PHOENIX—It’s no secret that the last few years have been a roller coaster ride for cattle ranchers. The Coronavirus pandemic and other disruptive events have wreaked havoc on live cattle markets and left ranchers feeling out of control of their own industry, even as consumers clamor for more American beef.
When the gap between live cattle prices and retail beef prices widened to historic levels in 2019, ranchers across the U.S. cried foul. When it happened again in spring of 2020, they piled even more pressure on lawmakers and industry organizations to address meatpacker concentration issues and what appears to many to be a broken market system.
Legislation has been proposed and industry organizations have come up with various solutions, but it has been difficult for all groups to align behind a unified plan. In an effort to find common ground, member leaders of American Farm Bureau Federation, National Cattlemen’s Beef Association, National Farmers Union, R-CALF USA, and the United States Cattlemen’s Association met May 10 in Phoenix, Ariz. The organizations convened at the request of Livestock Marketing Association.
The Phoenix meeting was a historic event and likely the first of its kind. In an effort to hear directly from ranchers on the front lines of the issue, the meeting was organized in secret and attendance was limited. Each organization sent four representatives, all of which were members or elected officials. No legislative staff or organization employees were allowed to attend.
American Farmers & Ranchers/Oklahoma Farmers Union (AFR/OFU) Cooperative President Scott Blubaugh was chosen to attend the Phoenix meeting as a representative of National Farmers Union (NFU). He was the only Oklahoman included in the event.
“I’m honored to have been included in such a discussion and to be part of the reforms that will ensure independent cattle producers and cattle feeders have a place in their own industry,” said Blubaugh.
Of the meeting itself, Blubaugh was afraid it would be unwelcoming or even hostile, but he was surprised by the atmosphere in the room.
“Lack of competition in the beef industry has led to an outcry over cattle market issues that is now at a fever pitch,” said Blubaugh. “Tensions have been running high lately and I didn’t know what to expect. But, I was pleased by how open we all were. We had a frank, respectful discussion and I was surprised by how much we were able to accomplish.
“The meeting brought all sides of the cattle business together to work toward solutions and that’s what we did. It was clear to me that everyone there has a heart for this industry and the knowledge to back it up. We all know what’s on the line.”
According to a joint press statement released May 17, the unprecedented meeting in Phoenix brought together the diverse set of industry organizations to “discuss challenges involved in the marketing of finished cattle with the ultimate goal of bringing about a more financially sustainable situation for cattle feeders and cow-calf producers.” The press statement also claims that “attending organization representatives were pleased to have reached consensus on many issues and are committed to the ultimate goal of achieving a fair and transparent finished cattle marketing system.”
Blubaugh agrees that the groups did find a lot of common ground and even reached consensus on a few points.
“Last week’s historic cattle industry meeting happened because of the dire situation many ranchers have found themselves in,” said Blubaugh. “Our nation’s ranchers have become increasingly more desperate for a fair and transparent marketplace and I believe everyone in the room understood that.”
“Six major players, with differences of opinions and different policies, came together and formally recognized that our producers are in trouble and, in large part, the market system is to blame. Despite our differences, we identified problems and solutions we agree on and have agreed to move forward with what we can. On those items of consensus, we’ll all be marching in the same direction. That’s huge.”
Key takeaways from the joint press statement include topics of discussion, including but not limited to:
- Packer concentration,
- Price transparency and discovery,
- Packer oversight,
- Packers and Stockyards Act enforcement,
- Level of captive supply, and
- Packer capacity.
According to the statement, Phoenix meeting attendees agreed to take the following action items to their respective organizations for consideration:
- Expedite the renewal of USDA’s Livestock Mandatory Reporting (LMR), including formula base prices subject to the same reporting requirements as negotiated cash and the creation of a contract library.
- Demand the Department of Justice (DOJ) issue a public investigation status report and as warranted, conduct joint DOJ and USDA oversight of packer activity moving forward.
- Encourage investment in, and development of, new independent, local, and regional packers.
For the complete joint statement, visit https://lmaweb.com/press-releases/.
AFR/OFU Cooperative is a membership services organization established in 1905 as Oklahoma Farmers Union. AFR/OFU provides educational, legislative and cooperative programs across the state and serves as a watchdog for Oklahoma’s family farmers and ranchers and rural communities. The organization is actively supportive of the state’s agricultural industry and rural population with membership consisting of farmers actively involved in production agriculture and non-farmers adding their voice in support of AFR/OFU principles.