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Captive Supply Reform Act

Sandhusker

Well-known member
Lies About the Captive Supply Reform Act


At first glance it is puzzling to consider why producers are so dead set against the Captive Supply Reform Act (S.1017) introduced by Senator Mike Enzi of Wyoming. But a quick reading of the many reports about the Captive Supply Reform Act reveals the problem. Most of the information producers are being fed about it is untrue.

The most prominent lie is that the bill would prohibit forward contracts. Anyone reading the bill could clearly see that this allegation is not true. The opponents of reform are not merely misreading the bill; they are deliberately spreading lies about it. The American Meat Institute (AMI) started last year with a misinformation campaign to stir up producers against it. NCBA president, John Queen, joined in by saying that he did not want forward contracts outlawed by the bill.

More recently the head of US Premium Beef blasted Enzi’s bill with the same kind of misinformation. The information in his release indicates that either he has not read the simple language of the bill, or he has no hesitation to lie about it.

Actually the Captive Supply Reform Act would give producers (sellers) of cattle more freedom than they currently have. According to the Livestock and Meat Marketing Study commissioned by GIPSA, producers who engage in captive supply contracts give up a discount on their cattle prices in order to get market access. All producers do not have free access to bids and offers. Cash markets are sometimes open only one day a week, and even then for a very limited time. Buyers are definitely controlling access to bids and offers. Only a privileged few have free access. Current practice means that cattle sold to a packer under these agreements do not get priced until after they are slaughtered. By then it is too late for a seller to look for a better bid.

The Captive Supply Reform Act would require that forward contracts be tied to a set price (or base price for grids) or to a futures price. Contrary to published reports, value-added premiums for quality are not prohibited. Market access would be free. If a buyer on Wall Street could legally control access to bids and offers, the entire stock market there would disintegrate. The Captive Supply Reform Act is just a single piece of legislation intended to make the cattle and hog markets work a little more like Wall Street. What would be wrong with following the time-proven principles used there? It’s that simple.

So why is the NCBA still lying about it?
 

PORKER

Well-known member
More recently the head of US Premium Beef blasted Enzi’s bill with the same kind of misinformation. The information in his release indicates that either he has not read the simple language of the bill, or he has no hesitation to lie about it.

WHAT does USPB gain by this action???
 

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