Headquarters
President ’s Per spec tive making tough choices By OCA’s President Tom Sharp
sharpranches@aol.com
Within the beef and cattle industry, we are in the position to make some tough agribusiness choices and we have some painful questions to ask ourselves like:
Do we apply for or accept
CARES Relief PPP, MFP,
EIDL, CFAP, or other
programs with government
assistance?
How do we achieve a
minimum negotiated cash
Will the PRIME Act enable
us to go more vertical from
beef production to the
june 2020
8
trade such as “30/14”?
consumer plate? Does the industry need
more beef packers?
“Where’s the Beef ?”
Would mCOOL really help?
Gone are the days of choices when Aunt Margie or Uncle Mel would send us a birthday card with a five-dollar bill in it with the choice to either put it in the piggy bank or to buy a hula hoop. For the last few months now, our choices have included some tougher questions like: “When do we re-open the economy?”, “Am I social distancing enough?”, “Can I go out again?”, “Should I wear a mask?”, “How about seeing the grandkids?”, and “Will I ever get another haircut, or should I just do it myself!?” A “silver lining” emerging out of the COVID-19 pandemic response might be the heightened public and political awareness concerning the essential importance of food and the luxury of experiencing no disruptions in our beef supply chain. Increasingly, the financial profit and loss disparity existent between “Packers in the News” and “Ranchers in the News” has gained public attention and greater elected official willingness to assist. But this silver lining might be more like a silver sword and it could cut both ways if the response actions go over the top by becoming excessive, exaggerated, or poorly informed. No doubt the politics of the moment highlight this bizarre time in the cattle and beef market. Packers are still unable to resume a normal slaughter schedule due to disruptions related to COVID-19 and the result has been sky-rocketing beef prices and shortages at the consumer level. At the same time, cattle feeders are unable to sell market-ready cattle in a timely manner because of the same production problems. And each week, producers manage to get some cattle harvested, but for the last month the prices have only been higher because some packers have voluntarily paid more due to their expanding margins. So, supply and demand, the usual determinants of price, have seemingly been cast aside. Government Assistance? The independence and pride of the American rancher has traditionally resisted government intervention including financial assistance in our operations, but because of events outside of a rancher’s control like the global health pandemic disaster, executive orders requiring the public’s isolation, potential market manipulation, or lack of profitability as a beef producer, operations have been dealt a bad hand for success. So, an alphabet soup of various government assistance programs (PPP, MFP, EIDL, CFAP, etc.) are now available to help keep farmers and ranchers
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