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Source: Farm Policy Facts news release

Challenges in the cattle markets are not new, but the pandemic has herded these problems to the forefront with historic packer profits - a function of spreads between the prices ranchers are paid for their cattle and the prices people pay at the grocery store or other retail markets for beef.

In the wake of these unprecedented conditions, Congress commissioned a new report from the Agricultural and Food Policy Center (AFPC) to examine fed cattle pricing, packing capacity, and related issues.

Dr. Bart Fischer, professor in Agricultural Economics at Texas A&M and co-director of AFPC, was editor of the report titled, "U.S. Beef Supply Chain: Issues and Challenges." Fischer has a background in agricultural production and extensive experience on Capitol Hill serving as Chief Economist of the House Agriculture Committee from 2011 to 2019.

"The cattle markets are extraordinarily complex," Fischer said on the latest episode of Groundwork. "We saw this huge shift away from restaurants into grocery stores, which puts a huge strain on the supply chain. And the form of demand really shifted during the pandemic with all the disruption that comes with that."

Packing operations also contended with COVID-19 labor shortages.

"Even just at that segment of the supply chain, you see both of those things colliding at once," Fischer said.

Because of the extraordinary challenges and complexity of the market, lawmakers continue to struggle with how to ensure transparent markets promote growth and fairness from the producer through the supply chain to the consumer.

On November 10, the Cattle Price Discovery and Transparency Act was introduced to address the declining negotiated cash markets and ensure more accurate price information in cattle markets. The bipartisan legislation was introduced by U.S. Senator Deb Fischer (R-Neb.), along with Senators Chuck Grassley (R-Iowa), Jon Tester (D-Mont.) and Ron Wyden (D-Ore.). A section by section summary of the bill is available here. While a step toward progress, the legislation still lacks complete support from all segments of the complex cattle supply chain.

At Farm Policy Facts, we believe "U.S. Beef Supply Chain Issues and Challenges" is required reading for anyone interested in understanding the complexity of this market - and certainly law and policy makers who are considering these issues. Our thanks to Dr. Fischer and all the beef market experts who contributed to this important work.

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