Republican and Democratic Senators from several cattle-producing states have introduced a bill to curtail captive supply in American cattle markets. Here in Canada, the National Farmers Union is calling for us to follow the American lead. The NFU has long said that the ability of beef packing companies to own cattle and control cattle through contracts is leading to lower prices for producers. The proposed American bill would prevent packers from using non-priced contracts as a tool to depress prices. Forward contracts would have to be traded in public markets. The bill does not ban packer ownership of cattle, although the NFU says that additional step is likely to come later. The bill exempts producer owned cooperatives, packers with low volumes and packers who own only one processing plant. Two companies have the vast majority of Canadian beef slaughter capacity. Competition is limited. The Canadian Cattlemen’s Association has not identified captive supply as a problem. However, if the Americans move on this issue it would seem prudent to carefully examine what might be done on this side of the border. I’m Kevin Hursh.
Kevin Hursh, PAg, CAC