To: All U.S. Cattle Producers

From: Bill Bullard, R-CALF USA CEO

Date: June 23, 2009

Subject: Show Your Support for an Urgent Call for Change on June 26

The U.S. Department of Agriculture (USDA) has spent considerable resources over the past three months trying to decide if it should impose onerous regulations on independent family farmers and ranchers by requiring them to enroll their property in a National Animal Identification System (NAIS) database and put electronic eartags in their animals’ ears. Meanwhile, farmers and ranchers continue to suffer horrendous injustices brought about by USDA’s complete and utter failure to protect the U.S. cattle market from the abusive marketing practices of the highly concentrated meatpackers.

These ongoing injustices will be highlighted at a news conference to be held at 1:00 p.m. CDT, Friday, June 26, at the home of Herman Schumacher, 102 6^th Ave. NW, Herreid, S.D.

R-CALF USA urges every cattle producer within driving distance to attend Friday’s news conference to help demonstrate the U.S. cattle industry’s dire need for protection against the abusive market power of the highly concentrated meatpacking industry.

For 22 consecutive months, U.S. cattle feeders have experienced horrendous losses, which exceeded $300 per head in late 2008 and early 2009 (see Fed Cattle Returns chart below). But, while cattle producers reel from low cattle prices, consumers continue paying at or near record retail prices for beef, with choice beef prices jumping over the $4.00 mark in February 2007, and reaching all-time highs in late 2008 and early 2009 (see Retail Choice Beef Prices chart below).

In a competitive marketplace, consumers would not pay long-term, record beef prices while cattle producers suffer long-term, below cost-of-production prices. However, the fact this is happening demonstrates that U.S. cattle producers have lost their competitive marketplace.

Congress passed the Packers and Stockyards Act (PSA) to ensure the U.S. cattle market would remain competitive. Congress charged USDA with the responsibility to protect the U.S. cattle market from the anticompetitive practices of the highly concentrated meatpackers. Congress found that these highly concentrated meatpackers possess sufficient market power to disrupt competition.

The U.S. Government Accountability Office (GAO) and the Office of Inspector General (OIG) each issued reports in 2006 showing that for nearly a decade USDA had failed to properly enforce the PSA. Thus, the cattle market has remained unprotected from the abusive market power wielded by the highly concentrated meatpackers.

While USDA ignored its responsibilities, a rancher and cattle feeder from Herreid, S.D., stepped to the plate with two other cattle feeders to correct this injustice. Herman Schumacher and his fellow cattle feeders filed a lawsuit in 2002 to enforce the PSA. The outcome of the lawsuit was decided by a jury, which concluded that Tyson Fresh Meats Inc. (Tyson) had violated the PSA and had financially damaged Schumacher and other cattle feeders. But in a rare and bizarre twist, Tyson convinced a federal appeals court to overturn the jury’s decision and to order Schumacher to pay Tyson’s court costs.

On June 11, 2009, the U.S. Marshals Service executed Tyson’s judgment against Schumacher by seizing Schumacher’s property – his home in Herreid, South Dakota. Tyson’s action sends this strong message to every U.S. cattle producer: “Your markets are controlled by the meatpackers and don’t dare attempt to do anything about it.”

The Friday news conference is a plea from the U.S. cattle industry to President Obama, USDA and to Congress to urge them to correct the ongoing injustices occurring in the U.S. cattle industry before the U.S. cattle industry is further destroyed by the highly concentrated meatpackers.

Charts:
Fed Cattle Returns (Nov 2006 – April 2009)
Retail Choice Beef Prices

Here is a photograph of the front door of Herman Schumacher’s home with Tyson-initiated signage.

If you are within driving distance of Herreid, South Dakota, we encourage you to stand with us on Friday at the home of Herman Schumacher to highlight the absolute need to restore competition to our cattle markets before even more producers are forced to exit our industry.

If you cannot make the Friday event but would like to support the effort to end the injustices in our U.S. cattle industry, you can send a contribution to:

R-CALF USA Legal Fund
P.O. Box 30715
Billings, MT 59107