I-BAND: Disastrous Cattle Markets Need More Than Bailout Package
(March 28, 2020) ~ The Independent Beef Association of North Dakota (I-BAND)
today expressed its gratitude to North Dakota’s congressional delegation for
passage of the federal Coronavirus Stimulus Package, which includes support for
the U.S. cattle industry. I-BAND President Dwight Keller said the aid for
cattle producers is welcome and comes in the midst of catastrophic market
conditions yet called the measure a “short term remedy for a long term
problem.”
“Fed cattle have lost $140 to $200 per head in recent weeks, equating to losses
of $5,000 to $7,000 or more for a load of cattle,” said Keller, “and still we
see plenty of evidence on social media of empty meat cases in a majority of
states and retail meat prices are soaring. Just since the outbreak of
COVID-19 in America, $8 billion to $9 billion in equity has been drained from
the live cattle industry according to Kansas State University Economist
Glynn Tonsor,” noted Keller (as reported by the High Plains
Journal on March 25, 2020.) “We’re starting to see liquidation
at a level where producers will be forced to sell off cows, heifers and other
assets in order to pay bills and meet financing obligations. It’s simply
not sustainable. Now it is more obvious than ever that the packing industry is
exploiting U.S. ranchers and putting an entire segment of the beef supply chain
at dire risk.”
On March 20, Tyson Foods announced the company would pay $5 per hundredweight
more than the agreed upon price for all cattle harvested beginning March 23,
2020. Tyson’s announcement came on Friday of a week that saw boxed beef
values increase by $42 per hundredweight. “On a 900 pound carcass this
boxed beef price translates to almost $400 more in profit for the packing
industry on top of the already obscene profits they’re reaping and none of
those profits are trickling back to cattle ranchers. Tyson’s meager offer is
viewed nothing more than a distraction from the real issues at play in our
markets,” said Keller. “A $5 per hundredweight increase from packers,
which translates to about $60 per head for feeders, is nothing more than an
insulting handout when retail meat sales are up 77% over 2019 levels.”
“Congress and the Trump Administration must act quickly before many independent
ranchers are forced out of business because that’s the point we’ve reached,”
said Keller. Following are the steps that must be taken immediately.”
1) USDA must suspend its decision to allow raw beef from Brazil.
2) Because federal inspectors have been idled due to the ongoing global
health crisis, all beef imports into the U.S. must be re-evaluated with safety
of the food chain the primary concern.
3) The Department of Justice must launch an investigation into the
inexplicable market volatility and affect including severely depressed cattle
prices and skyrocketing retail beef demand and prices.
4) USDA must enforce the Packers and Stockyards Act and utilize its
provisions as originally intended.
5) Prevent foreign ownership of U.S. packing plants, which, among other
things, creates inherent bias in lobbying efforts that occur in the U.S.
6) Fix mandatory price reporting laws. Right now, the poorest
quality cattle are used to base the price of all cattle in the U.S. This
does not reflect appropriate values and yet it is used to establish base
prices.
7) Prevent packers from owning cattle for more than seven days, including
formula-based or contracted cattle, and set mandatory thresholds for packers to
participate in cash markets.
8) Require all beef sold to be labeled as to where the animal it is
derived from was born, raised and processed so American consumers can choose to
put America FIRST by purchasing U.S. born, raised and harvested beef.
Keller advised there’s no time to waste. “Ranches and farms across this
nation are in deep financial trouble and many will not survive,” he said.
“The clock is ticking. We’re sending a strong message to Washington, D.C. that
this situation deserves long term solutions to enhance the security of our
national food supply chain, keep independent ranchers in business and protect
the viability of America’s rural communities.”