CALF_News_August_September_2020

27 CALF News • August | September 2020 • www.calfnews.net Corporate Office n Winchester, VA n 540-877-9632 n valleyproteins.com We offer high-energy fats and quality protein meals: n Bleachable Fancy Tallow n Recycled Cooking Oil n Choice White Grease n Meat and Bone Meal n Animal Vegetable Blends n Blood Meal We have these locations in the West to bring our services closer to you. Amarillo, TX n San Angelo, TX n Veribest, TX n Bernalillo, NM n El Reno, OK VALL_12004 – 2020 Calf News Ad.indd 1 3/23/20 2:21 PM due entirely to the supply disruptions at meatpacking facilities – plants are being closed or operated at reduced speeds due to the human health event. Further, there have been disruptions to common domestic trade flows – from delivery to food-away-from-home providers and to at-home food outlets. Additionally, we entered 2020 knowing protein supplies would be abundant most of the year. None of these issues are related to price discovery." Industry members more inclined to a “do no harm” laissez fare mindset are pursuing solutions centered around voluntary participation. One example is the “bid the grid” concept Levi is a proponent of. The idea focuses on using a grid-style marketing strategy for producers in which packers must bid the base price for a standardized grid formulated from the CME live cattle contract specifica- tions. With a main goal of increasing the volume of negotiation in the fed cattle industry, Levi also highlighted the benefit producers will receive for quality carcass traits. “There’s a reason the market contin- ues to gravitate to receiving premiums and discounts for carcass traits – because they’re being paid for that,” Levi said. “My solution is the ‘bid the grid.’ You get the best of both worlds. Cattle are not committed; they’re up for negotiation; they’re not turned in. Their starting price is a bid-and-offer process no different than the bid-and-offer process for tradi- tional cash. “Producers – both those in the 1,000- head world and those in the 50,000-head world – will be compensated for Choice, will be compensated for 1s and 2s, will be discounted for heavies, etc.” Levi recommended to the NCBA Cattle Market Working Group that the grid utilize the specs of the CME futures contract with a few nuances. Wall and Kooima challenged the “bid the grid” idea, expressing concern over packer participation and whether or not producers currently hold enough lever- age to pressure packers into implement- ing this strategy. Levi understands the skepticism regarding packer participation in any non-mandated program. However, he supports communicating with packers regarding programs that would work for them, which some state cattlemen’s association have been doing. And he said NCBA reported to the working group that all four packers “are extremely interested in” a standardized grid with standardized specs. Wall, Kooima and Levi all agreed there is a need for change to ensure a sustainable business environment for current and future cattle feeders. “I think there’s one thing we can all agree on – it’s that instantaneous information is extremely important to all our constituencies and peers,” Levi said. Instantaneous dissemination of information throughout the supply chain will enable producers to better leverage themselves in the marketplace. THE SCALES OF BALANCE Continued from page 25 Continued on page 29 