In this file:
· Sen. Rounds Announces Plan to Help Producers with Cattle Market Crisis
· Pandemic causing problems in cattle market
· Ranch group to Alabama cattlemen: Industry's market failure is by design
Sen. Rounds Announces Plan to Help Producers with Cattle Market Crisis
Katie James, FarmJournal's Pork
March 19, 2020
To help cattle producers with the cattle market crisis, which has been magnified by the COVID-19 outbreak, Senator Mike Rounds (R-S.D.) announced a three-part plan to media in a conference call on Thursday, Mar. 19.
The plan includes steps to provide immediate relief to cattle producers who are being “unfairly harmed” due to COVID-19 market disruption, supporting efforts to reinstate Mandatory Country of Origin Labeling (MCOOL) and urging a federal investigation into allegations of anti-trust violations by meatpackers.
Rounds began by emphasizing the need for investigation into the allegations brought against the packers. Rounds, along with Senators Kevin Cramer (R-N.D.), John Hoeven (R-N.D.), Steve Daines (R-Mont.), sent a letter to the Department of Justice urging it to investigate allegations of price fixing within the cattle market.
“Last summer, we saw the most recent allegation that resulted in the Department of Agriculture investigating the packers. That investigation is still underway. Additionally, we are asking the Department of Justice to definitively answer, whether a packer oligopoly exists within the cattle market and inherently creates an anti-competitive marketplace that unfairly disadvantages the cattle producer and the consumer. Cattle producers are seeing record losses at this point, and meanwhile, the shelf price of meat is at record highs and box beef prices are increasing as well,” he says.
The reality, Rounds says, is that there’s an inverse correlation between the producer’s price and the consumer’s price. If the Department of Justice finds no violations, then the statutory environment of the industry must be reconsidered, because the status quo isn’t working.
Rounds also sent a letter to President Trump supporting efforts to reinstate MCOOL...
Pandemic causing problems in cattle market
By Stephen Lee, Capital Journal (SD)
Mar 19, 2020
The effect of the COVID-19 pandemic is hitting close to home with South Dakota cattle producers and at Fort Pierre Livestock Auction.
The sales ring sells mostly calves born and pastured in South Dakota, usually thousands each Friday, as “feeder cattle,” from 350 pounds to 800 pounds. The buyers get them fed up to “fat cattle” status of about 1,350 pounds when they are ready to be slaughtered at processing plants and turned into beef.
Four major firms, Cargill, Tyson Foods, JBS USA Food Co. and National Beef Packing, control more than 80% the nation’s beef processing plants, said Bryan Hanson, an owner of Fort Pierre Livestock Auction.
For decades, cattle producers have said there is collusion that keep prices low to producers.
The pandemic of recent weeks has added a twist: as restaurants have closed, people have filled grocery stores, some in ‘panic-buying” mode, and that’s increased demand for beef, among other things.
“The COVID-19 virus has been used as a tool by the packing industry to lower the price of fat cattle to the producers,” Hanson told the Capital Journal on Thursday. “At the same time, the consumer has been stocking up on beef, which has created high demand for beef.”
The margin between low prices that producers are receiving for their cattle and what packers are making on the hot retail beef market have rarely been this large, Hanson said.
Prices for fat cattle were mostly under $1.20 per pound this week, after being mostly around $1.42 for several months
Meat packers are making a profit of $600-$700 a head on fat cattle, based on the margins between the high prices for boxed beef versus what packers are paying producers for fat cattle on the hoof, Hanson said.
Meanwhile, those selling cattle to packers are losing $300-$400 per head “on the cattle being killed now,” Hanson said. That means those producers, to re-fill their feedlots, won’t be able to offer impressive prices to ranchers bringing in calves to Fort Pierre...
Ranch group to Alabama cattlemen: Industry's market failure is by design
Source: Ranchers-Cattlemen Action Legal Fund United Stockgrowers of America (R-CALF USA)
via Aberdeen News (SD) - Mar 19, 2020
BILLINGS, Mont. — Speaking Friday in Falkville, Alabama, to area cattle producers, R-CALF USA director for the region and past R-CALF USA president George Chambers, and the group's CEO, Bill Bullard, provided an update on the state of the U.S. cattle industry.
Leaders from the Alabama Cattlemen's Association, a state affiliate of the National Cattlemen's Beef Association (NCBA), were present for the presentation and challenged R-CALF USA during a lengthy question and answer period on several of the group's reform-oriented initiatives. R-CALF USA answered every question and did not adjourn the hours-long meeting until every question was addressed.
"Your industry is not in the shape it's in because of droughts, floods, a strong dollar, competing proteins, or because you are poor managers or inefficient," Bullard told the crowd adding, "No, your industry is in the shape it's in by design — the design by some of the most powerful political and economic forces ever to march the halls of Congress.
He said the audience need only look at their sister hog, chicken and sheep industries to learn of the model that the multinational packers have already perfected in those sister industries and that they are now applying to the cattle industry, with the goal of capturing control of the entire live cattle supply chain away from independent cattlemen and women.
Bullard was asked what other initiatives R-CALF USA is pursuing in addition to trying to pass new legislation to require mandatory country-of-origin labeling (M-COOL) on all beef sold in America's grocery stores and the group's antitrust lawsuit against the nation's top four beef packers. He responded by stating that back in 2007 his group urged the introduction of a spot market protection bill to require packers to increase their purchases within the industry's cash market — its price discovery market.
But, Bullard explained that the spot market protection reform effort along with several other reforms such as their ban on packer ownership of livestock and their legislation to reform the packer's formula contracting methods that allow packers to accumulate captive supplies, were all defeated by the meatpackers and the NCBA.
His point was that the market is dysfunctional today because the meatpacking lobby had prevented the reforms R-CALF USA has been seeking for years, including proper enforcement of U.S. antitrust laws, M-COOL, and the rulemaking to implement the protections contained in the near 100-year-old Packers and Stockyards Act.
He said the current market's dysfunction, as evidenced by "strong beef demand, strong beef exports, and a continued willingness on the part of consumers to pay near record prices for beef, all while cattle prices remain seriously depressed" are the result of the failure of cattle producers to join together to change the negative trajectory of their U.S. cattle industry.
An Alabama cattleman criticized Bullard for supporting the rulemaking to prohibit undue preferences under the Packers and Stockyards Act because, as he said, the rulemaking would limit producers of high quality cattle from receiving a premium in the marketplace, arguing that packers would be forced to pay the same price for cattle regardless of the quality.