CALF_News_June_July_2021

26 CALF News • June | July 2021 • www.calfnews.net By Larry Stalcup Contributing Editor F irst-quarter fed cattle negotiated cash trade numbers were not as high as the goals established in a new plan. But compared to 2020, negotiated cash trade was substantially higher in many areas – which was the overall goal of voluntary cash trade measures supported by the National Cattlemen’s Beef Association (NCBA) and many state cattle organizations. The Texas, Oklahoma and New Mexico feeding region, which normally sees little cash trade, saw nearly 55,000 more negotiated cash trades from Janu- ary through March, compared to the same period in 2020, says Justin Bena- videz, Texas A&MAgriLife Extension economist in Amarillo. “Negotiated trade was also up sub- stantially in the Colorado and Nebraska area, but challenges remain in Kansas where volume for negotiated trade was down,” he says. The voluntary program supported by NCBA and state groups is counter to mandatory negotiated cash trade legislation being considered in Congress. Those mandatory cash trade proposals run from about 35 percent of total fed cattle sales to 50 percent. NCBA, Texas Cattle Feeders Association (TCFA), Texas and Southwestern Cattle Rais- ers Association and others argue that mandatory cash trade may reduce the benefits of producing higher quality cattle to meet consumer demand for higher quality beef. Producer expenditures for better genetics, quality, production practice transparency, verification and other measures to meet consumer demand may not provide the premium produc- ers are seeking from herd improvement. They also argue that the major packers will be forced to designate more specific days of the week to handle mandatory cash trade, causing a disruption in the supply chain. Voluntary 75% Negotiated Cash Trade Plan The call for mandatory cash trade grew loud after the fire at the Holcomb, Kan., Tyson packing plant in August 2019. The plant shutdown caused an historic spread between live cattle prices and packer boxed-beef prices. The volume hit a bedlam pitch when COVID-19 forced many packing plant closures in spring 2020. The spread was enormous between fed prices and boxed- beef prices. Something had to be fixed – and fixed in a hurry. But further government involvement in producer and feeder business was not the answer, claimed NCBA and many cattle groups. They favored a volun- tary plan, based on a “75% Plan.” The NCBA's Voluntary Negotiated Cash Trade Plan Progress Made, But First-Quarter Numbers Need Improvement