Report 5-25-21

Over the decades, getting various agricultural organizations to get behind a single issue has almost been impossible. But recently, representatives of National Cattleman’s Beef Association, R-CALF USA, United States Cattlemen’s Association, American Farm Bureau Federation, National Farmers Union and Livestock Marketing Association met to call for more transparency in the cattle markets and to ask the Department of Justice to publicly report on its ongoing antitrust investigation. Sixteen members of Congress also wrote to the Department requesting an update on the probe. The group discussed packer concentration, price transparency and discovery, packer oversight, Packers and Stockyard Act enforcement, the level of captive supply and packer capacity. According to Politico, during the meeting, it was revealed that JBS-SA, the world’s largest meatpacker had parted ways with the NCBA, potentially an indication that the big four meat packers are uncomfortable that the various livestock and agricultural organizations are joining forces to change the marketing system that’s currently in place. But observers question whether any reforms will be made if the Department of Justice doesn’t step up and enforce antitrust regulations. The disparity of what cattle producers are paid for their animals, and what packers are getting for them was pointed out by DTN on May 17th. DTN contends that packers are pocketing a record $128 per hundredweight, or more than $800 per slaughtered steer than what they paid cattleman for the live animal.

According to the USDA, exports constitute a large market for U.S. farm and food products and send ripples of activity through the nation’s economy. For instance, farm purchases of fuel and fertilizer spur economic activity in the manufacturing, trade, and transportation sectors, and the movement of these agricultural exports requires data processing, financial, legal, managerial, and administrative services. This additional economic activity is estimated annually by USDA’s Economic Research Service (ERS) using an agricultural trade multiplier that measures the employment and output effects of trade in farm and food products on the U.S. economy. In 2019, U.S. agricultural exports valued at $142 billion generated an additional $160 billion in economic activity, for a total of $302 billion in economic output.

While drought conditions in western Colorado range from severe to extreme, the northeast corner of the state is drought free, and much of the rest of eastern Colorado has dry conditions, but are not considered in drought at this time. The USDA reports that wet field conditions in many areas of northeastern Colorado has kept farmers from completing field work during the past several weeks. But continued rain in the corn belt has led corn and soybean prices to fall on commodity markets over the past week.

Also related to drought in the west, the Drovers Journal reported that sixty percent of the U.S. cow herd is now in some level of drought or dryness, because pastures aren’t greening up for grazing. That’s forcing an increasing number of cows to be culled and sent to slaughter in numbers not seen in a decade. The number of cows sent in March of this year was up 10% over last year and April was up 4% to 5% over a year ago.

American broadcast journalist and war correspondent Edward R. Murrow said, “The obscure we see eventually. The completely obvious, it seems to take longer.”

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