Editor’s note- Senior Farm and Ranch Broadcaster Ron Hays was at Day One of the 2023 International Livestock Congress in Houston where the total focus was on the impact of ESG to Beef cattle. Over the next several Beef Buzz reports, Hays will explore what was discussed at the Congress as it relates to Cattle and this exploding concept.
In today’s Beef Buzz, Senior Farm and Ranch Broadcaster, Ron Hays, is back visiting with California cattle producer, Mike Smith, with more about the conversation on Environmental, Social and Governance and the problems he sees down the road for cattle producers.
Smith has concerns that corporate America is interested in demanding information about greenhouse gas emissions without providing any value back in return to the producers who participate.
“A lot of these companies that are asking the industry to do these things have publicly stated they have no intention whatsoever of providing premiums to those who can meet these requirements,” Smith said. “So, effectively, it is ‘play our game, abide by our rules or tough kittens.’”
Smith said is time for the beef industry to push back. The National Cattlemen’s Beef Association has taken a position to keep government out, Smith said, but he has concerns because NCBA also says to keep from requiring farmers and ranchers from reporting this information, and to just require publicly traded companies to do so.
“Therein lies the rub, because even though there is not going to be direct requirements to the government of cow calf operators, there very well could be requirements coming down the supply chain,” Smith said. “So, big corporate America. It is the Burger Kings, it is the McDonalds, it is the Wendy’s.”
These publicly traded companies, Smith said, will want to make certain they have access, either to borrow capital or have asset management groups invest in their corporations. To get these investments, Smith said publicly traded companies will have to ‘play the ESG game’ to receive preferential treatment.
“It is banks, it is investment groups with too much power that are taking their eye off the ball,” Smith said. “They are allowed to invest in companies who are excelling in these ESG scores and not focusing on their primary role. As asset managers, they are supposed to be looking after the best interests of people that are investing in their funds.”
Asset managers who are very concerned about ESG scores, Smith said, is unsettling because as the fossil fuel industry is being viewed as a ‘bad actor’, the beef industry could be next because of its contribution of greenhouse gas emissions.
This is an issue looking into the future, Smith said, as beef producers could be impacted with more requirements and standards.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Ag Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR for today’s show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.