Consumers have a right to know where their food comes from and producers deserve a fair, competitive and transparent market.

COOL – Country of Origin Labeling

Presentation by Mike Callicrate - R-CALF Convention 2015

Trader Joe’s – U.S.A. Beef vs. Mexican Beef

U.S.A. Strip Steak $15.49/lb. Mexico Strip Steak $9.49/lb. Difference $6.00/lb.

Foreign sourced beef at Trader Joe’s is 39% lower in price. If finished cattle prices in the U.S. are adjusted to compete with Mexican beef, based on the percent difference in retail prices, U.S. live cattle prices would be $91.50/cwt. rather than $150/cwt.

If the big packers and retailers can keep consumers in the dark on the country of origin, they will make unprecedented profits and wipe out many more U.S. producers.

Brazilian cattle prices are roughly half of the U.S. market!

*All Fresh Choice Beef – USDA-ERS Data

35.0%

40.0%

45.0%

50.0%

55.0%

60.0%

65.0%

70.0%

1 2 3 4 5 6 7 8 9

1950 1975

1995 1996 1997

1998

2002

2000

2006

1999

Farm share of the consumer retail beef dollar A picture of abusive market power

2012

2009

2013

2014

$90 finished cattle would equal 32%

When markets were competitive

When prices were managed by big packers and retailers

Mad Cow

Market failure result in smallest calf crop since 1941

August 2015 – Vilsack announces S. American beef imports in September

What Happened?

1978 – Based on the advice of a consulting group, IBP, the largest beef packer in the world, developed a plan to control the cattle and beef markets.

• With four-firm packer concentration growing rapidly, it was easier for the big packers to manipulate the market. They decided it was more profitable to cooperate than compete. So they did.

• The highly profitable poultry model of vertical integration with captive supplies was implemented.

• The market (price) was essentially managed at below cost of production levels forcing U.S. cow herd decline.

• Today the big retailers (Walmart), now more powerful than the big packers, dictate terms to the packers.

“You should be suing

Wal-Mart [instead of

IBP], they are the

problem. They tell us

what they will pay and

we have no choice but

to pay you less.” - John Tyson comment to Mike Callicrate in

2002

10

What could happen? • Under pressure of the big retailers, the big packers are

being forced to search the globe for cheaper meat. • The only remaining barrier is COOL and an informed

consumer. The JBS (Brazil) and Smithfield (China) plan for world domination of beef and pork fails with COOL!

• If COOL is repealed, or made voluntary, foreign beef will flood into the U.S. market, reducing U.S. cattle prices to foreign levels less freight – shipping costs from Australia are around 4 cents per pound.

• It is very important to know that COOL now applies to less than half of the beef that is consumed in the U.S.

• Opening the border to South American meat in September will fill the wholesale market with much more cheap meat, reducing U.S. cattle prices closer to import costs.

• A $90/cwt. finished cattle price would mean a producer share of 32% of the consumer beef dollar.

$90 finished cattle would equal 32%

Without COOL, this label will disappear from retail meat cases. It raises unwanted questions about where the non-labeled meat comes from.

The Problem is Concentrated Power!

Let us never forget that government is ourselves and not an alien power over us. The ultimate rulers of our democracy are not a President and senators and congressmen and government officials, but the voters of this country. - Franklin D. Roosevelt

Over 90% of the people want to know where their food comes from. Congress is acting against our national interest.

WTO has got to GO!