South Dakota Stockgrowers Support Cash Trade Mandate
April 21, 2020
The South Dakota Stockgrowers are supporting a recent grass-roots push to increase the amount of negotiated cash trade withing the fed cattle markets. Many organizations with varying interests are banding together to help save the cattle industry.
Specifically, the push is to require each meat packing plant that is large enough to need to participate in Mandatory Price Reporting, to be required to purchase at least 30% of the cattle they harvest on a negotiated cash deal. The cattle purchased would then have no more than 14 days to be delivered.
Currently there is no mandate as to a minimum amount of cattle that must be purchased on a negotiated cash trade. Cattle that are reported as to this type of transaction have a delivery window of up to 30 days. While many meat packing plants in the northern United States are already meeting or exceeding this 30% cash trade, most plants in the southern part of the country are not, with some as low as around 5%.
“While this isn’t perfect,” Said SDSGA President Scott Edoff. “It is a good start. We’d like to see even more cash trade and more transparency within the fed cattle market than we currently have. We feel like this grass-roots legislation has a legitimate chance of passing. It would certainly help stop the consolidation within some areas of the country, and we hope producers in our area will feel the trickledown effect of more competition in the market.”
Many groups have come together to compromise on this 30/14 push. While nearly every group or producer involved would like to see 50% or greater in the negotiated cash market, the reality is that the 30/14 legislation is much more likely to get widespread support from lawmakers across key states. Additionally, many believe this would be sufficient enough to facilitate truer price discovery than we are currently experiencing.
David Uhrig, SDSGA Marketing Committee Vice Chair said, “More competition is going to be good for our industry. Doing nothing is not an option, and we think this legislation will help restore our market’s long-term viability.”
To view the letter and sign on to the 30/14 petition, visit nationalbeefwire.com
Source: South Dakota Stockgrowers Association