Cattle Markets Require Accountability and Solutions for Cattlemen
ARVADA, Colo. – While Colorado beef production has been focused on Coronavirus 2019 (COVID-19) for months, we now must focus on the integrity of our marketplace. As we watch packing sector profits skyrocket, the feeder, stocker and cow/calf producers are experiencing price decreases and extreme volatility.
CCA President, Steve Wooten, said “It’s abundantly clear that our industry needs to be assured there has not been anti-competitive activity or antitrust laws broken by the packer.” Wooten went on to say, “Regardless, our pricing system has become flawed to the point where record profit taking by one sector of our industry has resulted in unprofitable circumstances for others.”
The CCA Board of Directors has initiated a process for organization members to have their opinions considered at the highest levels. “CCA has already had interest from members of Congress and the Administration in the outcomes of our member discussion and recommendations. As CCA members have become accustomed to, the association will act with one voice and that voice will have substance.” said Wooten. The following letter introduced this action to CCA members:
Dear Member,
The membership of CCA, its affiliate leadership, committees, board and staff are committed to the singular goal of fighting for grassroot beef producers in ensuring that we have a healthy business environment in which to compete. The industry cannot continue to experience these periods of market disparities and inefficiencies and if allowed to continue unchecked, there will be devastating and long-term impacts on the cattle industry.
The extreme volatility and disconnection from market signals and market fundamentals that have been occurring has caused significant damage to the cow/calf, stocker and feeding segments of the beef production supply chain. We recognize that the record disconnect between wholesale beef prices and live cattle prices are not sustainable and have created significant financial challenges and hardship for our members.
CCA supports the investigations into the discrepancies between boxed beef prices and the futures and live cattle markets to determine why the markets failed to send appropriate market signals throughout the production chain, but we also believe that there are broader and more systemic reasons that our current marketing system is no longer functioning effectively.
The Colorado Cattlemen’s Association members have indicated that:
- Packers have taken advantage of price structure whereby upstream producers have been materially harmed. The current Marketing System has become or is close to becoming unworkable.
- Federal government can and should play an important role in enforcing and regulating the marketplace to ensure that a free and fair market is allowed to operate efficiently.
- Federal government is not capable, nor should they seek, to solve the fundamental problems that exist in the marketplace without broad industry direction .
- These market issues are systemic and after 25 years of incremental shifts, have reached a tipping point that must be addressed. These issues are complex and consensus solutions are not readily apparent in many areas.
- We need a grassroot industry effort to tackle our market issues, and it is our belief that this requires all segments of the industry, representing all sizes and geographic regions, to come together, and address these issues in a systematic, progressive way that empowers all segments to benefit from a fair and efficient marketing system.
CCA doesn’t have the answers. But an industry driven process that involves all segments of the industry has the wherewithal to address these problems and implement practical solutions. Anyone who believes that there are simple solutions to these issues isn’t thinking deeply enough.
CCA is asking its direct members and members of local CCA affiliates to rally around this process and be part of progress…progress that our sons and daughters are depending on. Additionally, we are asking that members stay focused and engaged. Don’t become enamored with a parody that has little chance of making real change. As with everything, we must put in the work to reap the rewards.
Sincerely,
CCA’s Board of Directors
The mission of Colorado Cattlemen’s Ag Water NetWORK is to help ‘keep ag water connected with ag land.’ Phil Brink, Brink, Inc, is the Consulting Coordinator of Colorado Cattlemen’s Ag Water NetWORK. Phil can be reached at phil@brinkinc.biz or 720-887-9944.