Blue Ribbons/Red Faces: Packer control of NCBA

by Lee Pitts

I did not attend this year’s NCBA Convention in Phoenix. I haven’t been
to one since I quit the organization four years ago. I know that as a
journalist I have a certain responsibility to report on such proceedings, but I could have told you before the convention what would transpire. Just as I speculated in this newspaper five years ago exactly what the NCBA would become if the merger was allowed to take place. It wasn’t hard to forecast. All you had to do was follow the money.

I remember the Alamo and the first NCBA Convention. When I left San
Antonio four years ago after the merger I felt we in the cattle industry had just been wiped out like those independent Texans of long ago. It was a massacre. There would be no survivors. The fact that I had worked very hard to raise some valid issues about the merger and ended up being being treated like the enemy was puzzling to me. But my biggest scar from the Alamo Convention was that I had been forever disillusioned with how the
“democratic” process DOESN’T work within our national trade organization.

A livestock magazine quoted me as saying I regretted putting up the fight
I did. Not really. I stand by everything I wrote and urge you to go back and read my work and see if I wasn’t right in my predictions. I only wish I would have been wrong. After reading this condensed report of what transpired at the NCBA Convention I think you’ll get the same uneasy feeling I experienced when first introduced to the NCBA.

You’re Stupid

I probably wasn’t smart enough to attend the NCBA Convention even if I
had wanted to go. At least that seems to be the opinion of Jon Ferguson, the
newly elected Chairman of the Beef Checkoff Division of the NCBA.

ITEM: During the Executive Committee meeting of January 26th Mr. Ferguson
made the following comment: “It is important for the decisions of the cattle
industry be made by this group (NCBA Executive Committee) of educated people
that are knowledgeable about the issues facing our industry. The large group
of grassroots producers we are always hearing about are not informed enough
or knowledgeable enough to understand these issues.”

I don’t profess to have the education of Mr. Ferguson who graduated from
Kansas State with a B.S. degree in the nuclear sciences and went to
Massachusetts Institute of Technology to pursue his doctorate with a
fellowship from the Atomic Energy Commission. But I do know one thing. In a
country or an organization you shouldn’t have to pass an IQ test in order to
participate. I’m also smart enough to recognize an arrogant and elitist
attitude when I bump up against it. But this is nothing new. Mr. Ferguson’s
statement could well be the motto of the NCBA.

Who Said There’s No Free Lunch?

One of my main concerns about the merger was that under the new industry
structure packers would have too much influence on the proposed organization
without having to pay fair market value for that influence! How un-American
is that?

ITEM: It’s now official policy that the NCBA will oppose any legislation
that would restrict packer ownership of livestock. That was always the
unofficial policy of the NCBA due to the strong influence that Texas and
Kansas cattle feeders have. Now, thanks to a balloting in the Stakeholder’s
Congress that included 191 voters, when that other Congress in Washington DC
visits this subject they will be advised officially that the million
cattlemen represented by the NCBA are against any legislation that would
prevent packers from controlling the market through direct ownership of
cattle.

By the way, this piece of NCBA legislation was officially given its
blessing by IBP head cattle buyer and NCBA Board member, Bruce Bass.

Swan Song

The theme for NCBA’s first convention of the millennium was “We Are
Family, Bold Initiatives for New Solutions.” What they were referring to were
the changes proposed by the much ballyhooed Blue Ribbon Commission. When
George Swan became president of the NCBA a year ago one of his first actions
was to appoint a Blue Ribbon Commission to review, evaluate and suggest
changes to the NCBA. This was in response to growing displeasure with the
NCBA. They were losing producer members and there was a growing consensus in
the country that the big packers and big feeders were taking control of the
organization.

At the time he created the Blue Ribbon Commission Swan said, “The next
two years will determine whether NCBA survives as a typical industry trade
organization or if it rises to become a meaningful catalyst for change.
Change is needed,” Swan said, “because things are not currently working as
well as they should be.”

After a year of countless meetings the Commission came up with several
ways to improve the NCBA. These included strengthening grassroots producer
influence by allowing only producers to vote on policy matters. (No car
companies and drug companies.) You may recall this was an issue I raised
editorially before the merger.

The commission also came up with several other suggestions. Such as:
creating a simpler, better understood organization; streamlining the board of
directors and committees; fostering a stronger state and national partnership.

ITEM: After hours of hotly contested debate at the NCBA Convention the
only action taken on the long awaited recommendations from the Blue Ribbon
Commission was to delay action. That’s right. The NCBA wants to debate some
more about the pros and cons of improving their organization. Should they or
shouldn’t they? The main emphasis of the Blue Ribbon Commission’s report was that only producers should be allowed to vote on policy decisions. The final vote was
135 to 125 in favor of non-producers continuing to have a vote on policy
issues.

Immediately after the much-hyped, non-event at Phoenix NCBA leaders felt
a conference call was necessary to explain to the livestock media what
exactly had transpired. NCBA officials said that those changes recommended by
the Blue Ribbon Commission that did not require by-law changes would be
implemented. Mostly this consisted of a $10 increase in individual dues.

I have a feeling this was not the dramatic change George Swan had in
mind. I’m told that after the balloting many NCBA’ers went home red-faced.
Some with anger and some were simply embarrassed by the proceedings.

Oh, they tried to put a happy face on the fiasco. But it would take Bill
Clinton’s Spin Doctors to make these results fly out in cow country. One
Montana cattle producer said, “After today’s fight we have killed, mutilated
and pulled the baby apart. We now have an organization no one wants and we
are looking for a place to discard the remains.”

We can only hope so!

Plaques And Parties

I have always objected to the NCBA using their quasi-governmental status
and authority to advocate a radical restructuring of the cattle industry in
favor of a multi-national corporate system along the lines of pork and
poultry. But it’s when NCBA’ers rub our noses in their importance that I
become most upset. Like when they throw parties for themselves, give each
other plaques and fly all over the country at our expense and then lecture us
that we owe them something for their sacrifice.

ITEM: In cooperation with Bayer Animal Health the NCBA presented their
Vision Award for Best Beef Innovator of the year to U.S. Premium Beef of
Missouri. According to industry observer, Mike Callicrate, “U.S. Premium Beef
continues to be lauded by NCBA, when in fact U.S. Premium Beef has actually
hurt cattlemen by doing nothing more than provide Farmland with price
depressing captive supplies. This is unbelievable. USPB cattle producer
members actually invested their own hard earned money to further wreck their
own market.”

I’m sure they’ll appreciate the plaque though.

So You Know Where You Stand

According to Jon Ferguson, we aren’t smart enough to understand the
issues faced by our industry. So, just in case someone asks, here’s you’re
official position as stipulated by NCBA staffers and officers during the past
four years.

ITEM: The new President of the NCBA is George Hall, retired president of
the Oklahoma Stockyards. In the January 2000 issue of Beef Magazine Hall
responded to the recent string of mega-mergers in the retail food industry as
being a benefit to the beef industry because there are fewer players to
influence. Good thing there are only three big packers left: Easier to keep
an eye on them this way, right George?

ITEM: In testimony on behalf of the NCBA George Swan last year testified
before the US Senate Committee on Agriculture that his organization
represented one million cattle ranchers and the NCBA supported the World
Trade Organization and funding and authority given to the International
Monetary Fund. Which is currently helping other countries expand their beef
exports to this country.

ITEM: NCBA joined Cargill, ConAgra, Continental Grain, Farmland, General
Mills, Nestle and Dreyfus as members in the Ag for Fast Track Coalition. This
will allow our domestic beef market to be further inundated with beef from
around the world.

ITEM: NCBA’s Chief Economist, Chuck Lambert, wrote a memo to the House
and Senate Ag Committees opposing a proposal from the Western Organization of
Resource Councils. It sought to restore some competition into the pricing of
fed livestock. Lambert advised that no action should be taken to alter or
halt current trends because that is the direction where NCBA’s Long Range
Plan says the industry must go.

ITEM: The NCBA rejected a proposed study on the impact of beef imports
although we’ve had several studies to show how we’re all benefiting from beef
exports.

ITEM: The NCBA opposed legislation that would have halted temporarily the
biggest agricultural mergers.

ITEM: In announcing a partnership venture with IBP, NCBA described it as
“a great marriage between two organizations that share a common vision.”

ITEM: NCBA opposed R-CALF’s anti-dumping case against Mexico and stayed
neutral on R-CALF’s case against Canada.

ITEM: Chandler Keys, NCBA’s head lobbyist in Washington on behalf of over
one million producers from across the country had a letter read into the
Congressional Record proclaiming that the nation’s cattle industry opposed
Tom Daschle’s amendments on mandatory live cattle price reporting and packer
concentration.

I don’t remember being asked how I felt on the matter, do you?

ITEM: At their mid-winter convention the Wyoming Stockgrowers passed a
unanimous resolution calling for the removal of the same Chandler Keys as
NCBA’s VP of Policy. A similar resolution came out of New Mexico.

In a letter to NCBA President Swan and NCBA CEO, Chuck Schroeder, the
Wyoming delegation summarized their displeasure in three areas: “(1) Our
members cite numerous examples of the Washington office of NCBA taking a
conciliatory position in early negotiations on issues critical to our
industry as opposed to adhering firmly to NCBA policy. (2) Our leadership has
been advised by both staff of our Congressional delegation and senior staff
of allied organizations that they find it difficult to work with Mr. Keys.
(3) Our producers who have had direct contacts with Mr. Keys, either in
person or through phone calls, feel that he is unable to relate to the
business challenges and cultures of the western cattle producer.”

Mr. Keys remains firmly entrenched in his NCBA Washington office.

Where Are They Now?

Four years ago all the living former NCA Presidents endorsed the merger
that created the NCBA. In retrospect, the industry structure it has created
has been beneficial for some. JoAnn Smith, Past NCA President sits on the
Board of Directors of IBP. John Lacey, NCBA’s first President, is currently
promoting a strategic alliance for the largest feeder/packer in California. I
did find one former NCA President who had the courage to admit he made a
mistake in supporting the merger. Jack Dahl regrets supporting it because he
feels the NCBA is now out of touch with grassroots producers. “It’s
considered an enemy by many grassroots producers because they don’t feel
their national organization is serving and protecting their interests any
more.”

I’ll bet if Jack Dahl showed up at this year’s NCBA Convention there were
a few tickets to exclusive cocktail parties missing from his convention
package.

Jack Dahl has suggested in interviews printed elsewhere that disgruntled
ranchers may feel they have only one option left to get rid of the NCBA and
that’s voting out the checkoff. (If ever given a chance by the USDA). Our
all-knowing NCBA leaders can blame whoever they want for losing the goose
that is laying all those golden eggs but I’d suggest they have only their
arrogance to blame. But then, what do I know? I’m just one of those
uneducated grassroots dummies out in cow country.

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