True Grit--22/23 Winter Edition

THANKFUL From the Editor TRUE Grit

It has been busy, busy around here, but three years in, I’m sensing that’s a theme here at R-CALF USA! This issue may be my favorite thus far, I may be a little partial though. So, I hope you take something away from it, whether its farm bill information or inspiration or anything from the number of other valuable insights contained in these pages.

I wasn’t quite sure what I was going to write about this issue. I’m not going to lie to you, I’ve been going through a serious season of burnout, and I wasn’t sure how to crawl out of it. As I made my journey to the Black Hills Stock Show this year, I wasn’t very excited, but I showed up ready to go to work.

Over the course of the 10-day stock show (and some very cold weather for this Texan) I found some spark again. When I came on at R-CALF USA, I quickly realized that not only are we an organization that fights fiercely for our industry, we fight even more for each other, our family, our friends and the next generation. I hope it always stays this way. Sitting at that booth, recruiting new members, welcoming them into our “family” and welcoming back renewing members is something I treasure. I love hearing your stories, your questions, meeting your families, and hearing what fires you up. But also, as I sat at the booth and as I navigate getting out of this burnout phase, I realized how intimidating it can be to not know your place in this fight. A good friend of mine frequently reminds me, we don’t need another Bill Bullard or another Brett Kenzy or another Eric Nelson, we need a YOU.

Your place in this fight is so much more valuable than you think. You keep us staff and board members going. We fight for the best people on earth and without you we would have a lot less fire. We won’t give up, and you can’t either because it’s worth the fight.

I am so thankful for each and every one of you. Thank you for inspiring us, thank you for fighting with us, thank you for pushing through. I hope you have a spring full of good moisture, and you enjoy your calving season, remembering how lucky we are to get to see the miracle of life every day. Let’s get to work.

Jaiden MorelandMarketing Director Editor-in-Chief, True Grit

Published by Ranchers-Cattlemen

Action Legal Fund United Stockgrowers of America (R-CALF USA)

PO Box 30715 Billings, MT 59107

Phone: (406) 252-2516

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R-CALF

USA STAFF

Bill Bullard

Chief Excecutive Officer

Candace Bullard

Operations Director/Proofreader

Carrie Walling Office Manager/Proofreader

Jaiden Moreland Marketing Director/Editor-in-Chief

Karina Jones

Field Director/ Advertising Sales

STAY CONNECTED

R-CALF USA is a one-member/one-vote organization. Voting members must own cattle. Associate members support the cause and do not own cattle. Activities carried out by R-CALF USA for the benefit of the U.S. cattle industry are funded exclusively by the independent cattle producers who pay their membership dues and by cattle producers, main-street businesses, and other individuals who participate in and contribute to fundraising events. All members of R-CALF USA recieve a quarterly copy of True Grit as a benefit of their membership.

IT’S OUR TURN

I recently had the opportunity to speak to attendees at two conventions, and I decided to address two common questions I receive: Is reform of this system even possible? Why don’t we just enforce the laws on the books?

Over the last few years, I’ve done some research, establishing a foundation for what I believe, and I want to share some of that foundation with you. It’s important to realize we’ve been here before, and there IS a path forward.

THE REVOLUTIONARY ERA

Let’s look back to some events that shaped who and where we are. America was no accident; it was a confluence of people’s experiences blended with bold vision and thought, and divine intervention.

Starting at the king’s monopolies, I referenced “Antitrust: Taking on Monopoly Power from the Gilded Age to the Digital Age” by Amy Klobuchar. Before America declared its independence, there were over 700 monopolies in England. Monopolies were illegal in those times, unless ordained by the king. A healthy fee was charged to be accepted as a legal monopoly, and the empire got its cut of residual silver for its approval. The British East India Tea Company was one such monopoly you may have heard of. You may also think of “no taxation without representation,” but you might not know that that tea was the only tea allowed to be consumed in the colonies, by order of the king. Cheaper tea, better tea was available, but the king needed his cut. We all know how the story ended: the tea ended up in the harbor and Americans ended up coffee drinkers.

It’s interesting to think that the colonists left England not only for religious opportunity and the promise of a new land, but to flee the oppression of a ruling elite who limited choice and freedom via monopolies.

I also referenced “The Conservative Case for Antitrust” by Jonathan Tepper. Capitalism, we talk about it but what does it mean? It’s defined as an economic system characterized by the freedom of capitalists (citizens) to operate or manage their property for profit in competitive conditions.

About the time the revolutionary skirmishes were occurring, a Scottish philosopher named Adam Smith was expressing a vision of a new economic system. His book “Wealth of Nations” was published in March 1776, and his ideas held great sway with the founders of our nation. He introduced ideas like specialization: the thought that the butcher, the baker and the candlestick maker could, instead of trying all these tasks themselves, specialize in one field of production,

allowing for greater efficiency. Smith theorized that if competition was maintained, the individuals could then trade among one another, creating commerce and growing the economy. Known as the father of capitalism, Smith proposed the idea of the “invisible hand of the market”: as long as competition was maintained, the laws of supply and demand would guide the market to its most efficient state.

As Smith put much emphasis on competition, he warned that maybe the worst consequence of monopoly or concentrated power was the undue influence it could create at the policy making level, for us that would be the corridors of power in Washington D.C. Once that level was achieved, it would be very hard to break that influence.

The takeaways so far: monopolies and concentration of power, especially when corporations and governments cooperate are not new. Smith wrote, by candlelight, how important competition was to an economic system, and how unchecked power would amass, and specialization could unleash commerce that would forever change the world.

Let’s personalize these assumptions. Name an industry that relies more on specialization than the cattle industry: the seedstock producer, the cow/calf producer, the backgrounder, the finisher, the packer, the retailer. Competition is what makes OUR BUSINESS WORK, as over two years of risk and investment finds its way from the pasture to our plates.

What is new is, America recognized that it WAS the government’s job to maintain competition in an industry. Not to pick winners and losers, not to nationalize, but to let competition guide consumers to pick the winners and losers.

THE ANTITRUST ERA

Antitrust is defined as “activity relating to legislation preventing or controlling trusts or other monopolies, with the intention of promoting competition in business.” The late 1800s and early 1900s saw a flurry of antitrust or anti-monopoly activity.

The Sherman Antitrust Act of 1890 was the first meaningful law passed to deal with monopoly power, even though Thomas Jefferson had wanted monopolies addressed in the Bill of Rights of the Constitution. Senator Sherman said, “If we will not endure a king as a political power, we should not endure a king over the production, transportation and sale of any of the necessities of life.”

The Clayton Act followed, and in 1921 the Packers and Stockyards Act (P&S Act). Here’s another quote by Wyoming Senator John Kendrick, from the floor of the Senate in 1921: “It has been continued on

Competition is what makes OUR BUSINESS WORK, as over two years of risk and investment finds its way from the pasture to our plates.

brought to such a high degree of concentration that it is dominated by few men. The big packers, so called, stand between hundreds of thousands of producers on one hand and millions of consumers on the other. They have their fingers on the pulse of both the producing and consuming markets and are in such a position of strategic advantage they have unrestrained power to manipulate both markets to their own advantage and to the disadvantage of over 99 percent of the people of the country. Such a power is too great, Mr. President, to repose in the hands of any men.” The same words could be used today.

The P&S Act was specialized to address the undue market power of the packers in transportation, marketing and retail. As stated by Congress, its purpose “is to assure fair competition and fairtrade practices, to safeguard farmers and ranchers, to protect consumers, and members of the livestock, meat and poultry industries from unfair, deceptive, unjustly discriminatory and monopolistic practices.” How’s it working for you today? It worked before, but not in the way a lot of people think.

Prior to the passage of the P&S Act, a joint investigation of the meatpackers of that time was commissioned, under the Sherman Act, by the Department of Justice and the Federal Trade Commission (both created by the antitrust movement). It’s interesting that the investigation was damning enough that the five packers who slaughtered about 70% of the nation’s cattle agreed to avoid prosecution and sign a Consent Decree. The Consent Decree essentially forced the meatpackers to divest of all interests other than meatpacking. The P&S Act was then passed to make sure the abuses never occurred again. The Consent Decree worked, and although cattle production has never been easy, the stranglehold of concentration subsided. By the late 70s, the “Big 4” packers’ control had subsided to 36% of the kill, an organic response to a competitive business environment.

DEREGULATION

The 1980s rolled around and America found itself short on energy and crippled with high inflation and high interest rates. (Sound familiar?) The Chicago School of Economics found sway with the Republican platform and antitrust was put on ice and the Consent Decree of the packers was allowed to lapse. A lot of people think it’s illegal for the “Big 4” to directly own and finance cattle, but not anymore, don’t confuse unethical with illegal.

The “Big 4” controlled over 70% of the slaughter of America’s cattle less than a decade after deregulation, then rose to over 80% where it remains today. Since the 80s, we’ve lost over a half million cow herds, and over 75% of feedlots, with only 27,000 remaining. We’ve lost over half of our USDA inspected slaughter plants, less than 30 plants controlled by the “Big 4” kill 85% of the 650,000 to 670,000 cattle per week harvested in America, and rural America’s share of the retail dollar has fallen from over 60% to less than 40%.

FREE TRADE

Another Utopian idea was emerging in the late 80s and became law in the early 90s: free trade. Free trade was sold as a way to lift third world countries like Mexico and Canada (ok, Canada isn’t a third world country, just seeing if you’re awake!) out of poverty and make them incredibly wealthy consumers of our goods. In reality, free trade just allowed global corporations to source their raw commodities and labor cheaper, then import it back to our country, tariff free, killing our manufacturing base. I am cautiously optimistic that we have seen the light on sovereignty trampling free trade and will move back toward bilateral agreements that benefit both countries.

If the true wealth of a nation is mined, manufactured and grown, the extreme wealth of the global elite is made by controlling imports and exports, and labeling both for maximum profit.

The battle for mandatory country of origin labeling (MCOOL) is a great illustration of the damage free trade can inflict on a domestic industry. If the true wealth of a nation is mined, manufactured and grown, the extreme wealth of the global elite is made by controlling imports and exports, and labeling both for maximum profit.

TODAY

So, where are we today? The American cattlemen has fans from both sides of the aisle. Trump ran on an antitrust, Made in the USA platform. Biden released an executive order on competition and put into motion rulemaking to enforce the P&S Act, an effort we wholly support and are taking part in. I read an article in the Federalist titled “The 1980’s called, they want their foreign policy back and the Republicans to finally wake up”. It outlined the need for a shift in policy back toward antitrust enforcement and reigning in the swamp. Missouri Senator Josh Hawley just did a podcast and wrote a book about the same thing.

The question is, how do you know it’s not just talk? That’s where we come in. It’s time to swing for the fences, the farm bill talks are heating up. Are we going to let it be all about subsidies and sustainability?

Thomas Paine warned us of the dangers of undue influence of monopolies over our policy makers, and he underscored the importance of competition in establishing vibrant markets. The antitrust movement of the 1900s showed us that competition can be restored. It’s not a partisan issue, all Americans are under a monopoly thumb: food, fuel, fertilizer, you name it.

It’s a battle of wills. No one has lived more independent, self-reliant and free than the American rancher. We need to lead the way back to prosperity and food security for this country and make rural America great again.

Organizationally, now is the time to stand strong. I’ll leave you with the words of George Washington as he addressed the delegates of the Constitutional Convention, strong willed men with different views and backgrounds, trying to build a nation from scratch: “If to please the people, we offer what we ourselves disapprove, how can we afterwards defend our work? Let us raise a standard to which the wise and honest can repair. The event is in the hands of God.”

It’s hard to stand up in front of people who do the same thing you do. It’s hard to dissect the problems, identify the trends and offer solutions. The point I’ve tried to make is we have been here before, now it’s our turn. Those who came before us rose to the challenge of their time and stood their ground. We don’t have to blaze a trail, they did that for us! All we have to do is follow in their ruts, but it will take courage. Now is no time to play paddy cake with power. We might seek out a compromised survival for ourselves, but what about our kids? Will we leave them our problems to add to their own?

Here’s what we must do:

1. Reinstate MCOOL to show the nation just how screwed up and anti-common sense our agriculture policy has become. Kick down the door with MCOOL, and make sure every American that eats sees you do it.

2. Follow with 50/14 as a straightforward and verifiable minimum code of conduct of packer procurement until the P&S Act can restore full competition to our markets.

3. Reform the checkoff to promote the people, the process and the product that we devote our lives to producing, as it was intended.

We have big problems in America: big government, big global corporations and big debt. Amidst all those big problems, it’s easy for us to feel increasingly small. What I’m compelled to tell you today is that you matter. Your family matters. Your ranch matters, your rural community matters, your country matters. Don’t let them make you feel small.

Brett Kenzy President and Region III Director

Event Recap

Winter Rollover Calf Sale Fundraisers

Creighton Livestock Market

Calf Donor: Paulsen Land and Cattle, Matt Paulsen

Crawford Livestock Market

Calf Donor: Dyesville Angus, Jack and Penny Dye

La Junta Livestock Commission

Calf Donor: Unwin Family Ranch, Harold and Peggy Unwin

Vice President Eric Nelson hosted an Iowa Livestock Producer Meeting in Ames, IA on Jan. 26.

Thank You!

On Nov. 22, cattle producers gathered at Creighton Livestock Market.

On Jan. 6, Crawford Livestock Market hosted a calf sale rollover fundraiser.

Northern Wisconsin Beef Producers Assoc. (NWBPA) hosted their annual Winter Rendezvous and Luncheon on Jan. 28 in Rice Lake, Wisc.

On Nov. 16, Southwestern Colorado Livestock Assoc. (SWCLA) hosted their annual meeting and banquet in Cortez, Colo. Region IV Director Cash Carruth gave a presentation.

On Jan. 18, the South Dakota Stockgrowers Assoc. (SDSGA) had a Legislative Day and Mixer in Ft. Pierre, S.D. Then on Feb. 6 they attended Ag Fest in Pierre, S.D.

On Nov. 19, Independent Beef Assoc. of North Dakota (I-BAND) hosted their annual convention in Bismarck, N.D. CEO Bill Bullard and President Brett Kenzy both gave presentations.

Producers gathered at La Junta Livestock Commission for a rollover on Jan. 25.

On Dec. 3, Lincoln County Cattlemen’s Assoc. (LCC) hosted their annual banquet in Davenport, Wash.

Southern Colorado Livestock Producers Assoc. (SCLA) met in Kim, Colo. for their annual meeting on Jan. 7.

From Jan. 27 to Feb. 4, R-CALF USA and SDSGA hosted a booth at the Black Hills Stock Show in Rapid City, S.D. The booth saw visits from numerous members of the R-CALF USA Board of Directors, legislators and their staff, and many new and renewing members. R-CALF USA also hosted a farm bill listening session and social, and Kenzy represented R-CALF USA on the Need for Unity in the Cattle Industry Panel.

Photos courtesy of Brett Kenzy

Photo courtesy of SWCLA

Photo courtesy of SCLA

Photo courtesy of NWBPA

Photo courtesy of LCC

Photos courtesy of Norman Kincaide

SCLA and SWCLA hosted a legislative day at the state capitol on Feb. 13.

Photo courtesy of SCLA

Photo courtesy of SDSGA

Photo courtesy of ICOM

More events TBA.

02 03 04 05 06

Across the Country

Photo from RFD-TV

06

Thanks Chad @bbar3cattle for sharing “Simmys at Sundown”.

We love seeing photos from Katrina @wisconsinbeefgirl, especially this cute snowy nose!

Missouri member, Coy Young has become a national voice for rancher mental health and an advocate for our broken markets. A More Perfect Union featured him in a documentary “Your Beef: Killing Farmers?”Watch the video on the R-CALF USA YouTube and Facebook.

R-CALF USA CEO Bill Bullard was featured on RFD-TV discussing the USDA’s mandatory animal ID proposal released earlier this year. Watch the video on the R-CALF USA Facebook.

James Bigley @jamesbigleyranches has been working with R-CALF USA and making videos on cattle industry issues reaching viewers across all social media platforms.

Share your ranch life photos and videos with us on social media by tagging us @rcalfusa or DMing us!

Photo from Vox Magazine

Photo from More Perfect Union

THE VIEW

From Billings

Why the 2023 Farm Bill Must Include Cattle Reforms

Congress Must Enact Meaningful Reforms to Avert an Impending Catastrophe – The Destruction of American Cattle Farms and Ranches As We Know Them Today.

In just over a generation, the average age of the American farmer increased from 51.9 years of age in 1982 to 58.6 years of age in 2017 (latest available census data). Presumably, this overall increase in the average age of the American farmer is consistent with the subgroup, beef cattle operation owners.

The average annual net cash income for business operations with cattle and calves fell 43% during the second half of the last 12 years (2016-2021) when compared to the first half of that period (2010-2015), falling in real 2022 dollars from $45,370 annual income per farm, per year during the first six years to only $26,080 annual income per farm, per year during the most recent six years. According to a recent study by the University of Missouri, 82% of farm household income came from off-farm sources in 2018 and farming began succumbing to this high reliance on off-farm income beginning about three decades ago.

The 2022 forecast for the average annual net cash income for cattle and calf operations at only $18,200 is the lowest income level since at least 2010. Despite being the largest segment of American agriculture (generating nearly $73 billion in cash receipts in 2021), the average annual net cash income for cattle and calf operations is far lower than any other specific agricultural commodity reported by the U.S. Department of Agriculture (USDA).

While the average size of the U.S. beef cow herd is about 44 head, which is too few to be considered a stand-alone, economically viable beef cow operation, there are only 65,962 beef cow operations with a herd of between 100 and 499 head. Within this size range are stand-alone, economically viable beef cow operations, meaning the owners/operators could be expected to depend entirely on sales of cattle and calves to maintain their existence. Thus, it is within this size range of beef cow operations that the heart of the U.S. cattle farming and ranching industry is centered. It is imperative that the 2023 Farm Bill include meaningful reforms to ensure that the stand-alone, economically viable cattle farming and ranching operations within this size range are afforded ample opportunity to remain profitable and prosperous. Doing anything less will cause the destruction of the U.S. cattle and farming industry as we know it today.

The Systemic Cattle Industry Trajectories the 2023 Farm Bill Must Reverse

During the past four decades, Congress and each Administration resisted making any meaningful structural reforms to the legal, regulatory, and policy framework within which the domestic live cattle industry operates. Regulators rarely took antitrust enforcement action and mergers and acquisitions by the largest beef packers occurred unabated, which led to an increase in the four-firm concentration ratio for fed cattle from 36% to 85% in just over a generation; administrative rules to implement the Packers and Stockyards Act were derailed; mandatory country of origin labeling (MCOOL) for beef was briefly implemented but repealed; the domestic industry’s persistent volumebased trade deficit in cattle and beef was ignored; and, legislation introduced to address price-depressing packer procurement practices rarely found their way out of congressional committees.

Concentration Is Dismantling the Cattle Industry’s Infrastructure

As Congress and past Administrations continually applied their laissez faire policy, the competitive infrastructure of the U.S. cattle industry began and continues today to systematically dismantle. The number of industry participants, i.e., independent cattle farmers and ranchers, has been reduced by 43%, with well over half a million cattle farms and ranches exiting the industry (Chart 1). The size of the U.S. beef cow herd likewise shrank and today is about seven million head smaller than four decades ago – even smaller than it was when the North American Free Trade Agreement (NAFTA) was implemented (by nearly 4.5 million head) (Chart 2). Marketing outlets available to cattle producers are disappearing, such as local auction yards and independent, family-sized feedlots. In fact, 75% of the nation’s independent, family-sized feedlots in business when NAFTA was implemented are gone today (Chart 3). The ongoing dismantling of these fundamental elements of the cattle industry’s critical competitive infrastructure is causing the continual hollowing-out of rural America. After all, the live cattle production segment of the multisegmented beef supply chain is the economic cornerstone for many, if not most rural communities in every state.

Globalization Is Exacerbating the Contraction of the U.S. Cattle Industry

The above reference to NAFTA, which marks the outset of globalization, is critical to any discussion of the prolonged downward trajectories of the U.S. cattle industry’s competitive infrastructure. Globalization, as opposed to structural reforms within the domestic market, was touted as the preferred means of reversing those downward trajectories – of strengthening the U.S. cattle industry through promises of expanded beef markets and increased beef demand that would restore profitability and prosperity to U.S. cattle producers. Those promises backfired and the downward trending trajectories of the number of beef cattle operations, size of the U.S. beef cow herd and loss of cattle marketing outlets worsened following NAFTA’s implementation.

Concentration and Globalization Are Destroying the Economic Viability of Cattle Industry Participants as it Recently Did to the Sheep Industry

The U.S. sheep industry, similar in biological characteristics and with a live-animal market structure similar to the U.S. cattle industry, is an illustrative bellwether indicator portending the immediate future of the U.S. cattle industry. The U.S. commercial sheep industry (meaning sheep farms and ranches substantially dependent on income from the sales of sheep and lambs for their existence) has been gutted by the combination of concentration and globalization. The number of sheep farms and ranches with a flock size of more than 100 head has declined by over 60% during just the past four decades, and America’s total sheep and lamb inventory has declined by nearly 57% during the same period. This industry evisceration occurred even though the four-firm concentration ratio in the sheep industry at 53% is lower than in the cattle industry (85%).

However, the drastic decline of the sheep industry exemplifies the destructive combination of concentration and globalization. Though domestic lamb consumption has trended sharply upward since 2012, the domestic sheep industry has been overwhelmed by imports (Chart 4). While domestic lamb production has trended sharply downward since 1991, imports have skyrocketed beginning in 2012 and the domestic sheep industry’s share of the U.S. market has declined to only 39%, with imports capturing 61% of the U.S. lamb market.

continued on page 12

The U.S. cattle industry is succumbing to those same destructive forces of concentration coupled with globalization. The supply sensitive (i.e., volume sensitive) U.S. cattle industry has been saddled with a price-depressing, volume-based trade deficit in its worldwide trade of cattle and beef each year for the past several decades. It is the NAFTA-USMCA trade that epitomizes the destructive nature of unbridled globalization. The U.S. has annually purchased from Canada and Mexico three times the supplies of cattle and beef on average than it sold to those countries, leaving the U.S. cattle and beef markets awash with an average annual deficit of over 1.5 billion pounds for the past several decades (Chart 5). Consequently, the NAFTA/USMCA agreement is a perennial burden upon the United States cattle industry that has prevented it from being a net beef and cattle exporter in the world market for the past several decades (Chart 6).

The effects from the decades-long combination of market concentration and globalization-caused trade deficits are manifest in a review of the indices of economic viability for the different segments of the live cattle supply chain. Starting with the cow/calf producer, data from the USDA reveal that the average annual return per bred cow for U.S. cow/calf producers remains on a downward trajectory and decreased 55% since NAFTA (Chart 7).

The USDA also estimates returns for cattle feeding – the last segment of the live cattle supply chain. Those returns are likewise on a downward trajectory since NAFTA. With an average monthly return to U.S. cattle feeders of -$27.25 per head per month for over two decades, the loss of 75% of independent feedlots as discussed above is readily explained. The USDA data show the average monthly returns for feeding cattle was nearly a -$60 per head per month for the past five years (Chart 8).

Another alarming index of the loss of economic viability is the prolonged downward trajectory of the share of the consumer dollar allocated to the live cattle segment of the multi-segmented beef supply chain. Data gathered by the USDA show over 41% of the share of each consumer dollar allocated to the live cattle segment has been deflected elsewhere (captured by beef packers and retailers) over the past four decades (Chart 9).

Chart 8

Chart 9

To better comprehend the nature of the deflection that has occurred in the allocation of revenues along the cattle and beef supply chain initiated from the retail sale of beef, USDA data illuminates the transference of revenues once allocated to the live cattle supply chain to the beef supply chain. Four decades ago, 63% of those revenues flowed to the live cattle industry, and 37% remained in the beef supply chain (from the beef packer through to the retailer). But today, the allocation percentage has been completely reversed. Now the beef supply chain captures 63% of the revenues and only 37% makes its way to the live cattle segment (Chart 10).

Chart 10

continued on page 14

This radical reallocation of revenues evinces severe market failure at the juncture between the two distinct industries comprising the overall beef supply chain - the live cattle industry and the beef industry.

Perhaps the best way to illustrate the fractured nature of the U.S. cattle market is to show the historical relationship between retail beef prices that consumers pay at the grocery store and cattle prices received by U.S. cattle producers. Beginning about 2015, the once synchronous relationship between beef prices and cattle prices ended, and for the past eight years, the spread between those two prices has been the widest in history (Chart 11). In other words, since 2015, beef prices have disconnected from cattle prices, which evinces severe market failure in the U.S. cattle market. This market failure is causing the exploitation of consumers on one end of the supply chain and cattle producers on the other.

Chart 11

The foregoing discussion reveals the decades-long adherence to the status quo – the combination of no market structure reforms and reliance on globalization to cure market ills, has wrought severe damage to the integrity of the U.S. live cattle industry and the economic viability of its participants. But it reveals even more. The Charts 1-3 depict prolonged downward trajectories in the key measurements of the industry’s competitive market infrastructure, i.e., number of industry participants, size of herd, and number of available marketing outlets. Charts 4-8 depict prolonged downward trajectories in the indices of economic viability. This means if Congress does not take meaningful, decisive steps to fundamentally reform the current structure of the cattle market, and if policies promoting globalization are not also reformed, then we can predict a dire future for the U.S. cattle industry.

That future will be marked by even further erosion to both the industry’s competitive market infrastructure and the economic viability of its participants. When the critical mass of competitive market infrastructure disappears (i.e., when we hit the point of no return because the infrastructure is insufficient to support a return of competitive market forces), the U.S. cattle industry will no longer be recognizable. Instead, it will become another corporatecontrolled, vertically integrated industry from birth to plate, and rural America will lose tens of thousands, if not hundreds of thousands, of its critical economic cornerstones. More damage will be exacted upon rural America than what occurred when the poultry industry (in the 60s and 70s) and the hog industry (9 out of 10 hog producers in business in 1980 are gone today, and so too are their markets that once were scattered all across rural America) succumbed to unbridled global and corporate power.

Bill Bullard

R-CALF USA CEO

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R-CALF USA Affiliates

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Madera County Cattlemen’s Assoc.

Madera, Calif.

Southern Colorado Livestock Assoc.

Kim, Colo.

Colorado Independent CattleGrowers Assoc.

Karval, Colo.

Lincoln County Stockmen’s Assoc.

Hugo, Colo.

Southwestern Colorado Livestock Assoc.

Cortez, Colo.

First National Bank Henning & Ottertail

Henning, Minn.

Independent Cattlemen of Missouri

California, Mo.

Hometown Credit Union

Kulm, N.D.

Independent Beef Assoc. of North Dakota

McKenzie, N.D.

Independent Cattlemen of Nebraska

Lincoln, Neb.

Producers Livestock

Omaha, Neb.

Buckeye Quality Beef Association, Inc.

Mount Gilead, Ohio

Oklahoma Independent Stockgrowers Assoc.

Seiling, Okla.

Morrow County Livestock Growers

Heppner, Ore.

South Dakota Stockgrowers Assoc.

Rapid City, S.D.

Cattle Producers of Washington

Ritzville, Wash.

Northern Wisconsin Beef Producers Assoc.

New Auburn, Wis.

Independent Cattlemen of Wyoming

Thermopolis, Wyo.

Stevens County Cattlemen’s Assoc.

Chewelah, Wash.

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Interested in starting an R-CALF USA state or local affiliate? Contact Karina Jones karinajones@r-calfusa.com!

WINNER of The Ranchers Media Award in 2021 by R-Calf USA.

Blasting out on 40 stations in Iowa, Nebraska, Minnesota, Wyoming, North and South Dakota!

Inconvenient Truths with Eric Nelson

Protections Intended To Protect Cattle Industry Participants Have Morphed To Allow Producer Harm

For nearly a generation, cattle ranchers and feedlots have been going out of business, with total numbers of both categories down dramatically since 1998. Supporters of an integrated cattle industry are often owners of large ranches and feedlots, as well as university economists quickly pointing to economies of scale from consolidation that benefit society through lower food costs. But what about ranchers and feedlot operators that are smaller scale operators? Are their rights as citizens and entrepreneurs somehow unimportant? For it’s the smaller operators, particularly smaller feedlot operators, that provide a service for the entire cattle industry: they help establish what the value of cattle is.

In 2023, the biggest feedlot operators often sell their cattle, sometimes all of them and sometimes years in advance, for whatever the price is at the time of delivery to the slaughter plant. This “formula” type of cattle purchasing arrangement has become so prevalent that only a relative handful of cattle end up determining the market price for the rest. Furthermore, rules within the U.S. Department of Agriculture’s (USDA) Packers and Stockyards Division (PSD), designed to protect cattle market participants, have over the years been so corrupted that today these very rules now protect the violators. Harm to competition and business justification rules, along with confidentiality within Livestock Mandatory Price Reporting, must be changed to help preserve competition and help save independent cattle producers.

Harm to competition means that in order for the PSD to bring an action against a packer for violating a cattle producer, it must be proved that the packer harmed all cattle producers. This is a rule that’s been hijacked away from the people in favor of global meatpacking companies. For example: In the fall of 2021, red hided slaughter cattle in the upper Midwest were discriminated against. If you had a pen of red and black hided cattle, the packers would not buy the reds. They wouldn’t offer a discount for the reds, feeders had to sort them out and take them to an auction market in order to get them sold (where they would bring a deep discount). Why is this a problem? Because, happening at the same time in the southern plains, cattle of all colors, red, white and brindle were purchased right along with black cattle without issue. But, USDA stayed on the sideline because while some producers were damaged, not all were. These things aren’t supposed to happen in the United States of America!

Business justification has roots in a court ruling of 15 years ago at the end of the Pickett v. IBP/Tyson price fixing court case. After the plaintiffs won in the lower court, the appeals court ultimately ruled that Tyson in

fact had cheated, but because the other meat packers cheat, Tyson had the business justification to also cheat. You read that correctly: Because businesses cheat, others have the clearance to do the same. Both harm to competition and business justification must be turned back in order for livestock producers to achieve protections needed to survive.

When the Livestock Mandatory Price Reporting Act was passed in 1999, it was heralded as needed protection for disaggregated cattle producers from a handful of large meat packers. But as the rules for this law were written, confidentiality protections for the meat packers (nowhere found in the Act) were included. Basically, allowing packers to carry on in a cloak of secrecy as they become dominant in a geography, rewarding growth in size and scale with being able to operate off the grid of Livestock Mandatory Price Reporting. Rewarding the biggest of meat packers for becoming the dominant player in a geography hurts the competitive environment in the entire cattle industry and must be addressed. What makes more sense is to have packers determined by USDA as a dominant player to be removed from any confidentiality protections.

The U.S. cattle industry is the largest segment of American agriculture. R-CALF USA needs everyone that wants it to be restored to the status of being a competitive industry, to join the efforts of R-CALF USA and demand these rules be changed to defend the very producers these rules now violate. Ask that meaningful changes to these rules be put into the 2023 Farm Bill as it is beginning to be crafted in Congress. Phone calls to Congressional offices will be needed and will communicate and coordinate these action plans in the very near future.

Eric Nelson

Vice President, Region VII Director and Marketing Committee Chair

BLAZING THE TRAIL stories

of ranching, liberty and legacy

THE JOHNSON RANCH

It all started with a squirt gun. A young boy was squirting a girl in the back of the head with a squirt gun, on the bus, on the way to school. When they got off the bus, to that boy’s surprise, as payback, that girl proceeded to take his squirt gun and jump on it outside the school until it shattered. That day Dean met Delia, and the rest is history.

If you’ve been to an R-CALF USA event, chances are you’ve met Dean and Delia Johnson.

Members since the beginning days of R-CALF USA, the couple have stood firm and worked to help develop what they consider the only organization giving them a fighting chance.

As they’ve watched R-CALF USA grow and change over the years, they themselves have watched their own operation and ranching community change right along with it.

Nestled in the rolling Black Hills of South Dakota, just outside of Rapid City, the Johnson Ranch operates in Fairburn, South Dakota, an area where both Dean and Delia’s families have been ranching for generations.

One conversation with the Johnsons and you quickly see their love and passion for the cattle industry and the western lifestyle.

“We have a love for the land,” said Dean. “For us it’s a lifestyle, not just a job.”

The Johnsons have together built the operation they run today from the ground up, a goal Dean said they had from the very beginning.

“It’s the best way to raise a family,” said Dean. “It teaches kids the value of work; out here kids can go to work with us every day and know exactly what mom and dad do.”

The Johnsons have three children, Uly, Kayla and Kaycee, so, it’s important to them that they continue to foster and fight for their lifestyle as their five grandchildren get to experience life on the ranch.

“I look at our kids and grandkids and it’s special to be that place where they come to learn where their food comes from and be that connection to nature and their food chain,” said Delia. “I look forward to the days when our grandkids are able to ride horses with us and we have three generations out there chasing cows.”

This rings true as their son, Uly, and his wife, Jessica, buy into the family operation.

“It’s a challenge to bring the kids in, but we are all very open about everything and we try to adjust our practices and be open to change and be flexible for the better of the operation,” said Delia.

“I was once told, ‘The first half of your life you figure out how to pay for it and the last half of your life you figure out how to pass it on,’” said Delia. “I never really thought about it when I was told that because I was still in that putting it together part and now, I see that’s what it’s all about.”

Dean and Delia have worked hard to pass on not just the ranch, but a passion for fighting for the cattle industry and the importance of being politically active, but one topic that really fires them up: mandatory country of origin labeling.

“Why wouldn’t you want to put your name on what you brought to life?” said Delia. “Every other industry gets to do it and we just sign that over like it’s no big deal.”

“The public should know where their food is coming from,” said Dean. “And there should be a decent living to be made when you’re feeding the country.”

As inflation continues to rise and rancher profitability continues to remain stagnant, the Johnson family will continue to hold on and fight despite what seems like never-ending challenges. As Delia says, “If you got rich at it, everyone would want to do it.”

The Johnsons have a strong, tight-knit community, one that Dean says has neighbors that are a ways away and not necessarily just at their fence line. But, while South Dakota overall has become a popular place for many Americans to move, the Johnsons have seen firsthand the effects of ranches selling out and money coming in.

“We’ve seen a lot of little places bought up into one big place and so we’ve lost a lot of neighbors,” said Delia. “I grew up here my whole life and knew everyone and it was this huge family and now we have so many people coming in with money, we’ve lost our school, and it’s just been hard on the community, it weighs on us.”

Nevertheless, the Johnsons consider themselves lucky to still have a group of neighbors that get together for many ranch happenings and to help one another when needed.

“Our community makes the ranch possible,” said Delia.

continued on page 24

Members of the Johnson family from left to right: Uly, Sadie, Jessica, Delia and Dean.

Over the years, the Johnsons community has extended past the Fairburn area and now continues throughout the country, because of R-CALF USA. Dean and Delia have been members since 1998, and Delia said they attended the first R-CALF USA meeting in their area.

According to Delia, Rick Fox reached out to her because she was the 4-H leader at the time, he asked if the 4-H group would help put on a supper at the fire department.

“That was the first time we were at a meeting,” said Delia. “Johnny Smith and Herman Schumacher were there, and we thought it was going to be really something, so we signed on.”

Twenty-four years later, the organization continues to have an impact on their lives.

“R-CALF is a part of our family, and it goes from Georgia to Utah and everywhere in between,” said Delia. “You never feel less than for how many cows you have, no one is trying to ladder climb, everyone is treated the same.

“The people at the base of R-CALF, that are the stalwart supporters, just have that moral fiber and are fighters, it’s pretty powerful,” Delia said. “In this outfit there are a lot of people that are really generous with their money, time, friendship, and fellowship, and that mentality is what holds us together.”

A large draw of R-CALF USA is the willingness to not just fight for your ranch, but to fight for the rancher sitting next to you. To do their part to help their R-CALF USA family fight, the Johnson’s donate a calf every year to the annual Fort Pierre Livestock Auction rollover fundraiser. A fundraiser that has historically raised upwards of $30,000 for R-CALF USA each year, the Johnsons have been donating a calf for the past 14 years.

But, not only do they donate a calf every year, Dean and Delia frequently donate their time and additional funds

to R-CALF USA including the R-CALF USA Cookbook, the R-CALF USA Calendar and other fundraisers over the years. They also always volunteer to work the booth at the Black Hills Stock Show or help when needed at convention.

“It’s the only outfit that’s working for us,” said Dean. “We’d have been out of business a long time ago if it hadn’t been for R-CALF.”

Year after year, the Johnsons will continue to fight for their livelihood and their way of life. Each year brings different challenges than the last.

“We’ve been here through the good, the bad, the ugly, the highs and the lows,” said Delia. “We’re not going anywhere.”

The Johnsons are a family that understand the power of having a passion for your way of life, inspiring others to act, a strong community to withstand the storms, and holding the line, fighting for what is important to you. And to think, all of it started with a squirt gun on the school bus.

“ We have a love for the land. For us it’s a lifestyle, not just a job.

Jaiden Moreland Marketing Director, Editor-in-Chief True Grit

550 Years O f P r O ven G enetics i n YO ur P asture

One of the most value-packed breeds (you may have missed the famous Texas Longhorn. They arrived in North America in 1494. Mostly running wild, they survived without vet care or pampering for nearly 500 years. Problems with genetic defects, calving ease, and disease resistance was eliminated, or they died. That is serious culling. With millions of culling-events, now the breed is of great value to all ranchers world wide.

Drop Box

Browse utilization is the best of any breed. The extra profit from grazing brush, cactus, weeds, and low quality fiber is a production-added effeciency value. Old fashioned traveling ability is another big value plus.

In 1967, the Dickinson family started raising registered Texas Longhorns. Every animal has been performance tested now, for 55 years. Little by little with each generation, more gain, more cutability and more profit has been recognized and enjoyed. Every herd sire has been IQ rated to the extent it is believed their IQ is the highest on DCC Texas Longhorns of any breed. Cattle can be bred to be smart, which makes them easy to handle, which is a very profitable labor factor.

DCC genetics can be purchased as registered breeding stock, frozen semen or embryos. Exports have gone to 32 countries who have proven the above information is correct – for a fact. Learn about becoming a producer of these great cattle at the ranch site. www.texaslonghorn.com, or call with questions

D ICKINSON C ATTLE

Average breed birth weights are 62-63 lbs with adult cows. Bulls like Drop Box (semen available) started out at 67 lbs and at maturity is over a ton. Cows have been known to annually produce up to 24 years old. No need to worry about replacement heifers every few years. This is a humane breed – easy on themselves and their owners.

"Long live R-CALF."

Q&AWith the Board

Tell us about yourself and your operation. My wife, Sarah, and I have a cow/ calf operation and raise horses in southwest South Dakota, west of Long Valley, on the Pine Ridge Indian Reservation. We run commercial cattle with my folks, and we have two daughters, Tawny and Mylee, that help with every aspect of the ranch, so it’s a total family operation.

You are the R-CALF USA Region X Director representing Tribal Regions, what drew you to R-CALF USA and why are you passionate about it? R-CALF USA is full of great people that just want to fix what’s wrong with our industry so we can raise our families and make a decent living. It was an easy fit once I started paying attention to the issues.

As Tribal Regions Director, you represent Native American cattle producers across the country, what are some unique aspects about representing this wide group of producers? In my region, I work with the tribal government to try to push for policy change at the national level. A unique aspect of producers in my region is, as tribal members or non-tribal members ranch on the reservation, we lease a lot of land from the tribes and the Bureau of Indian Affairs (BIA). BIA is a lot like leasing land from the Bureau of Land Management (BLM) except the land the BIA controls is owned by individuals, so the rental rates are set up differently than the BLM.

What are some of the biggest challenges you and the people in your region face? At this moment, more than anything, drought is hurting my area. We’ve had three years of hay crops that’ve been half at best. With the lack of hay and the hay market as high as it is there’s not much, if any, profit after you fill your hay needs. Another major problem is inflation, it’s really putting a strain on the cattle industry overall. What is a hot button industry issue that really fires you up and why? Mandatory country of origin labeling (MCOOL) would be my hot button issue. MCOOL encumbers so many other issues such as competition and imports. I don’t see how you can have true competition when the consumer doesn’t know the difference between U.S. beef and

the blended beef at the meat counter. MCOOL would force the packers to buy from the U.S. market, if the consumer chooses our beef over another country’s beef. You can’t have integrity, transparency or competition in any market without giving the consumer the choice with a truthful label at the meat counter.

Why should cattle producers join R-CALF USA? Real issues start at the local level. R-CALF USA is as grassroots of an organization as your local volunteer fire department. It’s a group of ranchers getting together to try to fight the battles facing our industry and make it better. Our volunteer board of directors spans across the U.S. We each bring local, state and national issues to the table and strategize how to push back against the problems we each face. I was the guy on the fence about joining an organization, and once you start paying attention to the issues in the cattle and beef industry, it’s not hard to see exactly where the corruption lies and how R-CALF USA stands against it every time. As we come up on a farm bill year, your home state has two very active Senators on many of R-CALF USA’s key issues. What would you like to see accomplished in this farm bill and in the next few years in the cattle industry? Right now, I’d love to see MCOOL make it into the farm bill, especially since one of the cattle organizations (that takes checkoff money) is lobbying so hard to keep it from getting a vote in Congress’s agriculture committees. There are many other issues we are working on, such as Packers and Stockyards Act enforcement, that also should be included in the farm bill. We have a platform that we are currently working on to try to make happen. What inspires you to keep fighting for our industry? My kids, nephews, nieces and just the younger generation in general, I want to keep the agriculture lifestyle going. It’s one of the hardest occupations there is, but it’s also one of the most rewarding and, in my opinion, it’s the best way of life.

What is your favorite cut of beef and how do you like it prepared? I’m really not picky, I like just about any steak grilled medium and covered in salt. As long as it’s not the liver, heart, or tongue, I’m all in.

Eric GropperRegion X Director

Tawny and Mylee Gropper

BOARD OF DIRECTORS

George Wishon Region I (Alaska, Idaho, Mont., Ore. and Wash.)

Judy McCullough Region II (Colo., Utah and Wyo.)

Brett Kenzy, President Region III (N.D., S.D. and Neb.)

Cash Carruth Region IV (Ariz. and N.M.)

Shad Sullivan Region V (Texas)

Kyle Hemmert Region VI (Kan., Mo. and Okla.)

Eric Nelson, Vice President Region VII (Minn., Iowa and Wis.)

Dave Hyde Region VIII (Ky., Ohio, Tenn. and W.Va.)

George Chambers Region IX (Ala., Fla. and Ga.)

Eric Gropper Region X (Tribal Regions)

Frank Endres Region XI (Calif., Hawaii and Nev.)

Mike Jones Region XII (Ark., La. and Miss.)

Alan Pruitt Region XIII (Md., N.C., S.C. and Va.)

Justin Oberling Region XIV (Ill., Ind. and Mich.)

COMMITTEE CHAIRS

Eric Nelson Marketing Committee

Shad Sullivan Private Property Rights Committee

Mike Schultz

Country of Origin Labeling Committee

Kenny Fox Animal ID Committee

Dr. Max Thornsberry Animal Health Committee

Bill Kluck Sheep Committee

Vaughn Meyer Checkoff Committee

CATTLE BARON’Scadillac the

In days past, it was an honor to be considered a cattleman. The American people loved the romance of the West and the rugged individualism that the cowboy portrayed, but there was something special about the man who is known as the “cattle baron.” A man whose presence demands respect when he walks into a room, yet he shows great humility among his peers. Set apart from the common and heroic cowboy, he is often referred to as a big picture businessman. He understands the cattle business from end to end and knows how to make the cattle work for him fiscally and productively. He’s always near the epicenter of his business whether it be in the corrals or in the office. Most are men of class and stature, are clean cut and often decked out in starched white shirts and khaki jeans, wear a silver-belly hat, French-toed boots and take time to enjoy a hand-rolled cigarette or cigar. Every cattle baron I ever knew rode with the cowboys, told stories of the past and silently sat evaluating his surroundings amongst a crowd. Likely, they were not the best cowboys, but they were cowboys indeed.

My dad was a common cowboy that learned the business from men like these, and over the years he became one of them by taking in their experience and knowledge. I can remember several men fitting the description that my dad held on a pedestal. One of those men I named my son after, Beatty. Another was a tall, blonde headed man that was refined and handsome, and as a little boy I always thought he belonged on the cover of a cattlemen’s magazine. This gentleman saw the spark in my dad’s eye and took him under his wing, not as a hired cowboy, but as a student. Back in the day, when cattle actually made money, and lost money, in a supply and demand driven market this fella had amassed a fortune in cattle by being smart and hitting some “good licks” as my dad called them. As long as I can remember, he was a part of my dad’s life, so I suppose he had been around forever, at least from my youthful perspective. Even as a young boy, this gentleman and my dad would take me with them all over buying and selling cattle. On the western slope of Colorado, off the Navajo Reservation, in north Texas, but I will never forget sitting at Winter Livestock in La Junta, Colorado, beside my dad and this old gentleman.

I remember one day my dad and I were sitting in the sale barn and this old gentleman came in and got my dad to give him a ride to the Chevy house so he could pick up his new car. We dropped him off and headed north toward home after he told my dad he’d see him at the sale barn in the morning. The next day we were headed to the sale in Syracuse, when we pulled up my dad said, “looky there Shad, Lewis got him a brand-new Cadillac.” It was gold in color and gold to my young eyes. I had never seen anything like it. Clean, shiny, and full of chrome, a far cry from what I was used to riding in. I remember my dad sat me on his lap in the front seat of that car and I looked up to find a sunroof you could see through. The leather was plush and that great big hood ornament, I couldn’t keep my eyes off it while he drove 80 miles an hour down the road talking cattle with my dad. I was proud of that car, and I asked my dad when we could get one just like it. He laughed and said, “when you make it in the cattle business son.” And I never forgot it.

Fast-forward 40 years, the landscape was a bit different. Although my dad had “made it” in the cattle business, he had taken some pretty big hits through the years that ground him down a bit. The 80s were terrible. A pot load of cattle stolen in east Texas, some tough markets, a few droughts, and a monumental land grab all added to the romance of building a cattle operation. Admittedly, there were some fantastic years that made the perseverance worth the fight and as my mother would say, “it averaged the years out.” But, time passed, nothing could erase that old Cadillac from my mind. I always told my dad that when I made it, I was going to buy one exactly like it.

In 2013, during a trip to the doctor in Colorado Springs, I was lost and was driving down a side street when suddenly it caught my eye. Sitting on the curb in front of a modest home with a for sale sign in the front window, beckoning me to give her a look. I slammed on the brakes of that old ranch pickup, flipped a U-turn in the street and to my eyes appeared the cattle baron’s Cadillac! The same year, the same model, the same chrome, only in red, but it was gold to me.

I had a lot of help getting started over the years. Although my dad never backed me financially, his reputation certainly did. My sister and I started from the ground up with our operation. A man named Brent loaned us his equipment to build our facility in Texas; a cattleman named Marvin was the first to lease us a ranch, because he trusted us. A buyer in Mississippi named Danny developed a friendship with me, and he’s a trusted part of our operation today, as is the first man to ever buy my cattle off the ranch, Kenny. Brad Oakes, my banker and dear friend, took a chance on me because he trusted me and “where was I going anyway?” My wife, Thea, has become not only a confidant but a financial wizard I thankfully added to the mix. And, of course, the matriarch, as my dad would say, “where would we be without her?”

But none of this would have been possible without that cattle baron and his Cadillac. The seed planted that day sprouted and grew until “I made it.” My wife hates that Cadillac sitting in the garage. We argue over it being in the way, not getting used (except around the block once in a while), and her inability to get to the freezer because of it. But what she doesn’t understand is that each morning I walk into the garage, I look at that car and see me and my dad talking cattle with a real cattle baron. I see the seed that reminds me “I made it.” No matter what, I made it, and you can too.

Shad Sullivan

Region V Director and Private Property Rights Committee Chair

in the USA

Meet Allegiance Flag Supply

When Max Berry, and Wes and Katie Lyon purchased their first homes, they searched for a high-quality American flag to fly. But they all soon encountered the exact same problem: finding a high-quality American flag that was made in the USA. Purchases from Amazon and big box stores resulted in flags that quickly deteriorated, wrapped around their flagpole, and were often made overseas. Even if the flags they bought were made domestically, they were often mass-produced with low quality materials. After an exhaustive search for a flag worthy of our country’s colors, everything came up short. Frustrated, they decided to take matters into their own hands, and launched Allegiance Flag Supply in Charleston, South Carolina, in 2018.

They made it their mission to scour the country and find the highest quality materials, sewing processes and accessories made in America. They spent two years researching and developing the perfect way to sew the American flag. Now, Allegiance employs dozens of seamstresses, many of whom saw their jobs disappear as American textile manufacturing moved overseas. Max, Wes and Katie are proud to contribute to a resurgence in American textile manufacturing.

They’re a fun-loving bunch who love their country, but making the American flag is serious business and a task they don’t take lightly. We make our flags with true American values in every stitch, every hem and every thread. Wherever you fly your Allegiance flag, you know where it’s made, what it stands for, and who it flies for.

LEAVE A LEGACY

Ensure R-CALF USA Can Protect the American Cattle Producer’s Independence for Generations to Come

Create a lasting legacy by including R-CALF USA’s charitable foundation USA FREE in your estate planning. USA FREE is R-CALF USA’s charitable (501(c)(3) foundation, established “exclusively for the specific purpose of benefiting charitable, educational, and scientific activities of R-CALF USA.” – USA FREE Bylaws Article II, Section 2.1A That means USA FREE is committed to the restoration of a strong, independent producer-based system of agriculture.

Planned Giving Opportunities

• One-time donations of cash or property.

• Will or trust bequests.

• Life insurance or retirement accounts.

• Stocks, bonds, mutual funds.

• Gift annuities.

• Charitable remainder trusts.

USA FREE provides research and education for the advancement of cattle production and rural communities. USA FREE donations are tax deductible as charitable contributions.

To gift life insurance and retirement accounts no attorney is needed, request a beneficiary form from your institution and complete it. To direct a charitable gift to USA FREE, your attorney will need the following information:

Legal Name: United Stockgrowers of America Foundation for Research Education and Endowment (USA FREE)

Address: PO Box 30715 Billings, MT 59107

Federal Tax ID: 45-0487585

Please contact us if you have designated USA FREE in your planned giving, or if you have any questions about planning your estate.

Learn more at www.r-calfusa.com or call (406) 252-2516.

Farm Bill Platform

THE U.S. CATTLE INDUSTRY IS FACING

A

SEVERE AND UNPRECEDENTED CRISIS

The U.S. cattle industry is marked for failure – just as occurred to its sister U.S. sheep industry that can no longer provide even half the volume of lamb needed to satisfy America’s consumers – unless Congress acts decisively and comprehensively to institute meaningful reforms in the 2023 Farm Bill to restore fair competition to U.S. cattle markets and opportunities for profitability for independent cattle producers.

The combination of decades of unrestrained industry concentration and globalization has fueled long, steep declines in the cattle industry’s competitive infrastructure, including its number of participants, size of its national cattle herd, and availability of marketing outlets and opportunities.

Unsurprisingly, the economic viability of all segments of the live cattle supply chain is in peril as evidenced by prolonged declines in cow/calf producers’ returns, returns to cattle feeders, and drastically reduced share of the consumer’s beef dollar allocated to the live cattle segment of the beef supply chain, which has been reduced by 41% in just over a generation. These declines are associated with an ever-increasing

average age of the U.S. farmer and rancher, and a steep decline in average annual net cash income for cattle operations. The very heart of the U.S. cattle industry is in peril – its cattle operations with an economically viable herd size upon which the independent operator is exclusively or almost exclusively dependent for his/her livelihood.

The long-term, negative trajectories associated with the decline of the cattle industry’s competitive infrastructure and economic viability portend a dismal future if the status quo is maintained, meaning if Congress does not intervene by instituting meaningful reforms.

However, Congress now has the opportunity to reverse the disastrous decline of the U.S. cattle industry before it reaches the point of no return, as has already occurred in the U.S. hog and poultry industries, and likely the U.S. sheep industry.

This is an abbreviated outline of the recommendations R-CALF USA urges Congress to include in the 2023 Farm Bill to preserve for future generations the U.S. cattle industry as it is known today.

ABBREVIATED RECOMMENDATIONS

Address the Four Corners of Market Failure Pervading the U.S. Cattle Industry

A. Address Lack of Competition in the U.S. Cattle Industry’s Crucial Cattle Market

1. Restore mandatory country of origin labeling for beef.

2. Force dominant beef packers to begin competing in the cattle industry’s most important price-discovery market – the fed cattle cash market.

B. Address Market Power Disparity Between Packers and Disaggregated Producers

1. Prohibit the following cattle procurement practices known to distort the value of domestic cattle.

a. Packer ownership, feeding, or control of cattle for more than seven days prior to slaughter.

b. Alternative Marketing Arrangements (AMAs) that do not contain a firm base price that can equate to a fixed dollar amount at the time of the transaction.

c. Top-of-the-market pricing (TOMP) pricing schemes.

2. Prohibit the following cattle procurement practices that are known to mask the competitive value of domestic cattle.

a. Providing monetary compensation not related to the market value of cattle at the time of purchase (e.g., bonuses for total volume or weight, or for any other reason).

b. Providing financing for feeder cattle purchases, feed, or feeding to some cattle feeders while denying others of the same financing terms.

c. Providing risk-sharing terms to some cattle feeders while denying others of the same, including but not limited to cost-plus contracts, stop-loss contracts, profit-share, lossshare, agreements to pay for feed or feeding, or any other arrangement that effectively deflects the financial risk of feeding cattle.

C. Address Price Distorting Trade Imbalances

Structurally reform trade policies to:

-Require all federal expenditures for beef, including direct beef procurement programs (e.g., National School Lunch program and military procurement) and indirect expenditures that include beef purchases (e.g., food stamps), be for beef exclusively derived from animals exclusively born, raised, and harvested in the United States.

-Reinstate identical U.S. food safety standards for imported beef.

-Reinstate import restrictions for country’s not free of pernicious cattle diseases.

-Reinstate monthly inspections at foreign beef packing plants.

-Reinstate import restrictions for countries with BSE.

-Implement safeguard measures to protect against cattle price collapses resulting from strategically timed import increases when domestic cattle prices attempt to rally.

-Instruct the Administration to revise rules of origin in all trade agreements to require beef’s origin to be where the animal was born, raised, and harvested.

-Require permanent origin markings on all imported cattle.

-Prohibit foreign ownership of critical domestic beef supply chain components.

-Prohibit the USDA from imposing a radio frequency identification (RFID) mandate and other production-cost add-ons on the domestic cattle industry.

End the beef checkoff program that forces U.S. cattle producers to subsidize generic beef promotional efforts that do not distinguish domestic beef from foreign beef, that treats all beef as equal, and that fails to distinguish between where and how beef is produced.

ADDITIONAL ABBREVIATED RECOMMENDATIONS

1. Clarify that producers need not prove competitive injury to enforce anticompetitive prohibitions in Packers and Stockyards Act.

2. Disallow the “business justification” defense used by the largest packers.

3. Eliminate confidentiality guidelines in the Livestock Mandatory Reporting Act.

4. Allow recovery of legal fees and costs in Packers and Stockyards Act litigation.

5. Pass legislation that promotes more local and regional beef packing capacity.

6. Pass legislation to reverse the USDA’s and other agency’s efforts to restrict and reduce grazing and water rights on federally managed lands.

7. Eliminate the risk of an inadvertent release of the live foot-and-mouth disease (FMD) virus by reinstating the prohibition against the importation of the live FMD virus to the U.S. mainland. This would necessitate cancelation of the current plan to study and manipulate the live FMD virus in the proposed National Bio and Agro-Defense Facility (NBAF) located in the heart of the High Plains.

D. Address Malignant Industry Promotion

LEGACY Looks Like Something

Charles Jacob Grossenburg and his wife, Blanche, founded Grossenburg Implement Inc. in 1937. C.J. Grossenburg, an energetic and reliable salesman, started out selling and trading cattle and hogs in Omaha, Nebraska, and Sioux Falls, South Dakota. His interest in cutting-edge farming technology (and several inventions under his belt) had him researching the opportunity to bring John Deere tractors to the Tripp County area – the need for two-cylinder tractors was on the rise during WWII, and so began Grossenburg Implement. As a friend at Deere and Company put it, “Charlie possessed the American secret of making things work and simultaneously exploiting them. That spells service, and a way of selling it to the customer.”

Blanche also added her work ethic to the foundation of Grossenburg Implement. Even in her later years, Blanche worked six days a week. She was always at the desk, always had a positive attitude, and was always thinking about the business. She loved her business, she loved the employees, and she loved her family. Blanche was a grand lady, and all that knew her appreciated her enthusiasm and her outlook on life. Charles and Blanche had two children, and both were actively involved in the business throughout their life. Norma (Grossenburg) Nielsen was the office manager and bookkeeper starting in 1970. Gene Grossenburg became more active in the implement business after he graduated high school in 1949 up until he was enlisted in the Army as part of the Korean War efforts. For his service in Korea, Gene earned the Korean Service Medal with two Bronze Service Stars and V Device, the United Nations Service Medal, the Bronze Star Medal, and the Purple Heart. When he came home, Gene became a full-time partner at Grossenburg Implement. This is where the business became known as C.J. Grossenburg and Son – the infamous name painted with green and yellow on the front of the Winner, South Dakota, location – which is still here today.

Gene had four children with his late wife, LaWayna, (Swaney) Grossenburg. Barry was the second oldest and was very active in the implement business at an early age (June 1, 1972, to be exact!). Barry is famous within the company for saying, “I was born, raised and will die an implement dealer.” Barry graduated from Winner High School in 1974 and went on to South Dakota State University (SDSU) in Brookings, South Dakota. He graduated from SDSU in the spring of 1978 with a degree in agribusiness. He married his high school sweetheart, Marilyn LaCompte, the summer of 1978 and they eventually had three children: Melissa, Charlie and Lanie. Marilyn also adds to the family business as the owner of sister company, Rosebud Concrete.

Like his father, grandfather and great-grandfather before him, Charlie Grossenburg took a liking to the implement business at an early age. Now in its fourth generation, Charlie is excited and honored to carry on the Grossenburg name from his great-grandfather. Charlie graduated from Winner High School in 2001. He followed in his father’s footsteps and graduated in 2006 from SDSU with a degree in agribusiness. Charlie married Winner-native Erin Engel and they have three sons: Jackson, Haydon and Liam. Lanie Grossenburg married Adam Severson in 2010. Adam graduated with a business economics degree from SDSU and then started working for Grossenburg Implement in 2009. Adam and Lanie have three children: Louie, Oscar and Mabel.

Grossenburg Implement carries forward the tradition of service established by Charlie and Blanche so many years ago by working to prove ourselves every day. Barry Grossenburg reminds all employees this every day of every week… this is what makes us successful year in and year out.

the R-CALF USA Round Up

What’s new on the podcast?

“Parallel Problems: The Dairy and Beef Industries” with Deborah Mills

The dairy industry has long been a staple of American diets and rural America, but much like their beef counterparts, the dairy industry we once knew is quickly disappearing. Today we visit with Deborah Mills, of National Dairy Producers Organization and discuss consolidation, cattle industry policies, and checkoff programs. This episode is sponsored by Grossenburg Implement Inc.

“A Dollar a Head” with Vaughn Meyer

On today’s episode, I sit down with South Dakota Stockgrowers Association President and R-CALF USA Checkoff Committee Chair Vaughn Meyer at the Black Hills Stock Show and discuss Stockgrowers, the beef checkoff, and the needed reforms to move our industry forward. This episode was sponsored by the South Dakota Stockgrowers Association.

“The Tariff Guy” with Charles Benoit

On today’s episode, we discuss the World Trade Organization, trade, tariffs and more as they relate to agriculture, the cattle industry and our country, with Charles Benoit from the Coalition for a Prosperous America. This episode was sponsored by Ag Risk Advisors.

When the ranch is in peace, no other life is more perfect.

-Charles

Goodnight

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www.r-calfusa.com