LINCOLN — Wednesday, the U.S. Senate Committee on Agriculture, Nutrition and Forestry held a hearing “Examining Markets, Transparency, and Prices from Cattle Producer to Consumer” to focus on ongoing market challenges that threaten the profitability and business continuity of cattlemen and women.
Nebraska Cattlemen shared members’ concerns regarding the live cattle market, processing capacity, and market transparency via written testimony, read into the record by Senator Deb Fischer. Nebraska Cattlemen’s comments focused on how cattle producer members and their livelihoods are directly impacted by the cattle market’s ability or inability to send appropriate price signals up and down the beef cattle supply chain.
“Price discovery is a public good. Negotiated cash market participants invest resources to negotiate and discover cash market prices for the entire industry. “- wrote William H. Rhea III, President – Nebraska Cattlemen, “Until the price discovery “public good” is better valued by both beef packers and some cattle feeders, the industry will continue on this downward spiral until there is little to no negotiated trade left and other outside markets will have to be relied on for price determination.”
Nebraska Cattlemen continued to share members’ concerns regarding processing capacity and throughput noting that adequate beef processing capacity is critical to maintaining profitability in the cattle industry. Currently, not only is there a shortage of processing capacity to meet the available fed cattle supply, there is also a reduction of processing throughput across the country resulting in a negative effect on cattle producer leverage in fed cattle negotiations because of lack of competition.
Nebraska Cattlemen comments concluded highlighting the need to increase market transparency through the development of a cattle contract specification library and ensuring that USDA finds ways to report collected information in a manner that ensures confidentiality, but prevents USDA-AMS from withholding from the public information collected in Livestock Mandatory Reporting (LMR).
— Nebraska Cattlemen
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