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Cows

A cow lies in a field Sept. 10 near Antelope Hills.

CASPER, Wyo. — Earlier this year, the United States Department of Agriculture required ranchers moving their livestock across state lines to implant their animals with an electronic chip to track them throughout the process, arguing that such a program would make it easier to understand the origin of disease and defects.

But now a group of Wyoming ranchers – who depend almost exclusively on services across state lines for their businesses – are suing over those rule changes, arguing they could have a negative impact on their operations and put them at a competitive disadvantage against some of the nation’s largest cattle producers.

Filed Oct. 10 in the U.S. District Court of Wyoming, the lawsuit claims an April guidance document from the USDA puts unnecessary and onerous regulations on cattle producers that the plaintiffs – which include several prominent ranchers in Wyoming as well as the vocal lobbyist group Ranchers Cattleman Action Legal Fund United Stockgrowers of America – believe were improperly rolled out and are unfairly slanted against independent cattlemen in states like Wyoming.

The heart of their argument focuses on the seemingly mandatory use of remote frequency identification tags – or RFIDs – on all cattle raised and produced on their land, which the plaintiffs say would cost them significant sums of money competitors in other states would be exempt from.

“This is critical in today’s marketplace, where the current marketplace is not even returning the cost of production to many cattle producers,” R-CALF USA’s Chief Executive Officer, Bill Bullard, said in an interview with the Star-Tribune. “This could, in fact, cause the exodus of ranchers who are operating in outlying states, where their cattle must be shipped across state lines in order to reach the conclusion of the live cattle supply chain.”

The USDA did not respond to a request for comment.

The lawsuit

At the crux of the ranchers’ complaint is not just the economic implications of the rule changes – which they argue could cost “billions of dollars” industry-wide – but whether or not the tracking requirements were, themselves, properly implemented.

Recognizing a need to standardize its methods for tracking livestock, the USDA in 2011 began a formal and public rulemaking process that, two years later, resulted in a list of official identification techniques producers would need to meet in order to engage in the market. Because different states have different ways of doing things, acceptable mediums were purposefully made to be flexible, and included everything from brands and tattoos to ear tags and RFIDs – which are more expensive to implement but, simultaneously, add value to the beef.

The rules, according to those interviewed by the Star-Tribune, were just what producers today hoped they would be, written in a way that was intended to be cost-effective and flexible for the livestock producers.

The final rules weren’t, in fact, final, and several years later, the USDA has attempted to amend those regulations with a requirement for ranchers who engage in interstate commerce to use RFIDs or face significant consequences. In the lawsuit, attorneys for the ranchers argue that the USDA’s new rules did not follow the process that was followed when creating those 2013 rules – essentially, creating guidelines to punish ranchers for not following a set of rules that were never formally approved into law.

In Wyoming, this is a problem.

Situated next to two strong cattle producing-states and with no processing plants of its own, Wyoming’s livestock producers often find themselves relying on states like Nebraska and Kansas, whose ranchers – if processing their beef in-state – would be exempt from the new law. With a new RFID requirement, Wyoming ranchers would now find themselves on an uneven playing field with competitors who are sometimes located only a few miles across the border, putting Wyoming beef at a competitive disadvantage.

“Right out of the box, you have a huge discrepancy between states with packing plants and states that don’t,” said Harriet Hageman, a former Republican candidate for governor and an attorney representing the ranchers on behalf of the New Civil Liberties Alliance, a Washington D.C.-based law firm. “So one sector of your cattle industry is going to be unfairly burdened by this, and another is not. That creates an economic advantage for a group of people that happen to live near a packing plant.”

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Why is this happening?

For R-CALF USA – a vocal, if controversial, industry group for independent ranchers – the latest lawsuit comes as another in a long line of litigation intended to fight back against what the organization sees as an aggressive strategy to alienate independent cattle producers in favor of the meatpacking industry and large-scale producers like Cargill and Perdue, which have a greater ability to absorb the costs a tracking program would entail – a strategy laid out in full by Bullard in a speech at the organization’s August conference.

Also speaking at that conference was fellow plaintiff Tracy Hunt, a Newcastle-based rancher and attorney whose son, Hans Hunt, currently serves as a member of the Wyoming House of Representatives. At the 2019 conference, Hunt – who declined comment for this article – spoke of an effort by some of the world’s largest producers to implement environmental and other rules and regulations written by big producers, for big producers, which organizations like R-CALF USA could price their clients out of the industry.

“They’re totally unnecessary and not helpful, and nothing but burdensome and costly and add to your inability to complete,” Hunt said at the conference.

“And if you don’t comply, you lose access to the marketplace, and that’s that,” he added.

With the implementation of RFID requirements, some – like Bullard – have been left wondering what problem the USDA was trying to solve. Prior to the regulations, the United States’ beef supply chain was already one of the world’s safest, according to a 2016 study published by the Journal of Korean Medical Science and, since the passage of the 2013 rules, some ranchers have voluntarily decided to implement RFID tracking systems and have been rewarded for doing so.

“In other words, it’s market-driven,” Bullard said. “We support that – we have members who are participating in these types of systems, and they are currently receiving a premium in the marketplace. But once a system like this is mandatory and everyone is doing it, then those who are now participating for economic reasons will see their premiums evaporate because no longer would the meatpackers have to pay the producers for incurring the cost of using this kind of a system.”

“We think that is really the driver here,” he added. “The packers want it, and they want the government to mandate it so they don’t have to pay for it. They want the government to gift them this additional value in the supply chain through a mandatory requirement.”

A path forward

Neither Bullard – nor groups like the Wyoming Stock Grower’s Association – are necessarily opposed to traceability initiatives, both saying that while they don’t necessarily improve the ability to trace diseases, they can add value to the beef that is produced with these devices.

“Is it an inconvenience? Sure. Is there some cost involved? In most cases, yes,” said Jim Magagna, the director of the WSGA. “But is it in the best interests of the industry? As long as it’s done the right way, we tend to think so.”

However, both believe that any directives should be driven by the market itself – not by the government.

“We’d like to see our industry becoming more aggressive in supporting things like RFID and identification tools,” Magagna added. “What we don’t want is for that to come as a requirement from the government. We see real value in being able to do animal disease traceability, and our policy is that it should be implemented at the state level.”

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