Steve Stratford- Assistant Manager of Pratt Livestock
Q: What are the major issues standing in the way of fair cattle markets?
Packer ownership and control, more importantly, undisclosed packer ownership.
A shallow cash trade market and the CME being a broken pricing structure for the cattle industry are also significant issues. The CME is too disconnected from the actual cash market, which allows basis traders to throw everyone else under the bus in a shallow cash trade market.
Q: What are your thoughts on bringing reform to our beef checkoff?
The checkoff has done an amazing job spotlighting beef and increasing consumption, but the increase in revenue from that promotion has mostly gone to the four major packers. What makes this situation even worse is half of those packers are foreign owned.
Producers and packers are in competing businesses; producers need a separate entity to represent them.
Q: Do you know many feeders who need to get cattle slaughtered, but can’t get them moved?
Yes, and its not only a problem for feedlots with fed cattle, its also starting to be a problem for feeder calves as feedlots are short on room to pen those cattle.
Some feedyards are having a lot more trouble than others. Formulated yards and those that have played by the packer’s rules are getting along much better than any yard that has ever tried to take a stand or do something different.
Q: What are your thoughts on the DOJ investigation into meatpacker pricing?
All the attention on our food supply should lead to an investigation. The processing sector is so monopolized, there isn’t going to be a glaring red flag, they are going to have to look at the overall picture and see this is nowhere near any kind of true price discovery.
Q: What’s your outlook on calves this fall?
A lot of factors will play into the market this fall, but the calf market could really hurt from this situation. Buyers that have been through a blood bath will be a lot more careful and conservative purchasing cattle.
Q: How are you seeing these tough cattle markets affect your area?
We’re just at the tip on the iceberg. Agriculture keeps rural communities going. Going forward, there will be a lot less discretionary funds to keep communities going. Real America is going to dry up and blow away if we continue down this path.
Q: What are your thoughts on the government direct payments that will be distributed to producers?
Cattlemen need the bailout, however the starting dates for the program are set too early. It would’ve been better for the government to demand the packers give the producers their fair share of the retail dollar, and in turn, the taxpayer wouldn’t have to be paying for this bailout.
Q: Any closing statements?
Cattle producers aren’t looking for some kind of advantage or to get wealthy. These folks are just looking to stay in business.
We have to have legislation that stops letting our food supply get sold to foreign entities.