Illinois Farm Bureau moves forward with livestock market work

BLOOMINGTON, Ill. — When it comes to the problems with livestock market transparency and price discovery, Illinois Farm Bureau isn’t trying to reinvent the wheel.

“I think we need to be very clear, I’m not sure we’re going to put together a working group. I think we are going to start on trying to execute on some of the policies we already have in place,” said Brian Duncan, IFB vice president.

Duncan offered an update on the progress of the work on looking at livestock marketing issues and price discovery. At IFB’s 2020 annual meeting in December, members asked the IFB board to take a closer look at livestock markets.

“District 2 wanted the (Illinois Agricultural Association) board to actively pursue solutions that align with current policy,” Duncan said.

Specifically, IFB delegates from District 2, which includes Winnebago-Boone, Jo Daviess, Carroll, Stephenson and Ogle counties, want to put into practice existing policies of Policy 68, Livestock Pricing and Marketing.

Duncan said the specific points within that policy that District 2 request referenced are:

• Point 2 — Providing the Grain Inspection, Packers and Stockyards Administration with the authority to enforce contract standards and enhance livestock transparency and price discovery with livestock contracts.

• Point 9 — Cooperating with the U.S. Department of Agriculture, livestock groups and university researchers to develop and utilize price discovery methods.

• Point 11 — Working with the CME Group, other industry groups and livestock packers to develop a livestock market mechanism that allows for improved forward pricing contracts.

• Point 15 — Reporting system changes that will generate reported market prices calculated on premium prices paid, as well as price lows in the range.

“I believe the direction from the delegates to the board was to take this bull by the horns and let’s go, so I think that’s the direction we are going to go,” Duncan said.

Speaking Out

Duncan sees the issue from his own perspective as an independent pork producer. He and a neighboring farmer are partners in an independent wean to finish hog farm. They market around 70,000 head of pigs a year.

“This whole issue of undue preference and discrimination that is not allowed under Section 201 of the Packers and Stockyards Act has been going on. We need to get some definitions in place and get some remedy for that. We’re not talking about pricing based on quality or even forward contracting. We’re talking about formulas that give some producers a better leg up in the marketplace at the expense of other producers,” Duncan said.

He said the significance that the calls for action came from District 2 and from both cattle and hog producers in those counties is not lost on the leadership.

“I had Julie Newhouse, the president of the Winnebago-Boone County Farm Bureau call me. She said this is as true of a grassroots effort as you’ll see. She wanted the IFB board to understand this was the grassroots, not speaking quietly, but they were shouting,” he said.

Duncan said IFB is uniquely positioned for the issue.

“I think this is a challenging issue for some of the commodity organizations, be it beef or pork, because there are those who have those good deals who don’t want the system to change and they may have a lot of influence in those specialty organizations. In Farm Bureau, we kind of come to it from an issue of right or wrong, rule of law, how do we approach this,” he said.

Duncan added that the issue also may be different for farmers and livestock producers in the Midwest than for producers in other regions.

“There are states and regions in the country that really have a different marketing system than the farmer feeders in the Midwest. Quite frankly, I think it’s put the farmer-feeders in the Midwest at a disadvantage,” he said.

“Some of those states don’t want to give up their superior positioning, so that makes it really hard to come to consensus on the national level. But I think Illinois Farm Bureau can pursue a lot of these items with a coalition of like-minded states and try to find some answers.”