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Live Cattle Marketing Update

Committee addresses price discovery, market restrictions.

Cattle Industry Convention & NCBA Trade ShowMarket volatility, a shrinking cash market for fed cattle and an insufficiency of tools for price discovery are concerns for cattlemen and all were discussed by National Cattlemen’s Beef Association (NCBA) members attending the Live Cattle Marketing Committee meeting during the 2017 Cattle Industry Convention in Nashville, Tenn. The Feb. 3 meeting also introduced a change of committee leadership, with Wall, S.D., cattleman Myron Williams serving as the new chairman, backed by Nebraska cattle feeder Steve Sunderman as vice chairman.


Committee members first heard a report by NCBA Vice President of Government Affairs Colin Woodall regarding the so-called Grain Inspection, Packers & Stockyards Administration (GIPSA) rule, which was put forward by former Secretary of Agriculture Tom Vilsack. According to Woodall, the rule would restrict marketing agreements between producers and meat packers and allow the government to dictate terms of production contracts, thus limiting opportunity for producers to market animals differentiated on the basis of added value.


“It opens up potential for litigation,” said Woodall, explaining that the rule could give standing to someone to bring suit against a packer because that someone objects to a marketing arrangement that bases price on quality or other attributes.


Woodall said the GIPSA rule problem may go away, as a result of President Trump’s executive order calling for a “two for one” trade-off on new regulatory agency rules. In essence, for every new rule it adopts, an agency must rescind two existing rules.


“We’re optimistic that this will ward off the GIPSA rule,” said Woodall. “If not, we are prepared to pursue other avenues for fighting it. We won’t rule out legal action. We have the paperwork done and a lawsuit is prepared if we need it.”


Iowa cattleman Ed Greiman reported on the progress of Fed Cattle Exchange, an online auction sales platform developed as an additional avenue to cash trade that will aid price discovery for fed cattle. He explained that weekly sales have been conducted since May, with approximately 13,500 head from 104 consignors offered thus far. Counting interested observers, as many as 800 entities have logged on for each sale, and five packers have actively participated as bidders. Greiman said all Fed Cattle Exchange transactions are subject to mandatory price reporting.


“I think the level of interest shows how hungry people from throughout the industry are for market signals,” said Greiman. “To me, the best part may be that sales are held on Wednesday, while most other marketing occurs as late as Friday. The Exchange gets trade started a little earlier in the week.”


Some cattlemen came to the meeting hoping to convince others that NCBA members should be required to market at least 50% of their fed cattle on the cash market — a notion that did not resonate with all cattlemen present. Among those who favor marketing choices, Greiman said he encourages cattle feeders to market at least part of their cattle by negotiated trade. The Fed Cattle Exchange provides a way to show a pen to multiple potential buyers simultaneously, and without working the phone all week to make a sale.


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Editor’s Note: Field Editor Troy Smith is a freelance writer and cattleman from Sargent, Neb. This article was written as part of Angus Media’s coverage of the 2017 Cattle Industry Convention. For further coverage, read the Angus Journal or visit www.angus.media.






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