USDA publishes cattle and beef pricing report
- Yesterday, July 22nd, the U.S. Department of Agriculture released their report on cattle and beef pricing resulting from the Tyson plant fire in Holcomb, KS back in August of 2019 and the 2020 Covid-19 pandemic.
- The 21-page report essentially shares the prices of boxed beef and fed cattle throughout the two events. The report specifically states that findings so far do not prelude the possibility that individual or groups of entities violated the Packers and Stockyards Act.
- The North American Meat Institute responded to the news by saying, “The report, which identifies no wrong-doing, affirms that two extreme and unforeseen events affected the beef markets.”
- NAMI also included a link to Stephen Koontz’s report regarding the situation. Koontz’s report explained that record-low livestock prices came as no surprise with packers cutting back their kill levels and an abundant supply of cattle.
- NCBA’s Vice President of Government Affairs Ethan Lane reported that the NCBA was pleased that the USDA produced a report into the market dynamics impacting cattle producers.
- Lane said that the issue of packer wrong-doing has been a central topic of conversation for NCBA since they initially requested the investigation.
- Senator Chuck Grassley feels that the industry must continue to investigate anticompetitive actions by corporate packers who value profits over the economic livelihoods of farmers, ranchers and rural America.
Unpublished USDA Report: 40% cash volume depressed cattle prices more than $33 per head
- An unpublished 2014 report by the Packers and Stockyards Division of the U.S. Department of Agriculture has shown that when the volume in the fed cattle cash market was nearly 40 percent, that alternative marketing agreements depressed the prices paid for cattle on the cash market in 2009.
- The report estimates that nationwide domestic cattle prices in the cash market were reduced by as much as $33.28 per head (based on a 1,300 lb. steer.)
- Every one percent increase in captive supply cattle depressed negotiated cash prices $0.54 per head for a 1,300 lb. steer on average.
- R-CALF CEO Bill Bullard said that this report firmly supports the need for Senator Grassley and Senator Tester’s Senate Bill, along with Cindy Axne’s House Bill 7501 that would require packers to participate in the negotiated cash market at least at the 50 percent level.
- Bullard feels that the key takeaway for policy makers is that producers who market in the negotiated cash market are being harmed and the majority of those producers are the small to mid-sized cattle feeders that support America’s rural economy.
Boxed beef prices
- Choice boxed beef: $201.15 (+0.27)
- Select boxed beef: $189.28 (-2.02)