Market News
Alternative marketing agreements big part of GIPSA debate
One of the arguments against the proposed GIPSA livestock marketing rules is that it may cause packers to stop paying premiums based on genetics and quality.
At the recent ag competition workshop in Colorado, Marquette, Kansas cattle feeder Allan Sents said he doesn’t buy that argument.
“One of the biggest disagreements we have is with the critics of this rule change saying that it’s all about procuring quality cattle,” Sents said. “That has nothing to do with it. The largest supply agreements have had everything to do with supply and controlling that inventory, and nothing to do with quality cattle—and that’s been show by numerous studies and examples.”
But the man in charge of the fourth largest cattle feeding operation in the U.S., James Herring of Friona Industries in Amarillo, Texas, says alternative marketing arrangements allow producers to get paid for the value they add.
“As sorted as our cattle are, it’s nothing for us to see $400 a head difference in a single pen,” says Herring. “So with that diversity in the herd, calling those animals the same in value is almost laughable. That’s like saying that all cars out in this parking lot are the same because they’ve got four wheels. It’s just silly.”
AUDIO: James Herring (9 min MP3)
The National Cattlemen’s Beef Association says new liabilities associated with the proposed GIPSA rule will likely cause cattle buyers to withdraw marketing arrangements rather than run the risk of litigation.
Add Comment