Senior Farm and Ranch Broadcaster, Ron Hays, is talking with Terrain’s Chief Research and Analytics Officer, Don Close. Among other things, Close has previously worked as a senior animal protein analyst at Rabobank, and as a market director for the Texas Cattle Feeders Association.
Terrain is an exclusive offering of American Ag Credit, Farm Credit Services of America, and Frontier Farm Credit. Hays and Close talk about one of the projects Terrain has been working on involving looking into the Cattle Contracts Library Pilot Project.
“We have tracked a lot of data, and we have stacked a lot of data between the existing Mandatory Price Reporting reports and the premium and discounts schedule that is under the contract library,” Close said. “Bottom line, what we have found is with a few exceptions, but most of those premium and discount characteristics track very well with the actual market data that is reported under mandatory price reporting with the premiums and discounts that are recorded under the contract library that is only looking at the contracts. It is not looking at actual cattle traded.”
Looking into that data, Close said it has been found that producers can take what they are being offered for a contract by characteristic and match it with the LMR premium discount/contract library discount, and between the three, they can be in the loop before they sign.
“That enables the producer to monitor if those prices are changing over time,” Close said. “We have got six months worth of data in the pilot, and six months that that the market has absolutely been pointed in a single direction higher. To look at that data set over time, with a combination of both price swings and the supply/demand balance, but also look at price swings on the cattle cycle table- clearly, if this goes forward, we will have much better data.”
While this information is not a finished product, Close said it has the potential to assure producers there is transparency in the marketplace.
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 at the top of the story for today’s show, and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
Here is the USDA page with Pilot Program resources: https://www.ams.usda.gov/market-news/livestock-poultry-grain/cattle-contracts-library
