Stockton: Best news for the cattle industry since 1921
I was puzzled when I received an email inviting me to a meeting at the White House. I accepted the invitation but was still puzzled when I passed through White House security early the morning of October 8th. Exiting 4½ hours later I was instead stunned in having heard some of the most significant news for cattle producers since the passage of the Packers and Stockyards Act in 1921.
Secretary of Agriculture Vilsack announced an Advanced Notice of Proposed Rulemaking “…to solicit feedback on an identified set of regulatory options that AMS (Agricultural Marketing Service) could employ to address concerns regarding price discovery and fairness in fed cattle markets.” In other words, Sec. Vilsack officially acknowledged what we have all been saying – the market for fed cattle is rigged. USDA is now looking for input as to the best way to establish honest price discovery.
This was not the only stunning announcement because USDA also released the “Interim Report: Competition and Fair Practices in Meat Merchandising.” We know that it is not only the packers who are stealing, but that big retail is also taking a larger and larger share of the consumer dollar from ranchers and feeders. This report describes the impact of the big grocery chain’s market power on beef and cattle prices and how it is nearly impossible for smaller packing plants to get their products on supermarket shelves. This is the first step to get beef and other local foods into the big grocery stores. It is a fight well worth doing.
There was yet a third announcement. This one will also benefit animal agriculture but more indirectly. Through some quirk or corruption of patent law, corporations like Monsanto have been allowed to patent genes. These corporations prevent university plant geneticists from studying or using the patented genes in research to breed publicly available seed varieties. USDA’s third report – “More and Better Choices for Farmers: Promoting Fair Competition and Innovation in Seeds and Other Agricultural Inputs” is a critical step in freeing our publicly funded agricultural scientists to breed less expensive, better yielding plant varieties.
When you couple those three announcements with one that was made the week before, which allocates $1.7 billion for purchase of locally and regionally produced food by schools and other public institutions, the possibilities are truly stunning. One thing that cattle producers agree upon is that our children should have locally grown and slaughtered beef in their school lunches. Many producers have been struggling to build demand for their own brand of locally grown beef, but it is an uphill battle. This investment by the Biden Administration will open up a huge market for locally produced beef and other fresh food.
These four announcements have the potential to significantly improve the lives and economy of ranchers, independent feeders, and rural communities but will take time and perseverance before any of it becomes a reality. The first priority shall be to provide input as to the best way to create an honest pricing benchmark for the fat cattle market. What we have now, where the negotiated spot market is used as the basis for pricing the captive supply (alternative marketing agreement – AMA) cattle, is hopelessly dysfunctional – not to mention dishonest.
What the fat cattle market needs is a video/internet auction to price both the spot market and forward contracts. In this era of electronic communications, this is the best and cheapest way to determine the actual market value of fed cattle. There will be intense pushback from the packing cartel and their paid and unpaid stooges. Unless independent ranchers and feeders come together in a unified response, the packers will confuse the issue preventing any meaningful change.
This is just the beginning of a process that will take time and perseverance to see to a fruitful end. It deserves our full attention because this is our chance to save independent family farms and ranches. Our organizations must speak with a clear and united voice when submitting recommendations to USDA. The more that we are in agreement, the better chance we will have to restore competition to the cattle market and in the process protect our independence. Comments are due by December 10.
Op-Ed by Gilles Stockton, Montana Cattlemen’s Association Director
