R-CALF Addresses Globalization And The Cattle Market
R-CALF recently submitted comments to the USDA that identified two factors as, what the organization called the core structural problems causing the current crisis in the U.S. cattle industry. R-CALF CEO Bill Bullard said the first factor, concentration in the beef packing sector, created the second problem.
He noted that just four meat packers control 85% of the international fed cattle market and 80% of the boxed beef market. Due to that massive market share, Bullard says, the quartet of packers have been able to consolidate their control over both the supply and demand side of the packing industry. He went on to say this has given the packers unlimited access to undifferentiated and lower cost imports from around the world.
"So they have the inherent market power, possessed by virtue of their high concentration. Then they have this new ability to displace domestic production with imports sourced from around the world. The combination of those two factors has contributed significantly to the downturn in prices that U.S. cattle producers receive."
The relationship between cattle prices and beef prices, Bullard noted, needs to be reconnected. And the glue that can bind the two is competition.
"Which we can do by supporting the Grassley-Tester Spot Market Protection Bill that requires the packers to purchase at least 50% of their cattle in the competitive cash market."
Bullard wants to see the globalization of input supplies addressed as well, adding he continues to push for mandatory country of origin labeling on all beef sold in the U.S., which he claims will give consumers the ability to better drive demand through choice.
Although reform in the industry is a slow process that is constantly hampered by the meat packing lobby, Bullard believes he and R-CALF are making headway. He pointed to the fact that consumers are now getting more involved on these issues after paying record prices at the grocery store while cattle producers are receiving depressed prices.
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