Ruminations

Argentina was so far ahead of us in the 100% grass-fed beef business (90% of their cattle were raised on 100% grass), but is now rapidly sliding backward to where only about 45% to 50% of their beef will be 100% grass—the rest is going to American-style feedlots.

According to a recent article in MeatTradeNewsDaily.com, Rodrigo Troncoso, general manager of the Argentina Feedlot Chamber, predicts, “Five years from now, 80% of Argentina’s cattle are going to be finished in feedlots.” The reason? A national policy intended to keep beef prices low in the country with the largest per-capita beef consumption.

What a shame. Read the complete article here.

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Our correspondent, Professor Chris Teutsch of Virginia Polytechnic Institute & State University, emails us about some good news about a fast-food chain of restaurants adopting grass-fed beef. Nineteen Arby’s Restaurants in Richmond, Virginia, are serving Pasture Perfect Grass-Fed Beef. According to Chris, “They have place mats, napkins, and are even giving out “You are what you animals eat” brochure from Jo Robinson.”

Thought we would never see the day!

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According to Allan Nation, editor of The Stockman Grass Farmer, the grass-finished beef market has exploded in the last five years. As interviewed and reported by the North Platte Bulletin, he says the good news for grass-fed beef farmers is this: “Although grass-finished beef amounts to only one-percent of the market, that percent amounts to a billion dollars, Nation told producers at the recent Nebraska Grazing Conference in Kearney.”

Read the interview here.

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by Ridge Shinn

We were shocked to see that Whole Foods needed to recall fresh ground beef from all of its stores Friday. As reported in the WashingtonPost.com, it was the latest retailer affected by an E. coli outbreak traced to Nebraska Beef, one of the nation’s largest meatpackers. We ask, When will Whole Foods catch up to the reality that only grass-fed beef from known producers (like Hardwick Beef) will be safe for consumers?

Read the article here.

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by Ridge Shinn

Establishing a fair price for our meat and milk is critical to establish a thriving, sustainable rural economy. But what determines a fair price?

Most of us are old enough to attest that prices in general have skyrocketed in our lifetime. But have the prices of meat and milk risen in accordance with the price of other everyday items? To clarify, Randy Cook of the National Organization for Raw Materials (NORM) provides the following calculations. Compare the price of a postage stamp in 1947 ($.02) to the price of a postage stamp today ($.37).  This ratio of almost 20 to 1 is reflected in many prices today in comparison to prices in 1947.

But look closely at the price comparison for milk and meat: the average price from 1947-1949 for milk was $4.37/hundredweight (cwt), and for beef was $20.13/cwt; the average market price as of January 2005 was $14.70/cwt for milk and $89.44/cwt for beef. Using the Consumer Price Index (CPI) of the base period 1947-1949 as 100, the value for 2004 would be 807.6. Therefore, to produce buying power equivalent to that in 1947-49, milk today should be priced at $35.29/cwt and beef should be priced at $162.57/cwt. At these prices, most farmers could make a living.

The year 1947 was not selected for this calculation arbitrarily. NORM, under the leadership of Carl Wilken and working with the National Association of State Departments of Agriculture (NASDA), determined that the years 1947 to 1949 mark a period in American history when prices paid to farmers actually reflected the cost of production: in other words parity prices (“parity” meaning equal or similar). This was because an Act of Congress established a government-backed loan program for commodities at the level of 90% of parity; this created a period of nearly full parity. After the War Price Stabilization Act ran out in 1951, it was not renewed; supports for parity pricing disappeared and pricing for agricultural commodities started a rapid descent.

Importance of Parity Pricing
A compelling description of the importance of parity prices is found in NORM’s summation of 60 years of analysis of the nation’s economic records.

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