Friday, April 25, 2014

Mad Cow, Beef, Small Business

Above is a beef export example with a back story.

The policy of the USA Federal Government is stated as "Get Big or Get Out." This does not mean merely our policy is "big government and big business" but "big government, big business, get rid of small business."

Not only is that the stated goal, specific tactics run throughout our economy and rules and regulations to effect this policy.  One example is beef exports.

There is a wee problem of mad cow disease.  I've blogged on how it is illegal to test all of your beef for mad cow disease a while back...  it seems Japan stopped buying beef when we refused to assure safety.  An enterprising small cattle rancher proposed to the Japanese that he would test all of his beef, and the Japanese agreed to buy.  So big business stepped in:
Larger meatpackers opposed such testing. Their argument: If Creekstone Farms were to begin advertising that its cows have all been tested, other companies fear that they too would have to conduct the expensive tests.
And we can't have safe beef assured, why that would cost too much (a full ten cents a pound!).  So not only is small business denied a chance to compete, we are all denied safe beef.  Corporate profits today!
The Bush administration says the low level of testing reflects the rareness of the disease. Mad cow disease has been linked to more than 150 human deaths worldwide, mostly in Britain. 
Aha!  Wait, I thought the low level of testing was enforced by law. Now they say "You can tell when a disease is rare, there is low level of testing."  Buyers want tests, rule is low testing, innovators are forbidden to test, rationale is the low level of testing proves safety.  Wow.
A federal judge ruled last year that Creekstone Farms must be allowed to conduct the test because the Agriculture Department could only regulate disease treatment. Because there is no cure for mad cow disease and the test is performed on dead animals, the test is not a treatment, the judge ruled.
Well, kiss your career goodbye, judge.  You don't know how the game is played.  (And wanting to test for a disease has to be taken to a federal court?!)  That reasonable decision was appealed.
The U.S. Court of Appeals for the District of Columbia Circuit overturned that ruling, saying diagnosis could be considered part of treatment. "And we owe USDA a considerable degree of deference in its interpretation of the term," Judge Karen L. Henderson wrote.
Now there is the right policy! I bet we "owe" the USDA, the handmaiden of Big Beef, "deference."  "Autopsy is treatment." Ka-ching! Otherwise, we would not have the regulators captured by the regulated, with Big Beef telling the USDA what the rules will be, and what is necessary to kill off small business in USA.   The USDA controls the testing kits (wait, what?) and fears testing will undermine their assertion their testing is sufficient.  Well, I've demonstrated elsewhere federal inspections cannot be effective, all food security gets down to the cook, but widespread testing would prove the USDA is not effective.  Cannot have that!  Cannot afford to have people doubt, that might lead to change!

In the meantime, innovations in meat-handling are making for new products, and transportation possibilities.  Market preferences are changing.  Also, in another "states-rights" issues, the Federal rules that wiped out the small independent slaughterhouses are killing off state industries and businesses, so there is some push back.  In Washington butchers have taken to creating mobile slaughter-houses that comply with all of the whimsical USDA rules and slaughter at the farm, saving small farmers who cannot afford to ship 4 sheep to California to be slaughtered.  In Nevada I shared resources with state people unhappy with the rules, and intrigued by the Washington small business work-around. Local slaughterhouses are slowly creeping back.

Hong Kong had forbidden untested USA beef, in particular bone-in cuts since mad cow is most likely present there.  That restriction has been lifted now that it is believed cows under 3 years have not had time to develop mad cow disease.  Hong Kong loves its cooking bone-in, so YOY 2013 saw a 750% increase in bone-in beef to Hong Kong from USA.

All that lost business for years because big business did not want its beef tested for mad cow, and the USDA makes sure what big beef wants, big beef gets.

Started in 1995 by a couple in Kansas looking to offer the world beautiful beef, what happened to Creekstone Farms, after taking on the USDA?
Creekstone Farms Premium Beef is owned by an affiliate of Sun Capital Partners, Inc.  Sun Capital Partners, Inc. is a leading private investment firm focused on leveraged buyouts, equity, debt, and other investments in market-leading companies that can benefit from its in-house operating professionals and experience.  For more information about Sun Capital, visit Sun Capital Partners or connect with Sun Capital Partners on Street Insiders.
Get big or Get out!

None of this is to scare you away from the work.  Life has always been thus, and the tedious work of going up against, or legally around, the rent-seekers and martinets, just comes with the territory, for our sins.  You just deal with it. but I'll say it again, the most revolutionary act a person can make is to start a business.

Feel free to forward this by email to three of your friends.


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