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The U.S. National Animal Identification System (NAIS) & the U.S. Beef-Cattle Sector: A Post-Mortem Analysis of NAIS

Rhonda Skaggs

New Mexico State University United States of America

1. Introduction

The appearance of bovine spongiform encephalopathy (BSE) in the United States in late 2003 resulted in severe economic impacts to the U.S. livestock sector. U.S. exports of beef and live cattle were immediately embargoed by importing countries as a result of BSE, and markets have not fully recovered eight years later. The trade status of the U.S. beef and cattle sectors was severely harmed when trading partners used BSE as justification for increased protectionism. The trade response to one BSE-infected cow and the desire to protect the U.S. livestock industry’s economic interests enhanced concerns about intentional and accidental disease outbreaks. The first BSE-infected cow identified in the United States and ongoing fears that a virulent disease (foot and mouth disease, in particular) could cost billions and destroy the U.S. livestock sector led many people to conclude that a nationwide individual animal identification system was necessary. As a result, the National Animal Identification System (NAIS) was set forth in early 2004 by a working group including both industry and government officials. The NAIS built on the National Animal Identification Plan initiated in 2002. The goal of the NAIS was nationwide 48-hour traceback of all livestock and poultry in the event of a disease emergency. The Animal Health Protection Act (AHPA) enacted with the 2002 Farm Bill set the legal stage for the federal government to be involved in the national animal identification effort. The 2002 AHPA includes language that indicates the federal government’s intention to expand regulation of livestock due to interstate commerce and related movements of pest or disease threats (O’Brien, 2006). The AHPA was interpreted as giving the U.S. Secretary of Agriculture the ability to prohibit all movement of livestock unless producers participated in the NAIS. The NAIS entailed three components: Premises registration, animal identification, and animal tracking. Premises registration was the assignation of a unique premises number to all facilities where animals are managed or held. Animal identification assigned a unique number to individual animals or lots in the case of animals that stay with the same group their entire lives. Animal tracking involved the collection of data for animal movements and the recording of those data in a central recordkeeping system which could be quickly and comprehensively accessed in the event of an animal health emergency. A 2005 USDA document indicated that the NAIS would begin as a voluntary program, but would become mandatory in 2009 (United States Department of Agriculture – Animal and Plant Health Inspection Service [USDA-APHIS], 2005). The USDA stated in a 2006 document that while the agency had the authority to make the system mandatory, it had chosen to make every component of NAIS voluntary at the federal level (USDA-APHIS, 2006a). In a 2008 report, the USDA designated cattle as the highest priority species with respect to NAIS implementation and presented revised timelines and benchmarks for NAIS progress by species (USDA-APHIS, 2008a). Implementation benchmarks for cattle were scaled down from previous NAIS documents, and the cattle implementation timeline was also extended. NAIS benchmarks were scaled back for other species, although not as much as for cattle. In June 2006 the USDA published a document intended to provide guidance for “noncommercial” livestock producers and their position within the NAIS. This guide attempted to alleviate small-scale livestock producers’ concerns about the system, stating that NAIS participation was voluntary and that the NAIS would “largely focus on commercial operations and animals” (USDA-APHIS, 2006b). Critics of NAIS quickly pointed out that many statements in the report were inconsistent with other NAIS documents regarding the government’s plan to extend NAIS coverage to all livestock and livestock movements within the United States. The federal government issued numerous grants and cost-shares to states and tribes as inducements for premises registration and spent more than $120 million in the process; however, at the end of 2009, only 36% of premises were registered nationwide (USDAAPHIS, 2010). Some states achieved higher levels of premises registration by tying it to other state-level licenses or programs. In September 2008, the USDA issued a memorandum which stated that premises registration would be mandatory for emergency disease management or for state or federal activities involving diseases regulated through the Code of Federal Regulations. Although this memorandum was cancelled in December 2008, the USDA maintained that the federal government has broad authority to assign premises identification numbers as part of their normal animal health program activities. Recent livestock disease outbreaks in some states thus have resulted in mandatory NAIS participation for affected producers. In June 2009, federal funding for NAIS in its current form was dropped from the fiscal 2010 spending bill by the House Agriculture Appropriations Subcommittee, with House leaders indicating that no future funds would be available for the program unless USDA developed and implemented a mandatory NAIS. The USDA conducted numerous NAIS “listening sessions” throughout the country in 2009 and received many more comments on NAIS at the Regulations.gov website. Since the inception of NAIS, the federal government has asserted that the future economic viability of the U.S. livestock industry rests on improved disease management through nationwide animal identification and traceability. However, over the last several years, many U.S. livestock producers raised concerns about the security and confidentiality of premises and animal data provided to the national system, increased liability on the part of producers as a result of traceback to the farm level, the costs of NAIS participation, and the overall feasibility of the system. Opponents of NAIS claimed it was unconstitutional, a violation of their property rights, inconsistent with religious beliefs, an invasion of their privacy, and a loss of freedom. They did not believe USDA’s assurances that NAIS information would not be subject to Freedom of Information Act requests or that use of the information would be restricted to animal health emergencies. The 2009 “listening sessions” were dominated by NAIS opponents, with a small minority of session participants speaking out in favor of the system. The comments posted at Regulations.gov were nearly unanimous against NAIS. In February 2010, the USDA announced that it was abandoning the NAIS (USDA-APHIS, 2010). The agency indicated that it was going to “revise prior animal identification policy and offer a new approach to achieving animal disease traceability” (USDA-APHIS, 2010). The new approach will apparently only apply to animals moving interstate, although the operational details of the approach have yet to be developed. The agency’s February 2010 Factsheet also stated that the new approach intends to “help overcome some of the mistrust caused by NAIS.” For almost a decade, proponents maintained that NAIS would protect producers’ animals, investments and neighbors, and that “as producers become increasingly aware of the benefits of the NAIS and the level of voluntary participation grows, there will only be less need to make the program mandatory” (USDA-APHIS, 2006a). The USDA stated that NAIS would help protect U.S. livestock and poultry from disease spread, maintain consumer confidence in the food supply, and retain access to domestic and foreign markets (USDAAPHIS, 2007). In 2010, the federal government was forced to admit that arguments in favor of NAIS had fallen flat with a large segment of U.S. livestock producers. The cattle industry was designated by the USDA as having the highest priority for full NAIS implementation; however, the cow-calf portion of the beef cattle sector was very resistant to NAIS (evidenced by continuously extended timelines and increasingly modest benchmarks for implementation). The economic, structural, and socio-cultural reasons for cow-calf producer resistance are the subject of the rest of this paper. If future livestock disease traceability efforts in the United States are to be successful (and disease catastrophes are to be avoided), it is absolutely essential that the context of cow-calf producer resistance to NAIS be fully understood. The objective of this paper is to describe the context and implications for the post-NAIS traceability framework.

2. Overview of U.S. agriculture and the beef-cattle sector

The history of U.S. agriculture is dominated by a relentless march toward increased concentration. Ever fewer numbers of farms are producing an ever larger percentage of total agricultural output. Of the 2.2 million farms enumerated in the 2007 Census of Agriculture, 10% generate almost 85% of the value of all agricultural sales (United States Department of Agriculture – National Agricultural Statistics Service [USDA-NASS], 2009). The remaining 90% of farms are responsible for 15% of output value. U.S. agriculture wasn’t always this concentrated and much of the history of U.S. settlement and economic development is one of smallholders supporting their household through agricultural production, while generating a small marketable surplus. Technological changes occurring throughout the 19th and 20th centuries worked to increase productivity and drive down per unit production costs; new lands and resources were brought into production, and real prices for agricultural commodities plunged. As the relative purchasing power of raw agricultural commodities decreased, so did farm household incomes. Extreme structural upheaval occurred, many farms failed and millions of farm families exited agriculture. Their land was subsequently absorbed by survivor farms which grew larger. The remaining farms were successful as long as they managed to stay on the technology treadmill or otherwise survive decreasing real prices for their products. Consequently, many farm households now achieve acceptable income levels as a result of non-farm income sources. One-third of all U.S. farms have consistently negative net farm incomes and nearly 83% of total national farm household income in 2004 originated from off-farm sources (Hoppe et al., 2007). At first glance, it would seem that negative net farm incomes should prompt continued outmigration of people and resources from agriculture. But, it isn’t happening.

U.S. farm-level commodity production is very diverse although 98% of U.S. farms are family farms, organized as proprietorships, partnerships, or family corporations that do not have hired managers (Hoppe et al., 2007). U.S. family farms range from small limited resource operations, to the extremely large industrialized farms that account for the majority of farm-level production. The USDA estimated that in 2004 57% of U.S. farms were retirement or residential/lifestyle farms, and that these farms’ off-farm income as a share of total household income was 98% (Hoppe et al., 2007). According to the USDA, rural-residential farms account for only 7% of the value of production and include 35% of farm assets (including land). Small farms of all types, defined as having annual sales of less than $250,000, are 90% of farms, generate 25% of production value, and hold 68% of farm assets. Small farms, and especially retirement and residential/lifestyle farms, tend to specialize in the production of beef cattle, primarily cow-calf enterprises (Hoppe et al., 2007). There are several economic reasons for this specialization, including lower labor and management intensity (desirable to operators who are retired or who hold full-time non-farm jobs), relatively low cash costs of beef cattle production, and favorable tax treatment. Productivity gains in U.S. agriculture over the last century have been astounding. However, the beef cow-calf industry is a notable exception to the productivity increases which characterize agriculture overall. This is due to the biological limitations of bovine reproduction. The rate of reproduction in cattle continues to be stable and low, with one cow rarely producing more than one calf. Natural twin production continues to be an unusual occurrence in beef cattle herds, and often results in extra production costs and/or sterile female offspring. By comparison, the U.S. hog industry has been characterized by steady increases in piglets/litter and litters/sow/year. Genetic advances and the adoption of industrialized confinement production by the hog industry in the post-World War II era led to dramatic increases in productivity, decreases in real hog prices, and industry concentration. The lack of equivalent productivity gains in beef cattle production are reflected in the much less drastic decrease in the real purchasing power of the calf commodity over the last half century, and an unconcentrated cow-calf sector. The nature of the bovine digestive system also has contributed to relatively low productivity gains and limited adoption of capital and management intensive technologies in U.S. cow-calf production. Land-extensive calf production processes continue to be used in much of the cow-calf sector because the beef animal functions as a scavenger, using and transforming low value forages produced on marginal lands into a higher-valued product. Land-extensive production processes are generally not compatible with management intensive technologies, adoption of which is driven by the need and opportunity to increase returns per unit of capital and management input. Most of the advances in technology and increases in efficiency in the beef industry have occurred beyond the farm gate at the feeding and packing levels. The feedlot and meat packing sectors have dramatically increased in size and concentration to achieve economies of scale. The beef feeding sector is increasingly dominated by a small number of extremely large operations, while the four largest beef packers controlled 84% of the market in 2007 (Hendrickson and Heffernan, 2007).

The beef cow-calf sector is the foundation of the beef cattle industry. Cow-calf production is not concentrated, dispersed nationwide, and occurs in every state, with an estimated 33 million national beef cow inventory living on almost 765,000 farms and ranches (USDANASS, 2009). Cow-calf operations produce the calves (or the animal frames – including skeleton, internal organs, and hide) upon which the cattle feeding sector accumulates meat using higher energy feed resources (usually under confinement conditions). The USDA’s National Animal Health Monitoring System (NAHMS) divides cow-calf producers into three groups: Those who have cow-calf herds primarily for income objectives (14% of producers), those whose beef cow-calf operation is a supplemental source of family income (72%), and those who keep cattle for some reason other than for providing family income (e.g., pleasure) (14%) (USDA-APHIS, 2008b). Differences in management practices for calving, animal health, feeding, marketing, and record keeping for different types of cow-calf operations are statistically significant and strikingly obvious in the NAHMS survey results (USDA-APHIS, 1998). Management of non-primary income herds is consistently less intensive, and productivity indicators for the herds are less favorable. The technologies used in cow-calf production have not changed greatly over the last century, although some advances in cow-calf productivity have been made through selective breeding, use of veterinary pharmaceuticals, and improved forage management. Cow-calf production in the United States continues to be characterized by low entry costs, low cash production costs, low technology requirements, and low management intensity. Cow-calf operations also have lower exit probabilities than other farm enterprises because of their compatibility with off-farm work (Hoppe & Korb, 2006). The technological stability of the U.S. cow-calf industry is evidenced by the small change in the average size of a U.S. beef cow herd over the last ~30 years (it went from 40 in 1974 to 43 in 2007) (USDA-NASS, 2009). By comparison, the average size of a U.S. milk cow herd went from 26 in 1974 to 133 in 2007. Nationally, almost 80% of U.S. beef cow-calf operations have fewer than 50 cows with these farms accounting for 29% of the country’s beef cow herd. Most research exploring U.S. cow-calf producers’ motivations has been conducted in the West by investigators interested in rangeland management and public land policy issues. For example, the desire to have a rural lifestyle was found to inflate the value of farms and ranches in the West (Gosnell & Travis, 2005) while a relatively small percentage of ranchland value can be explained by livestock income in the Southwest (Torell et al., 2005). Gentner & Tanaka (2002) found that half of western public land ranchers earn less than 22% of their total income from ranching, that a ranch business “profit motivation” is a relatively low-ranked objective for all types of ranchers, and that public land ranchers are strongly motivated to be in ranching for tradition, family, and lifestyle reasons (i.e., consumptive objectives). Similarly, Cash (2002) noted that most U.S. beef cattle producers are not actually in the business of farming. The multiple roles of livestock in traditional societies have long been recognized by anthropologists, human ecologists, and other social scientists. In traditional societies, livestock are mobile stores of wealth and status. And even though the United States has a very advanced economy, cattle continue to be viewed as “banks-on-the-hoof” by cow-calf producers (Eastman et al., 2000), who say that when they “need the money” is a key factor in determining when they market their cattle (Lacy et al., 2003). For many cow-calf producers, cattle and the land used to produce them are investments, savings, and financial safe-havens. Cattle provide emergency funds, and are also a stable supply of high quality meat for family consumption. Similar to their counterparts in traditional societies, cattle are also a source of identity and a cultural touchstone for many U.S. cow-calf producers. Pope (1987) concluded that “romance, recreation, the achievement of a desired social status, or simply the maintenance of a family tradition” are the primary motives for many western

U.S. cattle producers. Identity objectives are financially feasible, compatible with other lifestyle and household objectives, and are encouraged by the nation’s tax system. Lifestyle goals, particularly the desire to live in the country, were the most highly ranked strategic ranch goals among small-acreage livestock producers interviewed by Rowan (1994). Technological advances, structural adjustment in response to technology, economies of size, and the wringing out of cultural identity objectives have not occurred at the cow-calf producer level as they occurred throughout much of U.S. agriculture in the 20th century. As a result, household-level cow-calf production has maintained more of its traditional economic, social, and cultural character than any other geographically dispersed agricultural commodity sector in the United States today.

3. The NAIS pushback

The trend of fewer numbers of ever-larger beef feeding and packing operations throughout the United States has led many cow-calf producers to be concerned about the structure of the overall beef industry, the negative effects of downstream concentration, and their belief that they are at the losing end of the structural change. Many believe that prices received by cow-calf producers are depressed as a result of non-competitive market behavior by feeders and packers. Domestic cow-calf producers feel threatened by the market impacts of imported feeder cattle from Mexico and imported fed cattle from Canada. Live cattle imports are viewed favorably by a majority of feeders and packers, who generally welcome the flow of the animals into the U.S. market. Many in the cow-calf sector vigorously promoted country of origin labeling (COOL) for U.S. beef. COOL was opposed by feeders and packers as a result of their integration with the rest of the North American as well as the global cattle-beef markets. The schism between the cow-calf sector and the feeding and packing sectors led to the creation of a new industry lobbying group, the Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America (R-CALF USA). R-CALF consistently appeals to cow-calf industry fears about trade liberalization and global market integration, property rights erosion, loss of freedoms, and invasions of privacy. R-CALF was opposed to the NAIS. The National Cattlemen’s Beef Association (NCBA) represents cow-calf producers, as well as feeders and packers. In the view of R-CALF, the NCBA and the United States Department of Agriculture do not represent the interests of “independent cattlemen.” The NCBA publishes Beef Magazine, was very supportive of the NAIS, and was a key player in the effort to establish a centralized, NCBA-affiliated, privately held database for animal tracking information. In 2005 Beef Magazine reported that 76% of survey respondents said a national system of individual animal ID and traceback was needed for health monitoring purposes, and 63% indicated such a system should be mandatory. According to the magazine, 83% of cattle producers who responded to their survey individually identify their cattle and 12% use electronic ID tags. These results are very different from USDA NAHMS 2007-08 survey results, which found that 53% of U.S. cow-calf producers use no form of individual calf identification and less than 1% of producers use electronic ID technology (USDA-APHIS, 2009a). In 2006, the Cattle Industry Work Group (established by the USDA to develop NAIS guidelines and standards for the cattle industry) declared electronic ID technology (specifically, radio frequency identification (RFID)) as the technology to be used to individually identify cattle under NAIS (USDA-APHIS, 2006c). Although originally conceived as a means to deal with animal health emergencies (zoonotic and otherwise), NAIS proponents and technology vendors consistently emphasized the valuable management benefits to producers from individual animal identification and performance record keeping (particularly in their RFID and electronic forms). NAIS proponents and technology vendors have assumed that management intensification and the tools to accomplish it are desired by producers. However, cow-calf production is an intrinsically low-management intensity activity. It is a land-extensive activity and one where it is often not desirable, necessary, or feasible for producers to increase management intensity or capital investments. NAIS proponents touted individual animal identification’s role in maintaining international market access and cattle and meat trade flows. This justification has not been well received by cow-calf producers who believe international trade is a threat to their industry. In their opinion, shutting off beef exports would be a small price to pay for shutting off the live cattle imports with which they directly compete. For the cow-calf sector, NAIS became an attempt to impose a technology mandate and modernization on an industry where cow reproductive limitations, producer household and personal objectives, and cattle’s efficient use of low-value forage have limited and will continue to limit technology adoption and modernization. Much of cow-calf producer opposition to NAIS was founded on fears that they would pay for the NAIS while the feeding and packing sectors would benefit from animal tracking and performance information derived from the electronic data. Cow-calf producers’ fears about the costs of NAIS were confirmed in a 2009 USDA benefit-cost analysis of the system (USDA-APHIS, 2009b, 2009c). The analysis concluded that beef cow-calf operations would incur 79% of the total annual beef cattle industry cost of a fully implemented NAIS. Given existing economies of size, the cost of an individual cow-calf animal ID system with full traceability ranged from a low of $2.48 per head for the largest operations to a high of $7.17 per head for the smallest operations. These data supported NAIS opponents’ long-running contention that NAIS would benefit large agribusiness at the expense of the smallest farming and ranching operations in the country.

4. Conclusion

A few years ago, the author of this paper was forcefully told by a USDA official that anyone who wanted to “produce or market cattle in the United States” would have to comply with NAIS. This official clearly did not recognize what a critical wedge issue NAIS would become within the U.S. beef-cattle industry. He and the broad complex of government animal health personnel, large agribusiness interests (particularly feeders and packers), and established industry associations failed to appreciate the deep distrust many cattle producers have of them. The proponents of NAIS also seem to have been unaware or dismissive of the deeply ingrained socio-cultural aspects of cow–calf production and traditional small-scale lifestyle agriculture in the United States. Although this paper focuses on the cow-calf sector, many traditional small-scale producers of other species objected to the NAIS using arguments similar to those of cow-calf producers. Serious miscalculations by government officials about livestock producers and owners fed and strengthened grassroots-level resistance to increased animal health regulations. NAIS proponents in government and the private sector sent too many conflicting messages to NAIS skeptics. Official NAIS reports and documents that appeared on and disappeared from the USDA’s website following criticism added to confusion, suspicion, and hostility regarding NAIS. As a consequence, new disease management risks have been created and the ability of the nation to effectively deal with real animal health emergencies has been compromised. The level of suspicion created by NAIS among traditional livestock producers led to an environment where, should a disease such as FMD arise in the United States, many producers will not respond as they should in a true emergency. Rather, they will suspect that a false emergency is being used to expand government control of their activities. Efforts to implement livestock movement control, quarantine, condemnation, and depopulation will be hampered and defied by some producers. Under these circumstances, disease outbreaks could be catastrophic for the entire nation. The USDA appears to have recognized the suspicions and potential for civil disobedience within the livestock sector which resulted from the NAIS experience, as evidenced by official statement that the new animal disease traceability framework has trust issues to overcome (USDA-APHIS, 2010). However, memories of NAIS will negatively affect whatever form a federally-promoted traceability framework takes in the future. Cow-calf producers’ distrust of federal regulation and their suspicions about relationships between large agribusiness NAIS supporters and the federal government are unlikely to moderate under any new federal traceability program. NAIS became part of the paranoia smaller (and many larger) producers feel about industry structure and market power relationships within the U.S. beef-cattle sector. The USDA’s recent statements that the new traceability framework will apply only to animals moving interstate will not mollify many cow-calf producers, as the vast majority of beef calves produced in the United States cross state lines at some point in their lives (even if they are first sold “locally”). Specifically, the February 2010 statement from USDA-APHIS that small producers who sell animals “to local markets” will not be a part of the new disease traceability framework has yet to be operationally defined. Unfortunately, much federal and state credibility has been lost in the rush to mandate a culturally insensitive, high technology, management-beneficial, and trade-oriented animal identification program. NAIS represented an enormous leap in government involvement in the beef cow-calf sector. From the beginning of NAIS, government was under the impression that it was dealing with an “industry”; however, much of U.S. livestock production is deeply grounded in culture and lifestyle. Expanded regulation of culture and lifestyle choices was an uphill battle for NAIS, and will continue to be so in the future. USDA’s unsuccessful efforts to promote NAIS as a management tool and as a means for supporting trade carried little weight with the large percentage of non-management intensive, non-trade oriented cow-calf producers. These producers’ concerns about competition from U.S. imports of feeder and fed cattle aren’t going away simply because federal animal disease traceability efforts are being renamed. Successful animal disease management in the future will require significant rebuilding of trust between state and federal animal health officials and grassroots-level producers. This will require that animal health officials credibly demonstrate their independence from large-scale agribusiness and from identification technology vendors. Previous disease management and eradication programs (e.g., scrapie, brucellosis) haven’t required producer investments in electronic eartags and other equipment. Furthermore, a comprehensive, nationwide, 48-hour traceback objective probably is infeasible under any existing and future technology and management assumptions, regardless of what technology vendors say. The USDA-APHIS announcement that future federal animal disease traceability efforts will apply to animals moving interstate means that any new program is likely to have much in common with NAIS. A future federally-influenced traceability program will thus encounter resistance and disease management will be compromised because of the NAIS experience. The loss of federal credibility and increased mistrust of government which resulted from NAIS has made the United States beef industry vulnerable to trade barriers and protectionism. The U.S. beef industry needs international trade, and post-NAIS, also needs programs that assure the quality and safety of U.S. beef products to overseas buyers. The demise of NAIS and potential cow-calf producer resistance to future government-mandated traceability systems have created a vacuum that industry-driven quality assurance or process verification programs can fill. In the wake of NAIS, an industry-driven system that covers willing buyers and sellers and financially rewards specific attributes or processes will be more successful than government regulation at holding and growing international markets for U.S.-produced beef. Even though NAIS was not implemented, animal disease hazards haven’t disappeared. In their recent factsheet, the USDA indicated that post-NAIS animal disease management and traceability efforts will be led by the states and tribal nations (USDA-APHIS, 2010). NAIS-related damage control needs to be high on the agenda for state and tribal agencies responsible for animal disease management. Whatever reservoirs of trust grassroots livestock producers have for state- or tribal-level animal health agencies desperately need to be refilled before new or well-known pathogens emerge to threaten livestock or human health throughout the United States.

5. Acknowledgement

This research was supported by the New Mexico Agricultural Experiment Station, New Mexico State University, Las Cruces, New Mexico, USA.

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United States Department of Agriculture Animal and Plant Health Inspection Service Veterinary Services. (February 2010). Questions and Answers: New Animal Disease Traceability Framework. Factsheet. 11.3.2011, Available from http://www.aphis.usda.gov/publications/animal_health/content/printable_versi on/faq_traceability.pdf

United States Department of Agriculture National Agricultural Statistics Service. (2009). 2007 Census of Agriculture. 11.3.2011, Available from http://www.agcensus.usda.gov/Publications/2007/Full_Report/index.asp

Note: In this discourse the rancher’s point-of-view takes a look back from the dusty corral at a herd of people with their hands in the semen tank, who feel no pain. People are walking away with millions of cattlemen’s dollars while even select politicians and cattle people themselves condone this high-level heist! A robbery is sweet and kind if it is done with good intentions — right? No . . . WRONG!

Cowboy Makeover

By Lee Pitts

Lee PittsThe American rancher had to be forced into the chair at the beauty salon with a wild rag stuffed in his mouth and a pair of hobbles on his ankles so he couldn’t run away, but the career bureaucrats and professional meeting-goers were finally successful in completing the makeover. It was expensive and they had to be real sneaky about it, but those performing the makeover have finally managed to change two of the most iconic figures in our nation’s colorful history, the cowboy and the cattleman, into “stakeholders” and “producers.”

There’s just one BIG problem with this makeover: the American consumer doesn’t want to buy her beef from a “stakeholder,” or even a “producer.” No, according to market researcher Mary Love Quinlan, they want their beef from a “rancher,” or even better yet, from a “farmer.”

Ms. Quinlan found that women make up to 93% of food purchases and they don’t like words such as “feed additive” on the package. They hate hormones and the title “cattle feeder” turns them off. In fact, they don’t like industrialized agriculture very much at all. So why is the NCBA trying to change today’s rancher into exactly that kind of “stakeholder” that the consumer doesn’t want to do business with?

Makeup and Mirrors

We warned you about the merger of the NCA with the checkoff and all the bad things that could happen as a result (those things are now happening) so let us now warn you about a group called the US Farmers & Ranchers Alliance (USFRA). This group is composed of 33 organizations such as the National Corn Growers Association, American Farm Bureau, NCBA, National Milk, the Soybean Association, Grains Council Poultry & Egg, several state soybean associations, the National Pork Producers Council and other checkoff groups. Although these organizations say they have different viewpoints on some issues, they have this in common: they’re all cheerleaders for the kind of industrialized agriculture the consumer doesn’t trust.

As critics of factory farms, genetically modified seeds, hothouse hogs, downer cows and hormone fed steers appear on the daytime TV shows and book bestseller lists, those pushing industrialized ag realized that they’re losing the public relations war. In other words, they need a makeover.

How ironic then that the group that changed ranchers into stakeholders and producers, chose the trusted words “farmer” and “rancher” when they went looking for their own new name. But instead of looking for alternatives to hormones, GMO’s, 10,000 head dairies, lake-size manure lagoons and other things the consumer doesn’t want her food associated with, the USFRA wants to continue to do all those things while hiding behind the good name and image of the American farmer and rancher.

Members of USFRA say they want to build trust in our current food system and to be successful and have a bigger impact they all needed to band together. They view themselves as “natural partners in effort to promote “new” vision of American agriculture.” And that’s how checkoff dollars from a rancher producing grass fed or natural beef in Montana could end up being used to defend and promote factory farm hothouse pigs, hormone fed beef and milk inducing hormones for dairy cattle.

Sound Familiar?

One of the first warning flags that got our attention about USFRA is their structure and the way they constructed their Board of Directors. The minimum buy-in is $50,000 and any firm that pays $500,000 automatically becomes an ex-officio member of the Board. That’s what passes for democracy these days, you buy your way in, just like they do in Washington D.C. How very American of them. If it all sounds familiar that’s because that’s how the NCBA constructed itself and does business.

The beef checkoff so far has contributed $250,000 to USFRA. Because the beef checkoff is a government program (according to the Supreme Court) you’d think that our government would not condone any effort to promote one type of ranching system over another. But the USDA has given their stamp of approval to USFRA just as long as the checkoff money is used for projects and not membership dues.

One wonders where the NCBA got the money to buy their seat on the Board?

As of this writing only two businesses have ponied up the cash to join, Farm Credit and The Fertilizer Institute, but USFRA hopes to sign up big corporations like Archer Daniels Midland, Cargill, DuPont and Monsanto. USFRA currently has $10 million in the bank and hopes to spend $20 million in its first year. They also hope to have an annual budget of $30 million, most of it coming from agri-businesses and checkoffs.

USFRA plans to start presenting their message by mid-July and we already have a good idea of what that message will be and the image they’ll portray of today’s rancher. “No longer,” says visionary ag columnist Alan Guebert, “will it resemble a Land Grant alumnus ordering GM seed or livestock antibiotics on an iPhone. Instead, tomorrow’s farmer will look more like Walter Cronkite than Walter Mitty: weathered, wise, trustworthy. In short, more golden fields, golden sunsets and golden hair and less silver hog barns, silver-sided food factories and silver semis hauling ethanol.”

SuperGroup

Executive members of USFRA are Bob Stallman, American Farm Bureau; Phil Bradshaw, Soybean Checkoff; Bart Schott, National Corn Growers Association; Dale Norton, Pork Checkoff; Gene Gregory, United Egg; Forrest Roberts, CEO of the NCBA. Roberts will also chair USFRA’s Communications Advisory Committee.

What chance does a rancher’s organization like R CALF or the Organization for Competitive Markets, stand in having their message heard when you have the political muscle of big farm groups, commodity checkoff dollars, huge agribusiness firms and the minions who do their dirty work, all rolled into one SuperGroup? It’s all part of that “speaking with one voice” thing that the NCBA was founded upon. The only problem is whose voice the supergroup will be speaking with. From watching the NCBA we already know that answer: it’s whoever ponies up the most money. Even if it is your money that was taxed away from you by the USDA in the form of the checkoff.

How did we ever get so far away from the initial concept of the beef checkoff?

To avoid confrontation USFRA has decided to take two issues off their agenda: biofuels and the Farm Bill. Instead, they will focus on “presenting a more realistic and positive portrayal of modern American agriculture to the public.” It’s a good thing they took those two issues off their agenda because, as we all know, checkoff dollars are not supposed to be used for lobbying or to promote political agendas. (Wink, wink.)

According to Guebert, “the groups want the face of the small farmer and horse-riding rancher to be the public face of agriculture–not confinement hog barns, 100,000-head cattle feedlots; not manure lagoons, eroded fields, hypoxic rivers, lakes and oceans, not GM seed, not sub-therapeutic antibiotics. In other words, the big money behind USFRA wants to preserve and build upon the exact thing the public doesn’t want: modern food production practices it views as questionable, worrisome and even unnecessary.”

In announcing the firm of Ketchum as their public relations firm USFRA said, “Reflecting the new world of Facebook, Twitter and 24/7 tweeting, Ketchum is partnered with Zocalo Group, its full service word of mouth and social media agency, and Maslansky Luntz + Partners, a research-driven communication strategy firm that specializes in “language and message development.”

How very sad that the American rancher and cowboy, whose image and reputation have sold everything from cigarettes to war bonds, now has to hire a firm to develop its “language.”

The Way Big Business Does Business

Randy Stevenson of OCM remembers another time when big business sat down to pow wow. It was back in the early 1900’s when the Big Four meatpackers conspired to control meat prices. Back then they changed the face of American agriculture and had to be broken up by the government. Supposedly, the rules written back then prohibited meatpackers from being in the same room talking about industry matters, but it’s very easy to see them doing this at future USFRA meetings. “Meatpackers have had a history of collusion,” says Stevenson. “They have changed tactics and methods when they have been caught. The collusion is not restricted to that of market division or of price setting. Much effort has, in more recent years, turned to organizational power used to influence the regulatory regimen. The modern version of collusive power is the big and influential organization that influences politicians and helps to make sure that the rules written for regulating anticompetitive behavior don’t bother them.”

No doubt, USFRA will say their money will not be used for such diabolical purposes, but then, who ever thought that the NCBA would be the primary beneficiary of checkoff dollars when ranchers voted it in? Or that there’d even be such a thing as the NCBA?

Hijacked

All this image enhancement is going on amidst a war that has been taking place between the Cattlemen’s Beef Board, the Federation of State Beef Councils and the NCBA. According to R CALF, “There is an intense, lopsided, but classic power struggle being waged right now within the Beef Checkoff Program. This is the classic power structure between those who have all the money — the NCBA and its state affiliates — and those who pay all the money — the hundreds of thousands of checkoff-paying cattle producers throughout the United States.” (That would be “stakeholders for you NCBA members.) “Hinging on the outcome is whether the Beef Checkoff Program will be continually fraught with corruption, favoritism, and abuse, or whether the credibility of the program will be restored.”

“The beef checkoff has been in place for some 25 years,” says Fred Stokes, of the Organization for Competitive Markets, “with more than $1.6 billion collected and spent. Just how effective has the program been in “promoting, improving, maintaining and developing markets for cattle, beef, and beef products? Not very!” answers Fred. “During this period we have lost market share, downsized the domestic cow herd, drastically reduced the producer’s share of the retail beef dollar and put nearly 500,000 beef cattle operations out of business.

“So was the Beef Checkoff a bad idea?” Stokes asks. “I say it was a good idea that simply got hijacked! While producers have been compelled to pay the sum of $80 million per year, the overwhelming benefit has accrued to organizations controlled by opposing big meat packing and retailer interests,” according to Stokes.

“An examination of NCBA’s tax form 990 reveals that 80% of its total revenue is derived from the beef checkoff, with only 6% coming from membership dues.” In other words says Stokes, “the NCBA, representing less than 4% of cattle producers, continues as the primary beef checkoff contractor and has a prominent seat at the table when ag policy is discussed. They have opposed cattle producer’s interests at every turn. They fought against cattle producers that supported country-of-origin labeling; against cattle producers seeking mandatory price reporting; against cattle producers that opposed the National Animal Identification System (NAIS); against cattle producers that supported captive supply reform in a major class-action lawsuit; against cattle producers that tried to prevent the premature reintroduction of imported cattle from disease-affected countries; against cattle producers that attempted to ban packer ownership of livestock in both the 2002 and 2008 Farm Bills.”

Most recently they have fought against ranchers who support the pending GIPSA rules that would go a long way in reducing the packer’s power to manipulate prices.

All this is not to suggest that there have not been BIG beneficiaries of the beef checkoff. There certainly have been, like Dee Likes of the Kansas Livestock Association who the Comstock Report said received $311,000 for one year’s work. Another employee was paid over $225,000 and yet another over $150,000. “KLA’s CEO, Dee Likes, makes more money than Governor Brownback running the 14 billion dollar state of Kansas,” said the Comstock Report. “Likes can certainly give lessons on how to rob the checkoff train.”

Such revelations have started people talking about what one editor called “the nuclear option.” That would be to hold a referendum and vote the checkoff down. But the USDA and NCBA will never let that happen. Instead the USDA will stand quietly by while the rancher’s pockets are picked and his name is used to sell an ag production system that he may neither condone, nor participate in.

In introducing Ketchum as USFRA’s PR firm, a company partner Linda Eatherton, said, “With over 50 years of service to food and agricultural organizations, our firm was literally built for this assignment. Working side by side with USFRA members, stakeholders and allies, we know we can help people rethink the role of American agriculture in feeding hundreds of millions of Americans every day.”

So there you have it in black and white. In the words of your newest spokesperson you are either an ally or a stakeholder.

Which one, we wonder, are you?

R-CALF United Stockgrowers of America

“Fighting for the U.S. Cattle Producer”

For Immediate Release                                      Contact: R-CALF USA Communications Coordinator Shae Dodson-Chambers

Oct. 20, 2010                                                                                                        Phone: 406-672-8969; sdodson@r-calfusa.com

R-CALF Applauds USDA Decision to Proceed with GIPSA Rule;

Calls NCBA Attack on USDA Deceitful, Irresponsible

Billings, Mont. Today, U.S. Agriculture Vilsack reportedly declined the request by 115 members of Congress to complete a comprehensive economic analysis of the proposed competition rule (GIPSA rule) published by the U.S. Department of Agriculture’s (USDA’s) Grain Inspection, Packers and Stockyards Administration (GIPSA). In a news release also issued today, the National Cattlemen’s Beef Association (NCBA) called the Secretary’s actions “irresponsible” and asserted that the GIPSA rule “…could very likely result in financial devastation to a critical part of our country’s economy…”

“R-CALF USA fully supports the Secretary’s decision,” said R-CALF USA President/Region VI Director Max Thornsberry. “The call for a new economic analysis by less than a third of the House and NCBA was, pure and simple, an effort to delay – if not completely derail – the long-awaited GIPSA rule. NCBA could not be more deceptive in its attack on the Secretary given the Secretary had already granted NCBA an additional 90-day comment period in response to NCBA’s July 8, 2010, letter to USDA that asked for an extension of the comment period so NCBA could perform its own economic analysis.”

NCBA’s request stated, “Therefore, we need (NCBA needs) additional time to adequately perform a full legal and economic analysis on the impacts of this rule.”

“Now that NCBA received the accommodation it requested, it has suddenly changed horses in order to achieve an even longer delay in the rulemaking process,” said Thornsberry.

“NCBA’s allegation that the GIPSA rule will cause harm to the economy is absolutely baseless and irresponsible,” said R-CALF USA CEO Bill Bullard. “NCBA claims outright that the GIPSA rule will hurt producers because it could result in packers’ deciding to stop participating in marketing agreements with producers, which, NCBA claims, would result in all cattle being valued at an average price, regardless of quality.”

Bullard said this is evidence that NCBA is carrying the packers’ water by conveying the packers’ hollow threats directly to producers.

“This is the same sort of threat the packers made during the rulemaking for country-of-origin labeling (COOL) when packers threatened they would require producers to pay for third-party certification of origin claims, require producers to make their records available to the packers for ‘random producer audits,’ and pass all the costs associated with COOL onto producers,” he said. “Those were hollow threats then, and these are hollow threats today.

“There is absolutely no language in the GIPSA rule that would prohibit value-added or other legitimate marketing agreements between producers and packers,” Bullard continued. “These programs benefit packers as much as they benefit the producer, and the only way you could believe this NCBA nonsense is if there was absolutely no competition between packers for fed cattle or in the wholesale beef market.”

He pointed to the 2007 multi-million dollar study that Congress directed GIPSA to complete, which states in part, “Packers also identified AMAs (alternative marketing arrangements) as an important element of branded products and meeting consumer demand by producing a higher quality, more consistent product.”

Bullard said packers will not forgo the improved efficiency and profitability they gain through value-based marketing arrangements simply because the GIPSA rule would require them to maintain records that explain why price adjustments, including premiums and discounts, were applied to a producer’s cattle.

“We are dismayed by the outright scare tactics employed by NCBA and their meatpacking partners,” Thornsberry said. “But, we are pleased that USDA is not bowing to NCBA’s unscrupulous antics and is proceeding to finalize the GIPSA rule. In this rulemaking process, everyone has been given a full five months to submit their analyses and concerns, and these submissions will enable GIPSA to respond to and address any assertions of benefits and costs that were not already addressed in the proposed GIPSA rule that was made publicly available June 22.

“We’re not about trying to scare producers into opposing the most significant rulemaking our industry has seen in decades and one that holds promise to reverse the ongoing erosion of competition within our industry,” Thornsberry concluded. “Instead, we want producers to take a critical look at the rule itself and to formulate thoughtful comments that they can submit to USDA, which is how we can ensure that the rule will do what needs to be done to prevent the highly concentrated meatpackers from abusing their inherent market power.”

R-CALF USA encourages producers to read the rule, along with R-CALF USA’s summary of how the rule would impact the U.S. cattle industry by visiting http ://www.r-calfusa.com/Competition/gipsaRule.htm, and also encourages producers to submit their own written comments to GIPSA before the comment deadline of Nov. 22, 2010.

# # #

R-CALF USA (Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America) is a national, nonprofit organization dedicated to ensuring the continued profitability and viability of the U.S. cattle industry. R-CALF USA represents thousands of U.S. cattle producers on trade and marketing issues. Members are located across 47 states and are primarily cow/calf operators, cattle backgrounder! s, and/or feedlot owners. R-CALF USA directors and committee chairs are extremely active unpaid volunteers. R-CALF USA has dozens of affiliate organizations and various main-street businesses are associate members. For more information, visit www.r-calfusa.com or, call 406-252-2516.

Branding is still key form of identification

By Candace Krebs
Posted Jun 20, 2010 @ 09:55 AM
PUEBLO, Colo. —

Scenes of brandings are one of the most iconic and enduring images of the ranching lifestyle. For centuries, brands have played a vital role in conveying title of ownership. Officials say this ancient method of identification is still one of the best.

But questions are occasionally raised. How are hot iron brands perceived by consumers who have increasingly heightened concerns about animal welfare and how much does it cost the industry in terms of discarded hides?

The Colorado Cattlemen’s Association discussed the issue during a committee meeting at the 143rd convention this week, where animal welfare and animal health topics held key positions on the agenda.

Rick Wahlert, the Colorado brand commissioner, said he has fielded several calls on branding in the last few months. In addition, at least one of the big packers had issued a letter discouraging branding or at least urging cattlemen to leave the mid-section of the hide brand-free.
“I don’t know if it’s a push, but they’re looking at it again,” he told a meeting of the brand and theft committee.

Virginia Patton of Canon City, the CCA member who chaired the committee, said the association wanted to bring the issue to the attention to members and begin a discussion. “It’s not something we’re going to solve today,” she said.

The estimated value of an unbranded hide is believed to be roughly $5 a head. Gary Shoun, Colorado’s long-time former chief brand inspector, said packers launched a similar push for unbranded hides back in 1994 but premiums never materialized.

“I’ve heard that as long as I’ve been in the cattle business,” added John Stulp of Lamar, the current Colorado Commissioner of Agriculture.
Colorado is the only brand state that gives ranchers the freedom to place the brand wherever they want on the animal. Branding at the hip is typically recommended. Patton said on her ranch they moved the brand away from the middle of the hide but never recovered a premium for doing it.

Wahlert pointed out that a producer who left cattle unbranded and lost just two of them to theft would be out $1,000, and questioned whether even $5 a head was worth it.

“If you don’t brand, it sure makes it hard for us,” he said to producers.

The committee also raised the issue of animal welfare perceptions.

Wahlert said cattle have thick hides and few nerve endings, minimizing the pain involved. A suggestion was made to the committee to document those findings and put them into some kind of scientific paper. “It can’t hurt to get ahead of the horse,” Wahlert nodded in response, referring to potential complaints from animal welfare advocates.

Alternative forms of identification were also debated. Wahlert said there was nowhere to apply electronic chips where they weren’t at risk of migrating in the body. A bolus was a safer option, he added, but at a cost of $10 an animal was not financially feasible.

While freeze branding is becoming more popular, Commissioner Stulp and State Veterinarian Keith Roehr said it is more difficult to apply freeze brands successfully and they work better on horses than cattle.

Colorado State University animal handling expert Temple Grandin, a featured speaker at the convention and recipient of CCA’s Honorary Life Member award, said branding was a low priority when it came to animal welfare concerns, reeling off a laundry list of other items cattle producers need to work on first.

“Heat stress and fatalities in feedyards is higher on my list than branding,” she said in an interview. “Branding is a lot more defensible than whacking big horns off of adult cattle, or taking half of the ear off for identification purposes, or waddling them. Castration and dehorning are more on the radar than branding is.”

That’s consistent with the views of a group called the National Association of Farm Animal Care, which endorses branding as a searing process that never draws blood, is self-sealing and creates a permanent ID in seconds that requires no future use of medication.

No other form of animal identification has ever held up in court for a conviction of theft, the group added. Last year state brand inspection programs visually inspected and documented 27 million cattle.

To defend branding and other essential management practices, Grandin said ranchers need to do a better job of explaining what they do on the farm and why they do it. In promoting the recent movie about her life, which aired on HBO television, she found that the public is curious to learn about day-to-day farm life.

“It wasn’t negative,” she said of the countless questions she received in places like New York City. “That’s what was interesting. They’re just curious.”

She mentioned a YouTube clip in which a young boy narrates a tour of his family’s feedlot as an example of positive public relations for the cattle industry.

“This industry is very isolated from the public, and when we’re attacked, we get the siege mentality,” she said. “But we need to engage with the public, not PR people talking, but the regular ranchers.”

State Veterinarian Keith Roehr credits Colorado as one of the first states to adopt animal care standards. He said brands remain an important tool used in cultures all over the world and that Colorado would most likely remain a brand state for many years to come.

“As a bridge to a new animal disease traceability framework, the brand program is more important now that it’s ever been,” he said. “It positions us to do what needs to be done. Brand states like Colorado have been recognized as much more prepared to move into the future. The brand commission is not required to collect individual animal identification now, but they are aware that might happen in the future, and their role could become even more important.”

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