Prospects of huge losses at the ranch level and the government tightening its grip on the beef industry are key reasons a new coalition of producer alliances strongly opposes the Johnson amendment to the farm bill.
The Cattlemen's Alliance Coalition is asking members of the Congressional Conference Committee deciding the issues to spare the beef industry short- and long-term financial devastation by defeating the amendment.
The overwhelming majority of economic and legal analysis indicates ranchers would be harmed more than any other industry sector by passage of the Johnson amendment. Most notably, a comprehensive study conducted by Sparks company showed beef producers could lose up to $3.5 billion through a combination of softer feeder cattle demand, increased credit costs, reduced beef demand and lower finished cattle prices passed down by less efficient packers. The total breaks down to $44 lost per calf or about $8,800 for the 200-head cow operation.
"This business is tough enough without the government passing laws that take money out of our pockets," said Tom Woodward, Decatur, TX. Woodward sells beef through Ranchers Renaissance, one of 22 organizations belonging to the coalition.
Relying on legislation to solve industry problems sets a dangerous precedent, the coalition noted. While some believe the Johnson amendment would prevent packers from feeding, close analysis proves it would keep producers from participating in coordinated marketing ventures that generate additional revenue for higher quality cattle. All of the alliances belonging to the coalition were initiated at the request of beef producers, not packers.
"Unintended consequences of the Johnson amendment would be much more punitive for individual beef producers than packers," said Kay Richardson, an Evinston, FL, rancher marketing beef through an alliance called B3R Country Meats.
Though each of the 22 alliances belonging to the coalition is structured differently, the vast majority would be in jeopardy if the Johnson amendment were approved. A group of eight respected livestock economists said blocking independent producers from participating in coordinated ventures involving new branded beef product lines effectively denies them a larger share of the consumer food dollar and better profit opportunities. Innovative marketing concepts used by Cattlemen's Alliance Coalition members are credited with putting independent cattle producers in control of their destiny and helping increase the demand for beef over the last three years. By employing a systems approach to beef production, alliances, cooperatives and other joint endeavors are successfully delivering products the consumer desires.
"Supporting the Johnson amendment takes a proven marketing method out of the rancher's hands and clouds the beef industry's future," said Hope, AR, producer Buddy Boyce, who also sells beef through B3R.
In addition, members of the Cattlemen's Alliance Coalition are concerned the Johnson amendment would place beef at a competitive disadvantage. Poultry is not covered by the proposed legislation, creating an uneven playing field favoring another protein source.
The Cattlemen's Alliance Coalition includes Angus America, Angus GeneNet, B3R Country Meats, Beef Advantage Project LP, Beefmaster Cattlemen LP, Brangus GeneNet, Brawley Beef LLC, Certified Hereford Beef LLC, Charolais GeneNet, Farmland Supreme Beef Alliance, Future Beef Operations, Glacier Beef, Gelbvieh Alliance, Harris Ranch Beef, Maverick Ranch Beef, Meyer Natural Angus Beef, Oregon Country Beef, PM Beef Group, Power Genetics, Premium Gold Angus Beef, Ranchers Renaissance and U.S. Premium Beef.