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WASHINGTON, D.C. (August 4, 1999) - The National Cattlemen's Beef Association (NCBA) today urged Congress to focus on long-term solutions during the current debate over how to best help livestock producers during tough marketing cycles. While market indications show that cattle prices may be set to improve, policy makers must continue to implement common sense legislation that will restore viable market prices for beef, pork and other agricultural commodities, NCBA said.
Furthermore, tax relief, fair trade practices and a free marketplace are workable, permanent solutions to restore profitability to the agricultural sector, said NCBA President George Swan. Swan, a cattle producer from Rogerson, Idaho made the comments at a Senate Agriculture Committee hearing held on the extent of the current farm crisis. Senators gathered testimony at the hearing to provide a road map for action when Congress is back in session in September.
"Improving demand for beef is the bottom line for cattle producers," Swan said. "What can we do to address those critical issues that keep the nickels, dimes and quarters in our pockets while we continue our search for dollars of profit?"
Swan outlined tax relief as one solution, including death tax repeal, reduction in capital gains tax rates, income management tools and full deductibility of health insurance premiums for the self-employed.
"Short-term issues in the quest for long-term stability should not sidetrack us," he said.
The second answer is aggressive pursuit of solutions to trade disputes, unfair trade restrictions and barriers to U.S. agricultural products, Swan said.
"The frustration with the European Union in particular begs for some hard-nosed discussions with some of our trading partners on what America not only expects, but will demand, to ensure continued support for international trade agreements by U.S. producers," he said.
The third solution, Swan said, is to keep the government out of the livestock sector to the extent possible.
"NCBA has consistently supported assistance to producers to alleviate the impact of weather-related disasters. However, we have long opposed direct cash payments to any livestock sector to alleviate adverse market conditions," he said.
"Direct payments to address economic conditions affecting all producers do nothing to alleviate the supply/demand situation that typically is the root cause for low prices."
Swan referred to a recent economic analysis by two Kansas State University professors that shows a hog buyout program and direct cash payments to the pork sector raises the potential for additional negative pressure on beef prices, as well as pork prices. The two programs have been forwarded as part of a plan to address low prices in the pork sector.
Cattle producers have responded to marketplace forces, and the most recent USDA cattle inventory report shows the smallest July 1 cattle inventory since 1991. Fed cattle weights have increased seasonally over the last few weeks and are now essentially the same as weights a year ago. Cattle prices are expected to moderate slightly in the coming weeks before increasing into year-end.
"Beef producers have been battling this price situation for going on four years," Swan said. "The current outlook is for some price improvement over the course of the year -- but then, that was our outlook for 1998. In this business, you quickly learn not to hold your breath."
During the second half of 1999, slaughter steer and heifer prices are expected to increase about five percent compared to 1998 prices of $62-64. During 2000, fed cattle prices should continue to increase above year-earlier levels as they continue to be supported by low feed grain prices, smaller feeder cattle supplies and higher fed cattle prices.
Swan added that approval of legislation to mandate reporting of price, volume and terms of trade for live cattle, boxed beef and beef exports would help cattle producers better respond to marketplace forces.
-- NCBA --
The full text of Swan's testimony is available at
http://hill.beef.org/ct/economic.htm
The Kansas State University economic analysis is available at
http://hill.beef.org/library/pork.htm
Initiated in 1898, the National Cattlemen's Beef Association is the trade association of America’s cattle farmers and ranchers, and the marketing organization for the largest segment of the nation’s food and fiber industry. NCBA is producer-directed but consumer-focused, with offices in Denver, Chicago and Washington D.C. |