Cattle markets: NCBA looks into the future of marketing in the beef industry
The June 18 National Cattlemen’s Beef Association’s (NCBA) Beltway Beef podcast featured a deep dive into the foreseeable future of cattle markets. NCBA’s Director of Government Affairs and Market Regulatory Policy Tanner Beymer joined the podcast to discuss an array of challenges facing the cattle and beef industry in regards to cattle marketing.
“Producer profitability touches on everybody’s policy issue area currently,” says Beymer. “Specifically, as it relates to cattle market space, there is a lot happening.”
Packers and stockyards
Recently, the U.S. Department of Agriculture (USDA) announced the possibility of revisiting the Packers and Stockyards Act. Undue or unreasonable preferences and advantages in livestock negotiations is prohibited by Section 202 of the Packers and Stockyards Act.
Many have discussed the idea that the Packers and Stockyards Act needs to be strengthened, and attempts have spanned the last decade to do so, but Beymer shares the attempts have been unsuccessful due to obstruction from Congress, administration stalling and agency inaction.
In 2010, the Obama administration made an attempt to make Section 202 less objective and more clear, creating the Grain Inspection, Packers and Stockyards Administration (GIPSA). The agency was previously placed under the USDA and now resides with the Agricultural Marketing Service.
According to Beymer, “The GIPSA Rule has been left broad every time they thought they were close to finalizing it.”
In 2020, the Trump administration published what they thought was a final rule, however it was also left open-ended. This year, the Biden administration paused the GIPSA Rule to allow for evaluation and regulation review.
As the country is still struggling both economically and emotionally from COVID-19, NCBA has been hard at work ensuring cattle producers remain able to produce and have a focus on the priority of high-quality beef availability. Beymer notes many policies are under review, and without acknowledgement to packers and their businesses, some policies are viewed as the cause for the end of the American rancher and the consumers will be forced to pay a higher price for a lower quality product.
“NCBA was one of the first organizations in Washington to request the Department of Justice (DOJ) investigate packers to make sure all behavior during the volatile time was above board,” said Beymer.
After this request, the DOJ announced the plan to launch an investigation into meatpackers to evaluate transactions. However, there have been few updates or discussion about the process since the announcement.
“A sign of life would be appreciated,” Beymer said. “We have no indication they are still working towards an investigation. We requested this investigation for a reason and would like to have something come from it.”
“It is really important to remember there are many issues going on in the industry currently,” Beymer shared. “There is no such thing as a one size fits all strategy, that if enacted or if brought to fruition is going to solve all the issues at one time.”
According to Beymer, moving cattle markets forward is a full-featured approach. He notes there are several short-term solutions to consider which place emphasis on cattle producers.
“With cattle supply high and really strong beef demand – both domestically and in our export markets – there is no indication that suggests the demand will dissipate,” he explains. “Yet, on the supply side, we continue to see liquidation due to drought in the West.”
Beymer continues, “In the short term, we need to have more throughput at all levels if we are going to return some leverage to cattle producers. One thing we can do is make sure meatpackers are still operating at 100 percent capacity, which will help with existing infrastructure and its future.”
Cameron Magee is an intern for the Wyoming Livestock Roundup. Send comments on this article to firstname.lastname@example.org.