Government Accountability Office releases report on 2015 market crash

Following a 2016 request by the Ranchers-Cattlemen’s Action Legal Fund (R-CALF), the Government Accountability Office (GAO) released a report on its investigation into the sharp fed cattle price decline in 2015. In summary, the GAO report cited drought-related market fundamentals for the price declines. “According to industry experts and GAO’s analysis, a drought from late 2010 to early 2013 led the cattle inventory to fall and rise and, in turn, fed cattle prices to fluctuate.” The highest prices overlap with the lowest cattle inventory levels. The beginning of the price decline corresponds with the beginning of the inventory’s increase. The report also noted that “analysis of cattle market data from the U.S. Department of Agriculture [USDA] also indicated that competition levels among packers that slaughter and process fed cattle did not appear to affect the national price changes in the fed cattle market in 2015 but that areas of the country with less competition among packers had lower cattle prices.” R-CALF CEO Bill Bullard characterized the report as effectively incomplete. “The report used a very broad brush to describe a few of the more obvious problems in our U.S. cattle market and while it did identify some specific problems, it left several of the largest stones unturned.” — WLJ