The Iowa Cattlemen’s Association returned from the National Cattlemen’s Beef Association’s convention victorious, after garnering enough support to pass two new interim cattle marketing policies at the national level. The 2020 NCBA convention was Feb. 5-7 in San Antonio.
Both of these key ICA-supported policies are intended to provide more information and marketing leverage to Iowa’s cattle producers. The first policy advocates for a “Next Day Cattle Weights” report from USDA, similar to the report published daily in the hog industry. This change would allow the industry to more quickly see national carcass weight fluctuations through quicker reporting via USDA’s Agriculture Marketing Service.
The second policy is related to formula transactions, which have been increasing in use at an alarming rate in a number of states during the past few years. More than 50% of Iowa’s cattle are still marketed through negotiated cash transaction, providing ample price discovery in the region. Other regions of the U.S., however, trade less than 10% through negotiated trade.
Transactions need transparency
The policy brought forward by ICA’s Feedlot Council advocates for NCBA to support initiatives to increase transparency in formula transactions and to require Livestock Mandatory Reporting to publicly report the details of formula transactions including the net price, base price and any premiums.
“Market transparency is the biggest challenge that this industry has been facing and we have to work with others to find solutions together,” says Matt Deppe, CEO of the Iowa Cattlemen’s Association. “And it doesn’t matter what type of marketing transaction you prefer, more transparency of even historic data like this will assist producers as it relates to available data to better leverage market opportunities.”