Regaining Market Power

Four-State Working Group favors a voluntary, industry-drive approach to solving the challenges faced by cattle feeders.

Members of a special working group are out to regain leverage in fed cattle marketing. Saying “no” to government intervention, the 21-member Four-State Working Group is made up of representatives of the Texas Cattle Feeders Association, Kansas Livestock Association, Kansas Cattlemen's Association, Nebraska Cattlemen and Colorado Livestock Association. The group favors a voluntary, industry-driven approach to solving the challenges faced by cattle feeders.

The group says leverage has been lost in the fed cattle sector due to a lack of seller discipline, increased captive supplies, structural changes in the industry and basic supply and demand fundamentals. Top-of-the-week trades were singled out as being especially detrimental to the market.

Recognizing that the fed cattle trade likely won't revert back to the way business was done in the past, the members believe that through new ways of organization, the feeding sector can recapture lost market leverage.

The consensus is that a group-marketing effort could attract cattle that are currently being sold under captive supply arrangements.

Many cattle feeders, including some involved in captive supply agreements, are dissatisfied with the current marketing environment, the group says.

And the group believes that companies and organizations marketing cattle through consumer-focused, branded beef programs are taking the industry in the right direction.

The group intends to work closely with the National Cattlemen's Beef Association Value Discovery Think Tank to identify a new pricing benchmark that relieves pressure on the cash market and moves away from using sales of cattle valued on averages.

The Four-State Working Group was created to address challenges and arrive at solutions that improve fed cattle marketing.

A group subcommittee, assigned to develop and present the details of group marketing alternatives, was to deliver its report to the four-state group by Sept. 30. The full group was to then meet in October to review the recommendations and determine the next steps.