NCBA’s ‘price discovery’ plan takes effect January 1; packer participation still a work in progress
A voluntary plan to increase price discovery in the cattle industry, developed by the National Cattlemen’s Beef Association, goes into effect on January 1st. But a top official of the organization says the packer participation segment of the plan is still a work in progress.
“We launched with the negotiated trade silo completed and what we’re working to complete right now is the packer participation part of that,” says NCBA’s Ethan Lane.
“We’ve been appreciative of the packers being open to what we have to say. Obviously, I think they probably view this a little differently than we do on the cattle side. But they are understanding that they need to play a role here as well.”
NCBA’s “75% Plan” provides benchmarks on negotiated trade and packer participation for the industry to strive toward. Lane says one of the biggest hurdles is the confidentiality rule that USDA has to adhere to, as far as what they can release.
“We’re working with the packers right now, trying to find a sweet spot there where we can get the information that we need and also communicate out what we think is needed as far as participation in those different regions to really have robust, negotiated trade. Because that’s the goal,” he says.
The plan, which will be evaluated on a quarterly basis, contains triggers that must be met. If they are not met, NCBA says it will recommend that the organization pursue a legislative or regulatory solution to compel robust price discovery.
“I think they (the packers) are recognizing that there’s a lot of frustration out in the country and that it’s time to try to figure something out here,” Lane says. “Obviously, they have their own issues in the packing sector. I mean, they’re all in competition with each other. And we’re in their supply chain. So everybody has their own business that they’re trying to look our for in a deal like this. But there have to be some efforts toward the common good here, and I think that’s what everybody is trying to do.”