January 18, 2022

NCBA focuses on profitability for its members

WASHINGTON — Increasing opportunities for producer profitability throughout the supply chain has been the focus of the National Cattlemen’s Beef Association during 2021.

“We linked all the policy priorities into the central focus of opportunities and challenges facing the industry in this new administration,” said Ethan Lane, vice president of government affairs for the NCBA.

“For the first year of the Biden administration, we’re pretty pleased with the progress we’ve made,” said Lane during a press call.

One of the first items NCBA focused on this year was the Build Back Better initiative.

“This large, aggressive spending plan was advanced by the administration pretty quickly as they took office in January,” Lane said. “We spent most of the year trying to educate members on Capital Hill about the real threat of including pay-fors in this multi-trillion dollar spending package that could negatively affect cattle producers.”

For example, Lane said, there was discussion about limiting stepped-up basis when transitioning agricultural operations from one generation to the next and dramatically increasing tools like the capital gains rate.

“These would have had a disastrous impact for cattle producers just at a time when we’re expecting to transition about 40% of our operations to the next generation during the next 15 years,” Lane said.

“That culminated in one of the largest grassroots campaigns this industry has ever launched,” he said. “I’m really proud of NCBA leading that charge not just for the cattle industry or agriculture, but for small business owners throughout the economy.”

Hundreds of groups stood with NCBA to push back on proposals.

“We know we’re going to have to continue that focus moving into 2022 as the next version of Build Back Better is put together after the first of the year,” Lane said.

Sustainability

Sustainability and climate have been another focus of the cattlemen’s group during 2021.

“NCBA was excited this summer to come out with our sustainability goals that we’re going to demonstrate our climate neutrality as an industry by 2040,” Lane said. “I think it’s been well received in Washington by policy makers.”

Cattle production and grazing operations are being treated differently in conversations by politicians compared to a decade ago.

“In the past we’ve been thought of as a threat or impact, but now we’re being embraced as a climate solution which is the right place for this industry given the conservation benefit we provide,” Lane said.

“We feel there are tremendous opportunities for our cattlemen who are producing the highest quality beef in the world with the lowest environmental footprint,” he said.

NCBA is working to address the packing capacity issue, including the importance of adding new meat packing facilities.

“We need to diversify and regionalize the packing capacity and we need to make sure we’re looking for opportunities to create new packing capacity in areas that are underserved now,” Lane said.

“We need to make sure new packing capacity is created in a way that’s generating new opportunities for producers to generate more value for their product so that more of that beef dollar goes back to the ranch rather than further down the supply chain.”

Demand

Demand for beef is high by U.S. consumers and consumers in other countries.

“We’re proud of what we produce in this country and we want to make sure our producers get paid for it,” Lane said. “The quality product starts at the ranch, and if only one end of the supply chain is making money, that’s not going to work for us.”

This year has been a dramatic year for trade of U.S. beef.

“We are now exporting more $10 billion per year in beef to foreign markets,” Lane said. “The growth has been unbelievable over the last couple of years.”

Two or three years ago, Lane said, China was not part of the discussion for U.S. beef exports.

“Now it’s a $1 billion market for U.S. beef and continuing to grow alongside robust numbers for Japan, South Korea, Taiwan and Hong Kong,” he said.

Increasing exports is an important part of the conversation for expanding meat packing capacity.

“I know we’re in a herd contraction now which is a natural part of the cattle cycle that’s being exasperated by the drought conditions we’re seeing is some parts of the country,” Lane said. “But as we look towards the next few years, we want to see the growth continue and capacity built so we can provide the world with the protein they love so much.”

Price discovery is an important issue for U.S. cattlemen.

“Our voluntary framework has resulted in a pretty dramatic increase in negotiated and cash trade around the country,” Lane said. “That’s not an accident. That’s a lot of work by our producers around the country to find ways to market more of their cattle by negotiated means.”

It is important to find options, Lane said, to make sure producers have the ability to choose the best marketing method for their cattle versus the government telling them how to market cattle.

“We need to make sure we have a real indicator of what cattle are worth on the market from week to week,” Lane said.

“Rulemaking has been a really big focus in this administration and we’re seeing a lot of rollback in Trump administration rules including WOTUS and the Endangered Species Act,” he said. “It’s disappointing to see rulemaking labeled as problematic simply because of the administration they came out of when there was strong representation from all different kinds of groups.”

The rules were pretty balanced, Lane said.

“We need to make sure we look at those holistically and not just throw them out because of the name that was attached to them coming out the door,” he said.

Martha Blum

Martha Blum

Field Editor