The National Cattlemen’s Beef Association (NCBA), Cattlemen’s Beef Board and other cattle industry groups met in Orlando recently.
NCBA was definitely focused on the future, with traceability discussions, tax legislation preparations, the near-term focus on beef demand and cattle numbers, the duration of El Niño and the possibility of a better economy and political climate by next year.
NCBA is thoroughly preparing to argue tax policy with hard numbers and evidence of the effect on the cattle industry of losing the better tax treatment of the 2017 Tax Cuts and Jobs Act. That law expires at the end of 2025 unless Congress acts to keep or improve it, or lets it expire to raise more government revenue for the social engineering priorities.
The economic facts escape the political left. Even a recent study from the universities of Princeton, Harvard and Chicago, and the National Bureau of Economic Research, confirmed that the 2017 tax cuts, while cutting tax rates, stimulated business investment, increased wage rates and in a couple years, increased government revenue because of economic growth, more jobs and more business investment.
The death tax regulations are most critical for the cattle industry, along with closely related provisions for the step-up in basis and for special use valuation for land and equipment. There is also a qualified business income deduction rule that reduces pass-through taxable business income and Section 1031 like-kind exchanges.
NCBA’s Kent Bacus, executive director of government affairs, pointed out that half of the members of Congress weren’t around for the 2017 tax bill so education will be vital. The House bill to push for a flat-out death tax repeal has 166 co-sponsors so far.
To gather more background data, NCBA is asking members to take a tax survey, so they can present congressional members and staff with real-world data on the benefits of the present system and the damage losing it would incur. Use your phone or computer to access the survey: tinyurl.com/53tnx9jf.
The Cattle Contracts Library (CCL) Working Group’s report on USDA’s pilot program was discussed at the Live Cattle Marketing Committee. The pilot is funded for now and up for discussion going forward.
The 11-member working group’s report recommended no changes to NCBA’s existing supporting resolution, but the extensive report laid out pros and cons representing industry opinions so far, with detail in the background report. Interestingly, the working group was “evenly divided” as to whether the CCL was a “useful tool to producers.”
For pros: it provides Livestock Mandatory Reporting (LMR) info in a more user-friendly format and can provide actionable information for cattlemen. The con opinion doesn’t like that the data is sourced from only the Big Four packers and is concerned those packers will be able to analyze and use the data better than cattlemen.
Adjustments to the program could include expanding the data to all LMR packers, revisions to confidentiality rules and base price adjustment revisions.
The background report from Terrain is available here: tinyurl.com/3fm6extk.
Cattle industry vulnerability and USDA’s animal disease traceability proposed rule were big topics in the Animal Health and Well-Being Committee. All the rhetoric and misinformation aside, the issue is simple to many: A foreign disease outbreak like foot-and-mouth disease could decimate our domestic and foreign markets overnight.
The bank of vaccines is one important tool. But vaccinating or eliminating animals cannot stop the spread of disease unless we know very quickly when, where and which animals, to limit damage.
The $10 billion in export sales would be at risk for an unknown period of time ($425/fed animal). That supply would flood the domestic market and drive down prices for everyone.
NCBA’s resolution has a long list of recommendations but key points include keeping cattle ID information confidential; utilizing low-cost tagging devices and readers supplied by government funds where possible; operation at the speed of commerce; non-interference with state brand activities; and allowance for cattle movement between adjoining states on pasture-to-pasture permits, subject to state animal health officials’ control.
The resolution also supports electronic devices on interstate movement of intact cattle older than 18 months, show and rodeo cattle, and dairy cattle. It also supports a private, industry-managed, non-governmental independent database collaborator to handle the data for animal ID number, time, date and location. The system must coordinate with the USDA’s Animal Health Event Repository and follow a defined process for animal health officials to interact with the Independent Database Collaborator in the event of a disease event of national significance. — Steve Dittmer, WLJ columnist
(Steve Dittmer is the author of the Agribusiness Freedom Foundation newsletter. Views in the column do not necessarily represent the views or opinions of WLJ or its editorial staff.)
