USDA Under Secretary Discusses Markets with Ranchers in Billings

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The U.S. Cattlemen’s Association held their Winter Thaw Conference in Billings February 22nd. The nice weather brought a lot of ranchers come to town to discuss cattle markets and tools to add profitability to their operations.

The special guest at the conference was USDA Under Secretary for Marketing and Regulatory Progams, Greg Ibach. Northern Ag Network’s Colter Brown spent a couple minutes with him covering cattle markets, the USDA investing into beef packing margins and livestock traceability.

 

 

The Winter Thaw was held in conjunction with the MATE show in Billings. The event started at the Northern Hotel with 3 separate panel discussions. Western Ag Reporter Editor Kayla Sargent moderated a panel on women in ranching. Then Northern Ag Network’s Leif Bakken led a panel on tips for adding profit to the ranch and Colter Brown led another on commodity markets and hedging.

After hearing from Cattlemen’s Beef Board Chairman Jared Brackett during lunch, the group headed for the MATE show and a Beef Quality Assurance workshop.

The conference finished up at PAYS for the Cattle Market Power Hour and even more ranchers turned out to Greg Ibach and Tim Andrieson from the CME Group talk about some the challenges with these markets.

Ibach, also took questions on the recent announcement of the U.S. lifting the ban on Brazilian beef imports. He said that the re-entry of Brazilian beef into the U.S. was the result of an agreement for them to accept U.S. beef. Ibach said that Brazil is subject to the same science-based inspection and audit process as any other importer and the U.S. will monitor them closely to protect U.S. beef producers and consumers.

Tim Andrieson covered changes that the CME Group has made to the cattle contracts to better match today’s quality of cattle. It was a very technical conversation but boils down to needing more delivery locations, more long positions in the fed cattle trade and adjusting the choice-select spread to reflect actual quality grades.

Every rancher in the room listened closely as Joe Goggins gave his thoughts on the market and what steps need to be taken going forward. Goggins suggested that these cattle markets need a referee to make sure everyone is playing by the same rules and packers aren’t running roughshod over other segments of the industry.

Then the evening rounded out with another panel, moderated by Justin Tupper from St. Onge Livestock. Corbitt Wall from DV Auction, Brett Crosby with Beef Basis, Cattle Market Analyst Lee Reichmuth and Iowa Cattlemen’s Association Director Mike Schwarck had an in-depth conversation focused mainly on the fed cattle market.

One of the main issues the speakers pointed to was the lack of negotiated cash trade in fed cattle. They agreed that 15-20% of the fed cattle being sold on a negotiated and publicly-reported basis was insufficient. The panel pushed for more clarity on what cattle sell for and said that grid-based or formula pricing leaves too much gray area in the market.

Long-term the presenters and the producers in the room seemed bullish on the cattle industry. But many agreed that more transparency and clarity is needed in the fed cattle and futures trade.

 

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Northern Ag Network


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