April 19, 2007

 

US cattle group airs criticism to US congress over cattle marketing 
 

 

Members of the National Cattlemen's Beef Association and the American Meat Institute have testified at a congressional hearing, stating that the government should help the US beef industry and not limit or remove choices on cattle marketing.

 

The president of the National Cattlemen's Beef Association (NCBA), John Queen, testified yesterday (17 April 2007) at a House Agriculture Subcommittee on Livestock, Dairy, and Poultry hearing on Market Structure of the Livestock Industry.

 

John Queen, president of National Cattlemen's Beef Association (NCBA) a North Carolina cattle producer, said the market structure and competition issues should be regulated by the NCBA and not by the government.

 

His testimony was heard at the House Agriculture Subcommittee on Livestock, Dairy and Poultry on Market Structure of the Livestock Industry.

 

Queen pointed to the recently released Grain Inspection, Packers and Stockyards Administration (GIPSA) Livestock and Meat Marketing study which concluded that alternative marketing arrangements (AMAs) such as forward contracts, production contracts, packer ownership or custom feeding have provided benefits to some producers without harming the competitiveness of the marketplace.

 

Queen also described how producers can better control their profit margin with forward contracting as cattle ranchers can "walk away and find another buyer if the price doesn't fit their needs". This way, he says, ranchers become "price takers" which put then in control of their business.

 

The president of the American Meat Institute (AMI), J. Patrick Boyle, also testified at the hearing.

 

Boyle said: "We believe the strength of the livestock marketing system in the US is the flexibility it provides to producers, packers/processors and retailers in responding to market signals and offering an increasing variety of alternatives for the producer through to the consumer."

 

Boyle says producer options include: spot market transactions, production contracts, cooperatives, bargaining associations, marketing agreements, and other options that allow them to align themselves with consumer demands through contractual arrangements to manage risk and produce a desired product.

 

These measures, he said, aid a livestock producer's ability to manage price and weather risks, access credit, and participate in valued-added, branded product lines. Within the last decade, Boyle said the industry has witnessed significant sales growth in branded beef and pork products and the corresponding response to market signals by producers to increase production.

 

He further testified"  "We believe that the most appropriate government role in today's livestock marketing system is to enforce the existing laws and regulations that ensure fair and nondiscriminatory business practices among producers and packers, while allowing producers the freedom of choice on how best to market their livestock."