R-CALF USA Say Price Discover Proposed Rule Good for US Cattle Producers

The USDA recently released an advance notice of proposed rulemaking on a new rule focused on price discovery and competition in the cattle market under the Packers and Stockyards Act, this rule is seen as one of the most pivotal in reshaping market structure, potentially restoring robust competition for independent producers, according to R-CALF United Stock Growers of America, CEO, Bill Bullard.

“So what this rule is doing is seeking options for a new benchmark that can be used in these alternative marketing arrangements that will not continually shrink the cash market and continually grant to the meat packers tremendous market leverage in pricing fed cattle. This is an extremely important rule, and we urge every cattle producer, once the comment period is open, to provide comments and to pretend to help USDA determine what is the best option available, to establish a benchmark in contracts that will ensure a competitive marketplace for producers. And this is how we reverse the decline of the number of cattle producers that we're experiencing and the number of feedlots that have been dropping like flies. This is how we reverse it is we restore competition to the marketplace.”

Bullard adds, there have been studies that show the relationship between the increased volume of alternative marketing arrangements and the decrease in the cash market.