YOUR TEXAS AGRICULTURE MINUTE
Federal mandates hurt the cattle industry
By Gary Joiner
Price discovery and transparency in today’s cattle market are desired traits, but a bill in Congress that provides mandates on how cattle are purchased falls short.
The Cattle Price Discovery and Transparency Act gives the U.S. Department of Agriculture broad authority to mandate up to 50% of fed cattle in the Texas region to be sold through negotiated cash trade.
Those changes will discount the value of cattle. That will be passed to stocker and cow-calf operators.
Texas A&M University estimates it can cost the Texas, Oklahoma and New Mexico region as much as $126 million annually.
The bill will do nothing to change the packer concentration dynamics and increase competition.
If we want more competition between cattle buyers, we need more buyers and packers, or we need fewer cattle.
There are other parts of the bill that will be good for the industry, such as increasing packer pricing information and transparency.
But the bill takes away ranchers’ freedom to market cattle as they see fit.
No studies or supporting evidence have proven a government mandate in the cattle market will increase the price of cattle.
Economists at top universities have provided extensive analysis proving the mandate would have a negative effect on cattle markets with a decrease in the price per head of cattle.
More work is needed on the bill.
The preceding commentary is brought to you by Texas Farm Bureau, the “Voice of Texas Agriculture.” Called “Your Texas Agriculture Minute,” TFB will issue thought-provoking editorials each week—via print and audio—to spark understanding of agriculture in the Lone Star State and its impact on each and every Texan.
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