Because They Could
By Dennis Sun
A number of frustrations surfaced as the United States Department of Agriculture (USDA) released its report of the drop of fed cattle prices and the rise of boxed beef prices. These up and down prices were a result of the Tyson Holcomb, Kans. packinghouse fire last year, followed by the hardships and uncertainty of the COVID-19 virus.
These events were hard enough by themselves, but together they raised some real hardships for cattle producers and feeders as well as the sheep and pork industry. The last five months have been tough on all of these producers.
The beef industry made the most noise, calling for investigations by both the USDA and the U.S. Department of Justice. A number of U.S. senators and representatives got involved and the National Cattlemen’s Beef Association got President Trump involved.
Why were fat cattle prices so low and meat prices so high? It didn’t seem fair to producers out there. Cattle producers, like other livestock producers, wanted their fair share. It was really one sided, something was wrong.
In this column a few weeks ago, I expressed how I thought the packers did what they did because they could and that we need to change some laws or regulations. If one looks at what happened step by step, the planets lined up against the producers.
This doesn’t mean the packers are as pure as the drifted snow or we don’t need the upcoming Department of Justice investigation. We do. However, we don’t want to rush into anything by changing too fast.
Meat Institute President and CEO Julie Anna Potts said, “In its analysis of the effects of the fire and the pandemic, USDA found no wrongdoing and confirms the disruption in the beef market was due to devastating and unprecedented events. It is difficult to see how the USDA’s recommended legislative proposals would have changed the outcome of the fire or the pandemic. We will continue discussions with producer groups, Congress and the Trump administration to ensure there is a fair and competitive market. It is especially critical in these uncertain times for producers and packers to work together.”
Producers aren’t looking for a handout, but they do need some help getting through these times. The ag bankers out there, even with low interest, need to be paid off.
It will be interesting to see what the Department of Justice investigation comes up with. I suspect it may not differ too much from the USDA investigation. We’ll just have to wait and see what comes out of it.
I would guess now is not the time to make drastic actions, but right after the next investigation comes out, we need to take advantage of the president and Congress’ interest and start discussions on the issues. Whether it is better producer risk management tools, changing the way packinghouses buy fat cattle, cash or formula, it has to be fair for the producer and feeders.
Now, more than ever, we need strong checkoffs. We have to keep the demand up for our products. We have spent years developing high-quality meats that consumers want.
We need to get the politics out of everything that happens. It is hurting us all and we need to get this virus knocked down before winter hits and get the economy going where people will go to a restaurant and eat a big ol’ steak or chop.
