NCBA’s President-Elect Jerry Bohn Discusses 50/14 On AgriTalk
Greg Henderson, Drovers
May 14, 2020
The coronavirus crisis has “caused price discovery (in the cattle industry) to basically evaporate,” farmer, cattle feeder and NCBA president-elect Jerry Bohn, Pratt, Kan., told AgriTalk’s Chip Flory on Thursday. “We were barely in balance with supply and demand before the crisis, and now we’re backing these cattle up – we’re probably three to four weeks behind in marketing.”
Bohn admits the relationship between feedyards and packers is as stressed as it has ever been.
“There’s a lot of anxiety and anger about what's going on. This is the second black swan event in about seven or eight months after the Tyson fire,” Bohn said. “People are upset about the spread between boxed beef prices and cash fed cattle prices. Unfortunately, a lot of the bad ideas that have ever been born in the industry are showing up again.”
One idea gathering significant attention since COVID-19’s impact on cattle markets is a minimum percentage of cattle procured by packers each week be on a negotiated cash basis. Earlier this week Iowa Senator Charles Grassley and Montana Senator Jon Tester proposed a bill in the Senate that would mandate 50% of the cattle traded be on a negotiated cash basis with 14-day delivery. Bohn said NCBA does not support the idea of government mandates for the cattle markets.
“NCBA’s policy is that we believe it’s important to protect our members right to conduct and do business as they see fit that best meets the needs of their individual businesses,” he said. “And the bill Senator Grassley has proposed would mandate that many of our producers will have to change the way they're currently sell cattle. The question comes to mind is ‘what part of government's going to do that? Who's going to determine what's fair and what's legal and what's not? We believe that should be decided by the industry.”
Bohn said NCBA has a cattle marketing task force currently working on that issue. It’s not an easy issue to fix, “but we believe it should be an industry-led solution, not a government-mandated solution.”
In the mid- to late-1990s, Bohn said value-based marketing began to evolve. That was at a time when “beef demand was declining at a precipitous rate.”
Because of value-based marketing, Bohn says...
more, including audio [42:19 min.]
NCBA Responds to Proposed 50/14 Bill
Greg Henderson, Drovers
May 14, 2020
On Wednesday, National Cattlemen’s Beef Association (NCBA) Policy Division Chair and South Dakota Rancher Todd Wilkinson issued a statement in response to a proposed bill to regulate spot cattle trades. Introduced Tuesday by Sen. Chuck Grassley (R-Iowa) and Sen. Jon Tester (D-Mont.), the bill would require a minimum of 50% of a meat packer’s volume of beef slaughter to be purchased on the cash market.
"Currently, cattle producers utilize a multitude of methods to market their livestock, including the cash market. Increased price discovery will benefit all segments of the cattle industry — that is why NCBA has been closely working with key stakeholders, industry experts, and our partners in academia to develop tangible means to meet that end,” Wilkinson said.
“Any solution must not restrict an individual producer’s freedom to pursue marketing avenues that they determine best suit their business’ unique needs. Government mandates, like that being proposed by Senator Grassley, would arbitrarily force many cattle producers to change the way they do business. We will continue to work toward a more equitable solution and invite Senator Grassley, and other lawmakers interested in this conversation, to join us in the search for an industry-led solution based in free market principles."
Grassley and Tester’s bill would require “large-scale meatpackers to increase the proportion of negotiable transactions that are cash...