Did A Packer Discriminate Against a Kansas Cattle Feeder?

Did A Packer Discriminate Against a Kansas Cattle Feeder?
by Candace Krebs

USDA has scheduled a hearing for today, May 22, into possibilities that the Farmland National Beef Packing Co. singled out a maverick Kansas cattle feeder and refused to buy finished cattle from his feedyard. A determination will be sought to see if such action constitutes a violation of the Packers and Stockyard Act.

AgWeb.com first reported details behind the USDA investigation in a May 21 story entitled: USDA Says Farmland Violated Packers and Stockyard Act.

At the center of the controversy is controversial cattleman Mike Callicrate. He has been kicking sacred cows in the beef industry for some time.

You can read the entire interview with Callicrate, written by Candace Krebs and first published in the November/December, 2000 edition of BEEF TODAY magazine. That article follows, in its entirety.

The Feeder Who Won’t Take It Anymore
Zealous and determined, Mike Callicrate fights a controversial crusade against the beef establishment.
Copyrighted content, as first published in the November/December 2000 edition of BEEF TODAY magazine.

The man who would bring down the world’s largest meatpacker is describing his son Tyler, who died in a car wreck as a teenager. He remembers an earlier accident, one that occurred while the 9-year-old was racing motorcycles in Denver.

“These guys all start out in a big wide starting line, but they’ve got to go through a space the width of this room,” he says, gesturing across the office at his St. Francis, Kan., feedyard. “It’s just whoever is toughest and bravest.

“So Tyler, he gives it hell and causes the damnedest pileup at that point. And I just remember pulling all of the bikes off and everybody’s kicking their starters and getting going again, and Tyler’s on the bottom of the pile. I’m telling you, this little kid gets up and he’s just beaten up and bruised and hurt. He gets on his motorcycle, and he wins the race.”

The relentlessly passionate voice breaks here, grows softer, ragged. “And that’s the kind of determination this kid had. That was typical of him. We have a room full of trophies of this kid, he was just so competitive.”

For a moment, you might think this 49-year-old firebrand is somehow talking about himself. And it’s not that he worried about the cause of the pileup; It’s that the boy persevered.

Mike Callicrate is a native of Evergreen, Colo., the product of a large family, showing livestock in 4-H, working at the local grocery store, riding bulls and hand making bull-ropes while financing an animal science degree from Colorado State University.
 
After rodeoing for 10 years, he switched to farming, ranching and feeding cattle. He and 10 financial partners built a feedyard together in St. Francis in 1978. He managed the yard for eight years, then spent some time as a consultant before building his own 12,000-head yard at his current location in 1988.

Today, Callicrate’s company, No-Bull Enterprises LLC, includes farming and ranching, retail beef, publishing, and product manufacturing. His coup was rigging a scrotum bander, used by most feedyards and patented in 81 countries, for delayed castration.

Designing, manufacturing and distributing the Callicrate Smart-Bander employs 20. Meanwhile, he says that feeding cattle has become more punishing than riding bulls ever was. “The yards that are aligned with meatpackers, who are providing a captive supply to packers, are getting preferential treatment,” he says. The packers “want a constant supply, period.”

Driving prices down? He, like many feeders, feels that packers use their captive inventory to drive down cash prices for the remaining cattle they need to buy on the open market each week.
Cattle producers and cattle feeders, he says, “are losing billions of dollars, at the same time consumers are paying record-high prices for beef, and at the same time, we are importing nearly 20% of our total U.S. consumption.

“The U.S. is the largest and highest priced beef-consuming market in the world. It’s wrong that our producers are going bankrupt. That’s what I focus on every day.”
It’s that focus–obsession, some say–that separates Callicrate from other feeders who worry about the balance of power between packers and producers.

Indeed, Callicrate’s real mission, his true work, his passion, seems to be that of provocateur, political activist, hell-raiser. Early nearly every morning, he sorts through as many as 400 e-mail messages and fires off articles, reports and news items to the 740 “subscribers” to his free Internet opinion service.
 
His recent offerings included stories on such things as World Trade Organization demonstrations, successful political activists, the struggles of small farms and rural churches, boycotts of genetically modified organisms. And any bad publicity on his public enemy No. 1–IBP Inc., and the packing industry.

Callicrate and his supporters blame the economic stresses facing the cattle industry on the lack of competition in the market and a failure of USDA’s antitrust law enforcement.

“The last three years have been the most stress I’ve dealt with in my lifetime,” says Callicrate’s feedyard manager, Elroy Heim.

Their customers include 40 or 50 different ranchers, and some 80% of those are retained-ownership operators, says Heim. He says that Callicrate’s studied visibility has attracted some of the customers–even though it has also caused the yard some problems.

After Heim editorialized in an industry publication, charging that current value-based marketing grids were discount-based and disadvantaged producers, one of the major packers quit bidding the yard for three months, he says.

They think the packers “blackballed” them about a year ago. “Certainly there were high concerns over it by our customers,” says Heim. “We filed a formal complaint with the Packers and Stockyards Administration against Farmland, and are still anxiously awaiting the hearing, now set for March 2001. One packer, whose buyer lives 25 miles away, didn’t buy from us for more than four years.”

Callicrate is familiar with court proceedings. He seems almost fond of the process, in fact. He is the lead plaintiff on Picket vs. IBP, a class action lawsuit originally filed by 10 cattle producers back in 1996 seeking damages from use of captive ownership and long-term supplier agreements. He contends that “monopoly pricing” has cost him and other independent cattle producers at least $100 a head, and that it’s part of a plan to eliminate competition.

Foot-high piles of legal documents, along with assorted books, magazines and papers, await his daily consumption. More time is spent writing testimony for news conferences or congressional panels or media editorials. He also travels to an exhaustive string of meetings, often making several appearances within a week.

His lifestyle–sprinting around the country in a four-seat Piper Comanche airplane, pouring time and resources into political or social causes–arouses curiosity, suspicion, even envy. Fighting what he and his disciples consider “the good fight” for those who can’t–either for lack of time or funds or sheer courage–is costly (easily in excess of $100,000 yearly, he says) and often frustrating, but it hasn’t been completely thankless.
 
He receives a thin but regular stream of encouragement, just the way his favorite farm organizations (he lists the Organization for Competitive Markets, Western Organization of Resource Councils, Center for Rural Affairs, Ranchers-Cattlemen’s Action Legal Fund and the newly formed Kansas Cattlemen’s Association) get just enough financial support and volunteer elbow grease to survive.

He and his far-flung band of supporters spend much of their time together as a support group, back-slapping each other, backbiting their enemies and celebrating their marginal victories. “It’s all a matter of truth in the end. It’s all a matter of truth. And we’ve got a lot of people out there spinning the truth, particularly the packers and their spokesmen and representatives,” Callicrate says.
He condemns the existing power structure within the beef industry. He seems to see his role as agitator and one-man clarion for “reform.”

His lifelong membership in National Cattlemen’s Beef Association is punctuated with constant attacks on organizational structure, policy and leadership. He also criticizes USDA, university Extension, mainstream farm media (including, sometimes, BEEF TODAY) and big farm organizations–anything establishment–for what he sees as catering to corporate interests.
 
And Mike Callicrate has an opinion on just about everything. He abhors meat irradiation, saying it treats the symptom rather than the problem, which he sees as fast chain speeds in packing plants, leading to unsafe slaughter practices and worker abuse.

He flogs even at U.S. Premium Beef (USPB), the most successful of the new generation of producer-owned beef cooperatives, charging that it failed to go far enough.

“USPB started out with a good idea, but when they got in bed with Farmland, they sold out the mission,” he says. “USPB is a source of captive supply for National Beef, that’s all it is, giving them leverage in the marketplace to drive prices lower just like IBP, ConAgra and Cargill do with their captive supply.”

Not everybody agrees with such firm, publicly expressed opinions. In fact, many of the people who work with more traditional groups feel he is more than just an inflammatory blister under their saddles–they think he is misleading his audiences about the root causes of market change, the impact of those changes and, certainly, they would argue–his seeming distrust of their intentions.

A lot of them are careful not to talk about the man personally. But many involved in organizational work feel their groups are driven by the grassroots. It is not, they will tell you, easy to get a bunch of cattle producers to reach consensus. Callicrate’s opinions are shared by others, they say, but they say also that they are minority opinions.

A lot of folks think that the industry needs to be working more closely together. They note that the poultry and pork industries are much more united, and they say beef has to compete in that arena, like it or not.
 
And a lot of them don’t like the bedfellows or the tactics Callicrate chooses. They say he zealously supports boycotts, demonstrations and especially lawsuits, which have increased liability and regulatory burdens, at least partially driving concentration. They think his positions foster confrontation and polarization rather than reconciliation and cooperation.

“The inability to maintain and support consensus in a minority industry plays into the hands of the enemies of cattlemen and beef products,” says Dee Likes, executive director of the Kansas Livestock Association. “This is an industry under siege in many, many ways from a populace that doesn’t understand it. Continuing to argue and agitate is a detraction that makes this industry less focused and effective than it might be otherwise.”

Jim Schwertner, a past chairman of the Texas Cattle Feeders Association, observes that “sometimes it is good to have someone out there to polarize the issues so it changes the focus of the masses. At least it gets people to look at an issue. Still, developing a win-win relationship is a better approach. Instead of throwing rocks at the packers, we are extending our hand and saying, ‘Why don’t you join us?’ ”

(Schwertner is referring to Consolidated Beef, a 2.14-million-head marketing cooperative he helped organize to collectively bargain with packers.)
Callicrate doesn’t buy it. “I think the thing that polarizes today is that we’ve all been told that the industrial model of agriculture is more efficient and has the economies of scale, that it’s inevitable,” he says.

“I’m saying the efficiency and economies of scale arguments are a lie, and that the corporate-controlled industrial model is not mutually beneficial. It’s not sustainable and is not inevitable. I’m convinced. I’m going to find my way around it. I’m going to do my own thing.” A pause. “And I’m going to let steelworkers help me do that.”

A onetime Republican who says he turned registered Democrat (and supported Ralph Nader in the recent election), Callicrate makes it a point to mingle with union members, including seasoned labor bosses.
 
Farmers and blue-collar workers share a vital but powerless role in the economy, he believes. He envisions a series of “small, smart, safe processing plants” inspired by slower-speed, quality-driven, New Zealand-type technology, owned cooperatively rather than corporately. Cash-rich consumer groups, labor unions, and other groups have the incentive to invest in building an entirely new food system, he suggests. The unions, of course, have yet to be convinced. Call him radical, a pie-in-the-sky dreamer. But anti-progress? He pleads not guilty.

“No one is further out front than I am in new technology, or new and better ways of doing business,” Callicrate says. He points to his current value-added meat project, Ranch Foods Direct, which coordinates management from the cow-calf producer through processing and marketing. Among the elements of the program are individual identification from birth, a vaccination program, early weaning with the assistance of creep feeding and slaughter at roughly one year of age.

He says what makes his beef so good, in addition to the youthfulness of the animal, a new management system, and proper aging of the beef, is a “rinse-and-chill” processing procedure, which flushes the blood from the vascular system with a cold glucose solution, chilling the carcass from the inside out while reducing cholesterol 23%, and improving tenderness.

Kansas State University meat scientist Jim Marsden draws two big circles, one representing Callicrate’s views; the other, those of the general beef industry. The “progressive place” where the two spheres overlap is “figuring out ways to optimize the value of the beef carcass,” Marsden says.
By retailing beef bundles (available at www.nobull.net) and selling filet mignons to restaurants, Callicrate and his business partners hope to eventually capture $400 per head or more for the cattle producer by increasing their share of the beef dollar as well as cost savings and added value.
So far, until more of the process and system can be worked out, they have been paying cattlemen a $5/cwt. premium for finished cattle, about $60/head. Since June, 250 head have been processed through the program.

Callicrate spends an all-day interview enthusing about the meat project, his other businesses, the industry, the plight of family farmers, the bedrock importance of moral principles. But he stumbles when asked whether his life is balanced and what he does for fun. “My son Teegan is 14,” he says. “We are very close, and I spend a lot of time with him. I give him whatever time he needs. To that extent, it’s balanced.” He laughs. “I played golf once in the last year,” he reflects.

“I don’t know what I do for fun. I read a lot. I enjoy reading. I read more of the self-improvement type of stuff and the educational material. I don’t like recreational reading. I want something that I can get something out of, that will help me.”

In his view, he has plenty of reading and plenty of work to do. The IBP suit continues to run into snags, despite his typically exuberant insistence that his evidence is a “smoking gun.” In October, a District Court in Alabama denied his lawyers’ request to certify the class as feedlot owners who had sold cash cattle to IBP.

But Callicrate pushes on. If, so far, it’s not the happy ending he would have pictured, he insists that he prays for knowledge, wisdom and energy, not financial success.

He says he still remembers sitting alone in his hotel room the night before he testified against packer concentration at a congressional hearing in 1996. He knew the testimony he was preparing would enrage the same beef packers he depends on for his livelihood.

“I stepped over the line big time. I basically just chose a fight with the packers,” he says. “And here I am a little cattle feeder. I just decided it’s worth the risk to go broke if you have to.”

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Comments

  1. gary janssen says:

    Mike, I understand you are a big advocate of Raising Less Corn and More Hell. If you check pages 80,127, and the fifth page of the pictures you will get somewhat familier with what we did in the 80’s. We now live in emporia and were only 5 miles apart last Sat. Feel free to call me, best afternoon and evening, at 620 342 5058 or my cell 620 481 0237 if you would like a little more insight on parts of the book. I was an advocate with Prairiefire in the 80’s. Regards, Gary Janssen