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Beef producers pin hopes on government market probe

Others say more packer-farmer cooperation needed

By Gary Gunderson

gunder@agrinews.com

BILLINGS, Mont. -- Bill Bullard says it doesn't take an investigation to figure out why beef cattle prices are low.

Due to consolidation within the beef processing industry, producers have too few buyers seeking their cattle, said Bullard, chief executive officer for R-CALF United Stockgrowers of America.

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The increase in contract selling doesn't help, either, because it locks in supply for processors and prices paid are usually confidential, Bullard said.

It also helps weaken the price setting function of cattle markets, because so few animals are traded openly.

The Billings-based group has joined with 28 U.S. cattle associations to request a congressional investigation of the beef industry's pricing policies.

Others in the beef industry say an investigation may help, but it may be more productive for producers and processors to work together to increase sales by improving beef quality and reducing retail prices.

An investigation may help give a foundation to ideas R-CALF and others have that could increase cattle prices, Bullard said. These ideas include establishing farmer- and cooperative-owned beef packing plants, and allowing state-inspected processing plants to sell meat across state lines. Both ideas could give farmers new outlets for their cattle, forcing packers to pay more, Bullard said.

"There's no question we have too few buyers," Bullard said. "I believe we'll have an investigation. We've had a good response so far from Congress."

Rick Van Buren, a Backus, Minn., beef producer, said a probe may not help the beef industry's ultimate problem, stagnant sales. He is president of a local chapter of the Minnesota Cattlemen's Association, one of the groups calling for an investigation. He is also a member of the Minnesota State Cattlemen's Association.

An investigation may lead to more federal intervention in an area where it may be better for producers and processors to cooperate, Van Buren said.

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