Commentary by Bill Bullard, CEO, R-CALF USA
BILLINGS, MT | Well, here’s a darn tough but relevant question in today’s economy: Just how do you change the world?
And here’s the answer: You pick one ailing industry that you know embodies America’s spirit and values; then you convene a small group of dedicated participants in that industry who can develop a solution to reinvigorate their industry; and then you encourage that small group of dedicated industry participants to fight legally and ethically to achieve that solution.
So now I’ve just described for you the U.S. sheep industry, which is out to change the world.
You see, the U.S. sheep industry, an industry representing the economic cornerstones of rural communities across America, has been decimated. Today 74% of the lamb meat in the domestic market comes from foreign countries. That means that what’s left of America’s sheep industry is maintaining only 26% of its domestic market. In just the past few decades it’s lost 62% of its sheep and lamb inventories, 60% of its full-time sheep producers, and the packing plants that manufacture lamb are operating at an estimated one-third to one-half capacity.
How did this happen?
Well, here’s a little history. The United States has historically protected its domestic sheep industry from global market distortions through the use of tariffs. These tariffs were put in place in 1890, 1921, and 1922, and then were increased under the Tariff Act of 1930. Back then, the tariffs were $3 per head for imported live sheep and seven cents per pound for lamb. But that was the last increase, meaning there haven’t been any adjustments for inflation for nearly 100 years.
When those seemingly low tariffs were applied back then, the U.S. sheep industry flourished, supporting hospitals, Main Street businesses, places of worship, schools, and the social infrastructure of rural America.
By 1942, while protected from global market distortions, the inventory of sheep and lambs in America reached 56 million. That inventory is only 5 million today!
And that’s because there’s been no adjustments for inflation, rendering those 1930 tariffs immaterial today. Consequently, and aided by global market distortions such as weaker foreign production standards, global meatpacker concentration, and a huge disparity in monetary exchange rates, the domestic lamb market has been overrun with cheaper, substandard imports.
If Congress had adjusted those 1930 tariffs for inflation, the $3 per head tariff on live sheep would be $53 per head today and the seven cents per pound on lamb meat would be $1.25 per pound. But they’re not! Because they haven’t been updated, the tariffs intended to protect the domestic sheep industry against global market distortions have done nothing to prevent the U.S. sheep industry from becoming the first livestock sector in America to fall completely to competition by imports.
In fact, it’s already the first livestock sector in America to be outsourced as American consumers now depend on foreign supply chains for the vast majority of their protein needs satisfied by lamb.
To change their world, in other words to make their world better for themselves and their children, a group of dedicated U.S. sheep producers have developed a solution.
Their solution is to update the nearly 100-year-old tariffs by adjusting them for inflation. And then, because their industry has been so overrun with imports, to enact a tariff rate quota system that limits the amount of foreign lamb entering the United States. By doing this, the domestic industry will be given the space it needs to begin recapturing more of its domestic market and it will do so while the updated tariffs help to neutralize the global market distortions.
They’re not asking for the moon. They’re simply asking for the same type of treatment that currently protects our domestic peanut and peanut butter industries, our domestic sugar industry, and a host of others.
This dedicated group of sheep industry participants is using every legal and ethical means to fight to change their world.
They’ve filed a petition with United States Trade Ambassador Katherine Tai seeking an investigation to determine their eligibility for one of the trade remedies available under the Trade Act of 1974.
And they’re simultaneously drafting congressional legislation that would update the 1930 tariffs and establish a permanent tariff rate quota system to effectively level the domestic sheep industry’s playing field.
They’re also asking their respective county commissioners to pass resolutions urging their entire congressional delegation to support the sheep industry’s effort to begin managing the out-of-control imports that are destroying their industry.
So, do you want to be a part of changing the world? To help or to just learn more, go to www.ProtectAmericanLamb.com.
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R-CALF USA’s weekly commentary educates and informs both consumers and producers about timely issues important to the U.S. cattle and sheep industries and rural America.
Ranchers Cattlemen Action Legal Fund United Stockgrowers of America (R-CALF USA) is the largest producer-only trade association in the United States. It is a national, nonprofit organization dedicated to ensuring the continued profitability and viability of the U.S. cattle and sheep industries. Visit www.r-calfusa.com or call 406-252-2516 for more information.