CUERO – Hundreds of agricultural industry leaders applauded when President Donald Trump discussed his trade policies at the American Farm Bureau Federation’s 101st annual convention in Austin last month.
In particular, the U.S.-Mexico-Canada Agreement, a renegotiation of the North American Free Trade Agreement, has been lauded by numerous organizations.
Although the new agreement has near unanimous approval across most agricultural industries, the beef industry is the exception.
“Provisions in the USMCA will boost the trade economy, which will benefit our Texas farmers, ranchers, manufacturers and businesses,” read a Jan. 29 statement by the Texas and Southwestern Cattle Raisers Association, which supports the new agreement.
DeWitt County rancher Stayton Weldon is among the dissenters.
“It flies right over the head of the independent producers,” said Weldon, who refers to another USMCA supporter, the National Cattlemen’s Beef Association, as the “National Coalition of Big Agribusiness.”
Weldon, a regional director of R-CALF USA, the nation’s largest producer-only cattle trade association, attributes his disdain for the agreement to its failure to include a provision for mandatory country of origin labeling laws, which he said helps sell U.S.-born, raised and slaughtered beef because of its high-quality reputation.
The organization also opposed NAFTA because of detrimental effects it said free trade between North American countries caused to small, independent cattle raisers.
“Under NAFTA, we lost 20% of our cattle operations, wiped out 75% of our farmer-feeder-type feedlots, reduced our herd size by millions of head of cattle and we’ve eliminated opportunities for current and aspiring cattle producers,” read a statement by R-CALF officials.
The statement also said the new trade negotiation is even worse.
“At least for several years during the old NAFTA, American cattle farmers and ranchers received the tool they needed to finally compete against the growing volume of cheaper imported beef and cattle from Canada and Mexico,” the statement read. “From 2013 through 2015, mandatory country-of-origin labels for beef empowered America’s cattle producers to finally begin competing against this growing tide of cheaper, undifferentiated foreign beef.”
Joe Paschal, a Texas A&M AgriLife Extension Livestock Specialist, said the new agreement put an indefinite end to any hopes of a new mandatory country of origin labeling law.
“This is a free trade agreement, which means you can’t put up any barriers to trade,” Paschal said. “Labeling country of origin could cause discrimination based on that.”
Such a violation of a free trade agreement could land the U.S. in front of the World Trade Organization, as it did when the Canadian government argued before the organization that country of origin labeling rules violated NAFTA by distorting trade. Mexico made similar claims.
The World Trade Organization ultimately ruled in favor of Canada, that the U.S. country of origin labeling requirements discriminated against Canadian and Mexican livestock, and the two counties were authorized to implement over $1 billion in retaliatory tariffs against the U.S.
This sequence of events led to the repeal of the country of origin labeling law for beef in 2015.
David Anderson, an agricultural economist at Texas A&M University, said the retaliatory tariffs weren’t the only costs associated with country of origin labeling laws.
He said the very practice of separating the meat by country of origin in order to add market value was costly.
“You have to keep records,” Anderson said, which is a costly process. “Those costs get passed on both to consumers and to producers. Ranchers pay for it and consumers pay for it in a higher price of beef.”
Moreover, Anderson said there’s little evidence to support that consumers will put their money where their mouths are when it comes to their beef’s country of origin.
“If you just asked consumers, they say, “Yeah, that sounds good,” Anderson said.
But, when asked about beef origin in comparison to other desirable beef attributes, Anderson said consumers rank it pretty low.
Shanna Hall and her husband, Scott Hall, both DeWitt County ranchers, said they disagree.
“We’re in a day and age where you want to know where your food comes from,” Shanna Hall said.
All-in-all, Anderson said the added value of trade to the cattle industry makes the new agreement worthwhile from an economic standpoint.
“They say trade added about $70 a head to the value of calves,” Paschal said.
But Hall and her husband, two of the Crossroads’ several hundred R-CALF members, say most of that money goes to packing facilities, many of which are now owned by large, multinational companies.
They say the new agreement is only the latest example of ways the government has continually supported those companies at the expense of independent cattle raisers.
“We can’t compete with multinational corporations that own large cattle operations in South America,” Shanna Hall said. “The USMCA is going make it harder to fight those monopolies.”