Beef Buzz News
Third-quarter Packer Participation Data Coming Out of 75% Plan Disappointing
Fri, 19 Nov 2021 10:59:32 CST
Third-quarter data for the National Cattlemen’s Beef Association’s 75% Plan is in and from the looks of it, packer participation is not up to par. In the last few weeks, live cattle prices have increased now that front-end supplies of cattle are reflecting demand, making cattle markets current for the first time in about two years.
Listen to Ron's conversation with Ethan here.
The purpose of the 75% Plan is to test whether the industry can resolve this issue of low volumes of negotiated cash trade in a voluntary, industry-led manner - not a government mandate. The Plan monitors cattle producer participation and packer participation.
Ethan Lane, vice president of Government Affairs for the NCBA, told Ron Hays, senior director for Radio Oklahoma Ag Network, that producers have done all they can to help the situation.
“What we have seen is a substantial increase in cash trade,” Lane said. “The feeders, our producers and our members have shown up. They have marketed more cattle (via) negotiated (cash trade); they have done it sometimes at a loss; they have done it in weeks when they probably would have rather held cattle back. They have done it because they know getting these cash numbers up is really important.”
Adversely, the “big four” packers largely failed on their part of the agreement, according to third-quarter numbers.
“The packers have continued executing their business models,” Lane said. “The packer participation silo was set up to assess the number of the ‘big four’ packers buying cattle in each region in any given week, contributing to that competition that everybody is looking for. From our data, that did not happen in the third quarter.”
Lane said this news will call for many conversations at the upcoming Cattle Industry Convention and NCBA Tradeshow in early Feb.
“What have we learned from three-quarters of data coming out of this voluntary framework?” Lane asked. “Producers can certainly market more cattle negotiated but that they give up some leverage to do so. A lot of this conversation has been about how (producers) can gain leverage, not give some up.”
Click on the LISTEN BAR below to hear more from Ron Hays and Ethan Lane as they talk about disappointing third-quarter data from the 75% Plan and what that means going forward.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR below for today’s show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
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