05/02/07 Cattle market concentration

Cattle Market Concentration The beef industry is a house divided over a very important issue. I'm Jeff Keane; I'll be right back to explain a little about the problem. Cattle market concentration has the beef industry totally divided as to the competitiveness of the marketing process. Many of the larger national organizations representing cattle producers feel with only four major beef packers including Tyson, Cargill, Swift and Company, and National Beef Packing Company there is far too little competition in the cattle marketing system. The National Farmers Union, the American Farm Bureau, and R-Calf USA are organizations in this camp. The National Cattlemen's Beef Association and the American Meat Institute are groups that feel the cattle marketing process is fine the way it works now with packer ownership of cattle, forward contracts, and production contracts given to producers by these packers. I'm not sure which groups are right, but it seems to me with fewer buyers there will be less competition and more chance for market manipulation. John Queen, NCBA president, says with forward contracting producers can find another buyer if a p-rice doesn't suit them. Well, what happens when all four major buyers aren't buying? This happened in February 2006 when the big four withdrew from the cattle cash market for two weeks. A Grain Inspection, Packers and Stockyards Administration study says restricting marketing arrangements would cause a decrease in the supply of cattle and feeder cattle prices. I always thought a decrease in supply meant an increase in demand. I think I'm confused again. I'm Jeff Keane. Western Livestock Reporter 4/25/07