Cattle
Frustration With Cattle Markets Grow
Both producer groups and Congress look for change . by Wes Ishmael
“ 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 ,” said Jerry Bohn , president of the National Cattlemen ’ s Beef Association ( NCBA ). “ As members of Congress create policy that directly impacts business conditions for our producers , it is critical 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 . NCBA has strong working relationships with members on both sides of the aisle , we have grassroots policy to back the actions we outlined today , and we hope the conversation in Washington around these critical policy areas will progress quickly .”
The letter Bohn referred to was one NCBA sent in June — with the support of 37 affiliate state cattle organizations — urging the leadership of the U . S . Senate and House Agriculture Committees to address critical areas of concern in the cattle and beef industry .
In simple terms , the most visible producer frustration revolved around cattle prices remaining stagnant , while wholesale beef prices rose to historic levels , with no producer leverage to alter the outcome . Contained within the dilemma is everything from what some consider too little weekly , regional cash price discovery to beef packing capacity stretched to the limits for too long .
Arguably , on one end of the spectrum of producer opinion are those who believe the problem has to do with collusion and market manipulation by the nation ’ s beef packers , four of which kill over 80 % of the fed cattle in this country each year .
On the other end are those who believe the situation is the result of fundamental economics and free markets finding their way , no matter the outcome .
The broadest swath of producer opinion seems to lie in the middle . They believe in free markets and economic fundamentals . They understand too little packing capacity , relative to the number of market-ready cattle is key to market challenges that go back well before supply chain disruptions wrought by the pandemic . They also understand that in particular regions and in particular weeks , there is little to no competition for fed cattle , even if there was lots more
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74 • JULY 2021