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Agricultural News

So Far, So Good as Cattle Industry Looks to Increase Live Cattle Trade

Wed, 11 Aug 2021 12:43:06 CDT

 So Far, So Good as Cattle Industry Looks to Increase Live Cattle Trade Today’s report, from the 2021 Cattle Industry Convention in Nashville, Tennessee, is a service of Farm Data Services of Stillwater.

Tanner Beymer, director of Government Affairs and Market Regulatory Policy at the National Cattlemen's Beef Association, talks with Radio Oklahoma’s own Ron Hays about the 75% Plan. The plan was assembled about a year ago by NCBA members with the goal of achieving robust price discovery in the federal cattle market.

“It’s called the 75% Plan because we look at existing research that shows the number of cattle that must be traded on a negotiated basis per region to have robust price discovery,” Beymer said. “Given that we need to make substantial progress to get to that robust number, we wanted to start with some realistic benchmarks, so we (decided to aim for) 75%.”

Those numbers are then evaluated through two different lenses: the producer side and the packer participation from procurement side, Beymer said. If goals aren’t met, several minor triggers, called trigger silos, will trip, which will eventually trip major trigger silos. When enough major trigger silos are tripped, then a legislative or regulatory solution will be pursued.

The first-three quarters the NCBA has observed only the negotiated volume - or cattle-producer side, according to Beymer. Now that the packer-participation silo is complete, those figures will also be able to be analyzed.

“So far, third-quarter numbers look really good,” Beymer said. “Demand for beef is really high, both in the U.S. and abroad.”

A goal of the plan is to make sure the responsibility is not only on cattle producers to sell negotiated, but also depends on packers to buy negotiated, according to Beymer. The NCBA hopes to use the packer-participation silo to verify packers are buying negotiated cattle, Beymer added, because the NCBA legally cannot access the true numbers of individual packer transaction data.

To resolve this issue, the NCBA, with packers, are utilizing a third party to maintain the confidentiality of packers, but also give cattle producers factual figures, according to Beymer.

“The packers will voluntarily transmit their procurement information, (the third party) will analyze it against the plan’s framework and report back to (the NCBA) whether or not triggers were tripped.”

Confidentiality is a large barrier to full market transparency, Beymer said. It protects packer procurement information from their competitors, but also withholds valuable market information.

The 75% plan is a way to access this information while maintaining packer procurement confidentiality.

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