The first quarterly report on levels of negotiated trade by region under the industry’s 75% rule
By Elliott Dennis, Progressive Cattle
05 April 2021
Dennis is Assistant Professor and Livestock Extension Economist, Department of Agricultural Economics, University of Nebraska – Lincoln
Last year, several pieces of legislation were introduced in both the U.S. House of Representatives and Congress whose principal aim was to increase the level of negotiated cash trade.
The cattle industry responded to proposed legislation by creating a voluntary framework, known as the 75% rule, that includes cattle feeder and packing plant triggers based on levels of negotiated trade and marketplace participation. The overarching objective is similar to the introduced legislation – to increase the frequency and price transparency in all major cattle feeding and packing regions.
The details and updates to this framework can be found here. To review, the 75% rule framework functions off a series of minor and major triggers. There are eight minor triggers (four cattle feeding and four packer participation). Minor triggers are summed within a quarter and aggregated up from weekly thresholds where three minor triggers equal a major trigger. A major trigger occurring in two of four rolling quarters would prompt the industry to seek legislative action. This policy can be adjusted given updates from literature, industry, and qualifying black swan events or ad hoc events that disrupt the normal beef complex.
This voluntary framework went into effect on Jan. 1, 2021. The end of March represents the first quarter to be analyzed. This article presents the first update on the regional performance of the industry framework as of March 29, 2021. A detailed analysis of the historical performance and potential considerations, from a previous In the Cattle Markets article, can be found here. Each-quarter updates will be made to monitor the current performance of the proposed industry framework and to reflect the most current market conditions.
Packer silos ...
Feeder silos ...
more, including tables