The Certified Angus Beef brand has penned an open letter to beef industry stakeholders, voicing concerns of the 50-14 market proposal currently in Congress.
The letter asked three questions in particular: How will negotiated grids be handled under such legislation; why are dairy and dairy crossbred cattle, cattle over 30 months, and foreign-born cattle excluded from the proposal; and what will the impact be on value-added programs such as age-and-source verified, GAP-certified, NHTC, etc.?
The United States Cattlemen’s Association (USCA) responded to the open letter. Regarding negotiated grids, USCA said the bill would not include negotiated grid purchases as “spot” market purchases, “However, the enhanced true price discovery that results from the negotiated cash price will help drive the negotiated grid price.”
USCA said certain cattle are excluded from the legislation because, “Dairy and dairy crossbred cattle, cattle over 30 months, and foreign-born cattle do not represent the high-quality cattle that our members, and producers under the Certified Angus Beef label, raise.”
The association also noted these cattle types are not eligible for delivery against the CME live cattle futures contract. Regarding value-added programs, USCA said the current system “rewards quantity over quality and gives the packer pricing leverage when large quantities of cattle are committed on formula-based contracts.”
