Aug 27, 2010
by WLJ

An open letter to Agriculture Secretary Tom Vilsack

Dear Mr. Secretary, Misinformation and fear mongering abound as your department endeavors to fulfill the mandate in the 2008 Farm Bill to address marketing issues in the livestock industry. It is especially frustrating that critics of the proposed rule changes offer no solutions of their own, other than to say “nothing is wrong.” Continually, critics have stated alternative marketing agreements (AMA’s) were started to meet consumer demand for higher quality beef. This is simply false. The largest AMA’s were originally started and continue to be about supply management. Certainly, there have been specific AMA’s tied to unique “brands” or products. In the past, these programs have been considered, and it appears they will, under the new rules, continue to be seen as programs representing “reasonable” differences in the marketplace.

Interestingly, the largest volume consumer desired products would appear to be identified by USDA quality grades and programs. These include Prime, Choice and Certified Angus Beef. These high-volume products bring a premium in the marketplace that is available to any producer capable of supplying them.

Critics of the rule change point out that producers enter various AMA’s freely. Have they also mentioned that would seem to be a pretty natural attitude since they are getting something their neighbors are not going to get? The freedom of those who accept comes at the expense of those who are denied.

The beef sector is the last remaining, least vertically integrated livestock industry. Our rural economies are strengthened by having as many efficient producers participating as is possible. Consumers benefit from the competition and innovation that a market filled with many producers brings.

Some economists have argued that current “captive supplies” do not impact price. Yet, common sense and other economists indicate that the thinning cash market and producer loss of leverage has to have a negative market effect. Reduced access is another concern. Time and again, industry in this country has proven wrong the intellectually appealing concept that a “master plan” will generate more efficiency than a chaotic appearing free market—a market characterized by access for all viable participants, not just select players.

We urge you to stand firm.

Please, consider the comments you receive and clarify or change the proposed rules to address legitimate concerns. Perhaps it would be useful to give the industry examples of what you see appropriate and inappropriate under the new rules.

Now is the time for rule clarification and change. To wait for some grievous condition that necessitates change and we have lost a generation of producers in the process is a painful and unnecessary outcome. Please chal lenge

the critics to engage the process and help formulate effective change.

Sincerely, Allan Sents Thirty-year cattle feeder and United States Cattlemen’s Association Director