R-CALF Grateful for Swift Action to Fix Broken Cattle Markets
Minnesota Ag Connection - 05/13/2020
Tuesday, U.S. Senators Charles Grassley (R-IA) and Jon Tester (D-MT), along with Senators Joni Ernst (R-IA), Cindy Hyde-Smith (R-MS), Mike Rounds (R-SD), Tina Smith (D-MN), and Steve Daines (R-MT) introduced a bipartisan bill that requires beef packers with more than one plant to purchase at least 50% of their cattle in the competitive cash market each day for each of their plants. The bill further requires that cattle meeting the 50% threshold must be harvested within 14 days of purchase. R-CALF USA CEO Bill Bullard issued the following statement in response to the bill's introduction.
"Our industry is grateful for the swift action by Senators Grassley, Tester and others to halt the ongoing erosion of our cattle industry's most critical market - the competitive cash market where beef packers purchase cattle for beef production and where price discovery occurs for the entire cattle industry.
"The largest beef packers have progressively shifted large numbers of cattle out of the competitive cash market and into contract arrangements where no price discovery can occur. However, the beef packers continue tying the price they pay for their contracted cattle to the razor thin cash market that is no longer capable of establishing a competitive price for cattle.
"This has contributed to the disconnect between the prices that cattle producers receive for their cattle and the prices that consumers are now paying for their beef.
"Today, consumers are paying near-record to record prices for beef while cattle producers are receiving seriously depressed prices for their cattle. This is an indication of market failure and Senator Grassley's and Tester's bill represents one of the first meaningful steps that Congress and the President must take to begin restoring competition to our broken markets.
"We are further encouraged by the non-preemption provision in the bill that allows individual states to require an even higher percentage of cattle to be procured from the cash market as this empowers states to get more involved in their respective cattle industries."