Current Cattle Market Daily Headlines for Monday, October 5, 2020

Mackenzie Johnston

6 years ago

Johnson introduces sweeping cattle reform bill

Read our Interview with Dusty Johnson here.

Last week, U.S. representative Dusty Johnson (R-SD) introduced the PRICE Act, a bill that will increase transparency in the cattle market, improve risk management and support new and expanding meat processors.
- Earlier this year, the USDA released the “Box Beef and Fed Cattle Price Spread Investigation Report” that outlined numerous issues within the cattle markets. The PRICE Act was introduced in response to that report.
The PRICE Act offers greater price reporting and transparency, comprehensive risk management solutions, it supports small processor and producer-owned cooperative processing opportunities and updates the Packers and Stockyards Act to create a cattle contract library.
Representative Johnson stated that this bill is needed because cattle country is hurting. Cattle producers want a fair market and fair prices, and this legislation will do just that.

The cattle industry has seen multiple bills introduced in Congress over the past few months in hopes of improving price discovery in cattle.
According to agriculture economist John Anderson with the University of Arkansas, the industry needs to ask itself if it is really being hurt by the decline in cash trade while formula pricing becomes more dominant.
Anderson feels there could be unintended consequences with a legislative mandate pertaining to negotiated cash trade. The industry must tread lightly and consider how these decisions might affect incentives for pricing innovation.
According to University of Missouri’s livestock economist Scott Brown, increasing the volume of cash trade won’t necessarily mean better price discovery. He stated that it doesn’t take very many transactions to get adequate price discovery, but it’s worth a lot of discussion for the cattle industry, generally, to have this.

Cargill recently finalized a contract to manage another case-ready beef plant owned by retail giant Ahold Delhaize located in Camp Hill, PA.
This move by Cargill further establishes their presence not only in Pennsylvania, but also in the Northeast region.
A spokesman for Cargill said the company is excited to bring more stability and resiliency to the food supply system with this agreement.
Cargill is planning to fill about 200 positions at this plant that produces up to 2 million pounds of beef and pork products per week.

Choice boxed beef: $218.88 (-0.10)
Select boxed beef: 207.61 (-0.01)
Cattle slaughter last week:
- 665,000 hd., up 2.2 percent from the previous week and up 3.1 percent from last year.
Live cattle weights last week:
- 1,379 lbs., up 3 lbs. from the previous week, up 21 lbs. from last year.
Beef production last week:
- 1 million pounds, up 2.1 percent from the previous week, up 5.7 percent from last year.