The Chipotle affair...

I have been more than a little puzzled by the kerfuffle between the beef industry and Chipotle - for multiple reasons. But it's evident  - although virtually predictable - my opinion doesn't line up with the majority of farmers and ranchers. This became obvious when we talked about it on Agritalk Friday.

Chipotle has turned to Australia to source grass-fed beef. Considering the price of beef, especially the lean beef they need to cut our higher fat fed beef down to burrito level, this is hardly a surprise. But the beef industry took offense at their CEO comments.

In 2013, our company purchased about 45 million pounds of domestic Responsibly Raised beef; but the U.S. supply isn't growing quickly enough to match our demand. Even though our loyalty to American ranchers is strong, rather than meet the shortfall with conventionally raised beef from cattle treated with growth hormones and antibiotics, we decided to take this opportunity to start sourcing more truly grass-fed steak. So in addition to expanding our supply of beef raised without growth hormones or antibiotics, we are particularly excited to be able to serve more beef that comes from cattle raised entirely on grass. [More]

Of all the possible reasons, I think this quote hints at the most important one: the supply/price crisis in the US. Cull cows are setting records for both price and small numbers. So getting to 80/20 for ground beef is really tough with our beef output. Sure we have grass-fed beef but I can't even get any good numbers on the size of our grass-fed herd, let alone the percentage that are non-hormone and antibiotic free.

Nobody collects information on exactly how much of the grass-fed beef that Americans eat comes from abroad. Theo Weening, the global meat coordinator for Whole Foods, says his company buys very little. "We probably import maybe 3 percent. The rest is regional, local; that's what we really push for," he says.But you'll see plenty of Australian-origin beef in other supermarkets. Organic Valley, meanwhile, gets all of its grass-fed beef from Australia. There's also a lot of grass-fed beef coming in from Uruguay and Brazil.So why does the U.S., the world's biggest beef producer, have to go abroad to find enough of the grass-fed variety?Curt Lacy, an agricultural economist at the University of Georgia, says some of the reasons are pretty simple. Weather, for instance. In most of the U.S., it freezes. In Australia, it doesn't. So in Australia, as long as there's water, there's grass year-round.And then there's the issue of land. "If you're going to finish animals on grass, it takes more land," Lacy says. Grassland in Australia is relatively cheap and plentiful, and there's not much else you can do with a lot of it, apart from grazing animals.As a result, Australian grass-fed cattle operations are really big. In fact, they're the mainstream. Seventy percent of Australia's beef production comes from cattle that spent their lives grazing. And when beef operations are large-scale, everything becomes cheaper, from slaughtering to shipping.On Monday, the U.S. company Cargill announced a new deal with Australia's second-biggest beef producer — a company called Tey's. Cargill will now sell more Australian beef in the U.S., both grass-fed and grain-fed. [More]

I think Chipotle knows exactly what they are doing. And for the most part, the beef industry isn't thinking this through. Chipotle is arguably the brightest star in the food service galaxy right now, and seems to be handing both fast and casual dining competitors their heads, by inventing - along with Panera, etc. - a new category: fast casual.

There are now over 1,400 Chipotle locations in 43 states, and the chain reportedly made a 25% profit margin on $2 billion in sales in 2011.Chipotle began a trend in restaurants that the industry has dubbed “fast casual,” which offers a more upscale dining environment and food quality, along with higher prices, but in the familiar, convenient limited service format of fast food. “When I started Chipotle, I didn’t know the fast-food rules,” Ells explained years later. “People told us the food was too expensive and the menu was too limited. Neither turned out to be true.”By either ignoring or directly challenging all the dominant trends in its industry, Chipotle quickly became a great brand. Now Chipotle has become the trend-setter in the category, and trade publications feature headlines such as, “Who Will Be the Chipotle of Pizza?” Wendy’s and Taco Bell are just two of the most prominent fast food players investing in new store designs that look shockingly similar to that of Chipotle. The Wall Street Journal dubbed Ells the “Fast Food Revolutionary,” and Esquirecrowned him America’s most admired CEO....McDonald's sold its stake in Chipotle in 2006, and since then, Chipotle has moved farther and farther away from the typical fast food way of doing business. Ells’s latest obsession is the issue of sustainability. Chipotle is now the largest buyer of higher-priced pork, beef, and chicken from animals that have been naturally fed and humanely raised outside of the factory-farming system, which provides inexpensive commodity meats to the rest of the food industry. Produce served at Chipotle is also locally raised if possible (lettuce served in January on the East Coast still comes from California). What Chipotle has learned is that customers notice the difference in flavor from natural meats and fresh vegetables grown “with integrity,” as the chain’s tagline states--and they’re willing to pay extra for it. [More]

Chipotle is adding 200 restaurants a year to boot. Even the NCBA rep on the show with me pointed out the lines out the door at the stores in the DC area. Oddly, he couldn't connect that with the dots that suggest Chipotle knows what they are doing.

Mostly Big Beef hasn't gotten over their big beef (I've been saving that line for, like, ever) with the slick Chipotle videos, notably the latest - "Farmed and Dangerous". Partly this is due to the clearly top-notch production values, and mostly I think it's simply a lack of any effective response. 

The beef industry has decided, for reasons I cannot fathom, to go with "you hurt my feelings". 

Some U.S. producers say they were not given adequate opportunity to fulfill the company’s rising orders. While U.S. beef supplies are very tight, they aren't tight to the point where there's not enough supply. The company's decision to source some of its beef from Australia likely has more to due with price. Plus, the firm continues to strive for use of beef raised with no antibiotics or hormones, which it calls, "responsibly raised."Chipotle has the right to source its beef (and other meat) needs from wherever it chooses. But to say there isn't enough "responsibly raised" beef in the U.S. is a slap in the face of cattlemen here in the States. Cattlemen (and the entire farm community) should choose to "eat responsibly" and opt to dine at restaurants other than Chipotle. [More, but gated from Profarmer]

Brian Grete (above) reports this pretty accurately. I've heard and seen the "slap" reference repeatedly. It strikes me (heh) as one of the worst metaphors cattle producers could use. First, imagine somebody slapping the quintessential 'Merican cowboy (Marlboro Man, or Clint Eastwood from Rawhide). These are the rough-tough personas invoked often by our cow-calf people, so talking about a face-slap is an inexplicable transition from grizzled survivor to playground victim. Maybe the victimhood thing has worked so well for my sector (the weather/Chinese/Big Oil/etc.!), they have decided to join the whine cellar crowd.

But unlike corn farmers who are whining to government for hidden subsidies, cattle producers are aiming, I guess, for the public. This could be a big mistake. Jane Q Consumer is already aware of painful beef prices. And she is responding just like economists predicted, for once.  Beef consumption continues to drop. While there is substitution going on, total meat consumption is a tide that carries all proteins along.

[Source] [Note: I couldn't find any charts beyond 2012, but trend has not changed]

I see no evidence that pity-based marketing has been working or will work for the beef industry - unless they are shifting to subsidy-based ag, which could be, given the new livestock support in the recently passed Eventual Farm Bill ™. (This is my designation, which I thought up all on my own because the timeline for the current farm bill seems to be stretching to infinity and beyond)

Complicating this response is when you are "slapped in the face", simply griping about it seems a little...umm, limp, to put it mildly.

It could also be our grass-fed producers were simply out-hustled by the Aussies. [I would include an excerpt, but they lock down their content] At any rate, without oodles of corn, we should hardly be surprised Australia would be very, very good at growing and marketing grass-fed beef.  And just as we laud our export efforts in Asia, etc. when US beef takes market share from domestic suppliers, why are are miffed when the free markets works freely (both ways)?

But the bigger picture may be what is troubling most US cattle people (if only subconsciously). What if Chipotle's upfront promotion of "responsibly raised" beef works? What if competitors are forced to match their move? [See also: gestation crates] What if slick videos posed next to feedlot pictures sway consumers to eat less conventional beef?

Right now the answer seems to be, "We'll just export our product." This is a legitimate countermove. The US could become the high-value dominant supplier and simply leave the ground beef sector to others. While it seems to be working, there are things to watch as well. 

Increasing dependence on exports means greater volatility, IMHO. From currency fluctuations to competition to foreign policy entanglements to outright conflicts, lots can go wrong with exports. Secondly, growing income inequality here at home means the growth in the domestic market will be in exactly the sector dominated by the "Chipotles" of the industry. The domestic/export trend could intensify rapidly.

To sum up, beef producers at ticked at Chipotle for saying things they don't like, but can't answer effectively. They are also miffed at losing a grass-fed customer. But if it hasn't dawned on them there is not much they can do about it, they risk looking like ineffectual complainers.

The American and perhaps global consumer is getting used to vendors catering to even illogical preferences. Amazon has taught them they can really have it their way. Tomorrow. All of agriculture needs to realize this will ripple through our value chain and arrive our our farm gate, whether we like it or not. Meanwhile, our government is busying eating its own and can't be bothered with a tiny, never-satisfied slice of constituents. We can wrap US beef in the flag all we want, but that got tiresome back when Japanese cars kicked our automotive butts into the 20th Century. Patriotic shopping happens when consumers prefer US products.

I don't think Chipotle "slapped any cowperson's face". I think they said, "No thank you, I like Brand X".  It's not about us, it's about our products. And if we weren't plowing rangeland to grow insured-for-nearly-free crops, maybe we could play in the Big Grass-fed Leagues.

For the time being I think I'd take a pass on tattling that "Chipotle slapped me!"

Another problem for red meat...  

While the recent salami-cancer link has been disputed, new evidence of another culprit is striking even skeptics of the red-meat-cancer linkage.

The researchers had come to believe that what damaged hearts was not just the thick edge of fat on steaks, or the delectable marbling of their tender interiors. In fact, these scientists suspected that saturated fat and cholesterol made only a minor contribution to the increased amount of heart disease seen in red-meat eaters. The real culprit, they proposed, was a little-studied chemical that is burped out by bacteria in the intestines after people eat red meat. It is quickly converted by the liver into yet another little-studied chemical called TMAO that gets into the blood and increases the risk of heart disease.

That, at least, was the theory. So the question that morning was: Would a burst of TMAO show up in people’s blood after they ate steak? And would the same thing happen to a vegan who had not eaten meat for at least a year and who consumed the same meal?

The answers were: yes, there was a TMAO burst in the five meat eaters; and no, the vegan did not have it. And TMAO levels turned out to predict heart attack risk in humans, the researchers found. The researchers also found that TMAO actually caused heart disease in mice. Additional studies with 23 vegetarians and vegans and 51 meat eaters showed that meat eaters normally had more TMAO in their blood and that they, unlike those who spurned meat, readily made TMAO after swallowing pills with carnitine. [More]

This mechanism stikes me as plausible as well. Since Jan has been shifting us to less beef and pork for years, it won't require a major change in our diets. (It doesn't hurt I've become fond of dry white wines either, I suppose.)  Mild adjustments are my kind of lifestyle changes.

I'm not alone.

Well, today I got a big challenge to that theory. Scientists have isolated what looks like a plausible mechanism by which red meat damages your heart: the gut bacteria of frequent meat eaters process carnitine, a chemical found in red meat, into something called TMAO. And TMAO is associated with a higher risk of heart attacks.  

Interestingly, this only happened to frequent meat eaters; vegans who ate a steak did not show elevated blood-levels of TMAO. Over time, their gut bacteria had changed, so they no longer had lots of bacteria that like to eat carnitine.  

I tend to discount dietary fads, but the association between red meat and heart disease is sufficiently long-standing that I'm trying to cut back to once a week. If we see more studies like this, I may cut back even further.
Of course, as many of you will no doubt point out in the comments, it's impossible to be sure. New studies could overthrow these results any time.  
But that's always a problem in this uncertain world. In this case, my best guess is that red meat probably promotes heart disease (which anyway runs in my family). And the cost of eating more poultry and fish and less steak seems relatively small. Much smaller than dying of a heart attack in my sixties. [More from a food-fad skeptic]

This furthers my guess that beef consumption will continue to decline in the US as it climbs elsewhere (areas where folks are "under-beefed). Yet another segment of agriculture with a growing steak (hee-hee) in freer trade.

I can't wait to read...

The accolades from the Truthers about this.

China has agreed to lift its extensive limits on the import of U.S. beef, lower restrictions on imports of wind turbines and telecommunications equipment, and take an array of other steps that U.S. officials say could lead to a substantial boost in U.S. exports to the world's second-largest economy. [More]

This is a big deal for corn farmers as well.  Not only could this support beef prices high enough to keep from destroying demand, as the yuan slowly but inexorably increases in value, the beef price could anchor the whole protein complex.

It is mixed news for consumers. Beef will get more expensive as we increasingly have to compete with Chinese consumers. Given the grim health news that assuredly is linked in part to our poor dietary habits, maybe sharing our abundance of beef (for profit, of course) and eating smaller portions could actually help ourselves, while not hurting the cattle industry.

At the very least, this demand boost makes the battle for acres to supply enough corn ratchet up one more notch, IMHO.

Of course, this breakthrough is the product of hard work by many despised bureaucrats and diplomats, not directly due to presidential effort.  But as the pattern is to blame the top for all the failures on the watch, Obama should be given some credit.

Now it will be interesting to see if along with whacking land value increases, massive income tax breaks, estate tax relief, guaranteed access to health insurance, etc. this trade boost will cause any rethinking about our political affinities in farm country.



C'mon, it could happen...

Why not grain?...

If you want to measure the uncertainty and anguish of the consolidation of the beef industry, you don't need to go too much farther than AgWeb.  The current debate over GIPSA enforcement of new meatpacking regs is well-framed in adjacent posts. 

But the real crux of the matter is familiar: who gets to say what agriculture looks like?

What the Dudley Butlers want isn’t going to work.  Consolidation is being driven by factors well beyond their control. You and I may not like it, but it is helping provide consumers with more affordable, higher quality products. We’re not all going to be able to make a living growing cattle in the future, I suppose. But by what reasoning do we suppose we have a right—a RIGHT!—to do so?
This is, when you boil it down, the same debate we’ve been hearing in recent years about big box stores driving the mom and pop locals out of business. I never believed that a local hardware man had a “right” to force me to pay more for his products. I’m not sure why, then I have a “right” to feed cattle when others can obviously do it better and cheaper.
We have a right to a fair market. A fair chance. We have a right to start the race, but we don’t have a right to win the blue ribbon. [More]

It is curious to me how many in our industry fall back on the lament of "not liking" where the industry is going, but nonetheless would not pry the status quo's hands off the wheel while smaller producers fall under the bus. Impotent sighs of regret strike me as remarkably unhelpful and perhaps short-sighted.

What if the almighty consumer fecklessly drifts to another consumption ideal from "cheap".  I have always considered that a long shot, but given my own buying eating habits, maybe less far-fetched than previously. Could beef be going to bat for a business model that will leave a bad taste in consumer mouths regardless of the flavor of the steak?

Meanwhile, smaller producers see the matter somewhat differently:

Our cattle industry is at a historic crossroad. With the proposed GIPSA rule we can begin to work to rid the marketplace of the ongoing practices that are causing our industry to contract by making sure that our industry receives the full protections Congress afforded us since 1921, but which have yet to be implemented by GIPSA’s proposed rule.
Or, we can continue to believe that the meatpackers have our best interests in mind and do exactly what U.S. hog and poultry producers did. As we all know, the hog and poultry producers did nothing while the meatpackers used their market power to vertically integrate the production segments of those industries and, as USDA data show, the result was a loss of about 90 percent of all U.S. hog producers. [More]

I suspect Steve's point of view will prevail, but I doubt if the rewards to economic rationalism will bring him or the industry all that much satisfaction.

More importantly, if grain producers don't see this as relevant to their sector, they are fooling themselves IMHO.  Cattle producers may be the closest we have to our heritage of independent producers, and if they can be convinced vertical integration is the future, I see few factors that would prevent a duplication in grain production.

The refusal to accept any limitations, to support wholesale restructuring for a few percent of efficiency or growth has pushed into harsh extremes. Regardless, I see no hint of interest in compromise between the factions.

The question for our farm is what strategy do we deploy to cope with the same pressures on our farm?  I see only one sure bet: own the land.

Equal species time...

Steve has been wandering a bit much in the food aisle pondering the future of beef eating, and I have been happy to support and benefit from his musings.

But there are other protein sources, ya know.  Unfortunately, it seems the pork culinary tradition is a little less, umm...genteel.

Last night’s Cochon 555 event, an epic gustatory battle where five local chefs prepare eats from five different heritage pig breeds, boasted a little bit of everything, from pig-ear coleslaw and pig-heart ravioli to drunken head-butts, a chef being ejected from a local bar and a pair of food-industry pros being arrested by the cops after a brawl over local vs. out-of-state pigs. [More good food and pugilism readin']

I dunno, maybe these chef shows are crossing over into WWF territory.

Remember, tents aren't permanent...

Steve Cornett offers some ideas about the true crisis in the beef industry and its major member organization, the NCBA.  He makes very good points about the need to prevent splintering over single issues.

If NCBA is to be the “umbrella” organization for the beef industry, it should devise a system that would respect minority opinion. If I thought, for instance, that NAFTA was the reason my calves are so cheap, you’d have to forgive me for not supporting an NCBA that is fully committed to free trade. If I were an Iowa corn farmer, you’d have to forgive me for resenting an NCBA that opposes federal ethanol subsidies.
 

So what if NCBA only adopted policy that is agreed upon by a supermajority? Maybe two-thirds? If you can’t get that supermajority on an issue, then drop it and concentrate on the issues in which do have an industry consensus. They could get consensus on things like estate taxes and public lands issues and animal rights. Put the lobbying team to work on those issues and don’t drive off half your members because 49% of them think you’re working against their best interests. [More - and read the comments for responses equally as insightful]

Steve's suggestion, in short, is to ignore the divisive issues to prevent member loss and get a large consensus on those issues with wide agreement.  This seems reasonable.

I can see some problems however with letting go of simple majority rule.

• Little ever gets done. Supermajorities are really, really hard to accomplish. If organizations adopt super-majorities they end up pandering to various factions to get those last few votes.  See also: Senate, US.
• Ignoring issues that are divisive encourages the development of minority opinions.  Keep in mind, remaining silent on an issue is in itself a position. Depending on what constitutes a "big enough" minority (30%? 40%?) to remove an issue for the agenda, single issue proponents will diminish the range of subjects the group can address.  In other words, the number of issues the group can address will dwindle rapidly, I think.
  
• Without majority rule to enforce going along for the good of the many, there is no reason to ever agree - and I think we have ample history of how close votes in legislatures and courts have created the stable rules for advancing social and economic progress.
• Most importantly, I cannot see organization staff members embracing eagerly taking items off the agenda simply because they are divisive.  That takes work and jobs from their profession. 

Majority rule - even by 51% - provides an historic and logical basis for managing divisive issues.  What is different today is the reluctance of most to abide by majority rule. That is the true problem for organizations.  When the number of members cannot find enough common ground to give way on single issues, it is time to contemplate whether the organization has a reason to exist. Pragmatically it could be we are entering a time for smaller tents - even pup tents with 1-2 in each.  The power of the individual has never been greater to affect public policy.

We can witness the results of other organizations struggling to erect bigger tents and then keep members inside them.  While I think Steve is perfectly right in suggesting hardline stances are organizational death sentences these days (and I think the Republican party is amply demonstrating the consequences of litmus-test adherence to issue positions, at least in rhetoric), the opposite means you end up with a group with all the dynamic governing efficiency of umm, well,... Democrats.

None of us wants that, surely.

And you also end up with policy that is little more than everything for everybody, which does not provide effective answers for progress because of wasteful duplication and blatantly counterproductive programs.

I think we will discover the answer to be the same as groups before. If the group has relevance and impact, abiding by the majority opinion (however narrow) is the only way to get anything done.  However, if groups cannot inspire in members any commitment to the good of all, the problem is much more profound than procedural rules.

Attitude matters...

The prevailing sentiment in much of American politics has been macho confrontation. Indeed, Sen. McCain seems to be staking his presidential hopes on belligerence: All-War, All-the-Time. This curious mindset arises not from a confidence of strength, which the US surely possesses in abundance, but from the fear that we no longer 'have it".

As they say, adversaries can smell fear. And I think this is what Steve is describing in his latest look at the beef trade with South Korea.

There is nothing in the agreement forcing Korean consumers to eat our beef. But the agreement says the government will let it in. So be it or else, as far as I’m concerned. I'm not a fan of welchers. Drop it and let them deal with Obama and his protectionist base after next year’s election. [More]

I think Seoul sees a weakened and slightly desperate trading partner who is becoming increasingly irrelevant - or at least ignored - due to our weak currency and slow growth. America still commands the heights, but too many of our leaders have found a vein of fear to be mined for political gold, and have thus convinced too many of us we are under attack by giants of awesome power. The world looks at us and realizes we can be easily exploited as we search for new threats daily.

The politics of fear work for a while, but soon fall prey to the problem of boredom. The latest presidential approval ratings look like reviews from "Gigli". This is an disengaged audience. Meanwhile our trading partners have learned they can say, "Oh yeah, you and what army?", knowing full well where our army is.

Remember, it's all Big Oil's fault...

Even the big spenders are cutting back. One of the items slumping due to the softening economy: steak.

Allen Brothers, high-end cataloger and supplier of beef to steakhouses like Del Frisco's, says it has seen restaurant customers exchange prime cuts for lower-grade meat. [More]

Now imagine hard-pressed consumers cutting back high-end purchases like prime beef just as $6 dollar corn shows up in the feed trough.

Ironically, meats could be a bargain as the herds liquidate, but those guys are really hanging tough. Or simply holding on to the tow rope too long after the skis came off.

Downer cows, beef and me...

A few weeks ago, when the downer cow video and beef recall hit, I offered my opinion during John's World on US Farm Report. I anticipated a strong response from beef producers and was not disappointed. I also have realized that beef producers are under such economic pressure right now that they might not hear what I said, but hear instead an attack on beef consumption.

So, here is the record to date, including all the comments. Reach your own conclusion.

First, the original letter that came to us:

I am writing this to you because I know that you actually read these and
when you do respond on the air, you do so with good information. I was
deeply disturbed this morning by a video clip on my local news about the
most recent beef recall by a California slaughter house alleged to be
the largest recall in US history. The clip showed a clearly terrified
cow being pushed by a bulldozer into a pit. Another shot showed a
different cow who was clearly underfed being pushed into a similar pit.
The reporter stated that this slaughter house was having animal abuse
charges made against it and I assumed the video was evidence of that
abuse.

As someone who does animal rescue full time and who IS NOT a fan of PETA
and who does still eat beef and chicken, I would like to know how to
find out if the meat I am buying is processed using humane methods of
slaughter. Maybe that's a naive concept but there must be companies out
there who do not use the sick, disgusting methods shown in the video I
saw. There must be a way for the consumer to know how his meat is
processed. I have already stopped eating pork a year ago after seeing a
documentary called "The Witness" in which a man became involved in
animal rescue after saving a cat and eventually went so far as to go
under cover in a pork slaughter operation in which he filmed pigs being
dragged screaming by their ears into slaughter pits. I try to be open
minded about the reality of eating meat but THAT I cannot tolerate. If
that is also the reality of eating beef and chicken, then I can adopt a
vegetarian lifestyle. Although, the idea doesn't thrill me!!

Let me be clear.... I am not a tree hugging hippy or a PETA supporter.
I do not agree with their militant tactics although SOME of their
message is good. I truly enjoy a good steak but I cannot continue to
consume meat that causes unnecessary cruelty to the animals involved.
Can you PLEASE give out some information on how to find companies who do
follow humane policies. After seeing the video this morning, I am now
questioning all of the meat buying decisions I am currently making!
Maybe all of the things I think are cruelty free are fake! I try to by
free range chicken but is that a true concept? Or is the company just
putting "feel good" rhetoric on their packaging?? Are there really cage
free, free roaming chickens who produce the eggs I am buying?

I am sorry to going on so long but this really upset me and I want to be
as informed as possible.

Thank you for your time.

Amy Quinlan
Groveland, FL

This was my response on US Farm Report (We use all caps in the prompter):

TIME NOW FOR OUR WEEKLY LOOK INSIDE THE FARM REPORT MAIL BAG...

THIS RESPONSE THE THE BEEF RECALL FROM AMY QUINLAN IN GROVELAND, FLORIDA

"AS SOMEONE WHO DOES ANIMAL RESCUE FULL TIME AND WHO IS NOT A FAN OF
PETA AND WHO DOES STILL EAT BEEF AND CHICKEN, I WOULD LIKE TO KNOW HOW
TO FIND OUT IF THE MEAT I AM BUYING IS PROCESSED USING HUMANE METHODS OF
SLAUGHTER."

AMY, THANKS FOR WATCHING AND FOR YOUR MEASURED RESPONSE TO AN
INFLAMMATORY EVENT. YOUR REACTION WAS NOT THAT MUCH DIFFERENT FROM MINE, AND I HAVE, EARLIER IN MY CAREER HAD TO DEAL WITH DOWNER CATTLE, AND STILL REGRET NOT BEING ABLE TO DO IT MORE HUMANELY.

YOU CAN MAKE A POWERFUL DIFFERENCE IN HUMANE ANIMAL TREATMENT BY ASKING YOUR SUPERMARKET EMPLOYEES AT THE MEAT COUNTER OR EVEN THE CHECKOUT HOW THE MEAT WAS PROCESSED. IF THEY HAVE AN UNSATISFACTORY ANSWER, TAKE THE MEAT OUT OF YOUR BASKET. TRUST ME, THIS IS MORE POWERFUL THAN LETTERS TO CEO'S OR RADIO CALL-IN SHOWS.

SOME BUT NOT ALL OF THE BEEF INDUSTRY REALIZE THIS WEEKS' EVENT WAS NOT
ABOUT POSSIBLE MEAT CONTAMINATION, IT WAS ABOUT ANIMAL CRUELTY. ARGUING
THAT THE MEAT WAS SAFE MISSES THE POINT ENTIRELY.

IF YOU DON'T REALIZE IT YET, WE ALL ARE UNDER SURVEILLANCE MORE THAN WE
THINK. FROM OUR OWN GOVERNMENT, TO STORE SECURITY CAMERAS TO GOOGLE
STREETS, VIDEO COVERAGE OF EVERYDAY LIFE IS BECOMING NEARLY UBIQUITOUS.

DIRTY LITTLE SECRETS DON'T STAY SECRET LONG, AND THE SOONER WE START
MODIFYING OUR ACTIONS TO MATCH OUR WORDS THE MORE SUCCESSFUL WE WILL BE IN THE MARKETPLACE.

Which in turn generated these comments from viewers:

Several weeks ago on U.S. Farm Report a woman asked how she could tell if beef she purchased at a store came from some facility that mistreated animals. You replied that if she wanted to make a statement she should take the package of beef out of her grocery cart and put it back on the shelf. THANKS A LOT!

I am a beef producer that does not mishandle animals and the majority of beef processed is done as humanly as possible. It seems that the beef industry is attacked from every side by misguided individuals.

If you noticed the pictures of animals being mistreated in a California facility were dairy animals ~ not beef. All the pictures of cattle that were shown on T.V. that had symptoms of B.S.E. were dairy animals not beef animals. The dairy industry needs to clean up its act. The misdeeds of the dairy industry is damaging the reputation of the beef industry. Most of the dairy meat ends up as hamburger or processed meats, not steaks or roasts. As a crop producer, you probably do not feel the pain that beef producers feel when they are continually attacked by those who do not know all the facts.

Leonard Berghoefer
Hampton, Iowa

Mathew Moore, Kentucky

How do you address people to counter measure the beef incident that
happened this week. I really don't agree with it. Because he is saying
when you buy meat at the grocery store you can ask the meat guy or the
cashier how it is processed, if they can't answer it to take the meat
out of your basket. That's like saying you went down here to the shell
mart and bought a tank of gas and went in to ask the clerk how the crude
oil is processed into gasoline and if they can't tell you they should
get out of the car and walk. Probably don't mean a whole lot to him
because he grows a lot of corn. But from a guy who survives on beef
cattle alone it's a big deal. I really don't appreciate the way he
recommended the people to deal with what happened with the knuckleheads
out at the packing factory. Thank You!!


Mike, Camp Point, IL

I was listening to your commentary about the downer cow business. I am
a livestock farmer. I am sorry to see your people have hopped on this
anti beef wagon. This downer cow thing has been going on since the
beginning of time. How else are you suppose to move downer cows? We
ate downer cow meat growing up. These are PETA people that are telling
this story. When an animal goes down in a truck, we have to tie a chain
around them to get them out. We do not have too many packing plants
around. We will soon be running short like oil. We let emotions run
over reality. These farm organizations and broadcasters jumping on the
anti-meat wagon is sad. Soon we are going to lead people into being
vegetarians. This is the road we are going down. Very disappointed
that the packers(employees) were being fired. It was not their fault
and this is something they have been doing since they started. So, like
I said before I am very disappointed you jumped on the wagon with the
PETA people. It is hard enough for us to make a living out there as is
with the prices of corn and if you take away our livestock we have
nothing to live off of.


Dear Sir:

I was so disappointed in your “mail bag” segment of the Farm Report Sat. morning Feb 23. You took a wide brush and painted all beef, in the category of that horrible video of cattle being abused at the slaughter house. Those were DAIRY cows that had been shipped in there from some huge milk factory. The story started when they let those cows get into that shape to begin with and continued when they tried to wring the last dime out of them by dumping them at that slaughter house that hired whoever they could get at minimum wage. If you think you were repulsed, you should be a rancher that takes good care of their animals and certainly does not want to see ANY animal treated this way, but after they leave our hands we have no say as to what happens to them. Small businesses in America were “Wal-Marted” and Agriculture had been ‘Monsantoed” and “Con-Agra-ed”. You said to ask the checkers at the stores how the cattle were treated and if they did not know - put the meat back. They can’t know that any more than they would know if the clothes they checked were produced by human slaves in other countries or if the toys have lead in them, the big corporations do whatever they want. They don’t care if someone puts the meat back; they will just lower the price to the producer so their profits are not hurt.
How much of that 40 billion profit Exxon made goes to the peons in the oil fields in foreign countries? Are you not going to use fuel in your car or on your farm because of it? What is the answer to any of it???
But please--- people like you with a microphone and a pen or a computer should not wreck the beef industry because of what the dairy industry and big corporations are doing. We are already hurt because of feed costs—don’t accuse us of things we did not do.
Please apologize to the beef industry. Thank-you
Betty Williams

P.S. I am 76 and one of those dinosaurs that does not have a computer so my daughter is e-mailing you this letter.


Dear John,
I was surprised by your comment on the show about the meat recall.
First of all I blame the media for a lot of our problems in agriculture
because they don't do enough research before they air a news segment.
Take for example the lifting and moving the cows with the forklift. Have
you ever tried to move a cow that didn't want to move or couldn't? No
one asked what the other option was to handling those cows. I can tell
you, slaughter her right there. Those guys were doing the best they
could.
The part of your conversation that surprised me was when you said you
should ask the people behind the meat counter where the meat came from!
I'll give you odds 98% will point to the box and say it came out of that
box. You are telling our consumers to once again believe our food is not
safe. I don't believe your thought process was complete when you said if
the people behind the counter couldn't tell you where the meat came
from, you should put the meat back!
You showed a picture of a meat market in Cuba in a segment of your show.
Would you rather buy your meat like that? It was certainly fresh, but
for how long?
The meat that was recalled had no reported cases of illness caused by
eating it. If you wanted to report on something, find out what was going
to happen to the meat. There are a lot of hungry kids in the United
States who could use it.
I know you are not responsible for everything that goes on during your
show and I know there are plenty of disclaimers during the credits at
the end of the show but! During your segment about horses in Virgina the
film showed mares having urine collected for hormone manufacturing. Now
I believe in hormones, rBst, GMOs, implants and synthetic fertilizers
but a lot of people don't. I give note of this because it solidifies my
believe that reporters don't do enough research and generally have their
mouth in gear and their brain in neutral.
Do keep working at your program because I do enjoy it and I feel safe
in that at 5:00 AM in the morning, when your show airs, most consumers
are sound asleep and never see your program.
Thanks for your time,
Dave Johnson
Oregon


It is a rainy sunday morning in southern california. So I have some
time to write this. I have a concern regarding your view on the
Hallmark beef issue. I believe and have taught in my high school
agriculture classes the real issue of the Hallmark recall was the
use of downer cows in the meat supply. Since the BSE incident in
Sunnyside Washington I have consistently taught the problems
associated with our meat industry and that we have a safe wholesome
product when the laws are followed. But your stating the recall was
based on inhumane methods of slaughter I think was incorrect and
misleading. Regarding your comment on asking a checkout cashier
about a meat product was incorrect. If the consumer has a concern
then have them talk to the meat department. Telling the public to
refuse buying a agriculture product is "just plain wrong"

USDA has a responsibility in in enforcing the humane slaughter act
and approving preantemortem inspection. USDA was just as wrong as
these slaughter house workers. I haven't read about any action
against the USDA inspectors and this happened in our backyard. I was
upset with the video footage of inhumane treatment at Hallmark. It
was unfortunate and the meat industry needs to do some damage
control. But if the US Humane Society had their way we would have a
meatless society.

Sam Walker
Agriculture Instructor
El Capitan High School
Lakeside, CA

TO JOHN PHIPPS:
IN REFERENCE TO COMMENTS ABOUT MEAT IN THE SUPERMARKETS.

TO ASK THE BUTCHES OR THE CHECK OUT CLERKS IF THE ANIMALS WERE TREATED HUMANLEY.

I THINK IT IS ENTIRELY WRONG TO ASK EITHER THE BUTCHERS OR THE CHECKOUT CLERKS BECAUSE WE ARE NOT IN THE PROCESSING END OF THE OF THE MEAT CHAIN.

SOME OF THE CLERKS IN THE SUPERMARKETS DO NOT HAVE A CLUE WHERE MILK COMES FROM.

I HAVE BEEN IN THE MEAT BUSINESS FOR OVER 40 YEARS AND I CAN'T TELL YOU HOW THIS MEAT IN THE COUNTER HAS BEEN TREATED.

I THINK ON THIS CALIFORINA MEAT RECALL, THE GOVERNMENT INSPECTOR DROPPED THE BALL COMPLETELY ON THE TREATMENT OF THESE DOWNED ANIMALS.

THANK YOU,
JAKE THE BUTCHER

And my response to these comments:

The beef industry is indeed under siege as I have pointed out on USFR and on my blog. The corn industry no longer regards them as customers who should be consulted before mandates are enacted that triple the price of feed. Readers of this blog and USFR viewers have been subjected to my many different arguments against ethanol mandates (the most recent here), not the least of which was the damage it was doing to our best customer - the US livestock industry. But my defense of your industry does not require me to answer less than truthfully to viewers who watch my show.

Please read the transcript. I do not seek to place blame, I simply point out two things: First, for those in agriculture who think Internet video is childish or prurient nonsense, here is an example of why I think it could be a factor which shapes public opinion more than newspapers soon. Remember, video viewers can watch multiple times whenever they want and spread that experience to others. That is why I am warning agriculture they need to respect this technology: Farm like the whole world is watching! [Watch it here]

We can make all the excuses we want about what happened in that clip, but my experience is those images will last longer than any explanation. The beef industry might also want to review what happened to Howard Dean as a result of viral video. Too, the beef industry is one and the same as the meatpacking industry to most consumers, regardless of whether ranchers have any control or not. Nor will the public differentiate between dairy and beef cows easily.

Second, it is also my opinion that the American food industry tracks consumer whims with stunning efficiency. Any tiny feedback ("take the meat out of your basket") that makes being able to answer Amy's question a profit booster (remember what she asked me: How can I tell if meat is humanely produced?) would do more to correct abuse in the system than mandatory USDA guidelines. Modern retailing is not about finding and punishing the guilty. It's about responding to consumer concerns.

Consider the lead contamination of toys, for instance. I'll bet few store employees had answers to consumer questions when the problem first arose, but sales executives soon ensured they DID have answers within a few days.

I stand by my answer. And I think that it cannot be construed as an attack on the beef industry. It is suggestion to the industry to get up to speed on technology and its effect on the transparency of our food system, and that arguing with customers has proven to be a bad business model.

Thanks for all the thoughtful feedback.

The coming "tsunameat"...

I will be reading Steve Cornett even more closely now, since my brief discussions with livestock producers at various meetings. Steve captures well the larger picture for the livestock sector, and often shares some surprising insights that help crystallize vague intuitions of my own.

Consider his latest about agriculture and a small community:

None of them are farming, by the way. The fellow who owns that land moved in. So what those farm kids do now: real estate agent/builder; nursing home owner; old folks home administrator; city manager’s wife; retired army colonel; software designer in Dallas; veterinarian; retired ag teacher; minister.

That’s all I can think of right now, but the point is made. These folks are not, as my parent’s generation were, leaving because they were pushed by hard times. They left because A)We don’t need them farming because we got tractors bigger than our parent’s houses were; B) because they got good educations and don’t have to farm and; C) because in the modern world, daddy doesn’t have to send the smart kid to town and give the farm to the one that can’t make it outside. Now you send the runt to college to learn journalism and you keep the prudent one home to manage the family LLC. [More]

Industrial agriculture is shedding people because we don't need them, and no subsidy low-interest loan will overcome that fact. I will trying to outline what that could mean in an upcoming TP column.

But Steve goes on to address a growing concern I have for our livestock industry - an inability of consumers to do the math necessary to grasp how much meat we consume and how it is possible to produce it.

A few critics do, and while I am unsure of their power to effect consumption changes, I do think their voices will add to the problem about to explode in the form of meat prices.

A sea change in the consumption of a resource that Americans take for granted may be in store — something cheap, plentiful, widely enjoyed and a part of daily life. And it isn’t oil.

It’s meat.

The two commodities share a great deal: Like oil, meat is subsidized by the federal government. Like oil, meat is subject to accelerating demand as nations become wealthier, and this, in turn, sends prices higher. Finally — like oil — meat is something people are encouraged to consume less of, as the toll exacted by industrial production increases, and becomes increasingly visible. [More]

Briefly put, meat prices need to escalate drastically to overcome feed costs. To have this occur at the beginning of a downturn is ominous, but those who hang on may be able to gain some pricing power under the cover of rampant general inflation that strikes me as very likely. (Much more on this later this week).

Every outlook opinion for the hog industry I have seen lately read something like this: Alas, Babylon! And as the last of previously contracted cheaper corn and/or soymeal is consumed, the deeper into the red the meat industry slides.

Now throw in a looming regulatory problem to comply with pending food safety legislation. (More on this later as well). This looks like a perfect storm for meat producers and eaters.

And we will not emerge unchanged.

What happens when the deep-fat fryer breaks...



[More]

Now if they just get it onto a stick...

Bad news in old terminology...

To add to Great Britain's farm miseries, a new disease with the charming common name of "bluetongue" has appeared along with a sixth case of foot-and-mouth.

Britain's deputy chief veterinarian Fred Landeg told British television stations on Saturday that a cow on a cattle and sheep farm near Ipswich, Suffolk, northeast of London, tested positive for bluetongue.

The cow was to be slaughtered, other animals on the farm tested to see if they were also infected, and restrictions put in place at the site, Landeg and the Department for Environment, Food and Rural Affairs (Defra) said.

National Farmers Union (NFU) President Peter Kendall told BBC television that bluetongue "is definitely not as serious as foot-and-mouth but it is of major concern to us," as it is one more disease to deal with.

He said the disease is carried by insects like midges and is not transferred from animal to animal. [More]

Although this story is unfolding painfully slower than the 2001 FMD epidemic, the stubborn reappearance will likely further decimate British beef trade.

It is hard not to wonder if there is some systemic reason why the "sceptred isle" seems the be the lightning rod for these animal diseases. At the very least, we can say charming small producers in idyllic agrarian settings are not better protected against contagious outbreaks. In fact, it would seem insistence on past methods of animal husbandry sets up producers for persistent ancient disease scourges.

The precedent problem...

There are many cattlemen in disagreement with the voluntary BSE testing appeal decision by the USDA. One is our own Steve Cornett.

Your reporter remains skeptical about USDA’s refusal to allow voluntary BSE testing. As has been argued before, it’s not that voluntary testing is needed or the expense justified.

That’s not the question.

It’s a matter of the proper role of government and the fact that, from a public relations angle, this looks awful. [More]

This semi-science matter may be linked in the USDA's policy thinking to analogous issues with BST-labels for milk. Allowing marketing differentiation based on the consumer's health perceptions and not the regulator's is profoundly new territory. It may be the USDA is appealing just to say "Hey, we did all we could - blame the courts", when beef industry honchos complain.

As the music industry is finding out, consumers are getting pretty uppity these days.

I think Steve is pointing the right way on this one.

This can only get worse...

Thanks to a strange set of consequences, "meatlifting" is now the number one "loss prevention" problem for supermarkets.

Meatlifting is a grave problem for food retailers: According to the Food Marketing Institute, meat was the most shoplifted item in America's grocery stores in 2005. (It barely edged out analgesics and was a few percentage points ahead of razor blades and baby formula.)

Meat's dubious triumph is due in part to a law enforcement crackdown on methamphetamine use. Meat used to be the shoplifting runner-up to health-and-beauty-care items, a category that includes cough medicines containing pseudoephedrine, a key ingredient in home-cooked meth. In 2003, for example, a quarter of shoplifted products were HBCs, while meat took second place at 16 percent. But states began passing laws that require stores to move medicines containing pseudoephedrine behind secure counters. That was enough to cut the pinching of HBCs, which fell by 11 percent between 2003 and 2005.

When ethanol demand raises feed prices and the livestock industry cuts back production, meat prices will likely rise. Too many weird store security scenarios spring to mind as shoppers respond with more theft attempts.

So, more innovation is required in the battle against meatlifting. Meat-sniffing dogs pop to mind, though some shoppers might object to having a Doberman nosing around their crotches in search of stolen steaks. But you know what they say about civil liberties in a time of crisis. [more]

Beef - it's what's in the cross hairs...

Sometimes you don't know whether to laugh or cry. For example, consider this headline from Green Business News:

Miliband muses on farm farts ban

and this excerpt:

While it is unlikely that this will result in a "fart-tax" with civil servants chasing cows round with breathalyzer style methane measurers, Miliband did argue that farmers should act to reduce methane emissions by feeding cattle different food, breeding them to live longer, altering the handling of manure and getting farms to generate "biogas" or "biofertiliser" from animal waste.

Extending the polluter pays principle to farming would likely lead to higher food prices, but Miliband insisted that climate change could provide an opportunity for farmers, as it has done in other sectors. [More]

[My emphasis]

No, this is not some sophomoric humor rag, but a serious report on a speech in the UK. After we pause for rude jokes, I'll point out what did trigger some speculation on my part.

The "polluter pays" principle is popping up more often in environmental discussions. I'm not sure I disagree. It is a straightforward way to get the cost of externalities included in the price of consumer goods.

Oddly, the polluter-pays principle is accepted by both sides of the environmental issue. The right seeks to define it in terms of private property:

A correct interpretation of the polluter pays principle would detine pollution as any byproduct of a
production or consumption process that harms or otherwise violates the property rights of others. The
polluter would be the person, company, or other organization whose activities are generating that byproduct. And finally, payment should equal the damage and be made to the person or persons being
harmed.
Inanimate objects and the environment do not incur costs, people: do. It is not merely the physical
property that is being damaged, but the interests of the owner. However, most advocates of PPP rarely
talk about harm to people. Instead, they misappropriate the economic theory by redetining the concepts
of cost and damage to apply to things rather than to people. The statement above is typical. Polluters
are said to be those who “damage” or impose “costs” on the environment. [More]

The more familiar version of this axiom accords more rights to the the physical world itself. That is where it gets tricky. As long as my actions on my property do no measurable harm to anyone else, am I polluting? Can I cut down all the trees and re-shape the land to suit?

Strong property rights advocates have held this position for some time, but technology is catching up with them. Just as with the "cow-emissions" stories, we are now able to measure many more forms of "pollution" than before. And doubtless, attorneys are working to use those measurements to demonstrate downstream "harm" that would make recovery of damages legitimate - and the effort billable.

So like many private property defenders, I'm thinking this is a good time to begin negotiations before all the effects of my activities can be traced clearly back to me. (At a visit Tuesday at the EPA, I learned of efforts to use bacteria-tracing to see whose animal doodoo is in the creek). For environmentalists, accommodation is not such a bad idea either, as we have now had enough examples of polluters simply committing corporate suicide (bankruptcy) when challenged adversarially.

But back to the cows. As global warming unmistakably gathers momentum, I expect some of these now-silly ideas to be translated into costs for cattlemen. Either manure digesters or feedlot size limits or feed restrictions - the possibilities are significant.

Now add in feed cost increases due to an escalating market demand for corn. (We are finding out DDG's are not the simple substitute for corn, BTW). Corn farmers could be the unwitting tools of animal activists who want to decrease meat consumption. Some health advocates would likely be smiling as beef prices especially escalate beyond frequent consumption range from most budgets.

So do I think the beef industry is doomed? Oddly, I believe, not here in the US. Beef prices (retail) will rise, and consumption may stagnate, but our beef industry could still emerge strong if it is the best global competitor for the beef consumer dollar. Other producers/packers will have to battle our scale, efficiency and brand power to maintain market share.

Still corn producer's fickle abandonment of their long-time #1 customer - the cow - is short-sighted. The problem is serious for poultry and hogs, but the feed-conversion ratios suggest that beef could be the hardest hit.

On top of all that, factor the loss of grazing ground from conversion of CRP acres. Although that risk may be overstated.

It may not be Marlboros that kill the cowboy - it could be corn farmers.