CALF_News_August_September_2020

25 CALF News • August | September 2020 • www.calfnews.net 866-666-7626 ADMAnimalNutrition.com/Beef Today’s choices drive tomorrow’s reality. Follow ADM Cattle Nutrition At ADM, everything we do starts with the hard work of farmers and ranchers. ADM Animal Nutrition is dedicated to providing feed and resources to support our industry partners who are an inspiration in their resiliency and commitment to supporting our nation’s food chain. Cattle nutrition done right. mandate; some others are supporting a 30/14 formula – all were to be proposed at the Cattle Industry Summer Business Meeting, July 27-30. Proponents of a mandated cash pric- ing mechanism argue that drastic times call for drastic measures, indicating that we’ve reached a point where regulations and mandates are needed to save the American cattleman. Wall is in favor of a mandate, but a milder 30-percent minimum negotiated cash requirement.“I think 30 is enough,” he said.“Yes, it’s less than the 50 Iowa is already getting and it’s a little bit less than where Nebraska is at, but when- ever you force your packers that are at 7 percent in Texas and under 20 in Kansas to go to 30 percent, that is going to give a big, big push. It’ll make your packers search for cattle that they wanted to buy on the open market, and many times, especially in Kansas, they would go north into some of your Midwestern fed cattle auctions to fill that mandate.” There are pros and cons of this, of course. While yes, it will get the job done by increasing the volume of cash negotia- tion and, thus increasing the volume of price discovery, we, as cattle producers, should also be wary of consequences associated with this. An inherent part of the pride the industry takes in raising cattle is in the story of efficiency – we’re producing more beef with fewer cattle, using fewer resources. The driver behind this was innovation. We’re in an industry that, with the exception of environmental regulations, enjoys the benefit of free trade throughout the supply chain, which fostered an environment inspired by innovation. Welcoming government regulations into an industry dominated by “the less government the better” mindset has the potential to create unwanted consequences down the line. Asking for one mandate is like asking for one barn cat – you get one and, in a year, you have a whole inbred herd of them. Further, should we support move- ments like these if they’re based on a pathos-oriented motive vs. logic and factual evidence? Levi supports moving forward with ideas that have the research behind them to back them up. “The grid concept has been studied well, which is part of the reason we’ve seen the gravitation from 80 percent cash to 80 percent grid/formulas,” he said. “What hasn’t been studied are the unintended consequences of 50/14 or 30/14 [pricing mandates]. We saw the unintended consequences of live- stock mandatory price reporting. That was something we all had to have and here we are, discussing price discovery because we got what we asked for. “My point is that, if we’re going to mandate something or worry about unintended consequences, we best study or use some proven ideas,” Levi asserted. In his letter, Koontz agrees. Given the never-before-seen circumstances the industry finds itself in, implementing a government mandate wouldn’t solve the problem. “It would not address the current market situation in any manner,” he wrote.“The current market situation is Continued on page 27 