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Agricultural News


R-CALF CEO Charges Meatpackers with Working 'to Destroy Fed Cattle Cash Market'

Mon, 23 Jul 2012 18:04:10 CDT

R-CALF CEO Charges Meatpackers with Working 'to Destroy Fed Cattle Cash Market'
The U.S. Department of Agriculture (USDA) Agricultural Marketing Service (AMS) issued its weekly National Feeder & Stocker Cattle Summary report on July 13, 2012 (Click here for the original July 13 Livestock Report), and warned that negotiated or cash sales in the U.S fed cattle market are "now routinely making up less than 20 percent of the weekly slaughter."

R-CALF USA has called on the USDA and the U.S. Department of Justice to take immediate steps to stop what it says are attempts by multinational meatpackers to capture the U.S. cattle market away from independent cattle producers through their destruction of the cattle industry's price discovery market, which is the cash market.

The group charges that hundreds of thousands of independent poultry producers, independent hog producers and independent sheep producers were forced out of business when the meatpackers destroyed their respective cash markets by shrinking them below levels where true price discovery can occur.

"The meatpackers are now working aggressively to destroy the nation's fed cattle cash market, which shrank nearly 20 percent just during the past few years - from over 52 percent in 2005 to less than 33 percent in 2011," said R-CALF USA CEO Bill Bullard.

"The Original July 13 Livestock Report was alarming in that it stated the volume remaining in the price discovery market has now slipped to 20 percent, which is far too low for it to establish a competitive price for cattle," Bullard added.

Further, the original July 13 Livestock Report stated: "Over 60 percent of the weekly movement (in the fed cattle market) is formula-priced off the scant cash trade that is more like a dictatorship than a democracy. Soon, cattle feeders may be forced to ship their cattle with only a ballpark idea of what their check will look like - similar to the sheep industry."

Voicing concerns about the health of the cattle industry's price discovery market, R-CALF USA issued a membership-wide alert on July 17 titled "USDA Issues Strong Warning Regarding Dysfunctional Cash Market,"which the group also sent to USDA officials, Department of Justice officials and members of Congress. The group's alert quoted the data and commentary contained in the original July 13 Livestock Report and further stated:

"USDA has some good people within its ranks and they are sounding the alarm as well as they are able . . . It can't be said much stronger than this. Where are those promised reforms from the Department of Justice (DOJ) and USDA to prevent our cattle industry from being captured by the multinational meatpackers just as the poultry and hog industries already have been captured? USDA is now issuing the same warning R-CALF USA has long been issuing. It is time for decision makers to act.

"Immediately, the Obama Administration's USDA pulled from its website the original July 13 Livestock Report, scrubbed it of all data and commentary displeasing to multinational meatpackers because it signaled a danger to the cash cattle market, and then reissued the scrubbed report under the heading "Correction to narrative," effectively censoring all important facts and rendering it completely innocuous," said Bullard.

"The U.S. cattle market is in a Code Red state of emergency, with the few remaining independent cattle feeders losing upwards of $150 per head. Meanwhile, we have corrupt officials at the highest levels of this Administration working covertly to cover-up the data and facts needed to address this serious problem," Bullard said adding:

"The meatpackers are but a breath away from destroying our industry's price discovery market and capturing the live cattle supply chain away from independent producers and the only action from this Administration is to stick its head in the sand and kowtow to the multinational meatpackers."


   

 

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