So, the problem today, then, is that the too-thin cash market with increasing numbers of average-quality cattle is setting the base price for all cattle, regardless of how they are marketed. Even the highly regarded U.S. Premium Beef (USPB) Market Grid uses USDA's KS/TX/OK weekly average price as the base price it pays for cattle. USPB then bases its premiums and discounts on the average performance of cattle that National Beef Packing Co. (USPB's packing plant) purchases in the cash market, not including any USPB cattle.
This is the core problem R-CALFUSA is working to address. And, this is where R-CALFUSA departs from the packers and their allied trade associations like the National Cattlemen's Beef Association, the American Meat Institute and the National Meat Association. These groups do not even recognize or acknowledge that it is a problem to have the base price for all fed cattle determined by a too-thin cash market that is increasingly filled with average-quality cattle.
This explains why the reforms R-CALFUSA seeks are so controversial. Opponents to the proposed GIPSA rule don't even agree there is a problem to be fixed and they want to continue down the same path we are on, which happens to be the same doomed path already trodden by the U.S. hog industry that resulted in the exodus of 90 percent of all U.S. hog operations in just the past few decades.
Because the packers and their trade associations do not agree with R-CALFUSA that there even is a problem, there is absolutely no chance that the two sides will agree on an appropriate solution.
Cattle producers must decide.
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