Nov 5, 2010

Common sense

Common sense

It was a good week in some parts of the country after Tuesday’s events. On Wednesday morning, after the tally was made, it appeared that hope and change took on a whole new meaning. This was the largest voter turnout for any midterm election in history, which shows us just how disappointed the country is about the current state of our government.

The Republicans gained a lot of ground in the House, but not quite as much in the Senate. That’s okay in my book. Getting some political balance in Washington, D.C., is perhaps the best thing that could have happened. Neither party seems able to handle absolute power very well. Now, politicians will be forced to work together. Hopefully, we’ll see a bit more common sense when our lawmakers get to work. On the flip side, California seems like it might be the only state in the union that’s content with a dysfunctional government.

From where I sit, much of the legislation passed over the last two years could take 10 years to fix. The health care bill was a disaster as far as I’m concerned. Our little company, Western Livestock Journal, just received the new rates for our employee insurance plan for 2011, which came with a 52 percent increase. We’re not alone in this situation. After all the talk and legislation to lessen the burden of health care costs for small business, it’s downright irresponsible for government to create this problem. We’ll figure out how to handle it, but it sure makes one wonder what’s ahead. I would prefer government to stay out of it, but now that’s absolutely impossible. Just imagine if Congress had managed to pass some sort of cap and trade energy policy.

Okay, that’s enough ranting for the week. Jerry York, my wife, Rita, and I recently spent a week in Virginia setting up our next WLJ Ranch Study Tour. The country was gorgeous and the people were great. We met quite a few young, progressive cattlemen who manage dynamic cattle operations and are very aware of the value of their cattle and their markets.

Interestingly, they are also strongly opposed to USDA’s Grain Inspection Packers and Stockyards Administration (GIPSA) proposed rule changes to the Packers and Stockyards Act. Several of our new friends retain ownership of their cattle and sell through value-based marketing programs which are threatened by the proposal. They pay very close attention to their breeding programs and cost of production and are afraid that the changes to alternative marketing agreements and contracting will damage their ability to maximize ranch revenues.

Most simply couldn’t stand the idea of more government regulation in the livestock industry. It seems that not many people actually believe that government intervention is required to maintain a profitable ranching operation. One outfit we visited is being managed by the seventh generation.

Imagine all those years of success without government help in the cattle markets.

Several ranchers told us about an Associated Press story about the rules that ran on the front page of the local community newspaper. They were livid that the article suggested that they couldn’t survive in the livestock business without the government’s help. They told us the newspaper seldom carries stories about agriculture.

Now that the elections have passed, this competition rule shell game could change. The issue became very political and with the Republicans now dominant in the House, they will have the chairmanship of the House Ag Committee. The Republicans have already shown their opposition to how USDA interpreted the Farm Bill rule that started this fight. They realize that GIPSA Administrator Dudley Butler has a personal agenda behind the competition rule. It would appear that the new politics in the House Ag Committee could have a favorable impact on some of these ag issues such as ethanol, livestock markets and, hopefully, trade.

I believe that the bulk of livestock producers are not very happy about this GIPSA rule and most seem to think the livestock markets are working just fine. The strategy that the proponents have taken to further their attempt to change the dynamics of the livestock industry have become outrageous. The antics employed by some of these groups probably marks a very low point in the industry’s history. Now, after the elections, hopefully, there is a chance that truth, common sense and cooler heads will prevail. — PETE CROW