Completely Missed Forest for the Trees

June 8, 2022

Today our government is all atwitter to transform America’s food system following COVID’s forewarning that America’s beef supply chain is fraught with fragility, lacks resiliency, and is woefully inadequate to achieve America’s food security needs.

Now those are the trees in the “can’t see the forest for the trees” metaphor. They’re the easily identifiable problems manifest within our current beef supply chain, and those “trees” the government is focusing on are hiding the beef industry’s deteriorated forest.

But to see the forest for the trees, you have to step back about 40 years – about the time when economist Milton Friedman effectively erased from the mindset of corporate CEOs that they have any responsibility to society and, instead, wedded them to the notion that their only responsibility is to increase their company’s profits. And about the time when market regulators were directed to help corporate CEO’s by subverting antitrust laws with the notion that market efficiency trumps competition, which effectively nullified antitrust laws and gave free rein to corporate power.

These actions, of course, obliterated the forest.

So let’s define the forest: It was the intricate web of well over a million widely disaggregated cattle farming and ranching operations scattered all across America – in every state and in most counties. Their profits fueled the economies of their local communities – as The Meat Racket author Christopher Leonard coined it, these family-owned farms and ranches – which controlled the live cattle supply chain – were the economic pillars of Rural America.

Within just 40 years, we deforested the live cattle supply chain. Over half a million of America’s beef cattle operations have vanished, nearly 20% of the nation’s beef cows are gone, and 75% of the nation’s family-sized cattle feeding operations have disappeared.

Just last year the U.S. Department of Agriculture (USDA) reported a loss of another 1,000 of those family-sized cattle feeding operations, representing nearly a 4% additional loss in just one year. The USDA also reported a reduction of 1.2 million beef cows just during the past two years.

This means the forest is in serious trouble – it’s in a crisis. The live cattle supply chain, once the economic pillar of Rural America is now but a skeleton of what it recently was.

So, what’s the government’s response to this crisis?

Well, USDA recently announced it would spend over $2 billion to replant trees – meaning to address the symptoms of the crisis. It will invest $375 million for an organic transition initiative and support to urban agriculture. It will invest $900 million to enhance food processing; $550 million for food system aggregation and distribution; and it will spend $370 million for food and nutrition programs.

There are three truths to be learned from USDA’s announcement.

First, the out-of-pocket expense that taxpayers must now pay to restore the competitive infrastructure lost due to the government’s neglect and inattention over the past four decades is no less than $2.2 billion.

Second, it will take a long time, perhaps several years, for these expenditures to bear fruit, meaning before they will have any impact on the chronically depressed cattle market that continues to destroy the U.S. live cattle industry as we know it today.

And third, the USDA announcement completely ignores the alarming and ongoing loss of cattle farms and ranches, the ongoing reduction of the nation’s mother cow herd, and the alarming and ongoing loss of the industry’s important cattle marketing outlets – our family-owned cattle feeding operations

Speaking in metaphorical terms, what’s the first step to reversing the destruction of, say, the South American rainforest? Is it to plant new trees?

Of course not, the first step must be to halt the destruction – to ensure that no more of the forest is destroyed. Then, and only then, do you begin the process of rebuilding what has been lost.

Why is this lost upon our government? Is this simply to simple?

When the Ag Secretary unveiled his multi-billion-dollar announcement, I explained to him that conventional USDA programs are inadequate to meet the current needs of cattle producers who have now suffered nearly eight years of depressed prices, prolonged and widespread drought, and skyrocketing input costs. I asked him whether USDA had a program already in place, or if it could create one, to provide immediate assistance to cattle producers and cattle feeders who will face imminent foreclosure or liquidation – a program to allow them to continue operating until such time as the USDA’s longer-range plans can begin to offer them competitive prices for their cattle.

As of today, I’ve not heard back from the Secretary.

[agwhoneedsaphd]

Too bad we can't steal page from the corporate playbook. We could stop paying for all land costs (taxes, rents, and mortgage payments) because that represents an economic inefficiency and we just can't have that. Wonder how that would go over LoL