The Colorado Cattlemen’s Association (CCA) has formed a group of diverse industry representatives and stakeholders to devise a solution to the current cattle and beef markets situation.
The group’s formation comes at a time when ideas such as the 50/14 mandated negotiated cash trade proposal have surfaced. The 50/14 proposal is one of several suggestions producers have recommended to combat the negative impacts from the COVID-19 pandemic.
Terry Fankhauser, CCA executive vice president, told WLJ the market situation is a complex issue that yields more questions than answers. “We are looking in the face of federal legislation and other things being reported that we have no sense of what the implications would be,” Fankhauser said.
He continued that CCA is trying to slow the pace of the discussion, because the organization believes it’s important to not only develop policy that will ultimately guide legislative or regulatory activity, but also ensure constituents have a working knowledge of how the beef supply chain and pricing work.
“Everybody is familiar with what they deal with directly,” Fankhauser said. “If you feed cattle, you understand your grids and your structure, but you don’t necessarily understand other sectors or other pricing arrangements.”
Fankhauser said alongside policy development, CCA has formed a working group of about 15 individuals who are knowledgeable and practiced in different sectors of the business and pricing structures. This includes academics such as Dr. Stephen Koontz of Colorado State University, large and small cattle feeders, cow-calf producers, and individuals with futures markets experience.
Fankhauser said a main concern he has regarding a cash mandated contract is producers who may not realize how cattle are priced and are willing to give up the hard work they have put into their animals, and sell them on a price basis without any potential benefits or differentiation in the animals.
“At the end of the day, if we pass something that doesn’t work, we are giving up our genetic value on our animals, because we are going to price everything on a cash grid, not a performance grid,” Fankhauser said. “Whereas at the same time, we still need more participation for price discovery.”
The working group has held three listening sessions so far with membership to get their input and is now working on releasing a webinar series to provide a foundation of information for policy development discussions.
Fankhauser said the engagement of cattle producers has been positive. “I’ve been really impressed by producers who have been participating,” he said. “They have more questions and are reserving their positions until they better understand.”
He added producers have supported needing more price discovery and have expressed their interest in how a cash mandated contract would work, but haven’t explicitly said the proposal is the answer.
“I’ve heard them say it could be, it might be a portion of it, or it might not, but we aren’t willing to say yes to something like this without exploring it in greater detail, as well as the other options out there,” he said.
Fankhauser further said he thinks producers are responding exactly how they should, and it’s the duty of every trade association to further look into issues to build up a grassroots movement.
“You can easily go out and support a proposal and say that’s the answer to things because what we have doesn’t work, or you can do the heavy lifting and you can use your members and engage them in a grassroots process to find solutions that they know will work and they have fully vetted and built policy around,” he said.
Fankhauser said producers should not have to be convinced about what the right solution is, and when the right idea is there, everyone will know it and move forward with it.
He added producers should keep an eye out for webinar details coming out soon. It hasn’t been finalized yet whether the webinars will be accessible only to CCA members or open to everyone, but there will likely be recordings released afterward for everybody.
“The policy process is focused on our membership, but education and information are something the whole industry needs,” he said.
Other state associations may also be gathering information, and Fankhauser recommends producers take the time to thoroughly vet proposals and support testing them to ensure they work as intended.
“We do understand we are just Colorado,” he said. “But this is a national issue and we need national consideration.” — Anna Miller, WLJ editor
