A Monthly Report by R-CALF USA

Recently the Chicago Mercantile Exchange Inc., (CME) took emergency action to unlock the stalled feeder cattle futures market that had been locked the limit down for an unprecedented five consecutive days. In response to the lockdown, cash feeder cattle prices fell approximately $120 per head for an 800 lb. steer, in just two weeks.

There are many reasons this could have happened including an increase in corn prices and negative feeding margins. However, because the market is thin and cleared by cash rather than by delivery of the actual commodity, it is vulnerable to manipulation.

R-CALF USA has asked the CME and the Commodity Futures Trading Commission (CFTC) to investigate this event to determine if our suspicions of market manipulation are correct.

Ag Secretary Vilsack blamed producers for his checkoff failure in a recent interview with DTN Ag Policy Editor Chris Clayton. Vilsack had issued a formal notice in the Federal Register on November 10, 2014, seeking public comments on how those reforms should look.

R-CALF USA submitted comments that refute Vilsack’s claim that the industry agrees more money is needed for the checkoff. The comments state that after a decade of inaction by USDA to correct the abuses, corruption and conflicts of interest that pervade the current national Beef Checkoff Program, members of R-CALF USA voted overwhelmingly to urge Congress to repeal the program.

A 2010 independent audit report revealed that the checkoff program’s primary contractor, the National Cattlemen’s Beef Association (NCBA), misappropriated over $216,000, which the NCBA was later forced to pay back.

Vilsack is responsible for ensuring that the mandatory assessments collected from U.S. cattle producers are being properly spent and he has failed his responsibility. Blaming hard working U.S. cattle producers for that failure is disgraceful, as is pulling baseless facts out of thin air.

Foot-and-mouth disease (FMD) outbreaks persist in South Korea despite wishful thinking by Ag Secretary Vilsack and World Organization for Animal Health (OIE). FMD is perhaps the most contagious disease known to cloven-footed animals like cattle, hogs, sheep, deer and elk. Vilsack has already relaxed import restrictions on livestock and meat from certain areas within counties with FMD and now proposes to greatly expand the areas within those FMD-affected countries that would be eligible to export livestock and meat to the United States.

But that would be irresponsible and dangerous according to R-CALF USA. For example, look at the recurring outbreaks of FMD in South Korea, a country that both Vilsack and the OIE has declared free of FMD. However, South Korea continues to have FMD breakouts and the official cause is “unknown or inconclusive.”

The public can still comment on Vilsack’s proposal to allow the importation of fresh meat from FMD-affected Northern Argentina. Comments must be submitted on or before December 29, 2014. To comment, go to http://www.regulations.gov/#!docketDetail;D=APHIS-2014-0032.