Negotiated cash fed cattle trade was at a standstill in all major cattle feeding regions through Tuesday afternoon, according to the Agricultural Marketing Service. Live prices last week were at $114/cwt. and dressed trade was at $182.
Cattle futures closed mixed Tuesday, with continued pressure from Corn futures and uncertainty about the week’s cash direction.
Live Cattle futures closed an average of 33¢ higher, except for 25¢ lower in the back contract.
Feeder Cattle futures closed mixed, from an average of 42¢ lower to an average of 18¢ higher.
Choice boxed beef cutout value was $4.35 lower Tuesday afternoon at $234.68/cwt. Select was $1.47 lower at $226.17.
Corn futures closed mostly 4¢ to 7¢ higher; 13¢ higher in spot Mar.
Soybean futures closed 10¢ to 11¢ higher through Jan ‘22, and then mostly 3¢ higher.
Major U.S. financial indices closed lower Tuesday, with likely profit taking from the previous day’s sharp rebound.
The Dow Jones Industrial Average closed 143 points lower. The S&P 500 closed 31 points lower. The NASDAQ was down 230 points.
Bipartisan U.S. Senators—Deb Fischer (R-Neb.) and Ron Wyden (D-Ore.)— introduced a bill on Tuesday aimed at increasing transparency and price discovery in cash fed cattle markets.
The Cattle Market Transparency Act of 2021, according to the Senators, will:
Establish regional mandatory minimum thresholds of negotiated cash and negotiated grid trades to enable price discovery in cattle marketing regions. It will require the Secretary of Agriculture, in consultation with the Chief Economist, to establish regionally sufficient levels of negotiated cash and negotiated grid trade, seek public comment on those levels, then implement.
Require USDA to create and maintain a publicly available library of marketing contracts between packers and producers in a manner that ensures confidentiality.
Prohibit the USDA from using confidentiality as a justification for not reporting and make clear that USDA must report all Livestock Mandatory Reporting (LMR) information, and they must do so in a manner that ensures confidentiality.
Senator Fischer, a member of the Senate Agriculture Committee first introduced the bill last September.
“I am pleased to reintroduce this bill with bipartisan support,” says Senator Fischer. “It will help facilitate price discovery and provide cattle producers with the information they need to make informed marketing decisions. I am committed to working across the aisle to advance the bill forward this Congress.”
The need for increased market transparency and cash price discovery is recognized widely. Choosing a voluntary or mandatory approach is where opinions diverge just as widely.
“Cattle producers continue to face serious obstacles when it comes to increasing profitability and gaining leverage in the marketplace,” explains Ethan Lane, Vice President of Government Affairs for the National Cattlemen’s Beef Association (NCBA). “Leveling the playing field and putting more of the beef dollar in producer pockets remains the top priority of this association. NCBA shares Senator Fischer’s objectives, as do its affiliates and indeed the entire industry. The best way to achieve those objectives, however, continues to be hotly debated by the very cattle producers this legislation would directly impact. We have worked and will continue to work alongside our affiliates, Congress, and USDA toward regionally robust negotiated trade, the establishment of a cattle contract library, and commonsense in USDA’s rules of confidentiality by taking direction from our membership through the grassroots policy process.”
NCBA is two months into the implementation phase of a voluntary approach, which established a series of triggers to evaluate negotiated trade volumes in each region and benchmarks for improvement.