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NCBA in a nutshell

Feb 10, 2017

Pete Crow

Imagine 9,300 cattle industry supporters in one place. Nashville, TN, was a busy place last week at the annual Cattle Industry Convention hosted by the National Cattlemen’s Beef Association (NCBA). If I didn’t get to visit with you, I apologize. There were just too many other people in the way.

The mood of the crowd was positive. Some were still perplexed over the cattle market fallout, but most were pleased with the new business climate brought on by the new Trump administration. The public lands crowd was almost giddy with the prospects of reduced regulation, which has already started. Last week the House of Representatives passed a resolution that would repeal the Bureau of Land Management’s (BLM’s) Planning 2.0 rule. The Public Lands Council’s new boss, Ethan Lane, will do the West a good job. He said, “This is a huge victory for America’s cattle producers and a sign that some common sense is finally being restored in Washington.”

The Public Lands Council and NCBA have provided the administration with a laundry list of regulatory and legislative reform goals which is very comprehensive. With the speed at which this administration and Congress are moving, it seems there is a very good chance we can get Waters of the U.S. (WOTUS) and the recent changes to the Grain Inspection, Packers and Stockyards Administration (GIPSA) knocked out. Legislative stuff like the Endangered Species Act and wild horse amendments will take much longer.

Perhaps the most daunting issue on cattlemen’s minds was trade. CattleFax was telling us that we’ll have another 850,000 head of finished cattle to work through in 2017. The January cattle inventory report said there were 31.6 million head of beef cows in the national inventory. To keep markets at profitable levels, we will need export trade to move the added tonnage.

With Japanese Prime Minister Shinzo Abe coming to Washington, D.C. this week, cattlemen and pork producers are hoping that the Trump administration can do something quickly about tariff reduction.

The Trans-Pacific Partnership (TPP) was to start those tariff reductions. Current tariffs into Japan are 38.5 percent and our Australian competitors are headed to a tariff rate of about 9 percent very soon.

Dana Perino, the Fox News personality and former press secretary for President George W. Bush, was the keynote speaker at the opening general session. She advised cattle producers to make sure they get in front of the administration as much as possible on things like trade; giving away the upper hand on trade to China through the destruction of the TPP was not a good idea. But, she said, President Donald Trump can change his mind.

She also said, “Actions of the new administration are like watching a dog on ice chasing a marble. Government doesn’t work like a business,” adding that she hoped things would settle down for the administration. “Trump thrives on chaos. At some point, however, things will get calmer or the chaos will take over.”

Over in the live cattle marketing committee, there were a few amendments floating around from cattle feeders to obligate each other to market at least 50 percent of their cattle on the cash market. The Texas feeders didn’t want any part of that deal and got the amendments tabled so they could discuss it more. They also discussed changing the CME live cattle contract to 12 months and delivery specifications to 50,000 pounds, 70 percent Choice and 1,500- lb. live weight limits.

CattleFax packed the house for their annual industry outlook. They were thinking that commodity prices would start to stabilize a bit but forecasted nearly all prices to move lower. They forecast the average retail beef price to be $5.35 lb., with fed cattle to average $110 cwt., feeders $130 cwt., calves at $150 cwt., utility cows at $65 cwt. and bred cows to average $1,300 per head. The main challenges going forward are going to be price discovery, slaughter capacity, and export trade. They emphasized that the cattle cycle is still alive and advised not to expect any major market upswings until 2020.

One aspect of this year’s convention that was noteworthy was that there were lots of young people attending this event, and participating in the meetings. Establishing policy for the industry is an important job to guide this industry going forward. The future is in young people getting involved in production agriculture, especially the cattle industry. I’m confident they will have a good and profitable future in this industry. — PETE CROW

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