In today’s Beef Buzz, senior farm and ranch broadcaster Ron Hays speaks with National Cattlemen’s Beef Association’s Kent Bacus during the American Wagyu Association’s annual breed meeting in Oklahoma City. Bacus discussed uncertainty surrounding efforts to rebuild the U.S. beef cow herd, potential changes to livestock risk protection, trade with Canada and the importance of long-term stability for cattle producers. Part one of the conversation can be found here.
Market Uncertainty Could Discourage Herd Expansion
Bacus said uncertainty surrounding government intervention in the cattle market could make producers more hesitant to rebuild their cow herds. “I think that’s the biggest thing of all,” Bacus said. “The biggest concern is that any time the government starts to do this and they start to talk about where they’re going to intervene in different segments of the market, it just throws cold water on anyone’s ideas of trying to rebuild their herd or expand their operation.”
He said the cattle industry is already dealing with challenges involving succession and keeping future generations involved in the business. “We have real succession issues and multi-generational issues we need to address,” Bacus said. “The last thing we need is to encourage future generations to exit the industry.”
Bacus said building a stronger cattle industry requires stability rather than additional uncertainty. “We need to really focus on building a strong, resilient cattle industry and cattle herd, and you don’t do that with breeding uncertainty into the marketplace,” he said.
Producers Need a Stable Market to Rebuild
Bacus said government officials do not necessarily need to be experts in the biological process of raising cattle, but he emphasized the importance of listening to the people working in the industry. “We would hope they would listen to the industry that actually works on this and can help them understand that it’s important that we have that stable market, that stable opportunity to invest,” Bacus said.
He also addressed discussion about potential modifications to livestock risk protection that could provide additional incentives for heifer retention.
Bacus stressed that such changes should not be confused with a heifer retention tax credit. “They’re also looking at making some modifications to livestock risk protection to also incentivize further protections for heifer retention,” Bacus said. “That is not a heifer retention tax credit.”
He said NCBA does not support a heifer retention tax credit, arguing that government intervention of that type has not worked in the cattle marketplace. “So we do not want any kind of heifer retention tax credit. We don’t,” Bacus said. “That has never worked.”
Bacus said other tools or incentives could be considered, but he wants those decisions to focus on the long-term needs of the cattle industry. “If there are other ways, other incentives, other tools that can be made available, that’d be great,” Bacus said. “But we need USDA to look at that. We need them to consider what’s actually good in the long term, not what’s good for election day.”
He said the goal should be using existing tools while allowing market conditions to provide producers with the incentive to rebuild. “Let’s use the tools that we have,” Bacus said. “Let’s create a stable economy and a stable marketplace, and that is the economic incentive that producers need to rebuild the herd.”
Cross-Border Trade With Canada
Bacus also discussed trade concerns involving Canada and said the U.S. cattle industry has not been caught in the same trade disputes affecting some other agricultural commodities. “For the beef industry, cattle sector in particular, we’re still in a good spot because we’re not in the crossfire,” Bacus said.
However, he said continued discussion surrounding mandatory country-of-origin labeling, or M-COOL, and increased trade tensions could create additional uncertainty. “But the more rhetoric around M-COOL, the more saber rattling that happens,” Bacus said. “All that does is just pick at old scabs and it throws greater uncertainty into the marketplace.”
Bacus pointed to the amount of cattle and genetics that move between the United States and Canada as an important part of the relationship between the two countries. “The United States, we send a lot of calves north to Canadian feed yards, we also process a lot of cattle,” he said. “A lot of them are U.S. born that are fed in Canada and come back to the U.S.”
He said cattle also move through Montana into Alberta feed yards, while genetics are traded across the border throughout the production system. “There’s a lot of cross-border trade with genetics in every segment of production,” Bacus said.
According to Bacus, disrupting that relationship could create longer-term challenges for the cattle industry. “The more that we disrupt that broader relationship with Canada, the more damaging that’s going to be in the long run,” he said.
Flexibility and Independence in the Cattle Industry
Bacus said the cattle industry needs flexibility in where cattle are fed and processed, rather than additional consolidation. “We don’t need more consolidation in the industry. We need more flexibility. We need more independence,” Bacus said.
He said producers and other parts of the cattle industry need the ability to operate where it makes the most economic sense. “We need to be able to feed our cattle where it’s most competitive,” Bacus said. “We need to be able to process them where it’s most competitive. We need to be able to sell genetics where it’s most competitive.”
Bacus described Canada as a valuable trade partner for the cattle industry, while noting that continued escalation in trade tensions could create concerns. “Canada has been a valuable trade partner on this, and for now we’re still in a good spot,” Bacus said. “But the more this continues to escalate, that does raise a lot of concerns.”
China Remains a Major Trade Issue
Bacus also discussed the broader U.S. beef trade picture, including access to China. He said China remains a significant market for U.S. beef, but uncertainty has limited the industry’s ability to fully capitalize on that market. “China, while it is a massive market and it’s been a 1.2 billion dollar export market this last year, it was a fraction of that, and it’s because of the uncertainty,” Bacus said.
He said there are still issues involving plant listings and residue concerns, which he argued are not supported by science. “Even though the president was able to get export certificates renewed, we still have a lot of issues surrounding plants being delisted and residue issues,” Bacus said. “A lot of that is fabricated. None of it’s really supported by science.”
Bacus said long-term stability in international trade is important for cattle producers and identified enforceable trade agreements as an area where the U.S. government could provide that stability. “What we need is long-term stability,” Bacus said. “That is where the U.S. government can actually deliver long-term, meaningful success for cattle producers is securing strong, enforceable trade agreements with our trade partners, starting with China, and then build on that success.”
He said the cattle industry will continue watching developments involving Canada, Mexico, China and other trade partners. “I’m hoping that everything we’re seeing with Canada, with Mexico, with all these other trade partners, I’m hoping that that is all going to pale in comparison to the big victory that the president can deliver when President Xi is here next week,” Bacus said.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Ag Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR above for today’s show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
