What happened at JBS was just another blip on the screen, pointing out more vulnerabilities. Having your data center hacked has become common these days and the government needs to provide security for this valuable infrastructure.
The futures markets panicked, as we would have expected, but returned to normal, which was unexpected. The cash fed cattle market was trading equal with the week prior but estimated slaughter was running 155,000 head behind last week’s pace because of the broken-down logistics that operate on their servers.
Ransomware has been around a long time and it’s interesting to see these huge companies get hacked and held up. It can happen to anyone, including WLJ. Several years ago, an employee opened a piece of junk mail and bang, our computer server was under someone else’s lock and key. Fortunately, we had enough redundancy in our data backup, and we were off and running again in just a few hours, without paying ransom.
These large companies, JBS and Colonial Pipeline, caused major disruptions to our infrastructure and harmed society. These are private companies and must take care of business themselves. How is government going to help?
Cattle market issues are becoming hot and heavy. The famous meeting between cattle producers several weeks ago has prompted lots of government engagement. And it appears that some brought the trash back in the room—issues they will never agree on…like country-of-origin labeling or “COOL.”
Twenty-eight members of Congress sent a letter to U.S. Attorney General Merrick Garland pointing out some of the problems cattle producers are having with the packing industry. It has been referred to as the Rounds’ letter since, apparently, Sen. Mike Rounds (R-SD) authored it. This letter runs the gambit on the issues, from COOL to imports to packer concentration to the 100-year-old Packers and Stockyards Act. They even point out that there has been no new packing capacity built in 30 years.
Ironically, it’s very clear these elected officials know nothing of what the letter said, and just signed it. What bothers me is: If this is the best available science for government to make policy decisions from, we’re all in trouble. Just because they are senators and congressmen doesn’t mean they are the smartest people in the room. More than likely, they are up for reelection and want to show some support for their constituents.
Concentration is a big issue, but when it comes to forward contracts and formula buying, cattlemen only have themselves to blame. Cattle feeders—the big ones—are the guys who proposed formula trading and forward contracting.
This cattle market situation seems unfair to most cattlemen, but one thing that perplexes me is that I seldom hear cattle feeders complain. The situation at Easterday Farms showed us that packers have creative relationships with feeders. Cody Easterday was essentially financed to provide fed cattle to Tyson’s Pasco, WA, plant. How many other deals are like that, and do they offer those deals to every cattle feeder? Would this be a Packers and Stockyards violation?
The NCBA also produced a letter to the leadership of the Senate Ag Committee. Their priority issues were Livestock Mandatory Reporting, expanding processing capacity and support for outright grants to add shackle space to the system. They support state/federal inspection equivalency, as well as labor solutions such as changes to the H-2A program to include year-round employment. They do not support country-of-origin labeling but they do support the use of expanded labeling to promote the various attributes of program-produced beef. They feel that the industry does need to go further than using just the “Product of USA” label, which is applied to any federally inspected product.
It appears we again have two different points of view that we’re trying to promote to government. There are half a dozen bills that will take a long time to work through the process. We have a new administration, which will show more sympathy towards our more liberal farm groups.
The meat packing industry is under the eye of the U.S. Justice Department. After the price-fixing suit on chicken prices, I think the department will look a little deeper into pricing.
Do we need a total reform of the Packers and Stockyards Act? Perhaps, but the laws of supply and demand will still apply. Another thought is we should have the government come in and nationalize the packing industry and turn them into a public utility. But who would want skin in that game? When you start asking the government for help, it should scare you because you won’t get what you want. And don’t forget to pray for rain in the Great Basin states. — PETE CROW