Farm groups continue to call for transparency in cattle markets
By Jennifer Whitlock, Texas Farm Bureau
June 4, 2021
Cattle ranchers frustrated with an ongoing lack of transparency in U.S. beef cattle markets are renewing their call for Congress to address areas of concern.
At a May meeting, member leaders of the American Farm Bureau Federation (AFBF), National Cattlemen’s Beef Association (NCBA), R-CALF USA, the National Farmers Union and the U.S. Cattlemen’s Association discussed issues that caused consistent market imbalances between the pricing of cattle and retail beef.
The groups combined members’ concerns into three main points, according to AFBF Director of Congressional Relations Scott Bennett. Those action items include:
· expediting the renewal of the U.S. Department of Agriculture’s (USDA’s) Livestock Mandatory Reporting and the creation of a contract library;
· encouraging investment into additional independent local and regional processing facilities; and
· receiving updates from the U.S. Department of Justice (DOJ) regarding its investigation into livestock markets and potential manipulation.
“A meeting of this caliber amongst all of our national cattle trade organizations in the same room at the same time had never happened before. And no staff were involved. No press were invited. It was just leaders of these organizations gathering together to discuss issues that everyone had consensus with,” Bennett said in an interview with the Texas Farm Bureau Radio Network. “Those three points that came from the meeting are interesting because, from an American Farm Bureau perspective, these are things we’ve been working on for a couple of years now.”
The bottom line, according to Bennett, is cattle ranchers and feeding operations not receiving fair prices for finished cattle while beef packers are receiving record boxed beef prices at the end of the supply chain.
“The packer has their role in making sure the end consumer continues to buy beef, but cattle producers and feeders also have that same role. There will always be a tug-of-war between producers and feeders and packers. It’s just a matter of fairness in the marketplace,” he said. “We have thousands and thousands of producers, but just four major packers. The buying power of four major packers is much more significant than one or two or four individual producers. It’s important that the marketplace be fair to our producers, so we can ultimately give the consumer an eating experience that causes them to come back for more.”
Another investigation by USDA into the boxed beef and fed cattle price spread resulted in a preliminary report released last July. In the report, USDA fell short of confirming any wrongdoing, but instead focused on action items the agency said could “foster a more transparent relationship between the prices for live cattle and the resulting products.”
The softer tone and stance presented by USDA might not have “cut as deep as some of our members would have appreciated,” according to Bennett, but there is still hope the DOJ’s report will be more comprehensive.
“There’s more pressure on the DOJ to show us what they’ve done and what they found will certainly ease the minds of producers so they can have an answer as to why we saw volatility after the Holcomb fire in 2019 and volatility and supply chain disruptions from COVID in 2020,” he said. “Quite frankly, here we sit going into prime grilling season in 2021 without a ‘black swan’ event and we still see unbelievable cutout at the packer level. So, we’d like to see some answers to that, too. But before we get to that point, I think seeing what the DOJ and USDA have already done would be a great first step.”
He noted some progress has been made recently into moving the DOJ to release more information on their investigation.
“[In a confirmation hearing before the U.S. Senate Committee on Agriculture, Nutrition and Forestry] USDA’s General Counsel Janie Simms Hipp made public remarks that she would encourage USDA to work with the Department of Justice on their investigation, so only two-and-a-half weeks out from this meeting, we’re already seeing material results,” he said. “We were really excited to hear those remarks from her, and she hopefully is confirmed by the Senate in short order.”
In her interview with the committee, Hipp said updating the investigation would be one of her “top five priorities” if confirmed.
During Hipp’s hearing, Ranking Member Sen. John Boozman of Arkansas also expressed hope that Congress would conduct its own investigation into cattle market issues.
“I believe this is an important topic that warrants review by the committee, and I urge the committee to plan as soon as possible to have a hearing,” Boozman said. “I think the livestock industry is in a very difficult situation right now. We need to understand exactly what’s going on in that regard and begin to offer solutions.”
Several letters were sent in support of action of those three key points since the groups met in May, including letters from congressional leaders to USDA and letters from groups to members of Congress.
A letter from NCBA to lawmakers underlined the organization’s desire to see swift congressional action in resolving issues within cattle marketing and the beef supply chain.
“Cattle producers are frustrated and with good reason. In sale barns and state meetings across the country, we’re hearing the same story of sky-high input costs and intense market volatility. Across the industry, there’s a consensus that market dynamics, which consistently squash producer profitability, are not sustainable for live cattle or beef producers,” NCBA President Jerry Bohn said. “As members of Congress create policy that directly impacts business conditions for our producers, it is critical that they consider the grassroots input and firsthand experiences of folks on the ground. Our letter provides that perspective and reinforces how urgently we need something to shift here to strengthen the security of the beef supply chain.”
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