1 MGMT 561 Business – Government Relations Spring 2017 FINAL EXAM Instructions (1) You have four hours from the time you download this 20-page exam from Owl-Space to re-post it back to Owl-Space. Exams that come in after this time will not be graded (they will receive a grade of zero). The only exception is if Owl-Space is for some reason “down” when you go to re-submit; then, I will accept by email ([email protected]) using the time that you sent the email as the submitted time. (2) You are permitted to study with any other students in the class, up until you take the exam, provided that none of those students has downloaded the exam (see 4 below). (3) You are permitted to use books and notes to complete this exam. It is “open book.” (4) Once you have downloaded the exam, you are not allowed to talk to any other students or persons about any portion of this exam until after the close date of the exam (April 28, 9:00 a.m.). (5) Please write and sign with your student ID (as your signature) the Rice Honor Pledge on page 1 of the exam. (6) In the header of each page, include your Rice student ID# and page numbers. Please do not put your name on any portion of the exam. (7) Please use single-spacing and a 12-pt. font. No page limits on your response. (8) The question appears on page 11. (9) Best of Luck!2 Maverick Ranch Natural Meats It’s just April and Mary Jane Pinto is already having a busy year! Originally from a small ranching town in rural northeastern Colorado, Ms. Pinto had just returned to Denver in early spring of 2015 after spending four years in Washington DC as one of the staff members of Scott Tipton (See Appendix 8 for his bio), the U.S. House of Representatives member from the rural 3rd district in Colorado. Now, she was hired by Maverick Ranch Natural Meats (Maverick), a Denver-based producer of beef that is free of hormones, steroids, and pesticides. Maverick, once a small farm owned by Roy and Bobbi Moore that in 1995 served just one store in Colorado, had expanded to incorporate over 200 producers from four western states and was serving beef to about 1,100 grocery stores across the U.S. Ms. Pinto was the first person that Maverick ever had hired to formally conduct government affairs, now in the newly minted position of Director of Government and Regulatory Affairs. Maverick hired Ms. Pinto because the politics over food in general, and beef in particular, were becoming increasingly complicated. While once all that meat producers needed to worry about were the agricultural support programs that made their way through the Agriculture Committees in the U.S. Senate and House of Representatives and administered by the U.S. Department of Agriculture (USDA), the issues had now increased on almost every dimension. The new century brought a host of popular concerns about food. The range was huge: from human health concerns related to obesity, cardiac and coronary diseases and diet, concerns about fast food (and popularized by authors such as Eric Schlosser’s best-selling book Fast Food Nation: The Dark Side of the American Meal), mad cow disease in the mid-2000s (see below), “pink slime” in processed meats, growth hormones and steroids in conventional beef production (see below), and animal husbandry among others. Recently, in 2016, a rotten meat scandal in Brazil, including at a huge plant owned by JBS Sao Paulo (with a large U.S. subsidiary, see below) aimed mainly at international markets made many consumers nervous about eating beef. Additionally, environmental groups protested against many elements of the beef industry. For example, Conservation International, a well-respected NGO, has for many years led international efforts in countries like Brazil against the cattle industry where more and more forests are cut for the expansion of herds (mostly for international exports). In the U.S., P.E.T.A., a NGO fighting against animal cruelty, began a campaign in 2016 to educate people about the suffering of herds in some of the colder plains states like Colorado and Wyoming, where animals oftentimes freeze to death during the winter.3 The U.S. Beef Industry In 2015, the U.S. beef industry sold 24.8 billion pounds of beef valued at 49.2 billion (wholesale prices). The U.S. is one of the world’s top producers (see Table 1 below). Table 1. World Beef Production, 2016. Source: FAS/ USDA (metric tons) US Beef Trade The U.S., along with Brazil, Argentina, and Australia, stands today as one of the top beef exporting countries in the world, selling about 1,187,050 metric tons with a value of $6.343 billion in 2016 (see Table 2 below). Today, major markets for US beef exports include Mexico, Canada, Japan, and South Korea. It is important to understand the historical context. U.S. beef exports had grown steadily since the early 1980s. However, in December 2003, the discovery of BSE (mad cow disease) in the U.S. from a dairy cow which had been imported from Canada led many importing countries to ban or restrict beef and cattle imports from the U.S. In 2005, the U.S. reported a second case of BSE, this time in a cow native to Texas. Table 2. U.S. Beef Exports, 2016. Source: USMEF. https://www.usmef.org/downloads/Beef-2007-to-2016.pdf4 The BSE situation dramatically altered exports around 2004 and 2005. Several countries, including Japan and South Korea, ceased all imports of U.S. beef. They only slowly opened their borders, as evidenced by the rise of exports after about 2007 (see Table 2 above). Other historically good markets like Mexico and Canada stopped beef while resuming full-scale imports only around 2008. And the European Union (EU), historically the most lucrative market for U.S. beef, was virtually shut down from U.S. suppliers after the BSE crisis. Since the BSE crisis, the U.S. beef industry has worked hard on quality control to rebuild confidence in American beef. The U.S. industry adopted public relations campaigns to promote the safety of U.S. beef abroad. Since the height of the crisis, U.S. beef exports to the Middle East were up 36 percent, to Russia up 68 percent, and to Central and South America up 83 percent. Industry targeted the important Japanese and Korean markets with advertising and diplomacy. For example, the “We Care” campaign in Japan and the “To Trust” campaign in South Korea have successfully assured consumers that American beef is safe to eat. The Korea-U.S. Free Trade Agreement in 2011 that provides growth opportunities for United States beef by eliminating Korea’s 40 percent tariff on beef. However, the important markets of the EU and China still are closed to U.S. beef (more below). Furthermore, the Trump Administration’s quick abandonment of the Trans-Pacific Partnership, a trade deal, signals an uphill battle for U.S. beef to regain market share in countries like Vietnam and the Philippines. Domestic Beef Consumption For many years, beef reigned as Americans’ number one source of protein. Beef consumption continues to be strong, and beef is the most preferred of the red meats. In 2016, retail beef represented slightly more than 50% of all red meats (beef, pork, lamb, and veal) consumed in the U.S. However, in spite of beef’s longstanding position as leading meat preference in the United States, consumers’ eating habits have changed. In 2010, chicken consumption surpassed beef consumption in the U.S. for the first time since statistics were kept. The USDA estimates 2016 U.S. per capita beef consumption at 57.4 lbs, down 13 percent from 10 years ago and down about 25 percent from 1980. Low income households report more beef consumption per capita than other households. Lowincome consumers eat 62 pounds of beef yearly—more than middle- and high-income consumers by at least 6 pounds. Low-income consumers are likely to buy a greater proportion of food for home consumption than middle- or high-income consumers because of the high price of restaurant-prepared food compared with grocery food. Low-income consumers ate 70 percent of their beef at home. Additionally, non-Hispanic Blacks are dominant beef consumers. NonHispanic Blacks consume 61 pounds of beef per annum, Hispanics 58 pounds, and White, nonHispanics consume 56 pounds. Consumers in the Midwest eat about 7 pounds more beef per capita than consumers in other regions, while consumers in rural areas eat about 9 pounds more beef per capita than did consumers in urban or suburban areas. Hormone and Steroid Treated (‘Conventional’) Beef Production Growth-promoting hormones are used widely in the U.S. and in many other meat-exporting countries in beef production. Hormone and steroid treated beef is much cheaper and quicker to produce per head than the organic method. These cheaper costs are shared by both the producers and consumers. In the U.S., hormones and steroids are used on about 70% of all cattle and nearly5 100% in large commercial feedlots, such as by Tyson Foods and JBS Holdings (a Brazilian MNC [?] but with a U.S. subsidiary), the largest beef producers in the U.S. These large producers dominate the $40 billion beef industry, with Tyson’s sales at nearly $13 billion and JBS at $8 billion. (In comparison, the entire organic beef industry has about $3.5 billion of sales). Beef producers use hormones because they speed up growth rates and produce a leaner carcass more in line with consumer preferences. The hormones are typically injected with an implant behind the cow’s ear. The devices are regulated and approved by the U.S. Department of Agriculture (USDA) and the U.S. Food and Drug Administration (FDA). Steroids are sometimes administered to cows that become weak or ill. Both governmental agencies have studied and approved for human consumption beef produced by such methods. Beef as a Possible Carcinogen In 2014, beef took a hit in the scientific community. A study published in the Journal of Clinical Nutrition by Dr. Yanik Mael of the UCLA Fielding School of Public Health pointed out that processed meats, such as bacon, sausages, and hot dogs, that generally are smoked, salted, fermented, and/or contain chemicals, are linked to several forms of colon cancer. The World Health Organization’s International Agency for Research on Cancer followed with a report in October of 2014 that such processed meats are detrimental to human health. Additionally, beef consumption may be linked to other types of cancers. The American Society of Clinical Oncology, a medical association, issued a directive that patients should replace red meats with fish, legumes as part of a cancer-free diet. As a result, many celebrity doctors like Mehmet Oz, “Dr. Oz,” recommend a diet without red meat. Many pop and athletics stars have sworn off meat, including Beyoncé, currently pregnant with twins, who is “worried about how meat might poison the brain development of her babies.” Super Bowl winning quarterback Tom Brady and his supermodel wife Gisele Bündchen have famously eschewed beef in favor of a vegan diet. Organic Beef Industry As of 2016, the United States has 63,782 beef cattle certified as organic, up from 20,285 in 2006. In order to be certified, producers must meet the USDA’s National Organic Program (NOP) standards, which include: cattle being fed 100 percent organic feed, no growth hormones, and pasture access. Sales of organic meat products are projected to surge due to several consumer perceptions. These include:  the long term health benefits and nutritional value of purchasing organic beef  the better treatment of the animals  better tasting and freshness  the linkage between mad cow disease and conventionally-raised cattle Most organic meat is produced on a small-scale with a more limited distribution infrastructure. Farmers sell significant volume of organic meat directly to consumers and the fraction that is6 marketed by retailers is usually priced three times higher than non-organic meat products. As a result, the organic beef represents about 8% share of the (total?) beef market in 2016. Mad Cow Disease’s effect on Organic Beef Consumption Mad cow disease, BSE, is linked to the use of cow feed that contains animal remnants, commonly used in the large cattle feed lots for the vast majority of conventionally produced cattle. In contrast, organically raised cattle are not fed animal remnants. No cases of mad cow disease have ever been reported on animals that have been raised their entire lives according to organic production methods. Organic beef is also seen by most consumers to be safer to eat than non-organic beef (See Consumers Poll in Appendix 2). The impact of BSE (mad cow disease) on the organic meat industry is multi-fold: 1. Consumer demand – Organic meat sales have increased markedly since the initial BSE scare in 2003, expanding sales almost 8-fold from about a 1% share to now about an 8% share. It is believed that organic beef sales in the USA could grow even more if there was more supply. 2. Retailer interest – traditionally, retailers (i.e. grocers) have had low interest in organic meat products. But after BSE elevated consumer awareness, it prompted retailers to stimulate demand by introducing organic beef products in their stores. Some specialty chains like Whole Foods sell only organic beef. Most beef sales, however, are through conventional supermarkets such as H.E.B., Kroger, Safeway, and Wal-Mart, which have longstanding relationships with conventional beef suppliers (i.e., Tyson Foods). 3. Supply side factors – Only 2.2% of American pastureland and rangeland is certified organic in 2016, however a rise in organic farmland is predicted as more meat producers take the organic route. 4. Supply chains – The formation of supply chain systems for a more efficient organic meat distribution is expected to accelerate as retailers demand greater volume from organic meat suppliers. Companies like Dakota Beef are poised to take advantage as they are setting up strong supply chains from farmers to retailers. More conventional meat companies are likely to enter the organic meat sector and utilize their (own? Is that what you mean?) distribution infrastructure. Additionally, private equity investors are actively buying range land to lease to companies so that more supply can get into these supply channels. 5. Imports – Demand for organic meat products surpasses domestic supplies creating opportunities for exporters in other countries. In 2016, organic beef, organic pork, and organic lamb was imported into North America from Australia, Brazil, and (in small quantities) Europe. Maverick Ranch Natural Meats (“Maverick”) In 1982, Roy and Bobbi Moore bought a ranch in rural Idaho to raise their sons. Shortly thereafter, they decided to buy a breed of cattle called “French Salers,” known for their highquality organic beef and ability to do well in this arid landscape. By the early 1980s they were winning livestock shows and in 1995 a natural foods market in Boulder, Colorado decided to7 start buying beef from the Moore’s. About that time, the Moore’s started the Maverick Ranch Natural Meats Company, maintaining their ranch in Idaho, but moving to Denver, Colorado. So delicious and popular with local consumers were Maverick’s meats, that they expanded production quickly. In the early 2000s, they bought several other ranches in Idaho and Colorado and began to contract with about 200 other ranchers in Idaho, Utah, Wyoming, and Colorado. In 2004, Maverick became a supplier to the U.S. Olympic Training Center in Colorado Springs, Colorado. Maverick also expanded their meat portfolio to include organic buffalo and pork. Business boomed for Maverick throughout the early 21st century. At that time, an estimated 1,100 markets in the U.S. now sold Maverick meats, which represents less than 1% of the total number of markets in the U.S.. The BSE or mad cow scare has pushed more retailers to offer natural meats as consumer demand has soared. As a result, Maverick’s sales have increased 40% since the first mad cow was found in the U.S. in 2003. “Life is about timing, and maybe the time is now for natural beef,” says Estelle Zibous, editor of Meat and Seafood Merchandising magazine. Their 2016 sales topped $350 million. However, the sales forecast for 2017 is flat because more natural supply is entering the marketplace. Maverick’s production method is to feed cattle only from grass and non-pesticide grown grains. Maverick uses no hormones or steroids. In 2013, Maverick implemented a new and expensive tracking system that gives each animal a digital history of its growth and any illnesses. They use GPS on each cow to more easily round up their herds. They also are experimenting with drones to monitor their cattle. The use of these advanced technologies minimizes the chance that any of their cows could pick up the mad cow disease, ensuring a good product quality. Maverick is a member of the National Cattlemen’s Beef Association (NCBA), the industry-wide trade group that includes the large ‘conventional’ beef producers like Tyson, as well as the organic companies like Maverick. The NCBA is a major contributor to Republican candidates (Appendix 5). In addition, Maverick is a member of the Organic Beef Association (OBA), another trade association, which only contains organic beef companies. Bobbi Moore of Maverick serves on the policy coordinating committee of the OBA, which focuses upon public policies affecting the organic beef industry. The OBA supports candidates for elected office from both the Republican and Democratic parties (see Appendix 5).8 Public Policy Issues in 2017 In spring of 2017, the beef industry faced three public policy issues: (1) Food Guides: The Healthy Plate; (2) Food Labeling; and (3) Trade with Europe. (1) Food Guides: The Healthy Plate (Congressional bill) The “old” Food Pyramid was a tool created by the USDA to help consumers choose which foods to eat in order to have a healthy diet (See Appendix 1). The pyramid is designed to graphically highlight foods which one can consume in larger quantities (for example, whole grains) and others which one should consume only small quantities (e.g., solid fats from animal sources). Professional nutritionists, dieticians, and other medical professionals had for years complained about many aspects of the old Food Pyramid. Some complaints were that, for example, it failed to distinguish between a whole grain roll and a doughnut; nor did it specify how much of each food one could eat. The American Medical Association, a powerful trade association representing medical doctors, had produced lengthy “white paper” reports for the USDA and for members of the U.S. Congress who had oversight responsibilities over the USDA (such as the Senate Committee on Agriculture, Nutrition, and Forestry and the House Committee on Agriculture) that criticized the old pyramid. Thus the “new” pyramid, called MyPyramid, was born in 2005. The new pyramid boasts a personalized plan that can help each consumer know what and how much to eat. MyPyramid created several new problems. First, it was difficult for many consumers to access. The old pyramid was often printed on posters and placed at elementary schools and public libraries and also sometimes appeared on boxes of breakfast cereal. Second, MyPyramid is fairly difficult to use: one would need internet access, find the web-site (http://www.mypyramid.gov/), and input private data about one’s own age, gender, and exercise habits, in order to receive a “personalized” dietary plan. Coming under increased scrutiny once again, in 2011 the USDA introduced “MyPlate” to replace MyPyramid. MyPlate provides a more understandable guide to healthy eating. It promotes filling half the plate with fruits and vegetables and the other half with grains and protein. Flaws remain with this new initiative, however. For example, health officials claim that visually it incorrectly depicts nearly equal servings of vegetables and grains. This opens the door for too much consumption of refined carbohydrates, which are known to promote obesity, diabetes, heart disease, and cancer. Health officials also continue to complain that MyPlate does not go far enough in distinguishing between certain types of foods. For example, it lumps lean beef into the same category, “Protein,” as ground beef, as well as chicken, fish, nuts, and beans (the latter four preferred by professional nutritionists). As an alternative to MyPlate, Steve Scalise, the Majority Whip (3rd in power on the majority side, in this case the Republicans) from Louisiana, and Nancy Pelosi, the Minority leader (first in power on the Democratic side) from California, jointly proposed a bill, H.R. 23, “The Healthy Plate,” which would direct the USDA to separate fish and poultry from beef. The Healthy Plate creates a new category on MyPlate for fish and poultry. As of March 2017, the bill has been assigned to the House Committee on Agriculture, Subcommittee on Nutrition (see Appendix 29 for Membership). The Committee’s Chair has expressed his interest to schedule hearings about it this summer. California and Arkansas are the largest poultry states in the U.S., raising 32 million and 28 million chickens, respectively. Louisiana is the fifth largest producer of chickens at about 8 million heads per year. The bill gained bi-partisan co-sponsors from Alaska, Washington, Florida, Massachusetts, Oregon, and Maine, where fishing still contributes to the local economies. Representatives from the primary beef states like Oklahoma, Texas strongly oppose it. The House sponsors have actively recruited bipartisan sponsors in the Senate for a Senate version of the bill. The Senate version is slated to be introduced later this month by Senators Diane Feinstein, Democrat from California, Rob Wyden, Democrat from Oregon, Lisa Murkowski, Republican from Alaska, and Susan Collins, Republican from Maine. Senator Mitch McConnell, the Majority Leader, from Kentucky, has not taken a public position on the bill. (2) The Food Label Act (Congressional bill) The Organic Foods Association (OFA), a trade association representing a variety of companies producing organically grown or raised foods, had long been advocating for labels on foods. Unlike the existing labels on foods that list in the order of use all of the ingredients (e.g., a typical box of cereal will list corn, sugar, vitamins, colorings), the OFA wants to list the process in which each ingredient came into being. For example, for corn, the OFA suggested labels that would differentiate between genetically engineered corn (i.e., Bt corn) and non-modified corn. Since most corn and many other grains such as soy beans and rice that are grown in the U.S. are genetically engineered, many large growers and other agribusiness firms such as Monsanto and Cargill have resisted such labeling. As a result, no labeling requirements on the process of food production exist as of 2017 in the U.S. Most consumers do not know very much about the foods that they eat (See Appendix 3). The costs of the poor dietary habits of Americans are very high to both businesses and the public (See Appendix 4). However, former U.S. President Barack Obama, had a nearly fatal heart attack on April 17, 2017, and is currently (at the time of the writing of this case) in critical condition at Johns Hopkins Hospital in Baltimore. While his favorite food on Michele Obama’s “Let’s Move” webpage (note that former First Lady, Michele Obama, directed a program for healthy eating and exercise, particularly aimed at children) was listed as broccoli, his ‘real’ favorite food was cheeseburgers. In 2014, the Washington Post ran a story about some of President Obama’s favorite burger places in Washington, including Ray’s Hell Burger, Shake Shack, and Five Guys. Doctors attribute President Obama’s poor health to stress as well as his appetite for cheeseburgers and beef steaks. Since his heart attack, most of the nation’s newspapers as well as the national and international news spent the week reporting on the ex-President’s lousy diet, the food industry, particularly the beef industry, all with a critical eye. The famous trial lawyer, Steve Susman, described by the American Bar Association Journal as “a voracious animal” who “scares people to his side,” held a press conference announcing that he would file a class action lawsuit on behalf of burger eaters everywhere. President Trump expressed his sympathy for President Obama but admits to loving fast food, “because it is fast, the fastest!”10 Jon Tester, Democratic Senator from Montana introduced S. 89, “The Food Label Act,” into the Senate in March of 2017. The bill was assigned to the Senate Committee on Agriculture, Nutrition, and Forestry, Subcommittee on Nutrition, Agricultural Research, and Specialty Crops (See Appendix 5). Many Democrats, including Charles Schumer from New York, and a few Republicans announced support for the bill, including John Hoeven from North Dakota and Joni Ernst from Iowa. The Food Label Act would require food producers to describe and to print on their product the processes that they use to produce their product. For example, beef farmers that use hormones to speed up the growth of their cows, or steroids to make them larger and more muscular, or pesticides in the feed, would have to clearly disclose on the packaging such practices to consumers. Likewise, beef producers who use natural methods, such as Maverick’s practices, would disclose their practices on the packaging. The Organic Beef Association (OBA), the trade group representing the organic beef producers, had sought such a bill for years, but without success. Their efforts were opposed by the National Cattlemen’s Beef Association (NCBA), the trade association representing all beef producers, hormone and organic, and dominated by the big ‘conventional’ hormone and steroid producers such as Tyson Foods and JBS. Tyson Foods, the largest beef producer in the U.S., is headquartered in Arkansas. The NCBA said that this disclosure bill would add many costs to the beef raising and distribution process which would be passed on to consumers. The big beef producers said it would be virtually impossible to segregate meat as organic or regularly produced as it went from ranches to feedlots and through the processing plants and into the grocery stores. Although a companion bill has not yet been introduced in the House of Representatives, House (Republican Party) leadership supports the bill in principle because it gives consumers the information to make choices about what they purchase in the marketplace and allows the free market to work. However, some Republican leaders have questions about how the USDA would implement such a law and the costs of doing so. (3) Trade With the European Union (Executive Branch Agency, USTR) The controversy over hormone and steroid raised beef between the U.S. and the European Union (EU) is long-lived. Even before the mad cow scare, in 1989, the EU banned beef imports from the U.S. due to production methods of conventional producers. The ban was painful to U.S. producers of hormone and steroid raised beef because Europe had historically represented about a quarter of all U.S. beef exports. This ban applied to all U.S. beef – conventionally produced (hormone) and organic. The EU refused to distinguish between these different production methods, because so much of the U.S. beef was hormone treated, especially back in 1989. Most beef in the EU is produced without the use of growth hormones. In 1989, the U.S. took the case in front of the World Trade Organization, the world’s governing body on trade. These negotiations and deliberations took place over a long time, nearly 10 years. In front of the WTO’s dispute settlement body, the U.S. prevailed in its arguments that the EU was illegally discriminating against U.S. beef and permitted the U.S. to seek trade remedies as of 1999. The WTO allowed the U.S. to place tariffs (taxes) on EU goods coming into the U.S. to make up for the damage done to the beef industry. However, these remedies were not helpful to11 the beef industry as the Europeans decided to maintain their ban against U.S. beef imports and merely pay the tariffs (levied on other products, such as cashmere sweaters and toy trains) to the U.S. treasury. The two sides continued to talk during the 2000s and by 2008 had almost brokered a deal where the EU would accept organic beef if the tariffs on the other products were eliminated. But the deal fell through because of the financial crisis in the U.S. and EU. Starting again in 2012 and continuing through 2016, a bi-partisan delegation of U.S. Senators and House members from the major beef producing states began to hold public hearings about the failure of the U.S.’s primary trade negotiator and part of the Executive Branch of the federal government, the Office of the U.S. Trade Representative (USTR), to obtain specific remedies for the beef industry. The congressional hearings were meant to prod the USTR to make the beef industry a more important part of the U.S.’s trade agenda. The congressional hearings appeared to pay off. The USTR, under the Obama Administration, used its negotiations on a wider trade agreement with the EU, called the Transatlantic Trade and Investment Partnership, to press the EU on opening its market to U.S. beef. After intense negotiations, the EU announced in December of 2016, that it might be willing to allow imports of organic beef, pending meetings with the U.S. negotiating team about how that policy could be implemented. The Trump Administration, despite the loud public bluster of the President against the “bad trade deals” of prior Administrations, seems willing to backchannel trade negotiations with the EU, one of its historically favorite trading partners. The EU announced in February of 2017 that it would revisit the hormone treated beef issue once ongoing studies were completed by scientists at leading European research universities (studies are due to be released in July 2017). This meeting between the USTR and the EU’s trade and agricultural negotiators is slated for December, 2017 in Brussels. Ms. Pinto’s Political Decision Roy and Bobbi Moore’s passion was raising cattle, not worrying about public policy. That is why they hired Ms. Pinto as Director of Government and Regulatory Affairs to conduct Maverick’s political strategies. They let Ms. Pinto know that they have great confidence in her and that they’ll give her “whatever it takes” to keep the great growth of Maverick beef rolling. Your Final Exam Question: It is April of 2017. What should Ms. Pinto do about the public policy issues and why?12 Appendix 1 USDA Food Guides The Old Food Pyramid (1992) The Old Food Pyramid was developed in 1992 by the U.S. Department of Agriculture. This “old” Pyramid (pictured above) is a graphic emphasizing that a healthy diet is built on a base of grains, vegetables and fruits, followed by ever-decreasing amounts of dairy products, meats, sweets and oils. The problem with this pyramid was that it failed to distinguish between foods within a category, such as between a doughnut and a whole-grain roll, or failed to tell a person how much food they could eat. The New Food Pyramid “MyPyramid” (2005) In 2005, the U.S. Department of Agriculture launched a “new” food pyramid called MyPyramid (above) with more specific advice on portion sizes and calories. Part of the new food guidance system also will help people get individually tailored nutrition and exercise advice. One must go to the internet at www.mypyramid.gov to use it.13 Appendix 1 (continued) USDA Food Guides MyPlate (2011) MyPlate was introduced by the USDA in order to address the complexity of MyPyramid. It can be printed (such as above) and displayed in public places such as elementary schools and hospitals.14 Appendix 2 Members of the House Committee on Agriculture Subcommittee on Nutrition 115th Congress, 2017-2019 Majority Party (Republicans) Glenn Thompson, Chairman, Pennsylvania Steve King, Iowa Rick Crawford, Arkansas Scott Desjarlais, Tennessee Vicky Hartzler, Missouri Rodney Davis, Illinois Ted Yoho, Florida David Rouzer, North Carolina James Comer, Kentucky Roger Marshall, Kansas John Faso, New York Jodey Arrington, Texas Minority Party (Democrats) Jim McGovern, Ranking Member, Massachusetts Alma Adams, North Carolina Dwight Evans, Pennsylvania Marcia L. Fudge, Ohio Michelle Lujan Grisham, New Mexico Al Lawson, Jr., Florida Jimmy Panetta, California Darren Soto, Florida Sean Patrick Maloney, New York15 Appendix 3 Consumer Poll 2017 Have you ever heard of hormone or steroid treated beef? Yes: 24% No: 58% Unsure: 18% Have you ever eaten hormone or steroid treated beef? Yes: 13% No: 33% Unsure: 54% Would you ever eat hormone or steroid treated beef? Yes: 20% No: 65% Unsure: 15% Do you think that hormone or steroid treated beef has a negative effect on your health? Yes: 64% No: 19% Unsure: 17% Is organic beef better for your health than hormone or steroid treated beef? Yes: 72% No: 10% Unsure: 18% Source: Conducted by the Reliable Polling Organization. Based on a random survey of 2,500 U.S. households, conducted between January 15 and February 14, 2017.16 Appendix 4 Estimated Costs to the Private and Public Sectors From Diet-Related Health Problems For the Year Ended December 31, 2016 Health Problem Linked to excess Cost to private Cost to public health food consumption companies in systems in terms of of terms of higher excess medical insurance and emergencies absenteeism Colon Cancer Beef, Pork $ 8.3 billion $ 15.5 billion Coronary Heart Potatoes, Refined $ 32.0 billion $ 96.4. billion Grains, Beef, Pork, Fats Diabetes Sugars, Alcohol, $ 13.7 billion $ 47.6 billion Beef, Pork High Cholesterol Eggs, Beef, Fats, $ 22.3 billion $ 94.4 billion Potatoes, Refined Grains High Blood Pressure Fats $ 17.4 billion $ 65.1 billion Source: Big Owls Consulting Group prepared this report on behalf of the National Association of City and County Governments (an interest group representing local governments throughout the U.S.). April 1, 2017.17 Appendix 5 Members of the Senate Committee on Agriculture, Nutrition, and Forestry Subcommittee on Nutrition, Agricultural Research, and Specialty Crops 115th Congress, 2017-2019 Majority Party (Republicans) Luther Strange, Chairman, Alabama Mitch McConnell, Kentucky John Boozman, Arkansas John Hoeven, North Dakota Joni Ernst, Iowa David Perdue, Georgia Pat Roberts, Ex Officio, Kansas Minority Party (Democrats) Robert Casey, Ranking Member, Pennsylvania Patrick J. Leahy, Vermont Sherrod Brown, Ohio Kirsten E. Gillibrand, New York Chris Van Hollen, Maryland Debbie Stabenow, Ex Officio18 Appendix 6 Campaign Contributions to Federal Elections 2016 Election Cycle Beef Industry: Top 10 Contributors Contributor Amount % Democratic % Republican National Cattlemen’s Beef Assn. $425,047 33 67 Tyson Foods $268,159 45 55 Smithfield Foods $166,000 11 89 Organic Beef Association $145,000 60 40 East Shore Beef Processing $117,000 33 67 Boar’s Head Provisions $ 71,000 40 60 Texas Cattle Feeders Assn. $ 56,600 29 71 Swift & Co $ 14,000 15 85 U.S. Beef Corporation $ 14,000 45 55 J. Boubour Boeuf Co. $ 10,000 100 0 Source: Center for Clean Politics, Washington DC. 2017.19 Appendix 7 Leadership Positions in the 115th U.S. Congress Senate and House of Representatives US Senate- 115th Congress US House of Representatives- 115th Congress 100 Senators 435 Representatives Democrats- 46 Republicans- 237 Republicans- 52 Democrats- 193 Independents- 2 (caucus with Democrats) Independents- 0 ; Vacancies - 5 Leadership *Majority Leader- Mitch McConnell (KY) Majority Leader- Rep. Kevin McCarthy (CA) Majority Whip- John Cornyn (TX) Majority Whip- Rep. Steve Scalise (LA) Minority Leader- Charles Schumer (NY) Democratic Leader- Rep. Nancy Pelosi (CA) Minority Whip- Richard Durbin (IL) Democratic Whip- Rep. Steny Hoyer (MD) *Speaker of the House Paul Ryan (WI) *Note: In the Senate, the Majority Leader is seen as the most powerful office. In the House, the Speaker of the House is seen as the most powerful office.20 Appendix 8 Representative Scott Tipton Brief Bio and District Information Republican-Colorado District 3 U.S. House of Representatives 115th Congress (first elected November 2010) Committees Small Business Committee (Chair of the Subcommittee on Agriculture and Energy) House Committee on Financial Services Caucuses Congressional Beef Caucus Congressional Small Business Caucus Leading Employment Industries of District 3 Ranching (Cattle) Oil & Gas Mining Recreation and Tourism