Regarding GIPSA – “I can understand people wanting to take us back to the way we marketed cattle 30-40 years ago – after all, if we’re still around today, we had to be pretty successful back then. Yet when we all gathered in Fort Collins and debated about taking the industry back 30 years, Blockbuster Video was declaring bankruptcy because it insisted on doing business like it was being done 30-40 months ago, not 30-40 years ago.” Yikes
Ethanol – There are some who believe that an interesting alliance is building between fiscal conservatives and environmentalists regarding ethanol. The environmental movement has really begun to question the viability and true impact of ethanol. Even Al Gore admitted this week that it was a bad idea. (See "Al Gore Affirms Inconvenient Truth About Ethanol")
Fiscal conservatives and the recent election results have raised the stakes on subsidies and returning to real-world economic incentives. However, the articles this week referring to a possible showdown in the Republican Party over ethanol, and the support from the environmental movement, I believe are overblown.
Eliminating the subsidies and mandates at this point would be devastating to those who invested so much on the continued subsidization of the product. Sadly I think we’re more likely to get a bailout for the billions we’ve lost as a result of the subsidization of ethanol, than to stop it cold turkey.
A very smart producer from the heart of the Cornbelt offered a pretty good solution. “Stop the increase in mandates, and begin systematically lowering the subsidies and tariffs over a five-year period to give people and the industry a chance to return to real-world market fundamentals.”
A phasing-out approach makes sense to me.
Checkoff – USDA indicated that the Office of Inspector General would be auditing the beef checkoff this year. That’s not surprising news, but many see it as yet another step by USDA to assert more control over the entire checkoff, as it’s done with other checkoff programs.
My opinion is that the checkoff is fundamentally flawed and severely limited in building demand as it becomes increasingly a USDA program rather than a producer program. I believe we’re headed toward a referendum because without a major restructuring of the checkoff program, its value – while still positive – is declining sharply.
Our mantra shouldn't be that it’s still a lot better than nothing. We’ve built the infrastructure through the state beef councils, National Cattlemen’s Beef Association and the like to effectively build beef demand, proactively deal with issues, and grow our industry. It’s time we begin to leverage those strengths. The checkoff is worth saving; but to save it, we have to admit that it’s sick.
-- Troy Marshall