Beef Buzz News
Dr. Bart Fischer Says Government-Mandated Cash Cattle Trade Could Reduce Prices to Cow-Calf Producers
Fri, 22 Apr 2022 11:00:29 CDT
Texas A&M's Dr. Bart Fischer, former Chief Economist of the House Ag Committee talks with Ron Hays, Senior Farm and Ranch Broadcaster, on the work going on at Texas A&M on the cattle markets, and a hot topic for those in the cattle business right now- market transparency and mandatory cash cattle trade.
The agriculture and food policy center at Texas A&M University has been working with economists from across the country on the U.S. Beef Supply Chain. In fact, they put out a book after doing a workshop last summer on cattle markets.
"Two years ago, when all of these issues started heating up, and our congress was in the process of needing to reauthorize mandatory price reporting for livestock, the house, on a bipartisan basis asked us to start looking into these issues," Fischer said. "So, we coordinated with economists from all over the country- about 17 different co-authors- and ended up publishing a book last fall that digs into all of these issues."
Following the publishing of the book, Fischer said the Senate launched their compromise between Senator Charles Grassley of Iowa and Senator Deb Fischer of Nebraska. Senator John Boozman, ranking member of the Senate Agriculture Committee then asked us to study that proposal, Fischer said, and the compromise that came after as well.
Growing up on a cow-calf operation, Fischer said he understands where people are coming from on this price-reporting issue.
"We have had the rub between the cow-calf sector and the packers for a hundred years in this country, so it is not new," Fischer said.
In this particular case, Fischer said we are looking at imposing mandatory minimums of the amount of transaction volume that has to be done by a negotiated framework.
"I get that the idea is to introduce transparency, so I see nothing wrong with the motivation there to try to help producers," Fischer said.
The concern we see in, virtually, every economist we have worked with around the country, Fischer said, is that the solution designed to help at the farm level ultimately could end up reducing prices the cow-calf producers see at the farm gate.
"That is really the message we have been conveying is to be very careful about some of these proposals that are being offered because it may very well have the exact opposite effect," Fischer said.
We see nothing wrong with trying to improve transparency to help improve prices for producers, Fischer said, but the concern is that some of those solutions may actually end up making things worse at the farm gate.
Another concern with mandatory cash trade is that value-added programs may be penalized.
"A lot of this was innovation from the ground up," Fischer said. "It was designed to help capture value-added and capture and distinguish quality."
More in-person negotiation, Fischer said, is an example of these issues making their way back up to the farm gate. Added value programs were created to capture quality and contribute to the successful cattle industry we have in the U.S. today, Fischer said.
Click on the LISTEN BAR below to hear more from Bart Fischer and Ron on mandated price reporting.
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.
Ron talks with Bart Fischer on Mandator Price Reporting
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