Monday, April 21, 2008

Looking for Help on Beef Trade

I'm losing my bearings. I've never been able to embrace Pat Buchanan's protectionist approach to trade. But when a Brazilian-owned company is trying to become the number one beef processor in the U.S., should I be concerned?

I've been an opponent of Initiative 300, the ban on corporate farming in Nebraska, because of people in agriculture saying Nebraskans must be free to use whatever methods are necessary to compete and win in a modern global market. A nostalgic clinging to the romantic notion of the small family farm will kill agribusiness in Nebraska. A friend and former colleague in the Nebraska Legislature, Jim Jones of Eddyville, won the court case against I-300.

So I suppose I should cheer the proposed consolidation in beef processing that will make the Brazilian-owned company that acquired Swift & Co. last year tops in America.

One expert haled it: "U.S. beef will be sold in more countries than possibly could be imagined until now."

Others say the reduction in the number of processors competing for cattle will be bad for sellers of cattle.

Please bring on the comments.


OmaSteak said...

If you are still a small farmer, take some good advice and sellout now. Tillable farmland values are at historic levels and after the ethanol market collapses next year due to removal of tax subsidy and import tariff, the current ag boom will bust big time. Don't sell it on land contract since it's likely you'll be getting the land back in a couple of years when it will cost you too much to farm it yourself or rents will be lower than property taxes. Government created the current ag boom and in response to growing chorus of consumers complaining about high rates of food price inflation will pop the ag bubble. As for consolidation in any industry, that is strictly a private business matter in which government should play no part...ever. If you don't like the behavior of some company, don't buy their products/services. Even the biggest business can't fight the marketplace. Or better yet in the case of the cattle your beef direct from the producer. You get a much better product at a very competitive price. It's a "win-win" for all parties involved.

Chip Maxwell said...
This comment has been removed by the author.
Chip Maxwell said...
This comment has been removed by the author.
Chip Maxwell said...


Wow, there's a lot packed in there. I suppose I should expect nothing less from a correspondent named "OmaSteak."

I think you are saying: Government created the ag boom by subsidizing ethanol; high food prices will compel government to pull the subsidy rug out from under ethanol, which will gut-punch the corn market and send a negative shock wave through the broader ag market.

I guess that's plausible, though I don't know the ag economy well enough to say for sure.

Then you're saying consolidation is OK as long as it's the natural course of evolution in that market. Government should not impede or encourage the process.

I lost you on the last point. Am I supposed to drive out to a ranch or feedlot and buy a cow? Or go down to a South Omaha packing plant and ask someone to shave a few slices off a loin hanging in a cooler? (Senor, uno mas, por favor.)

I guess I first need to ask, exactly who or what is the "beef producer"? Are you talking about the entity that raises the cattle or the entity that turns the cattle into pieces of meat?

This is making me hungry.

OmaSteak said...

Ask around your friends and family and you'll likely find someone who knows a farmer or farming family. If they raise a cow or two for their own beef consumption, you're on the road to buying direct. Or in the alternative, lots of small towns have a local lockerplant where they process and store meat. They will be more than happy to put you in-touch with a local producer. Are you going to save money buying meat this way...maybe. But what you are avoiding is higher risk of exposure to contamination from the big meat processors plus you're not supporting their well known use of illegal alien labor. I do know the beef, pork and chicken I buy this way is always high quality and processed safely.