NCBA's Honesty Deficit

by Terry A. Stevenson & J. Randall Stevenson

December 10, 2007

With a last minute timing that looks like it was designed to prevent honest answers from having a chance, the National Cattlemen's Beef Association (NCBA) and some of its affiliates attacked some of the market reform amendments to the 2007 Farm Bill. Fortunately, the discussion and vote on the Farm Bill was delayed so that there is now an opportunity to carefully examine the outrageous statements made regarding those potential market reforms. Some of the statements made about the proposed market reforms are pure fabrications.

RTI Study Proves "Grade & Steal"

May 24, 2007

For years, many cattle producers have mockingly referred to it as "grade and steal.” Now, the study conducted by RTI International has confirmed it. The practice is often called "selling on the grid,” or "grade and yield” where quality, yield, and other factors determine a final price for cattle after slaughter and inspection and the application of premiums and discounts for those factors are calculated from a base price.

Market Access Risk

May 5, 2007

The Livestock and Meat Marketing Study (LMMS) describes a feature of the livestock markets it calls "market access risk." Since fat cattle are a perishable commodity they must be sold in a fairly narrow time frame. (Volume 3 page 5-4) The LMMS observes that, "Cattle held beyond the optimal marketing period begin to decrease in value because of excessive fat gain and the rising cost of gain." Market access risk describes the possibility that there may be no market participants available to negotiate a price during that optimal marketing window. It is distinguished from price risk which means that in an open market there is no guarantee of what price will be received.

Tilting at Windmills and Making Straw Men

April 17, 2007

John Queen is tilting at windmills. Both he and the NCBA he leads are speaking in favor of leaving Alternative Marketing Agreements (AMAs) alone. All of their presentations give the implication that someone is trying to prohibit AMAs in the cattle and beef industry. That implication is false. Not a single industry group is promoting such an idea, nor is there a bill in Congress, either already filed or waiting in the wings that would prohibit AMAs.

Moving the Market out of the Shadows

April 5, 2007

Senator Mike Enzi has introduced legislation to reform the cattle market by eliminating captive supply. Co-sponsors include fellow Wyoming Senator Craig Thomas as well as Senators Dorgan and Conrad from North Dakota and Grassley from Iowa. The bill addresses the captive supply issue directly. Packers have used their captive supplies as a market manipulating method for several years now. This bill would end that practice.

The Critical Question Remains Ignored

March 29, 2007

Normally when a study is done to analyze a serious matter, we at least expect the right questions to be asked. In the GIPSA study that was released in February the greatest question on everyone’s mind was whether captive supply affects the price of cattle. Somehow, when the analysis was being done the question morphed into the less relevant one of whether cash prices are lower than captive supply prices.

Four Senators Support Cattlemen

February 5, 2007

A bipartisan group of Senators including Enzi (R-WY), Dorgan (D-ND), Thune (R-SD), and Bingaman (D-NM) has written a letter to Secretary of Agriculture Mike Johanns raising objections to the USDA proposal to further relax its import restrictions on cattle and beef from Canada.

Making the Futures Markets Better

January 31, 2007

At its recent convention in Denver the conference attendees nominated policy statements to be presented to the membership for approval. Among those was one dealing with the commodity futures markets.

GIPSA's Evidence, What Will It Really Say?

January 26, 2007

In February GIPSA will release a long awaited study that includes analysis of the effect of captive supplies on prices. The contracted economists have completed their work and the GIPSA offices are reviewing the study before release. Whatever the result of the analysis, the study has a major flaw.

Premises Registration, the USDA Way

January 21, 2007

At the end of October, an announcement came out of the USDA that the national animal identification program was going to be voluntary. At that time, we expressed our skepticism. We pointed out the USDA's lack of credibility as evidence that its announcement of a permanently voluntary system was difficult to swallow. Now we have even more evidence of the USDA's real intentions.