US cattlemen seek government funds for price study
The United States’ largest cattle industry organisation has urged the House and Senate Agriculture and Appropriations Committees to find funding for research that would get to the bottom of volatile markets and low prices for cattle producers.
In a June 17 letter to the committees, Wythe Willey, president of the National Cattlemen’s Beef Association (NCBA), asked that funding be provided to USDA to "contract with an unbiased independent consortium of several pre-eminent business schools to conduct a thorough analysis of the entire livestock, poultry and meat protein complex."
The analysis, according to Willey, should take a broad look at the underlying fundamentals of the industry, as well as those associated with it. It should also evaluate the affect of international trade on the industry, as well as the impact of regulatory activities and costs of regulatory compliance at all levels.
In the letter, Willey said increasing levels of concentration should be one of the issues investigated. Less than 40 percent of the steer and heifer slaughter was conducted by the top four firms in 1980, while more than 80 percent is processed by the top four today.
However, Willey pointed out that during the last 10 years prices have been highly variable, while market concentration has remained virtually unchanged.
He pointed out that during difficult times like these "we need to take a careful and pragmatic look at the fundamental factors impacting our industries." He said this would allow producers to make informed decisions about the future and "assure that unintended consequences do not outweigh any potential benefits from legislated change."
Part of the analysis should include "looking at different business models and industry structures that will help producers maintain long-term profitability." The industry is changing rapidly, Willey said, and those changes should be recognized and understood.
