Q: What is your outlook for the market as we head into the fall run of weaned calves?
A lot of factors will play into the calf market heading into this fall. If Covid-19 doesn’t cause any more disruptions, we could see our markets hold firm and possibly gain more ground.
Q: How do you see heavier carcass weights affecting the feeder calf market and the cull cow/bull market?
The packers want to see these larger cattle because cattle numbers are in the producer’s favor. Additionally, with the incredible margins that packers are experiencing, larger cattle are beneficial for them.
Most of the heavier carcass weights are due to Covid-19, so with time we’ll work through these cattle and normal weights will ultimately return.
Q: What are your thoughts on negotiated grid?
There is nothing wrong with grids, value-based marketing, or anyone trying to get the best deal for their cattle. The problem with these situations is that they trend back to a cash market that doesn’t have enough transparency and is easily manipulated against producers.
Q: What are your thoughts on the surging imports and the declining exports of cattle and beef?
It’s no surprise that we’re seeing an increase in imports since MCOOL is not in place. It has to be consumer fraud to be able to import foreign product, repackage it, and then sell it as a product of the USA.
Production costs in countries that we import beef from are much lower than here in the U.S. This has created an unfair playing field and the only way to overcome this would be to reinstate MCOOL and differentiate our product.
Q: Do you think we’ll hear anything from the DOJ concerning the investigation into the big four packers in the near future?
The DOJ’s focus has been on finding collusion, something that would be fairly difficult to uncover. As of right now they aren’t looking in the right place. Manipulation of markets and trade needs to be looked into. They need to take a stance on anti-trust violations for the cattle industry to see any kind of results from this investigation.
It would be great to see this investigation expand into the Packers and Stockyards Act. We won’t see any change within the packing industry unless the DOJ comes out with a report stating that the industry has violated anti-trust laws and packers must change the way they do business.
Q: The USDA has proposed implementing RFID tags across the industry by 2023. What are your thoughts on this?
Those that have to pay for mandatory RFID tags are against it, but those that will profit from it are for it. If this actually occurs, it will be one of the most intrusive government moves that could happen to independent agribusiness.
Producers will literally be paying for the government to know everything about their operations, and so far, no one has said who will be handling all that confidential information.
If the market would drive us to RFID tags, the move would be justifiable, but the market isn’t doing such thing at this time.