VIDEO: Jim Felton discusses the stranglehold packers have on industry

by | Jul 14, 2020 | 0 comments

Photo courtesy of Felton Angus Ranch: https://feltonangus.com/

 

Q: What do you think are the major issues standing in the way of fair cattle markets? 

The biggest issue standing in the way of fair cattle markets is the stranglehold that the four large packers have on the industry. There is little to no competition in the markets because of formula cattle. Packers should be bidding on cattle, however, formula cattle make it so they don’t have to get out and do such thing.   

 

Q: What solutions can be implemented to fix these issues? 

The 50/14 legislation to increase negotiated cash trade would help alleviate the lack of competition within the cattle markets. With that being said, the 50/14 legislation is fairly aggressive and may be difficult getting implemented. The original 30/14 proposal might have been a bit more feasible to get passed. Regardless, something has to be done to hold the packers feet to the fire and make sure they bid on cattle. 

 

Q: What are your thoughts on MCOOL? 

Consumers want to know where their beef comes from, but more often than not, government mandates don’t go as planned. If MCOOL is implemented, the packers could find a way to bypass the law.  

 

Q: What are your thoughts on imports of cattle and beef? 

It would be great to see the U.S. stop importing cattle from countries that don’t have the same standards and regulations as we do. However, there are countries like Canada who are basically the same as us when it comes to rules. The concern is having enough grind to feed all the American people. We want to make sure we aren’t taking away from the consumer by halting imports.  

 

Q: Do you think there is a chance we could price ourselves out of a product if retail prices don’t drop back to normal? 

Retail prices have decreased from the highs we saw back in the height of the pandemic, however they still need to get back to pre-pandemic levels. If for some reason they don’t retreat, there is a good chance consumers will turn to other proteins. These high prices won’t necessarily cause consumers to totally cut beef out of their diets, however they will cause folks to significantly cut back on beef. 

 

Q: Do you think our industry is in danger of becoming vertically integrated? 

We’ve seen vertical integration in both the chicken and hog industries and if cattle feeders continue to get beat up and can’t make a living, our industry could easily become integrated. If cattle feeders continue to lose money they won’t be able to hold onto their feedlots and we’ll see the packers own the feedlots and they’ll also find some way to own the cattle. 

 

Q: In one statement what does the cattle industry need most today? 

The cattle industry needs more packer competition. The demand is there for beef, but we have to have more competition within the packing sector to increase our cattle markets. 

Related Topics: mCOOL | Meatpackers

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