Q: What do you feel are the major issues standing in the way of fair cattle markets?
The packer monopoly is standing in the way of fair cattle markets.
Q: What do you think will come of the DOJ investigation into meatpacker pricing?
The most that will come from the investigation is what we’re experiencing today, the packers paying a little more for cattle even though this goes against market fundamentals. When it’s all said and done, there may be some fines, but nothing that will amount to anything compared to packer profit margins.
Q: What are your thoughts on mandated negotiated cash trade?
Our cattle markets need competition more than anything right now, and currently, our fat cattle markets have very little to no competition.
We have fewer and fewer cattle feeders every day. This reduction in cattle feeders will soon affect our feeder cattle market because we’ll have fewer guys in the market looking to buy 800-900 lb. feeder cattle. If we don’t get competition back in our cattle markets, the trickle-down effect will go on and on and we’ll see our agriculture communities dry up and fade away.
Increased formula trading has resulted in a continual decline in competition. Setting a minimum requirement for negotiated cash sales will cause significant change and drastically help our cattle markets.
Q: Do you think the cattle industry could soon become a subsidized industry?
When a government subsidy becomes part of your business loan, that industry is done for.
For the most part, these government handouts are a joke. This program is a waste of taxpayer dollars that should’ve been thought out a little more. The cattle industry has groups and individuals that desperately want to build smaller-scale packing plants. That money could’ve gone towards those efforts to help folks get started and teach them how to make a go of it.
Q: What are your thoughts on the beef checkoff?
The program is definitely needed and it started out with the right goals in mind. We need promotion within our industry, but we might need a referendum to plan this program out a little better and start over from scratch.
Q: In one sentence, what does the cattle industry need most today?
The cattle industry needs to get a fair percentage of the retail beef price.
Q: Any closing statements?
Everyone is paying attention to what is going on within the cattle industry. We’ve been in the national media several times every week for the past couple months. This news may be negative, but at least we have mainstream media, along with national and world news talking about the cattle industry. It’s important for the general public to be aware of what is happening within this industry, and hopefully, this heightened awareness will help us bring about changes in our cattle markets.
Cattle markets will most likely get tougher in the near future. Soon enough, we’ll start to realize how far we’re actually backed up on fat cattle. It’s going to take slaughter levels getting back to 630,000-650,000 hd./day to even begin to work through this backlog. Clearly, this is going to take some time.