Andy Groseta is a third-generation Cottonwood rancher who just finished his tenure as president of the National Cattlemen’s Beef Association. The 31,000-member lobbying organization recently held its national convention in Phoenix, with 5,000 members from all over the country in attendance.
According to most recent statistics, the U.S. cattle industry produced an astounding
28 billion pounds of beef for domestic consumption in 2007, and it exported an additional
1.4 billion pounds across the globe. And under the right conditions, Groseta believes the U.S. is capable of producing more.
Groseta, a lifetime cowboy who has at one point or another served in official capacity for what seems to be every beef association in the state, gave the Arizona Capitol Times his take on the challenge and promise facing cattlemen across the nation.
How did you get involved with the National Cattlemen’s Beef Association?
Our family has been in the cattle business for 87 years. We’re old family in north central Arizona. I got involved with the Yavapai Cattle Growers’ Association, and I’m past president.
I got involved in cattlemen’s issues to create a more favorable business environment for us and to try to make sure we have less government regulation and to make sure cattlemen have the freedom to choose our own business model. We support free, fair and reliable trade to continue to grow our beef-export business. We want to make sure we are focused on the consumer, and we want less government regulation and the right to manage our land and resources. We’re the true stewards of the land; farmers and ranchers.
I was vice-chairman of the Federal Lands Committee of the NCBA for a year, and chairman of the committee for three years, so you can see from running cattle on federal lands that’s how I worked my way up the leadership ladder of NCBA. I was vice-chairman of policy and chairman of policy, moved up as vice-president and president-elect and then president. In 2008 I was the president, and it was a great experience.
Were there any goals met under your tenure as president that you are particularly proud of or consider an honor?
Yeah, three or four goals. One was to continue to grow our beef export market to levels to not only match, but exceed our levels in 2003. That’s when we had the BSE (Bovine Spongiform Encephalopathy, commonly known as mad cow disease) outbreak and trade exports virtually shut down overnight. My number one goal was to reach what we did in 2003 or exceed it, and we came very close. We shipped $3.5 billion in beef and variety meats last year, and in ’03 we shipped $3.8 billion, so we came really close.
I took over in February (2008), and for my first official function I was asked by President Bush to be part of the U.S. presidential delegation headed by Secretary of State Condoleezza Rice to attend the inauguration of the South Korean President Lee Myung-Bak. We were trying to get U.S. beef back in South Korea, and we did achieve that. That happened mid-summer and it was a great accomplishment. That can easily be a $1 billion market for U.S. cattlemen.
Ninety-six percent of the world’s population lives outside the borders of the United States, and over the last ten years one billion people have moved up from the poverty level to the middle class worldwide. And as people get more affluent, they want to get off of rice and beans and eat meat. I wanted to make sure the number one choice of protein worldwide was U.S. beef, and we’re well on our way.
We’re shipping beef to over 100 countries. We’re shipping to Russia, and that was a very significant surprise last year. We have made a lot of progress. In order for cattlemen to remain profitable and pass our farms and ranches to the next generations, we have to remain profitable. The big window for opportunity is beef exports around the world.
I also wanted to get more young people involved in the cattle business. Our future is our young people, and they have a lot of energy and enthusiasm and ideas. We need them and they need us.
A third goal I had was to grow membership in our organization. The NCBA has 31,000 members nationwide, and we had a 7 percent increase in membership last year.
A fourth objective is to have all of agriculture, and specifically the cattle industry, to speak with a unified voice. Less than 2 percent of U.S. population is involved with agriculture, and there are fewer and fewer legislators at the Capitol in Phoenix or senators and congressman in Washington D.C. that come from rural backgrounds. Many of them are two or three generations removed from agriculture, so we need to be pulling together.
We seem sometimes to be fragmented. We’re very independent by nature and that works for and against us sometimes, but it’s very important for us to speak in an organized voice so we can be influential in the decision-making process.
Any low-points?
I would have to see our membership grow some more. That’s not really a low point, but right before my tenure we had the largest recall in U.S. history in Chino, California. That was an HSUS videotaping of downer cattle (NOTE: The video taken by the Humane Society of the United States showed workers abusing sick or crippled cows). Our staff at the NCBA did very well with issues management handling that matter. We had to handle that as an industry. Farmers and ranchers are very proud of the animals we produce, and we expect everyone in the food chain to handle them with good animal husbandry practices.
What I would like to say about that is I’ve told people while traveling around the country that the number one threat to animal agriculture and to the cattle business is animal rights activists. These people want to take cattle off the land and beef off the plate. The well-financed HSUS is part of the group, and we in the business need to be proactive and handle these people right up front.
None of us condone those kinds of practices and I was disappointed to see that happen, but it did and it made the news and we had to deal with it. That was a challenging moment for me and the NCBA, but our organization stepped up and handled that issue very well. We can’t afford any more of those impacts to our industry.
During the 2008 presidential campaign the topic of revising NAFTA to install some trade barriers to came up occasionally. In your opinion, would revisiting this agreement benefit American cattlemen?
No. Our two largest trading partners are Canada and Mexico. That’s the result of NAFTA. Sixty percent of all the beef we export goes to Canada and Mexico, and Mexico is our number one trading partner.
The Obama administration has shared with us that they would like to revisit NAFTA regarding labor and environmental issues. And I’ve said, why would we want to jeopardize relationships with our two largest trading partners? NAFTA has been good to the U.S. cattlemen.
Right after 2003, with the BSE incident, Mexico was the first to open their borders to U.S. beef. Not only are they our neighbor friends to the south, they are our number one trading partner.
What is the background of the dispute over country-of-origin labeling for meat and other food products?
This was created in the 2002 farm bill, and the NCBA was not in favor of COOL (country-of-origin labeling). In 2006, the chemistry of Congress changed, and during the 2008 farm bill discussion our organization took the lead to make the impact less harmful to our producers.
O
ur concern was the cost of the program would burden our producers; the paper trail and the cost of business would fall on producers. The interim rule was published Sept. 30 of ’08 and was finalized before President Bush left town. The interim rule impacted Mexico and Canada and discriminated against their product. Their cattle were being discounted, and speaking as past president of the NCBA, we’re very proud of our product. But on the other hand, country-of-origin labeling was created as a marketing tool, but it is being perceived by the market as a food-safety tool. There’s a lot of confusion by producers to retailers.
NCBA was a big proponent to get the rule finalized, and President Bush did do that before he left office. But it did get put on hold, so it falls back to the interim rule. The chairman of the House Agriculture Committee, Colin Peterson of Minnesota, requested the Secretary of Ag to ask the Obama administration to let this rule be finalized. This rule needs to be implemented so that we can let the market deal with it.
The reason COOL was created was to add value on the (American) product. We don’t know if consumers are willing to pay a premium for U.S. beef or not. Let the market sort it out and see what happens.  I’m sure there are going to be some issues. Canada has filed a complaint with the WTO (World Trade Organization), and so has Mexico. Let’s implement it, see what happens and we can revisit it in six months or a year and see if we can make it even better.
Are you expecting changes to the U.S. beef industry to occur with the new administration?
I congratulate President Obama. The NCBA worked with both the Obama and McCain campaigns prior to the elections. Once President Obama got elected, he assured the NCBA a seat at the table, and we met with the transition team in Washington, D.C. in December regarding issues that affect our industry.
We are looking forward to working with the administration. Some of our producers are worried we will have more rules and regulations impacting our industry, but we have dedicated staff working and monitoring these issues to make sure whatever comes out of it is favorable to the U.S. cattle business.
In October of 2008, a group of Arizona ranchers and farmers called on the governor to request that the EPA reduce its ethanol production requirements to increase the amount of available corn to ranchers who have been complaining about high feed costs. Do you think efforts like this will prove to be effective?
Yes. The association is all for energy independence, but were also against government mandates that create winners and losers in the marketplace.
In this event, the ethanol mandate favored the people growing corn and it has created major adverse impacts to the cattle feeders in this country. The cattle feeding losses during the first six months of 2008 was
$1.5 billion, and during the last 13 months it has been $3.2 billion. There has been a large equity-taking, and feed lots are closing and are for sale.
Continuing to subsidize the ethanol industry at the expense of the cattle industry risks our food production capacity and creates economic hardship for cattlemen in this country.
Do you think some of these requirements will be overturned?
I don’t know. But there will be vigorous debate.
The NCBA recently asked members of the U.S. Senate to oppose a stimulus package proposal to buy out hundreds of thousands of dairy cows and their milk. How come?
It’s another example of government favoring one segment of agriculture over another. We strongly oppose the buyout because it will remove 320,000 dairy cows from production. I’m told the culled beef prices will drop about $2 per hundredweight (per hundred pounds), and we’ll have an onslaught of cattle hitting the beef market. Whenever you have an oversupply, it lowers prices and these decreases in prices would be a huge blow to producers in this country.
We are very flexible in working in the marketplace, but when you have government mandates that favor one segment over another you have unintended consequences with another. The last major buyout was in 1986, and cattlemen lost $1 billion. There are still people in this business who weathered that storm, but we can’t weather that again.
Do you think beef is cheap for consumers right now?
I think our product is priced very reasonably for the American consumer. With the U.S. economy being down, there’s no question.
In general, how do you feel Arizona’s cattle industry is faring?
The cattle industry in this state is a $3-billion industry. Agriculture is a little over $9 billion, so one-third of that is cattle-related. We have our own sets of challenges and issues like Mother Nature and rules and regulations. But I think the cattle business in Arizona is alive and well.
I think the cattle business in this country has a very bright future. Short term, we do have some challenges with regulations, and the economy is a big one, but the worldwide demand for beef is tremendous. We want to make sure we are strategically located so we can provide that product to the people around the world.
I think some of the best times in the cattle business lay ahead of us. These are exciting times for my children and grandchildren. I think the future is very bright, but we have to get healed up with the economy in the short term.
Are there any legislative goals that you would like to see the industry pursue?
I think fewer taxes on businesses. One of the best ways to jumpstart the economy is to lower taxes and get some tax breaks and credits to the business community.
Are you troubled by the cuts made to Arizona state government, particularly the Department of Agriculture?
There’s no question that all of us are going to have to tighten up our belt. It will impact the services of government, and industry will have to step up more if we want the services to continue.
The Arizona Cattle Growers are having a winter meeting in a couple of weeks and I’m sure that issue will be discussed. We have a great working relationship with the leadership of Don Butler. He understands agriculture well, but there’s no question we’re in challenging times.