Beef Buzz News
LMA's Chelsea Good Says Fed Cattle Price Dictates Price Discovery from Top Down
Mon, 20 Dec 2021 10:25:56 CST
True price discovery happens in its purest form at livestock auctions. For most cattle, the last time they sell in their life is when they leave a feedlot to be processed. By that time, the level of competition to purchase cattle is not there, according to Chelsea Good, vice president of government and industry affairs for the Livestock Marketing Association (LMA).
Good told Ron Hays, director for Radio Oklahoma Ag Network, fed cattle pricing matters to the entire industry.
“In livestock auctions … you have multiple people competing for those animals that are sold at auction,” Good said. “Those are typically younger animals. That last transaction is an interaction between a feed yard and a packer. You do not typically see that same level of competition.”
She said that deficit of competition at the fed-cattle level is concerning for the LMA. Over the years, there has been a change to the way fed cattle are priced, through alternative marketing agreements or formula contracts. Although integration of AMAs and formula contracts have been a good thing for the industry, Good said when the cash market is thin, it affects price discovery from the top down.
“That seems to be the core of all these conversations,” Good said. “Earlier this year, our leadership pulled together a meeting that included the National Cattlemen’s Beef Association, the U.S. Cattlemen’s Association, R-CALF U.S.A., American Farm Bureau Federation and the National Farmers Union.”
Those are groups that do not often come together, but through LMA leadership, the groups agreed to meet over this important issue for the U.S. beef cattle industry, Good said. Some of the suggestions, such as the cattle contract library seen in the Grassley-Fischer bill came out of that meeting, according to Good.
Click on the LISTEN BAR below to hear more from Ron Hays and Chelsea Good as they talk about cattle marketing in the U.S. and what role LMA is playing in the process.
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.
Listen to Ron's conversaiton with Chelsea here.
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