The workshop, led by U.S. Agriculture Secretary Tom Vilsack and U.S. Attorney General Eric Holder, featured panel discussions on a variety of topics, including competitive dynamics in the seed industry, trends in contracting, transparency and buyer power, and concluded with public testimony. 

“Today’s workshop provided the Department with an important opportunity to hear from a variety of perspectives and individuals about competition in the agriculture sector,” said Attorney General Eric Holder.  “We appreciate the importance of this industry to our economy and are committed to enforcing the antitrust laws effectively to ensure fair and open competition that protects both consumers and farmers.”

“In my travels across the country, I hear a consistent theme: producers are worried whether there is a future for them or their children in agriculture, and a viable market is an important factor in what that future looks like,” said Vilsack. “These issues are difficult and complex, which is why this workshop today is so important and long overdue.”

Friday’s meeting was the first in a series of workshops that will be held over the next several months. 

Holder, Varney serve notice to large agribusiness companies

The nation’s largest agribusiness firms received a stern warning from the Obama administration during Friday’s ag competition workshop in Ankeny, Iowa:  There’s a new sheriff in town and anti-competitive practices won’t be tolerated.

Attorney general Eric Holder set the tone for the session. “We know that a growing number of American farmers find it increasingly difficult to survive by doing what they have been doing for decades,” Holder said, “and we’ve learned that some them believe that the competitive environment may be, at least in part, to blame.”

Both Holder and Christine Varney, the assistant attorney general for antitrust, said that while big isn’t necessarily bad, it can be bad if the power that comes with being big is misused.  “With big comes an awful lot of responsibility,” said Varney.  “When you have a tremendous amount of market share, you have the responsibility to behave in ways that keep the competitive playing field open.  You cannot engage in acts that are designed to protect or extend your monopoly.”

Varney said her office will vigorously enforce antitrust law.  When pressed on what actions might be forthcoming, and when, Varney responded that it’s already happening.  She pointed to last year’s blockage of JBS SA’s attempt to purchase National Beef and a recent Justice Department lawsuit seeking to block milk processor Dean Foods’ acquisition of a competitor.   Her message was that future acquisitions and mergers will be getting much more scrutiny than they have in the past.

The following audio clips feature some of the opening comments made at the workshop.

AUDIO: Secretary of Agriculture Tom Vilsack (2 min MP3)

AUDIO: Attorney General Eric Holder (3 min MP3)

AUDIO: Christine Varney, head of DOJ Antitrust Division (3 min MP3)

AUDIO: Iowa Senator Chuck Grassley (3 min MP3)

Farmers have their say

The workshop agenda included a panel of six farmers conveying their thoughts on competition issues in agriculture.  Eric Nelson, a grain and cattle farmer from Moville, Iowa argued that the government needs to do a better job of enforcing the anti-competition and antitrust laws already in place.   Pam Johnson, a farmer from Floyd, Iowa, talked about the innovations that have made American agriculture the envy of the world.

AUDIO: Eric Nelson (7 min MP3)

AUDIO: Pam Johnson (6 min MP3)

Competitive Dynamics of the Seed Industry

Much of the focus of Friday’s workshop was the competitive dynamics of the seed industry–specifically Monsanto’s dominance in seed traits and whether the company is using that dominance unfairly.  At the heart of the discussion is the battle between rivals Monsanto and Dupont, which owns Pioneer Hi-Bred. 

One of the more interesting exchanges took place between Diana Moss with the American Antitrust Institute and Jim Tobin of Monsanto, both part of a panel discussing seed price, choice and innovation.   Dermot Hayes, Iowa State University professor of economics and finance, also weighed in.

AUDIO: Diana Moss (2 min MP3)

AUDIO: Jim Tobin (2 min MP3)

AUDIO: Dermot Hayes (2 min MP3)

Agricultural competition is one of those “hot button” topics, one that evokes some very strong emotions.  Corning, Iowa farmer Ray Gaesser, vice-president of the American Soybean Association will be part of a workshop panel discussing seed competition issues.  He says there’s fine line between too much and too little regulation.

“We think there is a need to review what’s going on in our industry—but at the same time, we have concerns that we go too far and stifle innovation,” Gaesser says, “so it’s really a fine line that we must walk on to make sure that we have competition, but at the same time that we don’t over-control and stifle competition.”

How great is the interest in this subject?  DTN reports that, prior to the workshops, Justice and USDA asked for public comments and received more than 15-thousand responses—so many that DOJ has been unable to post all of them.

AUDIO: Ray Gaesser (2 min MP3)

In addition, sessions will be held on climate change, renewable energy, health care and other issues important to NFU members as they form their policy for the next year. The 2010 NFU convention is Sunday, Monday and Tuesday.

AUDIO: NFU President Roger Johnson (11 min., MP3)

Dierks said several of the issues addressed at this annual meeting are similar or even same as those addressed in past annual meetings and will be addressed at future gatherings.   However, there is one new issue in the spotlight:

“The issue of animal health product availability has been debated on national television news but it is also being talked about in Congress. We have been working together with . . .other commodity and livestock organizations to make sure producers have access to using animal health products, because they are necessary to take care of the animals and actually it is an animal welfare issue for us because you want healthy animals.”

Enforcement issues in environmental realm, freedom to operate issues, and trade policy issues were all key topics of discussion.  ”At the same time, there is a lot of discussion about the We Care program.  It is our commitment to society and our commitment to doing a good job on animal welfare, on animal health, and community involvement to show that we are responsible citizens.”

When asked about the mood of producers at National Pork Industry Forum, Dierks replied, “Generally, people are optimistic. Money is not falling from the sky. But on the other hand we have made it through these challenges as it is related to the economy, as related to production, as related to H1N1, and the misuse of the name with H1N1. . .  producers see some opportunity to look at our future prices. There are some opportunities ahead of us. The reality is the US most competitive county in the world to produce pork. The USDA projects an 8 percent increase in our exports versus a year ago. So people are cautiously optimistic.”

Conversation with Neil Dierks

Schweiger, the outspoken president of the National Wildlife Federation, was at the University of Nebraska Wednesday to discuss global warming.  After his presentation, we asked him about those environmentalists who attack agriculture— and specifically, meat production. 

“They’re animal rights groups that are pushing that, not the environmental community,” says Schweiger. “They want to stop the use of meat for food and they’re finding any way they can to do that—and I frankly take exception to their numbers—they’re wildly exaggerated and they’re not real.” 

A National Wildlife Federation report released in January suggested that increased corn plantings for ethanol production are threatening grassland bird populations in the Prairie Pothole states of Iowa, Minnesota, South Dakota and Minnesota.   The report blamed state and federal incentives for corn ethanol production for what it called “high increases in corn planting” and the resulting “destruction of natural habitat.”  

Schweiger was asked for his own views on biofuels such as ethanol and soy biodiesel. 

“Well, I think there will be some use of various ag crops,” he replied. “I actually think that there’s an opportunity in biogas.  If you were to take the corn fodder of corn residues and gasify those in a reactor, that will produce biochar.  You can put the carbon back in the soil in a way that stays there for a long time—actually improves the soil condition—while also producing gas off of these waste fuel crops.” 

Regarding climate change, Schweiger says the earth is warming at an alarming rate—and he strongly advocates stringent carbon reduction regulations.  His views are best summarized by the title of his latest book—Last Chance: Preserving Life on Earth.

AUDIO: Larry Schweiger (7 min MP3)

Northey filed his petitions and paperwork this week to seek a second term.  He was first elected in 2006. Northey is a corn and soybean farmer from Spirit Lake.

Buffalo County documents indicate that a New York-based company, Midwest Meat Packing LLC, has purchased the shuttered plant.  Waverly, Nebraska turkey producer Bill Bevans told the Lincoln Journal-Star that he is waiting to see whether the sale will once again give him and others a marketing outlet in the state.  Bevans says he’s heard the new owners plan to process turkeys, but there’s been no indication of potential volume or from where the turkeys will be sourced.

According to the Lincoln Journal-Star, Hastings Acquisitions LLC bought the plant at a bankruptcy auction this week.  That company is a joint venture of an Orthodox Jewish family from New York City and Lincoln Provision, Incorporated of Chicago, a food wholesaler. 

The Premium Protein plant in Lincoln was not part of the sale.  Officials say Hastings Acquisitions has 14 days to reach a deal to purchase that plant as well.

It’s the second sale of a closed meat plant in Hastings in the past week.  Jacksonville, Florida-based Bubba Foods announced last week that is buying the former Armour-Eckrich meat plan in Hastings and will producer frozen hamburger patties there.

Ag communications—officially called Communications and Information Technology (CIT)—will be eliminated as part of a three-point-six million dollar budget cut announced Tuesday by UNL chancellor Harvey Perlman.  The unit provides news releases, radio and TV programs, newsletters, web support and other information services for ag programs at UNL.

According to the Lincoln Journal-Star, eight of the 18 CIT employees will be laid off, with the others likely moved elsewhere within the university.  Some of the services provided by the ag communications unit will be picked up by the University Communications and Information Services departments.  Perlman says that the delivery of education information by UNL Extension and other ag programs will be preserved and reassigned to other divisions.

“We have had two years where pork producers have struggled with losing more than $20 for every hog they sold on average as we looked where grain markets were, feed prices for feeding out hogs and what they were getting from the marketplace,” Novak explained.  “ We are starting to see recovery. We are seeing prices that are offering pork producers an opportunity to return a profit. That is an important step for this industry. More importantly for our organization though we are looking ahead to the future and looking ahead to how we can improve pork marketing. How we can focus and refine the research and investments we are making on behalf of the pork producers and we are very very excited about the future to come.”

As for the next step, Novak said, “One of the things we have done this past year is to reach out to consumers. We conducted a 12 to 18 month consumer research project to understand what consumers think about pork, what they think about The Other White Meat advertising, and the way that we have communicated to them about pork. We have found out unfortunately that many folks are still listening to grandma or mom when they say that pork should be overcooked. Today we have a product that is healthy and safe and if consumers would cook it to a medium rare or medium consistency as opposed to over cooking it they would be serving their family a much better product. That is a very important message going forward; how consumers can enjoy pork in more ways. It adds flavor to menus. It adds diversity to menus. That is something we have tried to communicate in the past, but we are truly getting around the table again and rethinking the way that we communicate to consumers.”

It is  also important to communicate with consumers the animal welfare practices that the pork industry is involved in everyday.

“The pork industry, three years ago, at this national meeting adopted a set of ethical principles,” said Novak. ”It wasn’t because this was the first time that they discovered ethics.   These were the values and the principles that pork producers have lived with for years. Yet, suddenly three years ago the industry realized that consumers who no longer have a connection to agriculture – people who not only their parents but their grandparents may not have been involved in food production - that we needed to be able to reach out to those consumers and explain to them what farmers stand for today.  How farmers are committed to protecting the environment, providing better, safer food for tomorrow, as well as providing better animal care. So, the ethical principles that our pork producers adopted became the launching pad for the “We Care” initiative. That initiative encompasses a number of programs that our industry has including the Pork Quality Assurance Plus Program, and the Transport Quality Assurance, a lot of acronyms. But the bottom line for consumers is that pork producers are voluntarily engaging in programs to learn better ways to handle animals, protect the environment, provide safer, better, and higher quality food products to our American consumers. Those steps are going to be important for us in assuring and reassuring consumers about the safety and quality of food.”

There has been a movement toward local where food is concerned. How is the pork industry embracing that?

Novak said, “The issue of local and organic and natural production is vital to this industry and we know that it should be there as a choice for consumer. And I think that is a very important message that we want to share. We do certainly want consumer to have a choice of food products based upon their individual beliefs. To the extent that we want to reassure consumers that the products coming from a modern farm operation are safe, are high quality, are grown or raised in a proper manner. That is an important message for all consumers to understand. At the end of the day for consumers the difference is price. We know that some of our natural systems, some of the systems that aren’t using animal health products regularly produce fewer pigs. They have fewer pigs that are born alive. They have more pigs that get sick from illness and aren’t able to get to market. To that extent, there is a higher cost of production. Those farmers have to pay more to produce the pork that goes on the table. So the expectation is that when consumers see those products in a grocery store they are going to come with a higher price tag. For consumers who can afford that choice it is a great thing. For consumers who are simply looking to feed their family and maximize their food dollar we know that the modern systems we have are better for the animals in many ways. We have moved animals indoors to keep them out of the Midwestern winters and out of the snow drifts to ensure better quality and safety for those animals as well. So, those are some things that I know are a part of consumer discussion and yet we also know that many consumers don’t necessarily understand the methods behind modern production. That is going to be part of the story that we do want to tell consumers going forward.”

Novak suggests that those who want to be involved in telling the story of agriculture should do so, starting in their local community.  “First, the “We Care” initiative, a part of that, one of the ethical principles is that pork producers will be involved and engaged in their community. So, one of the programs we have is Operation Main Street. We have trained 700 pork farmers who will travel thousands of miles each year to visit Kiwanis, Rotary, Optimist Clubs, local Chambers of Commerce, any type of community gathering in a fifty to 100 miles radius of where they are living. They are willing to take their time and provide those audiences with information about pork production and why we do the things that we do on the farm. We are working with some of those Operation Main Street speakers to move into the blogosphere. We are teaching them about facebook and twitter. We have a number of pork producers out there watching the dialogue in social media and jumping in. They are protecting and defending their industry, sharing information about what they are doing on their farms with consumers. We have some pork producers who have actually opened live web links with cameras on their farm operation. So, if consumers want to see what is happening on a farm they have that opportunity. Those are just a few of the things that producers can do. Engaging with local media stations – we have a wonderful farm broadcast crew obviously that helps us share the message - but for producers to pick up the phone or send a letter to their local media stations and offer themselves as a resource is also a great step. The pork check off has a number of tools that can help producers get information that they can share with local media sources. Producers can go to pork.org.  We also have porkcares.org which is a brand new website that we have launched that helps talk about those issues we know consumers have questions about as far as production agriculture; and finally theotherwhitemeat.com has been revamped. It has lots of recipes for consumers who are interested in spicing up their dinner menu.”

Conversation with Chris Novak