What the agricultural industry needs

By Brett DeBruycker, Dutton

Agriculture is facing very pressing issues today that will determine the viability of family-owned operations. Future Federal and state administrations, governors, senators, representatives, and local governments are all going to have to make these issues a priority if our rural economy and communities are to remain viable as we know them today.

Trade: It is imperative that we move past bilateral trade discussions and trade wars. It is generally understood the Trans Pacific Partnership (TPP) was lacking in areas like labor and environment, and it needed more daylight shown on the negotiations, but pertaining strictly to agriculture, it was one of the finest trade agreements negotiated for U.S. farmers and ranchers, and we need to get back to this kind of model while correcting inadequacies. 

U.S. agriculture would be in a far better place today had our government remained in TPP. Imagine where we would be as a country concerning China if TPP were signed and then, rather than starting a trade war with China, we had gone to India and negotiated a free trade agreement with them. An agreement with India most certainly would have brought China around in many areas of contention as India is one of the largest populated and fastest growing economies in the world and would have created competition with China for our products. Future administrations and elected leaders will have to place added emphasis on trade delegations to get U.S. agriculture back as an international leader.

Reinstate mandatory country-of-origin labeling (MCOOL): Every class on marketing teaches that in business you need to differentiate your product from others to be successful. The quickest and easiest way to differentiate our U.S. meat from others is to label it with a mandatory country-of-origin label. I have heard before that “consumers don’t want it.” If this is true, then let the market dictate the outcome rather than continuing to brand other countries’ meat with the USDA grade stamp, disguising that meat as homegrown USA product. There are many large interests that are against MCOOL and for good reason as MCOOL will certainly dig into their bottom line and deliver more money into U.S. producers’ hands. At the end of the day, consumers have the right to know the origin of their beef, and cattle producers have the right to a transparent market.

Packers and Stockyards Act: The small/medium cattle feeding segment of the industry is on the verge of extinction. In the last three years, the packers have been highly profitable. The slaughter house fire of August 2019 in Holcomb, Kansas, along with coronavirus, has accentuated already high margins in the U.S. beef packing industry. It is true that these packers have issues to contend with because of coronavirus, but the level of profit margin is not one of their problems. Ranchers are beginning to feel the results of the dire straits of the feeding segment of the industry through the low prices being paid for calves and cull cows. 

The U.S. Department of Justice should be conducting serious investigations into meat packer practices and the U.S. Department of Agriculture should be utilizing the Packers/Stockyards Act to limit packer control and give more power back to the people. When you couple the issues facing the small/medium cattle feeding segment with the issue of the corporate feeders and their tight relationships with the packers, ranchers had best be very concerned about their long term outlook.

Wall Street has all the money: Today, there are many segments of agriculture and many producers that are in poor financial condition. Banks are cracking down on borrowers. In the meantime, the few who are invested in the stock market are seeing huge returns on some stocks. When these investors tire of the stock market and are looking to divest their earnings, the first place they will look to put their money is into land. With many producers being unable to purchase or compete for this land because of their own financial issues, we will see increased consolidation of land into outside interests along with more negative pressures on our rural communities. It is imperative that local, state and national government officials take this seriously and find ways to get more of the ag dollar into the producers’ pockets so they can compete with these outside interests.

Improve federal crop insurance: Today’s federal crop insurance program offers little coverage for producers unless they suffer a complete disaster. Under the rules it is impossible for young/new producers to improve their production guarantee in a timely manner to even have disaster insurance protection. Therefore, these young producers are at a distinct disadvantage under federal crop insurance’s rules. The procedures need to be changed so that young producers and new crops can utilize better guarantees and enhanced insurance coverage. Also, there need to be new guidelines put into place so that the producer has coverage during times of mediocre crops as those are the crops that are the most financially dangerous for producers.

Public funding for research of seed and cattle: As newer and better varieties of crops are developed, it is imperative to keep the publicly-funded varieties in the hands of the public, not the multinational corporations. The Extension Service is doing well in many ways, but in some instances it has gotten too close to big business through industry trade groups with land grant institutions. This has happened through personnel creep and through money provided to professors for research. These kinds of things need to be monitored closer so we keep separation between big business and trade groups/universities/extension services. More public money needs to be provided for research of small grains, forages, pulse crops and oilseeds. This public money will find its way back into local communities by assisting farmers and ranchers in being more profitable and is for the greater good of our rural economies.

Local value added: It is important to find ways to develop and control the sale of more of our meat and grains locally rather than ship them out for large processors to gain the profits. Progress was being made in the last 10 years, but the trade wars essentially cut the legs out from under some companies by loss of markets or profitability. Many of these enterprises have either had to consolidate with larger firms or have gone out of business. One way we can help local cattle producers is to change government requirements for interstate shipment of meat, moving away from USDA inspection of plants and toward state certification being qualified for meat export. State certification will allow many smaller plants to sell meat into population centers outside of Montana, will develop numerous niche markets, and will invigorate the feeding industry of our state. If this regulatory change takes place, then there will be room for numerous small packing plants to be built, supplying new jobs and opening markets to our local cattle producers.

I know there is more that could be added to this list, but improvement in the areas I’ve listed would go a long way to helping our rural communities and agriculture survive and thrive.