Bullard addresses cattle market at ICOW
Casper – The Independent Cattlemen of Wyoming (ICOW) joined for their annual meeting on Nov. 1-2 in Casper, with a diverse agenda covering a variety of topics. Among speakers at the event, R-CALF CEO Bill Bullard headlined the afternoon of Nov. 1, noting that cattle producers should be wary of trade agreements and mandatory activity.
Bullard said the U.S. is losing ranches. Looking back to 1980, about 1.3 million beef cow operations existed in the United States. Today, that number is about 729,000.
“We’ve gone through drought, trade agreements and geo-political activities, but this is a trend,” he emphasizes. “We haven’t had a bobble. We’ve been losing ranches as an alarming rate over the last 40 years.”
Looking at the mother cowherd, Bullard said in 1975, the country had 46 million mother cows. Today, that number is closer to 31 million.
“We’ve been liquidating cattle since the late 70s. This is a trend, and the industry is shrinking,” Bullard said. “This is the message members of Congress need to hear. They need to quit pretending that our industry is not shrinking or shrinking at an alarming rate.”
Bullard also looked at the sheep industry, noting the structure of the sheep market is the same.
In the 1980s, as consumption increased, production increase.
“In the early 90s, our production of lamb and mutton began to collapse precipitously, and we saw a skyrocketing volume of imports coming in from New Zealand,” Bullard said. “In 2006, imports actually exceeded domestic production in terms of who was satisfying American’s appetite for lamb and mutton.”
Bullard also looking at the impact of Country of Origin Labeling (COOL) on the beef market.
“In May 2013, consumers knew definitively which products were produced by U.S. cattle producers in the United States of America, compared to what beef was imported,” Bullard said. “The average returns to the producer for the three years we had full COOL implemented was a positive $282 per bred cow per year.”
In 2015, when COOL was repealed, Bullard said average returns fell to about $100.
“Based on USDA data, producers enjoyed the highest nominal levels in history when COOL was implemented,” he added. “Prior to COOL, even though we were reducing the size of the U.S. cattle herd, producers were experiencing significant losses. Then, even with a partial implementation of COOL, producers were receiving significant benefit.”
“We can expect to receive tremendous pressure from beef produced in South American and Asiatic countries,” Bullard asserted.
Despite the fact that live cattle aren’t imported from South American countries, Bullard said concerns for foot-and-mouth disease, as well as parasite concerns, are the only factor preventing “floods of foreign cattle from flooding our markets.”
Further, he predicted that implementation of mandatory individual animal identification will only exacerbate the problem, as he foresees that increased traceability will influence live cattle from South American countries to be imported.
Increased access as a result of trade agreements will only continue to push prices lower for U.S. beef cattle producers.
Bullard reflected on 2015’s price collapse, noting that the production that year was also the lowest since 1993, when the North American Free Trade Agreement was implemented.
“In 2014, cattle imports increased by 41 percent from Canada,” he said. “What industry can withstand that kind of supply increase and not suffer a price collapse? No one.”
Bullard continued, “Just during the period since NAFTA, we’ve lost 20 percent of cattle operations, 84,000 small cattle feeders, our mother cow herd fell to the lowest level in 40 years. Our mother cowherd is 3 million head less than when we started NAFTA.”
At the same time, U.S. output of beef fell to lowest levels in over 20 years, resulting in negative impacts as a result of an import surge, which Bullard says “broke the U.S. cattle market in 2015-16.”
With a new U.S.-Mexico-Canada Free Trade Agreement in the works today, Bullard said the U.S. cattle industry will continue to shrink.
Bullard emphasized, “The impact to the U.S. cattle industry will be significantly impacted, and it will be negative.”
Saige Albert is managing editor of the Wyoming Livestock Roundup. Send comments on this article to firstname.lastname@example.org.