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CapitalPress.com
Friday, June 25, 2021
Livestock
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Rabobank expects global beef, cattle prices to move lower
By CAROL RYAN DUMAS
Capital Press
Many regions around the world
are experiencing high prices for beef
or cattle, leaving analysts at Rabo-
bank to question whether that will
ultimately force overseas prices to
drop.
While there are some common
factors, such as strong demand from
China, local drivers — herd rebuild-
ing in Australia and a re-opening of
foodservice in the U.S. — are argu-
ably more important in causing the
record prices, the analysts said in
their latest “Beef Quarterly” report.
They expect many of those local
factors to eventually correct and
cause an adjustment in prices.
“However, with China’s demand
expected to remain fi rm, we also
believe that the market has seen a
fundamental step up,” they said.
They also warned that the global
beef supply is so tight that any local
disruptions — such as droughts or
Tyson Foods
Workers process beef at the Tyson Foods plant in Pasco, Wash.
an increase in consumer demand
— now have the potential to exert
a much more dramatic impact on
global trade.
In the U.S., renewed competi-
tion between foodservice and retail,
combined with grilling season, all–
time high consumer income and sav-
ings and strong exports have put the
U.S. beef sector in a demand-driven
market.
Beef prices in April were 18.5%
higher at wholesale and 11.5%
higher at retail compared to April
2019. Beef production January
through April was up 6% compared
with the same period in 2019.
“Unfortunately for cattle produc-
ers, the imbalance between fed cattle
and operational packing capacity has
prevented high beef prices from fi l-
tering through to cattle prices,” the
analysts said.
Despite record-strong beef
demand, cattle prices have been
depressed throughout the pan-
demic. Both domestic and export
beef markets continue to be excep-
tional, but fed cattle prices continue
to be a huge disappointment, they
said.
The analysts estimate fed cat-
tle supplies have averaged 120% of
operational packing capacity since
April 2020, and current fed cattle
prices are about 41% of beef cutout
values.
The insuffi cient slaughter capac-
ity is further hamstrung by a labor
shortage, restricted productivity at
plants due to COVID-19 protocols
and larger-than-normal slowdowns
due to weather and plant mainte-
nance, the analysts said.
They expect wholesale beef
prices to moderate in the near future
as the peak of grilling season pur-
chases subside, restaurant supply
chains are fi lled and consumer stim-
ulus money is spent or reallocated.
But cutout prices could remain 5%
to 10% above pre-pandemic levels
for much of 2021.
If fed cattle supplies can fall
back under packing capacity con-
straints in the third quarter, cattle
producers will get a larger share of
the beef dollar throughout the sec-
ond half of this year, they said.
Year to date, beef cow slaughter is
up 2.5% from a year earlier. Contin-
ued drought across the West, rapidly
escalating feed costs and tight hay
supplies are forcing cow slaughter.
“Despite increased feed costs,
demand for replacement cat-
tle remains stronger than earlier
expected,” they said.
USDA fi nes Idaho calf company
USDA will reconsider its
organic livestock standards
Capital Press
By CAROL RYAN DUMAS
Capital Press
USDA Secretary Tom
Vilsack announced on June
17 the agency will reconsider
the Trump administration’s
interpretation that USDA is
not authorized to regulate
the practices set forth in the
2017 Organic Livestock and
Poultry Practices fi nal rule.
The controversial ani-
mal-welfare rule was fi nal-
ized in the Obama admin-
istration and quashed in the
Trump administration. It
included new standards for
raising, transporting and
slaughtering animals.
“I have directed the
National Organic Program
to begin a rulemaking to
address this statutory inter-
pretation and to include a
proposal to disallow the use
of porches as outdoor space
in organic production over
time and on other topics that
were the subject of the OLPP
EO Media Group
Holstein cows graze at an organic dairy east of Herm-
iston, Ore. USDA will reassess rules related to the wel-
fare of organic livestock.
fi nal rule,” Vilsack said.
USDA anticipates send-
ing the proposed rule to the
Offi ce of Management and
Budget within six to nine
months from the date of the
remand.
The new standards were
set to go into eff ect in March
2017 but were delayed by
an executive order by Presi-
dent Donald Trump, putting
implementation of all pend-
ing regulations on hold.
USDA delayed imple-
mentation again in May and
November 2017 and with-
drew the rule in March 2018,
stating it exceeds the agen-
cy’s statutory authority and
could have a negative eff ect
on voluntary participa-
tion in the National Organic
Program.
The Organic Trade Asso-
ciation challenged the delays
in court in September 2017,
amending its complaint
twice and challenging the
withdrawal of the rule.
Save
the date!
There’s so much work to be done.
Be a part of the conversation.
September 23 , Powell Butte
Oregon Cattle PAC Fundraiser
October 8-9 , Ontario
Stockman & Stewardship Event
Beef Quality Assurance Certification
November 21-23 , Pendleton
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& Tradeshow
USDA has entered into a
stipulation agreement with
Jerald Hale, doing business
as H&H Calf Company of
Filer, Idaho, for alleged vio-
lations of the Packers and
Stockyards Act.
Under the terms of the
stipulation agreement, Hale
waived its rights to a hearing
and was fi ned a civil penalty
of $1,300.
An investigation by
USDA’s Agricultural Mar-
keting Service found Hale
had failed to pay when due
for 15 transactions consist-
ing of 130 head of cattle val-
ued at $53,336, from Janu-
ary through April 2020.
The law requires buyers
to issue the full payment for
livestock by the close of the
fi rst business day following
the purchase and transfer of
possession. Failure to timely
pay for livestock purchases
is a violation of the law.
The law authorizes
USDA to assess civil penal-
ties up to $29,270 per viola-
tion against any person after
the notice and opportunity
for a hearing on the record.
USDA may off er alleged
violators the option of waiv-
ing their right to a hear-
ing and enter into a stipu-
lation agreement to quickly
resolve alleged violations.
Legislation addresses antitrust enforcement
By CAROL RYAN DUMAS
Capital Press
Three U.S. senators have introduced leg-
islation to beef up enforcement of the Pack-
ers and Stockyards Act.
The bill, sponsored by Sens. Chuck
Grassley, R-Iowa, Jon Tester, D-Mont.,
and Mike Rounds, R-S.D., addresses anti-
competitive practices in the meat and poul-
try industries that threaten the nation’s food
supply and national security following the
recent ransomware attack on JBS, the coun-
try’s largest meat supplier.
The Meat Packing Special Investiga-
tor Act would create a new dedicated offi ce
within the Department of Agriculture’s
Packers and Stockyards Division.
The Offi ce of the Special Investigator for
Competition Matters would have a team of
investigators, with subpoena power, dedi-
cated to preventing and addressing anticom-
petitive practices and enforcing antitrust
laws.
The new special investigator and team
would coordinate and act in consultation
with the Department of Justice and the Fed-
eral Trade Commission and create a new
bridge between USDA and the Department
of Homeland Security.
“With a team of dedicated staff , the
USDA will now have the ability to investi-
gate the tough issues facing producers and
hold bad actors accountable,” according to a
press release from the senators.
“This bill provides USDA with the nec-
essary tools to beef up enforcement of the
Packers and Stockyards Act, increase coor-
dination with DOJ, FTC, and DHS and to
foster a fair and functional marketplace for
farmers and consumers alike,” Grassley
said.
Unfair, anticompetitive practices in the
meatpacking industry have hurt ranchers for
years and put rural communities and family
agriculture at risk, Tester said.
In addition, corporate consolidation is
a direct threat to national security because
a single cyber attack can threaten the food
supply, he said.
“That’s why this bill is so important. It
devotes the needed tools to USDA to shore
up our national security and address anti-
competitive practices in the industry that
threaten Montana ranchers and consumers,”
he said.
It’s long past time to address packer con-
centration, Rounds said.
Cattle producers are going broke while
consumers are paying an over-infl ated pre-
mium for beef at the grocery store, Rounds
said.
“Our legislation strengthens USDA’s
ability to investigate harmful anticompet-
itive behavior to apply the Packers and
Stockyards Act as intended,” he said.
U.S. Cattlemen’s Association has long
advocated the creation of a special inves-
tigator position, said Leo McDonnell, the
association’s director emeritus.
“This bill comes at a critical time for the
U.S. cattle industry. To ensure a level play-
ing fi eld for U.S. cattle producers, we need a
referee that can call foul on anticompetitive
market practices,” he said.
The bill directs coordination between the
agencies and grants subpoena power to aid
in the investigation and prosecution of vio-
lators, he said.
It also “bolsters the legal power of the
USDA by maintaining a staff of attorneys
and other professionals with relevant exper-
tise that can elevate cases of corruption,” he
said.
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