AMI study shows potential harmful effects of GIPSA rule
The results were announced today during a teleconference attended by more than 15 members of the media, including reporters from the Associated Press, Bloomberg and DTN.
The study found that the disruption and resulting inefficiencies in the market should the rule be implemented would increase retail meat prices by 3.33 percent at a national level, causing a 1.68 percent decrease in consumer demand for potentially lower quality meat and poultry products. The study’s findings also highlight the fact that livestock producers would be especially affected by the implementation of this rule, losing as many as 21,274 jobs, many in rural America.
This new study is the first to quantify the proposal’s potential impact.
“At a time of record unemployment, slow economic recovery and rising poverty levels, it is unfathomable that the administration would propose a rule that could cost one American job, let alone 104,000,” said AMI President and CEO J. Patrick Boyle. “As the analysis shows, these are not just jobs in meat packing or livestock production, but in nearly every sector of the American economy. This is, quite simply, reckless regulation.”
Boyle added that according to Gallup's 2010 annual Governance survey, an expanded proportion of Americans (59 percent – up eight percentage points from a year ago) believe the government has overstepped its bounds and grown too intrusive and too powerful. “This government intervention will dismantle 20 years of progress that has helped the U.S. meat and poultry industry to deliver the safest, most affordable meat and poultry supply in the world,” said Boyle. “As our study shows, this protectionist policy proposal would do nothing but harm Americans who work every day to put food on our tables.”
“As an economist who makes his living studying and modeling the economic impact of government regulations on businesses and industries, I have seen firsthand the unintended consequences of misguided policy proposals like the one proposed by USDA,” noted John Dunham, president of John Dunham and Associates, who conducted the study. “It is noteworthy that USDA says this proposal will revitalize rural America, yet my analysis shows it will actually cause substantial job losses.”
The study is presented in a new, interactive website that aggregates economic impact on national, state and congressional district levels. The complete study, a methodology report and frequently asked questions and answers can be found at www.MeatFuelsAmerica.com/GIPSA. For more information on the proposed rule, visit: http://www.meatami.com/GIPSA and http://www.themarketworks.org/.
Other associations have also responded to the AMI study. National Cattlemen’s Beef Association President (NCBA) Steve Foglesong said the rule goes beyond the intent of Congress and serves as another example of government overreach into private business.
“Congress did not direct USDA to write a rule that would take away the rights of cattle producers to be innovative and creative by embarking on contract agreements for premium, consumer-demanded beef,” he said. “The goal of cattle producers is to provide the very best and safest product possible, while sustaining our family owned operations for future generations. The administration should help us accomplish these goals and not throw them down the drain along with 104,000 jobs.”
R-CALF, a staunch proponent of the GIPSA rule, stated that the study is not an economic study at all, but rather a direct political threat by the monopolistic meatpackers to exact financial harm on producers and consumers as a retaliatory measure if GIPSA proceeds to prohibit them from exerting abusive market power to lower cattle prices to producers and increase beef prices to consumers.
“The entire study is based on the outrageous threat that packers likely will collude to destroy certain marketing arrangements that benefit everyone in the marketing chain – from consumers to retailers to packers to cattle producers – by providing high quality beef for consumers,” said R-CALF USA President/Region VI Director Max Thornsberry. “This threat would be laughable if it weren’t coming from one of the most economically and politically powerful trade associations known in Washington, D.C. We think the U.S. Department of Justice should step up its antitrust investigation of the packing industry given AMI’s admission that the concentrated meatpackers likely possess, and likely intend to exercise, their abusive market power to coordinate actions to increase food prices for consumers. Indeed, AMI’s entire study presumes this outcome.”
Source: AMI, NCBA, R-CALF
Proposed Swift plant would bring 2,500 jobs to IllinoisA proposed hog processing plant in Pekin, Ill., would bring potentially 2,500 union jobs to the area. The Peoria Journal Star reported that city officials are negotiating with Swift & Co. to bring a hog processing plant to the city, which would be located near the business park.
Sources familiar with the details, but who would not agree to speak on the record because nothing is final, said they hope to close the deal with Greeley, Colo.-based company soon. Neither Swift or city officials would comment on the negotiations.
Source: Peoria Journal Star
Russian poultry producers call to ban on importsDomestic poultry producers in Russia are calling for a ban on imports, blaming a drop in prices on the resumption of imports from the U.S. The farmers are urging the government to ban imports of cheaper fowl that are hurting their profits, according to Moscow Times, citing Interfax.
Poultry prices fell five percent last week after 30,000 metric tons of U.S. chicken arrived, the report said, citing Senator Sergei Lisovsky. Prices will drop further after 100,000 tons of chicken now in transit arrives in Russia, it said.
Poultry farms representing 70 percent of national output will petition Prime Minister Vladimir Putin to ban imports because domestic production of more than three million tons is enough to meet demand.
Source: Agnet, Wisconsin Ag Connection
Cargill wins McDonald's Sustainability AwardCiting the ability to balance long-term sustainability goals with the need to perform competitively, McDonald's USA has selected Cargill for its 2010 U.S. Sustainability Award.
"One of Cargill's strengths is that when we face a challenge the best of the company comes together to solve it," said Pete Richter, president, Cargill global McDonald's business unit. "This award shows the progress we've made in leveraging our leadership in food and agriculture to tackle complex economic, environmental and social challenges throughout our supply chains."
McDonald's U.S. Supply Chain Management team established the award three years ago to recognize the importance of sustainability as an area of growing importance to the business. "Cargill has demonstrated a proactive, systematic approach to understanding and seeking solutions to address how our supply chain affects, and is affected by, the world around us," said Susan Forsell, McDonald's vice president, quality systems.
McDonald's cited these examples of Cargill's accomplishments:
* Managing and proactively improving animal handling practices in the company's red meat business using remote video auditing;
* Managing the administration of the research that will be conducted with the Coalition for Sustainable Egg Supply. This research requires the coordination of suppliers, non-governmental organizations and academia, and potentially will play a leading role shaping the egg industry of the future;
* Promoting science-based animal welfare programs through the North American Food Animal Well-being Commission;
* Sponsoring, with McDonald's, the World Wildlife Fund (WWF) Global Conference on Sustainable Beef in Denver, Colorado, in November 2010. The conference is designed to reach out and engage other beef industry leaders and trade associations to address sustainability concerns; and
* Establishing 2015 environmental goals for Cargill in energy efficiency, greenhouse gas intensity, renewable energy use, and freshwater efficiency; as well as reporting annual progress against those goals.
The U.S. Sustainability Award follows McDonald's recognition of five Cargill business units in its "2010 Global Best of Sustainable Supply Report," which was released earlier this year, as well as Cargill Meats Europe earning McDonald's European Sustainability Supplier of the Year Award 2010.
Odom's introduces turkey sausage biscuitsFor the first time in its 67-year history, Tennessee Pride has introduced its first poultry-based breakfast sandwich: Turkey Sausage Biscuits. The company has been expanding its breakfast sandwich business recently to meet a growing consumer demand for hot, nutritious breakfast products that are lower in fat. The idea that sparked this new product came directly from consumer research, which showed that mothers have a need for a nutritious breakfast alternative for their children. The product also needs to taste great and be easy to prepare – especially for hectic mornings before school.
According to Larry Odom, the president and CEO of Tennessee Pride, "We listen to our customers to keep our product offerings in tune with their changing needs. The new Turkey Sausage Biscuits are a perfect solution for families seeking a new breakfast option. They have 60% less fat than our regular Sausage Biscuits, contain no MSG, and have only 100 calories per sandwich."
Source: Odom’s Tennessee Pride
Agri-Beef contributes to Washington, Idaho food banksAs more people are turning to food banks for help feeding themselves and their families, the food banks are often running short on high-protein items like meat. The beef industry in Washington and Idaho is working to provide more meat to the region’s foodbanks, said Jay Theiler, executive director of marketing at Agri-Beef Co. in Boise, Idaho.
We need to be involved in communities where we're doing business," he told the Seattle Post-Intelligencer. "When we talk to food banks, we hear them say they are not getting enough protein. Obviously beef has a lot of nutrients and this is something we can do."
Several state associations - Cattle Feeders, Livestock Marketing, Cattlemen's and Cattlewomen's - and the Washington State Beef Commission along with Washington Beef are partnering with Second Harvest Inland Northwest, a regional food bank supplier, to create what's been dubbed Beef Counts.
A recent fundraiser cattle auction raised more than $10,000 to help in the effort. Area cattlemen are donating cash and animals, and Washington Beef, a Toppenish, Wash., slaughterhouse owned by Agri-Beef, is matching 50 percent, up to $50,000, of the money raised. In December, the money raised will be used to buy wholesale beef from Washington Beef that, in turn, will be distributed to 275 food banks throughout Eastern Washington and Northern Idaho.
Source: Seattle Post-Intelligencer