Nebraska Cattlemen Board Address Black Swan Market Responses
LINCOLN, NE (April 8, 2020) – Yesterday, the Nebraska Cattlemen Board of Directors unanimously approved a letter to the U.S. Department of Justice (DOJ) to identify and investigate any evidence of fraudulent business practices within the beef meatpacking industry.
“COVID-19’s impact on the cattle market has reignited concerns that surfaced following the 2019 beef packing plant fire. These concerns continue to focus on extreme market deteriorations that repeatedly take place for the production segments of the beef industry and coincide with rapid increases in boxed beef values and waves of windfall margins for the packing/processing sector.” Ken Herz, President – Nebraska Cattlemen
Nebraska Cattlemen understands and acknowledges there is a pending USDA investigation into the market reactions that took place after the August 2019 Holcomb, KS plant fire. We firmly believe next steps should be taken to address member concerns and we ask the DOJ to open their own investigation and expand the scope to include both the market aftermath of the Holcomb, KS fire and the similar, yet magnified, market response to the COVID-19 situation. Both events continue the undue financial burden for all cattle producers within the production side of the beef cattle industry.
Additionally, the Nebraska Cattlemen Board amended current policy and passed interim policy to increase competitiveness in fed cattle markets by increasing packer capacity and reinstituting good business practices by packers. This includes amending existing policy to strengthen language by mandating packers to purchase at least 50% of their weekly slaughter in the negotiated cash or negotiated grid market within specific delivery windows.
New interim policy doubles down on NC’s ask to the Nebraska delegation for long term solutions to cattle producer profitability – by revamping the Risk Management Association Livestock Risk Protection program to eliminate limitations that discourage cattle producer participation and by modifying subsidy levels to attract increased participation by cattle producers.
In addition to these efforts led by NC, we support efforts led by Senator Deb Fischer to request the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights hold a public hearing, in addition to asking Agriculture Secretary Sonny Perdue determine if there is any evidence of unfair practices and ensure the beef meatpacking industry is compliant with the Packers and Stockyards Act.
We thank all of the federal delegation for their support urging the USDA to quickly implement relief for producers and rural communities included as part of the recent COVID-19 aid legislation and that the agency continue to provide all available support through their various programs and authorities.
To find additional NC action regarding extreme market volatility and COVID-19 response, visit www.nebraskacattlemen.org.