| September 2006 | |||||
| Touring NCBA President-Elect Addresses Beef Cattle Issues |
 |
 |
|||
Queen is president and owner of John Queen Farms, a third generation cattle farm founded in 1917 and located in the western mountain region of North Carolina. His background in the beef industry includes cow/calf producer, stocker/backgrounder, feeder and grazer. He order buys, has been an auction barn owner and operator, and currently is owner of Southeast Livestock Exchange, a video-telemarketing company working in the Southeast. Queen will be only the third cattleman from the Southeast to head the nation’s largest cattlemen’s organization, founded 108 years ago. Joann Smith from Florida was president in 1985 and Alabama’s own John M. "Bubba" Trotman was president in 1972. While touring the state, Mr. Queen visited a lot of people at a lot of places including the NW AL Livestock Auction in Russellville, a Fayette County producer visit at the Ag Center, a producer meeting at John Lang Ranch in Tuscaloosa County, a producer meeting at Broussard Ranch in Hale County, AL Livestock Auction in Uniontown, Simmentals of Alabama in Sardis, ACA headquarters in Montgomery, Sand Mountain Stockyard, Fort Payne Stockyards, a producer meeting in Jackson County, Cullman Stockyards, Arab Stockyards, a producer stop at Whitley Feed Store in Etowah County, Debter Hereford Farm in Horton, Macedon Farms near Madison, Alabama Farmers Cooperative in Decatur and Moulton Stockyards.
While in Decatur, the Cooperative Farming News (CFN) managed an interview with him. Here are some of the questions and Mr. Queen’s responses. CFN: What are the strengths and weaknesses of the beef industry in the Southeast as compared to other regions of the nation and how are Southeastern cattle viewed by Western feed yards? Mr. Queen: As an order buyer and ex-market operator from here in the south, I see that there are advantages here like a longer grazing season, that maybe people don’t have in other parts of the country. But, we also need to follow through with new marketing ideas. One of those would be the video sales. Video sales would allow small cooperatives of producers to sell cattle in larger lots and thus cut down on costs to them.
CFN: What impact will this drought have on feedlot placements as we prepare to sell most of our fall calves in the next two months; and what will the effect of drought and wildfires in the West and Midwest have on retention of heifer replacements? Mr. Queen: I really don’t feel the drought is going to affect us drastically. We had large placements earlier in the year due to the drought and wildfires out west. We did have a good many calves hit the market then that would have been fall calves. Those calves have already been through the system; there was a little glut, and we saw that it lowered the market just a little bit…especially in the calf and feeder part of it. The fat cattle industry dipped but we still stayed approx $10 a hundred weight (/cwt) over the averages that everybody had anticipated for the summer. With the feeder level staying high, it also left us with good prices for our calves. I think as we go into fall we’re not going to have a glut of cattle in the feed yards. As a matter of fact, I think we’re going to have a big demand for yearlings and calves. If you look at the futures market, we’ve got a tremendous market coming up the last quarter of this year and the first quarter of next year. This is a result of not having enough cattle and increasing demand. It looks to me that the cow/calf operator still has a great opportunity despite the drought. CFN: Stored feed (usually hay) is a major expense for cattlemen. In Alabama there seems to be increased producer interest in finding ways to reduce stored feed needs. Is this a long-term nationwide trend? Mr. Queen: Here in Alabama and the rest of the southern tier, you have a unique situation in that you have the ability to graze cattle for longer in the year than other parts of the country. I know that being from the Carolinas, we don’t have that opportunity except in the eastern part of the state; and we have to store feed for the winter. I know it’s expensive to do but, you know, in my mind, it always pays to have a little bit of insurance in stored feed, whether it just be in stockpiled grass or in the form of hay. I don’t think it’s a national trend that they store so much hay. Most people just store enough to get through the winter and should always do that for insurance. CFN: Will grass-fed beef be a "Southern" phenomenon, with our extended grazing season, or will it be accepted in other parts of the country; and what is your view of the future of grass-fed beef, organic beef, or other such specialty beef products? Mr. Queen: Certainly here in the southern tier, as I mentioned, you do have an extended grazing season. If there is a market, the Southeast will have an advantage over the rest of the country. Grass-fed beef is a niche market, along with all organic and all natural beef and that’s great…for people that can afford its slightly higher price at the supermarket. We need that in the industry because there are people out there who desire that type beef. But, we also have the people that love that good grain-fed beef that’s been so nutritious and so tasty for all these years and has been proven healthy. I think that we’ve got a place for all of it in our economy. I don’t think that it will overcome, by any means, the magnitude of our grain-fed product. CFN: Recently, there has been a sharp increase in the number of goats and goat producers in the Southeast. Do you see this trend having any implications (positive or negative) for the beef industry? Mr. Queen: I don’t think there are many implications there in any way. We do produce the most tasty, nutritious beef in the world. Consumers in our domestic market, as well as international markets, understand that. I don’t ever see it affecting the good, choice, healthy cuts of beef within our industry. Now, when you get down to some of the variety cuts of beef, there is a chance that at some point in time it might affect sales there. But, if we continue to grow population here in the U.S. (and that was the secret of our survival after 2003), we can still utilize most all the product we raise in this country. I don’t feel that there will be any impact on the beef industry, negative or positive, to come out of increased goat production in the U.S. CFN: Currently, U.S. beef imports are banned in over 20 countries, including South Korea and China. What negotiations, involving the NCBA, are going on to open these markets? Mr. Queen: As you know, international trade is dealt with on a government to government basis. We at NBCA, with our integrity in the industry and the product that we produce, often have a seat at the table with the USDA and the Secretary when it comes to how we feel the negotiations should be conducted. We are asked for our opinion when it comes to dealing with each country. What we feel really needs to happen in our country would be an equal set of guidelines that would give everybody equal footing…an international set of guidelines that we should be trading by, worldwide. That would mean cattle would have to be at least 30 months of age, removal of SRM (Specified Risk Materials such as the brain, skull, eyes and spinal cord) and bone in/bone out. We just opened the Japanese market the 27th of July and within two weeks, U.S. beef was on the grocery store shelves in Japan. In dealing with countries like Korea and China, what we’re trying to do is to negotiate for fair regulations for us all to abide by. In Korea we’re trying to arrive at a bone tolerance level. Early in negotiations the Koreans were asking for a zero bone tolerance. It’s impossible to have a zero tolerance in anything that has bones. You can go to any restaurant in America today and you may get a bone chip. We have to come up with a tolerance that they will accept and, sooner or later, we’ll arrive at a tolerance level that we both can live with. We have to have these markets…they are very, very important to us. Perception is the biggest issue in international trade; perception that we have an animal I.D. system. Even though it isn’t a beef safety measure, it’s a tracability feature. In the minds of those people, if you say you have an animal I.D. system in place, then they look at our product as safer because we have a way of tracing back any disease that may arise. We’ve had two cases of BSE in the United States, the Canadians have had seven and the Japanese have had twenty-seven. Because the Japanese government mismanaged their BSE issues, the general public is very skeptical of what might happen. Because our friends to the north in Canada have an I.D. system in place, the Japanese have never stopped trading with them. It’s the perception of the Japanese people that Canadian beef is safer than ours even though they have had more cases of BSE. Producer relations is another issue. A Japanese producer gets nearly $4,000 for a slaughter steer over there. They don’t want our product over there because it’s going to lower the value of that steer. In the U.S., every time we import some lean beef from Australia or wherever, producers jump up and down. But in 2003, when we stopped international trade, we were a net exporter in terms of value to the tune of $1.4 billion. Our beef industry accomplished this by importing lean product from those countries to mix with ours to make ground beef. Ground beef is 54% of the product served in the United States. Otherwise, we would have had to grind the chuck and the round to put in that fattier product of ours to make an 80/20 blend that they use at McDonalds, Burger King, etc. We have lost a big part of the international market but we’re turning it around. We’ve got some product in Japan, we’ve got some product in Vietnam…we’re asking the consumer to choose now. It’s out of the hands of the government. It’s out of the hands of the producer. It’s in the hands of the general consumer. We’ll let them decide if our product is safe, if it’s tasty and if it’s nutritious. I think we’ll win the battle. CFN: What is the National Cattlemen’s opinion of the border beef trade with Canada? Mr. Queen: The NCBA’s position on trade with the Canadians is that we continue the trade as it is today with cattle being thirty months of age, bone in/bone out SRM removal just like the OIE (Office International des Épizooties, French for "International Epizootic Office") and other international guidelines state. The USDA has taken the position to where they’ve pulled the rule to accept over thirty month of age cattle out of Canada due to the fact that they have not completed the investigation of their last BSE case. We agree with the USDA. We feel that this is a very prudent decision. We don’t feel that there should be a rule that we accept product over thirty months of age given the current situation. We know that 30 months and under is safe and this is accepted internationally. Those are the rules that we abide by in this country and we feel that we should trade on those guidelines alone. We had an eleven point directive presented at our national convention a year ago and we have fulfilled nearly all of those directives from our board of directors and from the membership. These included opening the borders with Japan and resolving the blue tongue issue with the Canadians. Things like that are not only bettering our relations with Canada, but with all of our international trading partners. We have a good ally in the Canadian feeding and packing industry and we’re proud to be partners with them. CFN: What is the Cattlemen’s opinion of the U.S. going to such lengths to entice the Japanese into importing our beef again? Should we? Mr. Queen: We not only have to have Japanese trade, we have to have all international trade. International trade prior to December 23, 2003, at 1.4 billion dollars, added $15/cwt to the price paid to a U.S. producer for a finished animal. This added up to somewhere between $175 and $225 per animal. That’s how we ended up with such good prices paid to producers in the early 2000s. Of that $225 in value added to what the producer got, $150 to $175 of that we gained was for products that we don’t use in America. Foreign markets, especially Japan, do use products like tongue, kidneys, liver and offal. We normally grind it up and throw it away. That adds extra value to a carcass. Japanese trade alone was $5 of that $15/cwt. When we were at our traditional cattle herd size of not many years ago, nearly 100 million head, we had to export approximately 10% of our finished product to hold the prices up. If we don’t have that market, we’ll tend to go down in that low cycle and we’ll all be disappointed again. Prior to re-opening the Japanese market, we were only utilizing 3.5% of that 10% that we need. If we continue to increase our herd size we’ll certainly need the international markets. The Australian government has changed their check-off this year from $2 to $5 a head, the Canadian government set aside $100 million for advertising in international trade; and we’ll be operating on a budget in 2007 of $52 million…half of what the Canadians are doing and less than half of what the Australians are putting in. To compete with the world in international markets, we’ve got to match them financially as we go through this trade battle. We’re good friends with these people and there’s nothing wrong with what they’re doing. They know what it will take and are willing to spend the money to properly advertise their product. We need to do the same. CFN: When and how will the National ID Program be implemented? Mr. Queen: The USDA has told us that it will be mandated in the year 2009. Because of what the NBCA feels will be added value to our commodity, we have chosen to be part of the USAIO (United States Animal Identification Organization), which is a coalition of meat segment groups coming together to form a private data base. Every farmer’s and rancher’s information is confidential and will allow the government 48 hours to trace back in the event of a disease or animal health emergency in our country. In the end, those who choose to give their information to other segments out of this private database will add value to their products. Animal ID should not be mandatory. Premises ID possibly should be. If the USDA is going to mandate anything, it should be information on where the farm of origin is. Here in Alabama the legislature just passed a rule that if you entered your information in a database with the Cattlemen’s Association, everything will be confidential, even your premises ID. Hopefully we can get that done nationwide. Going back to the perception that our product is safe…an ID program will certainly help. The ones that get on board first are going to reap the biggest part of the harvest. We encourage everyone to come on, let’s keep government out of this issue, off our farms and out of our industry as much as we can. Limited government is one of the main things that we stand by. This is an issue that needs to be voluntary. CFN: What will the National ID Program mean to the small ranchers here in this state (most of our farms have 25 head or less)? Mr. Queen: I think the average herd size in Alabama is 24. We’re a nation of small farmers. 71% of cattle producers have less than 50 cattle on their farm. 80% have less than 100 head. The average herd size in the United States is just 39. I think this is an opportunity for the small producers with good genetics and good quality calves to co-mingle those calves that are age and source verified. Everybody keeps those records already, my dad and granddad even wrote the cow’s name down when they didn’t have a number on her. They wrote down who sired a calf and what pasture they came from. We’ve all done that for generations. We all do the record keeping, it’s just a different way of record keeping in a different day and time. An animal identification system is so much quicker with the electronics we have today. A small producer will have the ability to ID their calves at the first point of commerce. There’s no sense in identifying an animal if it’s not going to market because it’s not going to be consumed. Once it starts that transition from one part of the industry to another, it has to be identified. If you identify it at a sale barn or another buying facility, where they tag them and weigh them, you will create uniform load lots and will add value for that producer. CFN: How will it be monitored? Mr. Queen: The way the USAIO is set up, the monitoring will be at the first point of commerce. Every animal that sells will have to be identified electronically, whether it be at the sale barn, an order buying firm or an individual trade in the country. The buyer will be responsible for identifying that calf. As it changes premises IDs, then the premises that it goes to each time will be responsible for identification. As far as the government monitoring this information, they won’t unless it’s a health issue or a disease outbreak. Then they have the right to go into that information database just for that individual animal and then trace back to identify from which premises it originated. That’s the way animal ID works. As far as confidentiality for tax purposes, the IRS won’t ever monitor these records. No feedlot, no packer, no one can monitor where that calf came from other than that owner-producer. CFN: Since it is proclaimed to be a consumer necessity - will the consumers pay for this ID program or will it be tacked on to the cattle producer’s expenses? Mr. Queen: We don’t want the government to pay for the ID program. Once we demand that they pay for it, it ceases to be confidential. It becomes a government project and that’s what we’re trying not to have. I can’t tell you that the producer’s not going to pay for part of it and I can’t tell you that the consumer’s not going to pay for part of it. I think that both of them will pay a percentage of the cost. I think that the only cost for the producer will be the identification button and whatever the minimal amount of labor involved. Now, the infrastructure within the sale barns will change. Will they absorb this cost? No. They’ll pass it back to the producer a few pennies at a time. Every cost, whether it’s making a cow or making an automobile, will be passed back to where the demand began. The consumer will pay for some of this because they’re the one demanding that it be implemented. The cost that anyone has to pay won’t be enough to detrimentally affect the beef industry. McDonald’s will share, Burger King will share, feed yards will share but, eventually, it will be paid for. |
|||||||||||||
