Iowa cattle producers are pressing for additional discussions surrounding cattle market price transparency.
USDA’s Agricultural Marketing Service released its findings yesterday (Wednesday), after investigating the boxed beef and fed cattle market spread.
Iowa Cattlemen’s Association Director of Government Relations Cora Fox says the organization appreciates the information as they look forward to introducing policy changes.
“Producers are asking for solutions to be developed, and it’s because producers have been put in a position where (they) have no leverage. And when you have extreme market shifts or black swan events like the Holcomb fire or COVID-19, it’s a challenge to see light at the end of that tunnel. We have to do something now and we have to be bold,” Fox says.
Cattle producers called for change after they claim market disruptions were caused by the Tyson plant fire in Holcomb, Kansas and coronavirus pandemic.
The cattle industry has seen a shift in marketing dynamics, which has led to more formula transactions. She says some producers from the state want to see a stronger cash market, which offers robust price transparency.
“That’s what you hear a lot about with the 50/14 movement. What they’re saying with that is meat packers must participate in the cash market 50 percent and you have to have delivery of your cattle once an agreement has been determined between a buyer and a seller within 14 days,” she said.
Fox says the only way these matters can be addressed is through a federal legislative fix or regulatory fix.
“What we’re asking for is a thoughtful discussion centered on these cattle marketing issues. Our representatives here in Iowa are getting calls from producers all around the state highlighting the need for more robust price discovery, more transparency within our industry and competition,” Fox says.
She says there’s been quite a bit of reluctance from Chairman Roberts to organize a thoughtful discussion on this topic, but we hope the findings from this USDA report add some fuel to that fire and to get the conversation going before September.