Ideas don’t always work out the way they are intended. For instance, an Australian firm that seeks to promote South Australia recently mailed – yes, mailed – a number of goldfish to various media outlets with the tagline: “Be the big fish in a small pond and come test the water.”
Predictably, at least 55 of the goldfish died in transit.
A spokesperson for the PR firm that mailed the goldfish said, “We offer our sincere apologies. There was absolutely no intention to cause distress or harm to the fish.”
The Australian goldfish promotion obviously produced unintended consequences.
On a much larger scale, unintended consequences were what many of us feared if the U.S. Department of Agriculture had fully implemented the proposed changes to its Grain Inspection Packers & Stockyards Administration (GIPSA) regulations.
Since June of 2010 when USDA first announced proposed changes, opinions have flowed from all directions. Those supporting the rule argue that changes are needed to restore market competition for livestock producers. Specifically, some believe packers have far too much leverage and they favor some producers over others.
Opponents believe that the proposed rules would greatly reduce the incentive to seek premiums through production marketing arrangements, thereby driving the cattle industry backwards to the time when all cattle were sold as a commodity, undoing the progress the industry has made toward quality the past two decades.
USDA received over 60,000 comments to their proposed rules, and I have received numerous comments of my own. Indeed, I’ve listened to several enthusiastic supporters of the proposed GIPSA rules over the past year, but my humble opinion remains that the proposed rules would cause many unintended consequences.
Further, it’s becoming increasingly hard to visualize this dominant leverage packers are supposed to have on the cattle markets. At least twice this year we’ve seen record fed cattle prices, and cow-calf producers are having a banner year. At the same time, packers have been losing money by the bucketful on every head they’ve purchased this fall – the Sterling Beef Profit Tracker pegged last week’s packer losses at $56.90 per head.
Finally, if the packing industry is so lucrative – with government regulatory agencies oblivious to their underhanded actions – why aren’t there more people trying to get into the packing industry?