News
Value-added’ still has elusive meaning
There’s a lot of talk nowadays about Montana’s need to produce value-added products from its basic
agriculture commodities.
By JIM GRANSBERY
Of The Gazette Staff
The precise definition of value-added, however, can be elusive, as was demonstrated Wednesday during
an international business conference in Billings.
A panel of ag exporting experts tussled with the definition and each other during a workshop at Montana
State University-Billings, which for two days has hosted "Passport to Success: A Conference in International
business. The conference attracted more than 250 students, entrepreneurs and government officials.
For Jim Christianson, the debate over value-added products is "a bunch of baloney."
"My great fear is that we will forget what we do best," he said. For him, it is the quality of the wheat produced
in Montana that makes it valuable, not that it is turned into flour or bread.
Winter wheat in Kansas is selling at $2.70 a bushel," he said. "In Montana, it is $3.05. Just a quarter of a
percent increase in protein increases its value."
Christianson, the executive vice president of the Montana Wheat and Barley Committee, said turning
Montana wheat into flour or into bread is unrealistic in that "we have the highest freight rates in the world. The
transportation component is crucial.
"I know it is not sexy, but the inherent quality of the wheat is its value," he said.
Richard Owen, the executive vice president of the Montana Grain Growers Association, agreed with
Christianson: "If they knocked off 25 cents (a bushel) in freight rates, that would return $80 million to $100
million a year." That is money that would remain with the producer, he added.
That may be the crux of the argument as pointed out by one attendee, who questioned if value-added
products "provide benefits to a particular processor or make their way to the producer."
Ralph Peck, director of the Montana Department of Agriculture, said that better transportation costs add
value, but it is through marketing that "you get a superior price."
Getting a superior price for a superior product can be enhanced by restricting the USDA grading stamp to
U.S.-produced beef and imposing country-of-origin labeling on meat products.
That was the approach taken by Dennis McDonald, a cattle producer from Melville, who represented the
R-CALF organization, which has worked in recent years to get into law the two restrictions. The new farm bill,
now in conference committee, may include country-of-origin labeling. The Senate version calls for it, the House
version does not.
Richard Fritz, cautioned about what one wishes for. Fritz, a vice president for trade and development for the
U.S. Meat Export Federation said the United States sends thousands of beef livers a month to Egypt. "It would
not be a positive to have the U.S. flag on a product right now," he said referring to the anti-U.S. sentiment in the
Middle East.
A representative of the Alberta government told McDonald that country-of-origin labeling ignores the market.
Randy Skrepnyk said Montana cattle go to Canada to be fed, come back to the United States for slaughter, with
some of the meat going back to Canada.
"How would that work?" Skrepnyk asked. "Really, Canadian and U.S. product is the same."
Skrepnyk is manager of the U.S.-Latin America desk at the Ministry of International and Intergovernmental
Relation of the Province of Alberta.
Another angle to adding value lies in research, said Dave McClure, president of the Montana Farm Bureau
Federation.
Christianson agreed and said that identity-preserved grain varieties produced on contract provide the
opportunity for price enhancement for the individual farmers.
The panel was moderated by Michael Punke of Washington, D.C., who has participated in international
trade negotiations.
Punke put in a plug for trade promotional authority for the president. The authority would allow the
government to negotiate multilateral treaties and then present the final document to Congress for a vote.
Support for the authority, also known as "fast track," is split in the agriculture sectors across the country.
While Punke and Fritz both emphasized the need for U.S. negotiators, the authority is unlikely to be granted by
Congress this year because of the volatility it would create in this year’s elections.
Jim Gransbery can be reached at 657-1288 or at [email protected]
Copyright © The Billings Gazette, a division of Lee Enterprises
MATR Supporters (view all)
Sorry, we couldn't find any posts. Please try a different search.