Cattle market reform bills are moving in both chambers of Congress. Yesterday, the Senate Ag Committee held a hearing on the situation that just a small handful of companies control roughly three-fourths of the marketplace, and what can be done to encourage more competition.
You would think that this would be enough to get most cattle producers to agree and join forces, but it has not been the case. Some producers are actually frightened to testify.
Just ahead of Yesterday?s hearings, Iowa Senator Chuck Grassley talked about the status of the legislation that he and Nebraska Senator Deb Fischer have introduced to address the situation. Grassley said that there is plenty of support, but it is still a knotted-up situation with Ranking Member, Senator Boozman or Arkansas, opposing the bill. He points to a study from Texas A&M.
Senator Fischer was hoping to see cattle producers from her state of Nebraska at the hearings. Nebraska is one of the top cattle-producing states. Word is that there are cattlemen who would like to testify but are afraid of retribution. The possibility of such packer retribution is a reality that many producers are worried about, and so they will not attach their names to any testimony or information provided.
They are between a rock and a hard place. They feel that the market needs to be expanded to include more competition, but they also know that their bread is buttered by the ?Big-4? packers, and if they officially call out the situation, they may have to look for a new buyer. And that wouldn?t be easy in a marketplace controlled by four companies that are working together only to maintain that stranglehold.
The USDA is ready to implement any decision that Congress makes. That is according to the Senior Advisor for Fair and Competitive Markets, Andy Green.
Shawn Tiffany is the President-Elect of the Kansas Livestock Association and is strongly opposed to these reforms. He points out that the NCBA and the American Farm Bureau Federation.
Now, this is where it can be murky for understanding the situation. It isn?t necessarily that the big producers are opposed to opening competition so that there is fair pricing for all, but they are against government mandates. However, the problem is that so many things have been tried, and mandates are the next thing on the list to attempt.
As stated earlier, this whole situation is the perfect illustration of how much power the big four packers (Tyson, JBS, American Beef, and Cargill) have. They are controlling the markets so much, that there can?t be any competition, and it is squeezing out the little guy. However, nobody in the industry can do much to help the little guys, because then they risk losing it all because a packer retaliates against them for speaking out.
It truly is a story of David and Goliath. Except in this version, David is having to sling that rock with his eyes closed.
The House Ag Committee has a hearing on Cattle Market Transparency later today.
