Billings, MT - An organization of family farmers, ranchers and consumers called on the National Cattlemen's Beef Association to support reform of "dysfunctional cattle markets" when the NCBA meets in Denver. The Western Organization of Resource Councils (WORC) asked the NCBA to support WORC's proposal to restore fairness in a monopolized industry by making beef packers buy cattle for slaughter in open, public markets.
"NCBA policies support exactly what WORC's proposal would achieve," said Skip Waters, a Moorcroft, Wyoming, rancher and WORC spokesman. "WORC's proposal would lead to an open, public market for cattle that pays producers for good quality cattle. It would also facilitate full and fair enforcement of the Packers and Stockyards Act by USDA, to make sure packers play by the rules," said Waters.
"I know [NCBA President-elect] Clark Willingham is as concerned as I am that the level of ‘captive cattle' currently controlled by the major packing firms is hurting the cash fat cattle market," Waters said. "We think it's time the NCBA took action to aggressively address this problem by endorsing WORC's proposal as a viable solution to this problem."
A year ago, the United States Department of Agriculture (USDA) asked for public comment on a "petition for rulemaking" filed by WORC, which asked USDA to limit the use of "captive supplies" of cattle by beef packers. Cattle that packers own and feed in their own feed lots are called "captive" because the packers control them. Packers also sign contracts with feedlot owners to buy some or all of their cattle, which are also called "captive." Many farmers and ranchers say that beef packers' use of captive supplies limits open competition and lowers the price they get for their cattle — without lowering the price of beef to consumers.
"The cattle market is monopolized by three packers more intent on producing profits than on getting quality beef to consumers," said Tom Breitbach, a Montana rancher and spokesman for WORC. "The packers control more and more of the cattle they need for slaughter through private, non-competitive deals every week. There is very little open competition left. Producers are at the mercy of dysfunctional cattle markets," Breitbach said.
According to the federal Agricultural Marketing Service, 45% of the cattle marketed last week in the leading cattle feeding states of Texas, Oklahoma, Kansas, Colorado, Nebraska and Wyoming were captive — fed by or for packers, financed by packers, under contract or formula agreements with packers, or committed to packers without a negotiated price prior to the change in ownership,
"More than 1,700 cattle producers and beef consumers submitted comments on our proposal, and they ran 33 to 1 in favor of it," said Breitbach. "Our proposal recently received the unanimous endorsement of USDA's National Commission on Small Farms. It is supported by hundreds of businesses, local governments, and groups representing hundreds of thousands of farmers, ranchers and consumers," Breitbach said.
"One of the handful of comments opposing the proposal was submitted by a staff member from the NCBA," Breitbach said. "Those comments and an NCBA staff memo to members of Congress contain misstatements and distortions concerning the petition, WORC, and NCBA's own policy." Breitbach said.
"WORC's petition for rulemaking proposes a common sense public policy, which would preserve the rights of packers and feeders to contract while restoring fair and vigorous competition to the markets on which we as cattle producers depend," said Breitbach. "It's slightly Quixotic for the NCBA to say it wants the best prices for cattle while allowing packers to buy cattle without any price at all." We hope the leaders of the NCBA will correct its initial misjudgement and adopt our proposal to restore fairness and competition in the cattle markets," Breitbach said.
"NCBA policy calls for ‘development of a negotiated ‘grid' pricing structure by the private sector with the base price and spreads determined by competitive bidding no more than seven days prior to shipment,'" pointed out Waters. "WORC's petition for rulemaking calls for regulatory reform that would lead to the same thing — a negotiated ‘grid' pricing structure. It's time that the NCBA come on board with all the other organizations representing cattle producers and consumers and support a solution to the cattle market failure that is staring us in the face," Waters said.
In addition to the National Commission on Small Farms, the minority report of Secretary Glickman's Advisory Committee on Agricultural Concentration also recommended adoption of the reforms proposed in the petition. Other groups supporting the proposal include the National Farmers' Union, National Farmers Organization, American Corn Growers Association, National Contract Poultry Growers' Association, New England Milk Producers Association, Campaign for Family Farms and the Environment, Farm Aid, Western Livestock Digest, Center for Rural Affairs, National Family Farm Coalition, U.S. Catholic Conference, United Methodist Church, and the National Campaign for Sustainable Agriculture.
The Western Organization of Resource Councils (WORC) is an association of grassroots organizations in six western states: the Dakota Resource Council (North Dakota), Dakota Rural Action (South Dakota), the Idaho Rural Council (Idaho), the Northern Plains Resource Council (Montana), the Powder River Basin Resource Council (Wyoming) and the Western Colorado Congress (Colorado). The members of these groups are farmers, ranchers, small business and working people who seek to protect natural resources, family farms, and rural communities.
Further information about the Western Organization of
Resource Councils and the petition for rulemaking is available on WORC's
web site at
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