Beef Buzz News
NCBA's Todd Wilkinson Carries Message of Caution to Members of the House Ag CommitteeFri, 08 Oct 2021 12:31:25 CDT
All is not well in the U.S. beef industry. In the same week U.S. beef exports broke the $1 billion mark for the first time, the House Agriculture Committee had a hearing to review the state of the livestock industry. Many U.S. cattle producers believe the profits of the large meatpackers have not been shared equitability with producers.
U.S. Senator Charles Grassley was the lead-off witness for the U.S. House Agriculture Committee hearing Thursday, pitching mandated negotiated cash trade.
“I want to make it clear that I am not upset about paying more for beef,” Grassley said. “I am upset because farmers are not making a profit … we need serious reform, in the way our country markets cattle.”
The senator from Iowa introduced a bipartisan bill that “establishes that a minimum of 50% of a covered packer's weekly volume of livestock slaughter must be purchased through spot market sales from nonaffiliated producers.” Grassley’s bill is an amendment to the Agricultural Marketing Act of 1946.
“Kicking the can down the road is not an option,” Grassley said.
National Cattlemen’s Beef Association vice president and South Dakota rancher Todd Wilkinson vehemently disagreed with Grassley, taking the witness stand shortly after.
“The message I am here to deliver today is that complex problems rarely have simple solutions,” Wilkinson said. “Regardless of the origin of today’s problem, it is clear: There is no silver bullet.”
The NCBA has and still is strongly urging congress of the pitfalls of one-size-fits-all policy prescriptions, which can have disastrous unintended consequences.
“Careful consideration must be given to the risk/reward of enacting market-influencing laws for hundreds of thousands of American ranchers and million of beef consumers,” Wilkinson said.
Wilkinson was asked to voice his concerns about possible unintended consequences of government mandates of negotiated cash trade by Chairman of the U.S. House Agriculture Committee David Scott.
“Our concern is that if we shoot one bullet to try and cure a problem that has gone on for far too long, that we are going to decimate part of the producers,” Wilkinson said.
He explained that while the target would be the large meatpackers, in reality, feeders would take the shot and that damage would trickle down to cow-calf producers.
“If the packer says, ‘I am not going to purchase your cattle today because I have got a certain quota that I have to meet of a different criteria,’ suddenly we are going to make commodity cattle,” Wilkinson said.
Government-mandated negotiated cash trade would stifle the value producers get from participating in Alternative Marketing Agreements, which are credited with the development of higher-quality beef and have added about $700 million to the market as of 2019.
To Wilkinson, a part of the solution is to increase and diversify cattle processing capacity in the U.S.
“The market is down to so few players that they are largely controlling what is happening,” Wilkinson said. “If we had more packing capacity, they would not have this funnel that (producers) would have to pour everything through.”
He said the efforts to increase processing capacity by the U.S. Department of Agriculture and Congress is the right path in the eyes of the NCBA.
Click on the LISTEN BAR below to hear Ron Hays covering yesterday’s U.S. House Agriculture Committee hearing to review the state of the livestock industry.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR below for today’s show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
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