D.C., April 17, 2007 – America's cattle producers say the government should help grow the U.S. beef industry and not limit or remove choices in the marketing of cattle. This message was at the heart of testimony given by the National Cattlemen's Beef Association (NCBA).
The House Agriculture Subcommittee on Livestock, Dairy, and Poultry held a hearing on Market Structure of the Livestock Industry. NCBA President and North Carolina cattle producer John Queen told the subcommittee, “When it comes to market structure and competition issues, NCBA's position is simple – we ask that the government not tell us how we can or cannot market our cattle.”
Queen pointed to the recently released Grain Inspection, Packers and Stockyards Administration (GIPSA) Livestock and Meat Marketing study which concluded that alternative marketing arrangements (AMAs) such as forward contracts, production contracts, packer ownership or custom feeding have provided benefits to some producers without harming the competitiveness of the marketplace.
“The report states that the leading reasons ranchers participate in AMAs are the ability to buy or sell higher quality cattle, improve supply chain management, and obtain better prices,” says Queen. “The study concludes that restrictions on AMAs would cause a decrease in the supply of cattle, quality of beef, and feeder cattle prices.”
Queen described how producers can better control their profit margin with forward contracting. “If the price doesn't fit their needs, they can walk away and find another buyer,” says Queen. “Being a ‘price maker' rather than a ‘price taker' puts ranchers in control of their business.”
As a producer-driven organization, all the policies outlined in Queen's testimony were brought forward by, debated by, and voted on by NCBA members. “Our membership has consistently said that we want access to business opportunities that will help us improve our bottom line,” Queen says. “The opportunity to engage in and benefit from new market innovations is good for the individual rancher as we supply the consumer with the beef products they demand.”