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.”