Livestock Marketing Council
Meets in Nashville
Price discovery, market transparency addressed.
Composed primarily of auction market managers and order buyers, the National Cattlemen’s Beef Association (NCBA) Livestock Marketing Council met Feb. 2 during the 2017 Cattle Industry Convention in Nashville, Tenn. NCBA leadership and staff were present to update Council members regarding some key livestock marketing issues.
Nebraska cattleman and NCBA president-elect Craig Uden explained how cattlemen serving on the NCBA/CME Working Group had responded to concern over cattle market volatility; the increased difficulty with which effective risk management strategies are implemented; and a potential link between these issues and electronic, high-frequency trading of futures contracts.
“We’ve been trying hard to address producers’ concerns regarding price discovery and ways to improve market transparency,” stated Uden, noting that the working group's efforts have prompted the CME to consider adaptations to cattle futures contracts and the Commodity Futures Trading Commission (CFTC) is taking a closer look at automated, preprogrammed trading.
“Our members’ efforts have made a difference,” he added.
Uden also credited the creation of Fed Cattle Exchange, an online fed-cattle marketing venue, for contributing to negotiated trade of cattle on the cash market. He introduced Iowa cattleman Ed Greiman, who briefly explained the Fed Cattle Exchange format. According to Greiman, since its launch in May, Fed Cattle Exchange had (to date) conducted 18 sales, offering more than 13,500 head of fed cattle representing 104 consignors from 10 states. Buyer participation has included six beef packers.
“This format shows the world what cash cattle trade is and helps improve price discovery,” stated Greiman. “I don’t expect everyone using formula sales to completely abandon alternative marketing methods, but I would encourage all cattle feeders to support the cash market by putting a pen of cattle on Fed Cattle Exchange.”
NCBA Manager of Government Affairs Sarah Calhoun also addressed the Livestock Marketing Council, explaining NCBA’s commitment to stopping implementation of the “GIPSA (Grain Inspection, Packers & Stockyards Administration) Rule.” NCBA views the proposed rule as regulatory overreach, and fears its ambiguous language could ultimately threaten value-based marketing programs that many within the beef industry have worked hard to build.
Calhoun said NCBA is also committed to securing Mandatory Price Reporting as an essential government service. She also praised the presidential cabinet nominee, Sonny Perdue, saying the former Georgia governor’s confirmation as U.S. Secretary of Agriculture “bodes well” for cattle industry interests.
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.