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Latest USDA Report Hints Potential Relief for Beef Industry

While trouble in the beef industry continues due to its smallest herd size since 1952, there is potentially some good news down the road. The USDA reported that the number of beef replacement heifers was up 2 percent from a year ago. Analysts on average actually expected the numbers to decline by 0.4 percent.

“It is too early to draw hard and fast conclusions from one data point but this may be an early indication that the cattle herd has the potential to start rising in a couple of years,” wrote J.P.Morgan analyst Ken Goldman in a note to investors.

Goldman called the report “potentially positive long-term for beef packers such as Tyson.”  He went on to say, “It is interesting to see beef heifers as a percent of the total beef cow herd at a nearly 20-year high. If this trend continues it would help alleviate some of the lack of cattle supply that packers such as Tyson currently experience.”

Other factors such as the severe drought force many analysts to remain cautious about herd size recovery. Livestock analysts Steve Meyer and Len Steiner cautioned that time will tell. “As for cattle herd rebuilding, the latest survey showed that the incentives are there but weather will remain a critical driver,” they noted in the Daily Livestock Report.

Heartland Drought is Hurting Workers From the Fields to the Stores

In mid-January, more than 1,800 workers at a Cargill-owned beef plant in Plainview, Texas learned that their plant would close just two weeks later, all because there simply aren’t enough cattle to keep the plant open.

The US Department of Agriculture says that the nation’s cattle herd shrunk by 2 percent in 2012, and the herd is now at its lowest levels since 1952. The cattle shortage is being driven by a severe, two-year drought that has dried up soil and wilted crops throughout America’s heartland and affected more than 80% of our agricultural land. As a result, there’s less corn, alfalfa, and hay available for feed.

So far, the drought has hit the beef industry the hardest, because cattle are typically raised in the states hardest hit by the drought. Unfortunately, if nothing changes there’s likely to be a ripple effect through the pork and poultry industries as well as the beef industry, threatening jobs of meatpacking and poultry workers, jeopardizing the livelihood of farmers who can’t afford to feed cattle, increasing prices at grocery stores across the country, and eroding consumer demand for beef – which in turn threatens even more jobs. The unfortunate reality is that this drought affects people across all industries – right down to butchers working in grocery stores thousands of miles away from the nearest feed lot.

Compounding the problem is the ethanol mandate – part of the 2007 Energy Act which requires billions of gallons of corn-based ethanol be mixed into the US gasoline supply. Because so much of America’s corn crop must go to fuel, it exacerbates the scarcity of corn already caused by the drought. The high demand for corn and its low supply means the cost of corn for feed is extraordinarily high. The situation makes it difficult and barely profitable to raise cattle and bring them to market in drought-ravaged states like Texas, Oklahoma, Nebraska and Kansas.

Advocacy work on behalf of UFCW members at the federal level has already begun. Our union will be working with the USDA and other agencies to consider meatpacking workers along with farmers and ranchers in its drought relief programs.

Elsa Gordillo is a steward at Cargill Meat Solutions in Schuyler, Nebraska and a member of UFCW Local 293. She, along with dozens of other UFCW stewards and staff attended a USDA regional workshop with USDA Secretary Tom Vilsack to discuss the agency’s drought recovery efforts held in Omaha at the end of last year. “We went to the USDA meeting so they could hear from UFCW members and meat packing workers. Everyone left knowing that people who work in plants are suffering from this drought too, and that our jobs and in many cases, our entire communities are at risk of plant closures. When the USDA or Congress takes action to help farmers and ranchers, they should also consider workers in our industry who are also at risk.”

UFCW members will also be working to advocate for meatpacking workers by educating members of Congress about how the drought, the ethanol mandate, the price of corn, and the cattle shortage hurt the livelihoods of meatpacking workers.

To learn more about UFCW’s food workers and meatpackers, visit http://www.ufcw.org/industries/fairnessforfoodworkers/

 

Pinnacle Foods Workers in Fort Madison Authorize Strike to Protest Company’s Plan to Eliminate Pensions

FORT MADISON, IOWA – Over 400 Pinnacle Foods Workers in Fort Madison who are members of the United Food and Commercial Workers International Union (UFCW) voted on Sunday, January 6 to authorize a strike to protest the company’s plan to eliminate their pension plan.  The Pinnacle Foods plant in Fort Madison manufactures canned food products, including Vienna sausages, Armour brand corned beef hash, beef stew and chili.

“In a volatile financial environment, Pinnacle Foods workers in Fort Madison are simply trying to protect middle class jobs and their retirement benefits after working hard to make their company profitable,” said UFCW Local 617 President Darin Boatman.  “I hope this strike vote sends a strong message to the company and moves the negotiation process to a successful conclusion.”

Defined benefit pension plans are the most secure retirement system for workers.  While many workers are forced to rely on less secure investments, like 401 (k) plans, or have no retirement at all, many UFCW members have retirement security through their pension benefits that provide for a monthly payment for their lifetime after they retire.

Pinnacle Foods, Inc. is backed by the Blackstone Group L.P., a private equity firm, and posted net sales of $2.5 billion in the 2011 fiscal year.

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The United Food and Commercial Workers International Union (UFCW) represents more than 1.3 million workers, primarily in the retail and meatpacking, food processing and poultry industries. The UFCW protects the rights of workers and strengthens America’s middle class by fighting for health care reform, living wages, retirement security, safe working conditions and the right to unionize so that working men and women and their families can realize the American Dream. For more information about the UFCW’s effort to protect workers’ rights and strengthen America’s middle class, http://www.ufcw.org/, or join our online community at http://www.facebook.com/ufcwinternational and https://twitter.com/UFCW