People used to a relatively free society like to feel like they are in control—farmers and ranchers even more so, since they often operate their own family businesses in ways they think are best.
Those expectations exist on both sides of the fed cattle marketing debate. Some cattlemen feel they are not in control of marketing their cattle because the old methods of determining value, like hauling cattle to local auction markets, are not as readily available as in the past.
Other cattlemen—those using alternative marketing agreements to value and market their cattle in new, more complicated ways requiring long-term commitments and records—feel the government is angling to take away their cattle marketing control. This is a predictable conflict.
The recent House and Senate hearings on fed cattle marketing showcased this. Several ranchers who testified spent time referencing past data and methods. There is no question things have changed and will keep changing. Not all change is to your advantage, whatever your position in the beef production chain. But producing what consumers want at the best price we can should be everyone’s goal.
Neither the government nor taxpayers should be involved beyond what’s absolutely necessary. The government tallies livestock census data, marketing numbers and prices and performs food safety inspections to ensure a steady supply of meat and to protect taxpayers/consumers. Regulation should extend to markets only to the extent necessary to stop cheating.
The idea that the government should control or prohibit marketing channels that are legal and provide win/win transactions is not only antithetical to a free market, but it harkens back to change. Cattlemen themselves have a hard enough time keeping up with changing trends. How could government bureaucracy keep up and find adaptive ways to cope with changes?
Both hearings had cow-calf producers who complained they had no idea what their calves were worth because they had no local auction market. That is one of the important functions auctions provide where they are available to producers. But with today’s available marketing options, reduced cattle numbers, labor problems and operating costs, auctions can’t be everywhere any more than major packers can.
There are other ways to determine the value of a calf if a producer really has an accurate view of his cattle. Documenting the past performance of calves is absolutely critical today. Calf pricing still has no direct connection to the major packers.
Another producer complaining of the lack of auction market calf value determination said they used to get more bidders and better prices at auction markets. How much does the psychology of auction market bidding enter into producers’ confidence they got the “right” price, despite information from public and private sources being more available now than ever?
Sen. Cindy Hyde-Smith (R-MS) mentioned a bill she co-sponsored that would raise the USDA Agricultural Marketing Service’s fines from $10,000 to $90,000 to help finance the Packers and Stockyards (P&S) Act and raise compliance. However, she also noted that compliance was “very high” at 96 percent, and the 4 percent noncompliance rate was usually due to office errors.
So the feds want to throw millions at the USDA and P&S budgets, partially to increase competition and enforcement of the P&S Act for the less than 4 percent of covered businesses that are noncompliant. Do they want us to think there are thousands not getting caught?
He didn’t fully explain it, but Sen. Roger Marshall (R-KS) made a great point. In any industry, overregulation increases concentration because only the biggest and best-capitalized businesses can cope with all the regulations.
It is obvious that the inflation rate, especially in food prices, has the politicians in D.C. very scared—fuel prices, too. And when was the last time the general media and Congress were whipped up about fertilizer prices and availability?
Who signed the executive orders that started the energy crisis and pushed for the spending of trillions that fueled inflation? It wasn’t us.
Fear motivates politicians to spend our money to “fix” their mistakes. That’s what scares me. As a measure of their intelligence, note how they want to “take action” on gas prices all the while shutting down pipelines, delaying permits for new ones and piling on restrictions for new wells. They want millions for charging stations for the few electric cars on the road when the electric grid is overtaxed and utility companies are warning of brownouts and blackouts. They are proud of rolling back Trump’s Environmental Protection Agency (EPA) deregulations, and they brag about their infrastructure bill for projects that their EPA and Endangered Species Act crackdowns guarantee will either never get built or take decades.
Do we really need this kind of twisted “expertise” running (ruining) our cattle markets? — 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.)
