Troy Sander Looks Forward to Price Discovery Progress in Cattle Industry

Listen to Ron Hays talk with Troy Sander about market transparency and price discovery.

Senior Farm and Ranch Broadcaster, Ron Hays, is visiting with the Chair of the National Cattlemen’s Beef Association’s Live Cattle Marketing Committee, Troy Sander. Located in Oklahoma City, Sander is also the Chief Operating Officer of Heritage Beef, overseeing feedlots in southwest and southeastern Kansas.

The 2023 Cattle Industry Convention coverage is being powered by Performance Ranch, a part of Zoetis, and by Farm Data Services located in Stillwater, Oklahoma.

Sander was part of the price discovery task force that was put together a couple of years ago in Denver and believes the industry has learned quite a bit from that process, which will help form a basis for some of the conversations this year at the Live Cattle Marketing Committee Meeting in New Orleans.

At the price discovery meeting in Denver, Sander was representing the Kansas Livestock Association.

“Our position and policy at KLA at the time is that we were against mandatory, and still is, against mandatory marketing, if you will, by the government,” Sander said.

Sander said a big focus of his was continuing to promote the importance of negotiated trade and transparency each week, while continuing to allow alternative marketing agreements and marketing devices that add value to the cattle and back down the production chain.

“I think that we are so wrapped around the idea that is has to be cash trade,” Sander said. “Really, what we are talking about is weekly negotiated trade for price discovery. That negotiated trade can also be negotiating a base price on a grid or formula marketing agreement.”

Despite challenges such as Covid restrictions and a high supply of fed cattle outpacing hook space, Sander said the market transparency and price discovery plan by the industry was able to accomplish a few important goals.

“We did make some progress on weekly negotiated trade in several of the states; in fact, Kansas weekly negotiated trade was up by about an average of about 9,000 head over the last couple of years,” Sander said. “Texas has increased about three to five thousand head weekly. Didn’t see much change in the Nebraska numbers, and Iowa was up about a couple of thousand head.”

Overall, Sander said weekly negotiated trade between specific regions increased by about 14,000 head per week.

“I really think that what came out of it more so than anything was just the awareness,” Sander said.

Sander said a big accomplishment of the plan was helping packers to see that a chance is necessary.

“I think it actually allowed them to get more open-minded about doing more negotiated grid-type marketing agreements each week, if you will, so I think there was a lot of awareness that came out of it more than anything, and we did increase some numbers.”

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