Policy passed: NCBA adopts policy policy to increase cash trade levels at annual meeting
After a six hour discussion during the Live Cattle Marketing Committee meeting at the National Cattlemen’s Beef Association’s (NCBA) Summer Business Meeting, NCBA adopted new policy changes to support voluntary increased cash trade levels.
According to NCBA Vice President of Government Affairs Ethan Lane, “All individuals present at the meeting agreed price discovery efforts must be focused on individual regions, away from a national level and down to a more granular level of detail.”
“Proponents and opponents couldn’t be separated by state or by cow/calf producers versus feeders, which resulted in a passionate discussion,” Lane said.
Final policy supports voluntary approach
The final policy adopted by NCBA supports a voluntary approach, which increases frequent and transparent negotiated trade in order to achieve robust price discovery.
The policy requires this price discovery be determined by research, directed and funded by NCBA, in all major cattle feeding regions. The policy also includes triggers, which will be determined by a working group consisting of NCBA leaders by Oct. 1, 2020.
If the voluntary approach does not achieve robust price discovery, as determined by NCBA funded and directed research, and/or meets the established triggers, NCBA noted they will pursue legislative or regulatory solutions.
NCBA said they also support a three-year review on any negotiated trade solutions that are implemented to allow for a thorough cost-benefit analysis to be conducted.
“The idea behind the NCBA funded and directed research is to ensure the information received by the industry is what is needed, rather than a report by the USDA that tells producers what is needed,” explained Lane.
“Assuming packers won’t participate merely because they’re asked to, the policy focuses on a voluntary period for engagement with a backstop,” Lane added.
He continued, “Here’s the deal, NCBA is unanimously passing policy, saying if this doesn’t work, we’re going to the Hill. We’re going to seek another solution and that’s where the teeth are. This was a unanimous vote to keep building on the progress being made, but if it slows down, this is only going to go one direction.”
Regional differences needed
Research and data conducted by NCBA proves a nationwide, blanket mandate won’t work.
“To achieve what is necessary, in terms of price discovery and negotiated trade, regional differences must be respected with concentrated efforts where they are most sorely needed,” Lane explained.
He noted NCBA will continue to work with USDA and Capitol Hill to determine what a regulatory mechanism, should it be needed, might look like.
In addition to the fed cattle policy, the Livestock Mandatory Reporting policy was also passed during NCBA’s annual meeting. This policy supports the withholding of reports in regions that do not meet a minimum level of negotiated cash trade.
“Extensive discussion of selling on the grid was criticized for the lack of teeth to encourage engagement,” said Lane.
“The ideal situation would be to make the grid attractive enough individuals on both sides want to do business there,” explained Lane. “They need to be able to walk on, get the premiums they’re looking for, and the packers feel like they can engage and actually get the optimized supply chain they’re looking for.”
“The policy we passed today is the result of every state cattlemen’s association coming together to work through their differences and finding solutions that meet the needs of their members, all of whom agree our industry needs more robust price discovery. This policy provides all players in the industry the opportunity to achieve this goal without seeking government mandates,” said NCBA President Marty Smith. “Everyone who took the time to participate in this process over the past several months and throughout this week’s meetings is to be commended.”
Hannah Bugas is the managing editor for the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.
