11/30/07

UFCW lobbies Congress for cattle ownership ban

It's obvious the United Food & Commercial Worker's Union (UFCW) doesn't know much about the meat industry.

In their ad supporting Farm Bill measures (S.2302, Sec 10207) that would strip meat packers of their private property rights to own livestock, their lead argument is that "companies close plants to move production closer to the livestock they own," putting workers out of work.*

Unbeknownst to the UFCW, livestock processing began moving out of railheads like Chicago, Cincinnati and Omaha not long after World War II when livestock began moving by truck. Packing plants went to where livestock were fed to limit hauling distances for live animals. Over 30 years ago, the boxed-beef concept took over because hauling primal cuts meant hauling fewer pounds than with carcasses.

Livestock have been fed for generations where feed and water were plentiful and the climate suitable. No large-scale beef packing plant has been built outside the High Plains for 25 years. Pork processing plants have been located in an arc from the Corn Belt to the Southeast where hogs have been raised for decades. The union's arguments begin with historical inaccuracies.

More ridiculous is the contention that packers would move plants closer to the livestock they own. For one, packers only own, in the case of cattle, five percent of the cattle on feed. So they wouldn't handicap themselves for 95 percent of the cattle they process by locating plants anywhere but where the cattle are. For another, since the plants have been located where they are for decades, they already own what feedyards and cattle they own right where much of cattle production is - in the High Plains region. Likewise, with their contracted cattle.

Ironically, it is often the smaller plants away from the high-density cattle areas that are more likely to be owned by cattlemen or cattle producer groups who bought or built smaller plants to keep them open in lower production areas. Plants like those in the Northwest, California and the Southwest are inexplicably under attack by the proposed Farm Bill limitations on cattle ownership. Those smaller plants, plus the large #4 packer -- majority-owned by cattlemen -- would be made illegal. Cattlemen who have invested in a high risk, extremely competitive, narrow-margin business would be put out of business by Senators with little respect for free enterprise or Constitutional private property rights.

Even worse, by forbidding packers to participate in beef alliances where cattlemen, packers and retailers share ownership, spread risk and cooperate to improve cattle management and beef quality, the Senate would declare war on consumers. By destroying some of the most consumer-focused systems the beef production chain has devised, Congress would be depriving consumers of a better quality product at competitive prices.

"Natural" beef, in which consumers are guaranteed that cattle have been raised under certain non- standard production protocols, would be eliminated under other provisions in the bill. With no alliances or branded programs allowed under cattle ownership restrictions and no contracting or marketing agreements under other provisions, it would be impossible to make such guarantees. "Natural" beef production would be gone.

In the pork business, the production chain is tightly coordinated and often integrated under one ownership. So Congress would simply be declaring such pork companies illegal and putting them out of business - and employees out of work - plus creating a critical shortage of hog slaughter capacity.

Maybe it's so difficult for the UFCW to fashion a coherent argument that their jobs are threatened, at least for much of the beef-packing business, because many union jobs were phased out decades ago. Many beef packers striving for competitiveness with inexpensive chicken were built around rural, non- union structures in the 1970s - more flexibility, less restrictive work rules and lower wages than urban union scale. That's why, of the UFCW's 1.3 million members, only 250,000 (19 percent) work in meat processing. Uncompetitive labor costs were among key reasons for packing-plant closures in the past.

Packers rarely built feeding facilities from scratch when they entered livestock production. They purchased large, existing production facilities, already located in heavy production areas close to packing capacity. So "moving" packing plants to where packers own livestock is a non-issue.

The union's arguments are specious, their "facts" out of date and the proposed legislation extremely damaging to the interests of consumers, livestock producers and processors.

*Click here to see UFCW ad

(cattlenetwork.com)

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