Congressman Frank Lucas, R-OK, wants answers for his cattlemen constituents. And he\u2019s not alone.<\/p>\n
On May 1, Lucas delivered a bipartisan letter, signed by 24 of his House colleagues, to U.S. Secretary of Agriculture Sonny Perdue. The letter \u201cpolitely and firmly\u201d requests the findings of the U.S. Department of Agriculture\u2019s Packers and Stockyards investigation into the divergence between live cattle and boxed beef prices that it began in August 2019.<\/p>\n
The investigation originally was limited to the price divergence following the fire in the Tyson Fresh Meats plant in Holcomb, Kansas, in 2019. Just the past month the scope was broadened to include the recent price divergence that\u2019s occurring in the midst of the COVID-19 pandemic.<\/p>\n
Lucas has particular knowledge of the cattle industry. He and his wife, Lynda, are cow-calf operators in Oklahoma, and his constituents are largely cattlemen as well. The price situation as it stands is very critical for cattlemen, he emphasized. From January to April, cattlemen have seen cattle futures falling 29%, all while the price of beef that consumers paid rose.<\/p>\n
\u201cIt is a life or death economic situation right now for cow-calf producers,\u201d Lucas said. Maintaining the very beginning of the beef chain is key to keeping cattle going into feedlots and then into processing and ultimately on the consumer\u2019s plate. If producers are unable to stay in business, it puts the whole chain in peril.<\/p>\n
\u201cThe letter I\u2019ve authored and sent to Sec. Perdue, and we\u2019re soliciting signatures from both House Republican and House Democratic colleagues, first thanks USDA for its work up to this point,\u201d Lucas said. \u201cThe MFP (Market Facilitation Program) and disaster money that it\u2019s hopefully allocating in May we hope a big chunk will go to the cattle producer.\u201d But, he said, for the second time in just a few years, cattlemen are finding themselves in the same position with this disconnect between cattle prices paid at the plant door for cattle on the hoof, and what that same packer gets for boxed beef sold to retailers.<\/p>\n
The situation is complex, to be sure, but there\u2019s added concern over the role of the futures market in the situation. Speculators and investors play a key role in the cattle futures markets. If they pull their money out of the futures, that can have as dramatic of an effect on the price of cattle as when investors pulled their money out of the stock market in the last month.<\/p>\n
\u201cAs one cattlemen told me, \u2018if we don\u2019t have someone willing to buy our hedges, we don\u2019t have the ability to hedge,\u2019\u201d Lucas said. While USDA is working with the Commodities Futures Trading Commission to address the situation, there needs to be more insight into the relationship between cattle spot and futures markets. Volatility during a pandemic \u201chas made market participation difficult to manage and capital intensive.\u201d<\/p>\n
Without the findings of the investigation, Lucas\u2019s hands and those of his colleagues are tied in being able to make any laws that would fix the situation. The letter is urging the USDA to release its findings as soon as possible, in order for the situation to be addressed by Capitol Hill, and ultimately bring trust back into the markets.<\/p>\n","protected":false},"excerpt":{"rendered":"
Congressman Frank Lucas, R-OK, wants answers for his cattlemen constituents. And he\u2019s not alone. On May 1, Lucas delivered a bipartisan letter, signed by 24 of his House colleagues, to […]<\/p>\n","protected":false},"author":12,"featured_media":4222,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[202,200,201,1],"tags":[],"acf":[],"yoast_head":"\n