations are in place to ensure withdrawal periods are followed prior to slaughter.
“I’m happy to comply. I want to comply. In fact, my brother and I go above and beyond requirements, and implement management practices to ensure our feedlot does not have a negative impact on our land or our neighbors’ land,” Kenzy says. “But it all costs.”
And this year, while the Big Four processors are bringing in $1.2 billion a month, Kenzy and his brother, George, say they are just trying to pencil out feed and equipment costs so they can reach $0. “We just hope we can break even.”
Then what is left over? What profit is available to cattle producers and their families to cover typical living expenses? What is the motivation for U.S. cattle producers to continue raising cattle?
These questions keep 42-year-old Hecla cow/ calf and feedlot producer, BJ Richter up at night.
“In the last two-to three years, I’ve lost my faith in our industry. When we lost COOL, we lost our ability to differentiate our product,” explains the second-generation cattle producer.
Richter is not a pessimist. He grew up with and understands traditional cattle market cycles – good prices encourage producers to breed more cows, flooded markets result in lower prices.
But what Richter’s witnessed since the 2015 repeal of COOL, is not traditional cattle market cycles. He says its market manipulation by four packers who are not required to price report on formula cattle and are not held accountable by consumers who are unaware there is an issue because of the Product of the U.S.A. label...