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Q: What do you think are the major issues standing in the way of fair cattle markets?
Packer concentration and vertical integration being brought on by the packing industry are the biggest issues standing in the way of fair cattle markets.
Q: What are your thoughts on MCOOL?
Almost everything we buy is labeled; from the clothes we wear to the produce we purchase at the grocery store. However, our beef isn’t labeled because the packing industry makes too much money off of lower quality, imported beef that they mix with our domestic beef and then sell as U.S. beef.
Q: What will happen to the independent cattle producer if changes aren’t made to achieve fair cattle markets?
The cattle industry will become just like the hog or chicken business if changes aren’t implemented. Right now there is sizable vertical integration within the industry; many of our smaller feeders are gone and we continue to see more and more exit the industry.
Q: If you were to speculate, how soon do you think the cattle industry will be swallowed up by vertical integration?
The cattle industry will be vertically integrated within the next ten years. Consider the hog industry; twenty years ago Elgin Livestock sold 800-1,000 hd. of hogs weekly for local farmers. Today, there are only a couple local farmers that are still in the hog business. Corporate feeders have come into the hog industry and made it so the small producer doesn’t stand a chance.
Q: What is your outlook for the market as we head into our big fall run of calves?
The market for weaned calves this fall won’t be great. Cattle producers might be able to breakeven, but they sure won’t make any money.
The yearling market right now is fairly strong while we see the fat cattle market continue to struggle. This doesn’t make sense but is made possible by packer integration and sweetheart deals between packers and feeders who strictly feed cattle for them.
Q: Do you have an outlook for the fat cattle market through the rest of 2020?
That market depends on our on feed reports and how many of these cattle are suppressed under packer conditions where they are non-disclosed. Our cattle on feed reports are so far off that there is no way of knowing how many cattle are actually out there.
Q: What are your thoughts regarding cattle and beef imports?
As long as there are foreign owned packers in the processing industry, they will take care of their foreign beef before they take care of domestic product.
Q: Do you have any closing statements?
Do the math and figure out how many dollars are leaving rural America, it’s staggering and there is no way to get that money back. Politically, the cattle industry receives very little to no help. Vertical integration continues to grow within the industry, and because of this it seems like there is no light at the end of the tunnel.