By Tim Alexander
SPRINGFIELD, Ill. – The Illinois Beef Association (IBA) is joining with the National Cattlemen’s Beef Association (NCBA) in calling for structural reform to how cattle are marketed both regionally and nationally. Jill Johnson, IBA executive director, issued the call for reform during a policy webinar broadcast on Aug. 11.
“IBA leadership has been working to examine options to provide long term structural changes to the cattle markets,” Johnson said. “These options have been many over the last several months. Some want to seek a voluntary approach to some of what we are dealing with in the markets. Some of these solutions are market-driven; some of these solutions look at bringing in legislative or regulatory measures.”
IBA leaders are working quickly to vet possible solutions before issuing a recommendation on which course to take. “We absolutely know that things need to change, but we also don’t want to do something that could be full of unintended consequences,” she said. “The struggle is really focused on price discovery and transparency. Those are the topics we will remain laser-focused on.
“First, IBA is committed to requiring more details be reported on (price discovery). We are also diving into ways to increase negotiated cash trade. We recently passed policy that supports robust price discovery by compelling packers to purchase cattle through negotiated cash trade at regional levels.”
IBA was thoroughly engaged in the recent six-hour NCBA Live Cattle Marketing Committee meeting that resulted in the committee and NCBA board of directors adopting a voluntary effort to improve cash live trade marketing in the next 90 days, with the potential for mandates in the future. During that meeting, the following policy decisions were approved:
- Support for a voluntary approach to increase negotiated trade on a region by region basis.
- Live Cattle Marketing Working Group to identify “triggers” using research, funded and directed by NCBA, which identifies regionally sufficient negotiated trade thresholds.
- Pursue legislative or regulatory solutions to increase negotiated trade on a regional basis if triggers are not met.
- Three-year sunset on any new programs to ensure viability.
“An important thing to bring to light about price discovery is that every single cattlemen’s association affiliated with NCBA in the weeks leading up this meeting all agreed on one thing in principle and that was there is a need for the industry to increase price discovery to robust levels,” Johnson said.
The IBA director noted that there was dissension among the 44 or so NCBA state affiliates over recommending voluntary compliance or mandated compliance in the price discovery proposals. “A part of the industry feels that a voluntary approach has not been working. This is a compromise policy that first commits to a voluntary approach. But if that does not lead to significant price discovery within specific regions, it will trigger NCBA to pursue a legislative or regulatory solution,” Johnson said.
At heart is the disparity between live cattle price and boxed beef price. The Tyson plant fire of 2019 and the effects on the supply chain from the COVID-19 pandemic led the beef industry to ask the U.S. Department of Justice to investigate extreme market shifts allegedly associated with the two events. The investigation, which also involves the USDA, is ongoing.
‘We feel that any fraudulent business practices brought to light from an investigation need to be addressed by the highest levels of government,” Johnson said.
Other 2020 policy priorities approved by the IBA were related to the Livestock Management Facilities Act, which the organization remains in support of, and adapting legislation to require labeling “alternative protein” non-meat products in supermarkets.
“Our work on the national level with the NCBA dealt with establishing a regulatory framework to ensure appropriate oversight, and we are working to end what we call deceptive labeling of plant-based proteins,” Johnson said. “And we continue to push back on false health and environmental claims that disparage beef’s good name.”
On the state level, IBA is sponsoring an advertising campaign that points out the differences in animal and plant-based protein products, with the message “there’s no substitute for beef.”
The webinar was the final in a “Cattlemen’s Education Series” offered by the IBA. This and other series webinars are available to view by visiting the IBA website (www.illinoisbeef.com) and clicking on Cattlemen’s Education Series.