A mandatory minimum for cash cattle trade would backfire, according to NCBA

Some policy solutions are starting to emerge for the livestock industry, after a series of four hearings on the challenges they face.

Price transparency and packing capacity were two common themes in the latest House Ag Committee hearing on the livestock industry.

While there have been some proposals to set a mandatory minimum amount of cash cattle trade to support prices, National Cattlemen’s Beef Association VP Todd Wilkinson says that plan is likely to backfire.

“We think we’re gonna hit the packers and I’m all for hitting the packers, I will tell you that. But, I think the bullets not going to go with the packers, the bullets going to go at the feeder and then trickle down to the cow-calf operator, because if that packer says, ‘I’m not going to purchase your cattle today because I’ve got a certain quota that I have to meet of a different criteria,’ suddenly we’re going to make commodity cattle,” Wilkinson explains.

He says that alternative marketing agreements allow producers to sell cattle at a premium, but he does agree with Oklahoma Farmers Union president Scott Blubaugh that the beef industry would benefit from a cattle contract library, similar to what the pork industry already has.

According to Blubaugh, “If we can get that contract library, we can get that data in there on all of the sales and not just part of the sales reported. That is going to help us a lot; make that be able to decide what really is true value of our cattle, because it’s so difficult right now.”

South Dakota Representative Dusty Johnsontold the group that he plans to introduce legislation on the issue soon, and USDA is already working on creating one for the poultry industry.

Witnesses also agreed on the need to expand packing capacity.

Francois Leger, an owner of a regional processing company, says that labor form would help: “We need cattle producers and cattle producers need packers, and we need workers. Currently, we see on average 20 percent of daily absenteeism in our plant. The labor shortage affects not only processing lines but also warehouse workers, maintenance positions, and other jobs that are so critical to maintaining the supply chain, like truck drivers.”

USDA has already announced $500 million dollars to help small packing plants get started or expand, but Ag Secretary Tom Vilsack says that they will also be looking into ways to ensure they can stay in business long-term.

“If you take a look at where the money is in this industry, there’s a lot of money being gained with value added, and I think the opportunity here for small and very small processing capacity is to add an additional value added component to customize, if you will, the product that they’re producing so that they get a higher value in the marketplace,” the Secretary noted.

Several lawmakers also expressed frustration that the Department of Justice has not completed its investigation in the big four packers, and Sec. Vilsack says that he has not been updated on when that might be done.


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