Claims Mandatory COOL Was Reason for Record Cattle Prices in 2014-15 Totally BaselessTue, 11 Sep 2018 09:37:17 CDT
While R-Calf is claiming that mandatory COOL was the reason prices for beef cattle were at their highs in the 2013 to 2015 time frame- a look back at fundamentals of the cattle business tell a totally different story.
In reviewing a news release from the populist organization this week, Radio Oklahoma Ag Network Farm Director found the claim by R-Calf member Mike Schultz of Kansas one worthy of checking out further. Schulz was quoted as saying "Three simple words, "Product of USA" is the new metaphorical cash cow. When the COOL law was fully implemented from 2013 to 2015, American farmers and ranchers received $325 per calf more compared to the next two years when meat packers were no longer required by law to label beef with its country-of-origin."
The time period mentioned was right after a major drought in the southern great plains- a drought that had drastically reduced the US Beef Cow herd. The 2013 to 2015 time period saw the market respond to extremely tight cattle supplies in a very strong, positive way.
Hays asked Oklahoma State University Extension Livestock Market Economist Dr. Derrell Peel to review the 2013-15 and 2015-2017 time frames and how market fundamentals were playing out during that time span. Peel says this was perhaps the most unique period in U.S. cattle and beef supply and that market fundamentals completely explain cattle prices in recent years. Peel believes that "the presence of COOL had no measurable impact on the record prices in 2014/2015 and the absence of COOL had no measurable impact on the declines from record levels. 2015 cattle slaughter was the lowest since 1963 leading to beef production the lowest since 1993 is the explanation for record prices and the industry response to expand cattle numbers and beef production led to the subsequent adjustments."
Dr. Peel adds that several measures of that market period help to show how the market was working- he calls the 2013-15 market "extreme- "heifer retention was at record levels and cow culling was at a record low level. Record heifer retention led to record steer to heifer slaughter ratios…not seen since the 1970s. The market provoked record high prices to jump start herd expansion and rebuilding beef production."
Schultz is the chairman of the R-Calf COOL Committee- the organization continues to demand the Trump Administration to issue an Executive Order to reestablish mandatory COOL.
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