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For decades, U.S. cattle producers have asked U.S. Department of Agriculture to clarify and define specific terms in rules that provide oversight to the relationship between meat packers and cattle producers. Since the beginning, our country has recognized that a civilized society requires boundaries and that without them, the freedom of the powerful eventually diminishes that of weaker parties. Even when equally empowered, their actions will eventually devolve into chaos if left unbound.
In 1921, our governing officials recognized the need for rules and boundaries to maintain a fair and competitive livestock marketplace by passing the Packers and Stockyards Act. In recent years, those rules have been either misinterpreted or inconsistently applied by judicial authorities. The need for clarification in these nearly 100-year-old rules requires immediate attention.
Unfortunately, major livestock trade associations have chosen to not participate in this process of rule clarification. These organizations could have chosen to offer solutions that would benefit their diverse memberships and the industry as a whole. Instead, because of individual self-interests, and a desire to maintain the upper hand, they chose to oppose all efforts to address needed changes and definitions that ensure competition and true price discovery. In the meantime, independent producers have been unfairly treated and the marketplace has devolved into one almost devoid of the competitive action essential to its survival.
Today, there are weeks when only one of the four major cattle packers will be active in the cash cattle market. Often, as is the case in the major cattle producing state of Texas, less than 10% of the trade is negotiated. As a result, there has been a huge leverage shift away from producers to the meat packers.
Participants in the marketplace must recognize our practices are not sustainable if we truly value the benefits of competition to maintain our free market system. Now is the time to support the efforts of USDA to fulfill its role of referee in the marketplace. If there are problems associated with the new rules, we need to provide competent suggestions for improvement – not just mindless opposition.
Allan Sents is marketing committee chairman of the U.S. Cattlemen’s Association. He is the manager and part owner of McPherson County Feeders, a 10,000 head commercial cattle feeding operation in Central Kansas.