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Natural Resources & Energy

Wyoming ranchers and feedlots could see changes in how cattle are priced if federal bill passes 

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A proposed federal bill would give cattle ranchers and feedlots in Wyoming more negotiating power at the market.

The Cattle Price Discovery and Transparency Act of 2022 would require a minimum of cattle to be sold through negotiated cash deals. Right now, it is mostly formula based, which is a set price and that does not necessarily reflect the current economy.

Most ranchers in Wyoming sell to feedlots who then sell to a meat packer. Four packers control nearly 80 percent of the sales, said Jim Magagna, the executive vice president of the Wyoming Stock Growers Association.

He has concerns about the bill.

“If we put practices into place that increase their costs of acquisition of cattle or of operational costs, eventually those dollars are going to come back and be reflecting what we can get for our cattle,” Magagna said.

However, proponents of the bill argue that if feedlots are able to negotiate higher prices to the meat packers, it’ll trickle down and create higher payouts for cattle ranchers.

“Zero percent negotiated trade is the end of the independent producer, and with it, a sovereign and secure food system,” a U.S. Cattlemen’s Association press release said regarding the bill. “We cannot allow corporate interests to steer a sinking ship – we need to immediately restore marketplace fundamentals and implement guardrails to prevent the industry from capsizing.”

However, Magagna said cash negotiation sales could lump higher quality cattle together with lower quality cattle.

“So, if we do everything on the basis of averages, it weakens the incentive for us to make improvements in our own products and how we raise our stock,” he said.

But proponents of the bill said that is exactly what is happening in the market now with formula based pricing and negotiating cash deals would help increase cattle prices.

The act is being considered by the Senate Ag Committee and is co-sponsored by Wyoming U.S. Senator Cynthia Lummis.

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