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The South Dakota Stockgrowers Association is a grassroots organization whose individual producer members determine issues of importance to the state's livestock industry. With input into the policy development, each member has the opportunity to influence SDSGA's policy and priorities. Individual members of the Association pull together to make powerful decisions - dedicated to promoting the livestock industry and enhancing the opportunity for profitability.

SD Stockgrowers News

Stockgrowers Respond to Senate Judiciary Committee’s Investigation of Cattle Price Collapse

Stockgrowers Respond to Senate Judiciary Committee’s Investigation of Cattle Price Collapse

 

Statement from Stockgrowers President Bill Kluck, Mud Butte, SD:

“The members of the South Dakota Stockgrowers Association are really impressed and want to say thanks to the Senators who have agreed to move this investigation forward. The price collapse that we saw in the fall of 2015 was a serious downturn in our industry and strained the finances of our family ranches. If you figure that the average ranch had $500 per head less income in 2015, that’s a lot of money that isn’t circulating in our rural economy right now.

We appreciate that the leadership of the Senate Judiciary Committee took this seriously and is conducting this investigation to make sure our markets aren’t being influenced unfairly.”

 Statement from SD Stockgrowers Marketing Committee Chair, Vaughn Meyer, Reva, SD:

“This investigation is great news, and we extend our thanks to Senators Grassley, Leahy, Lee and Klobuchar for their ongoing commitment to keeping our markets fair. The best way to keep our independent family ranches going is to keep our markets strong and competitive so that we get fair prices for the high quality cattle we’re raising.

The types of market swings that we’ve seen over the last year make it hard for our family ranch businesses to plan for the future and make us question just what is causing the drops. This investigation and full enforcement of the Packers and Stockyards Act are critical to making sure we don’t have anti-competitive forces trying to break the market.”

 

Press Release from R-CALF USA

Senate Judiciary Committee Approves R-CALF USA’s 

Request to Investigate Cattle Price Collapse

In response to R-CALF USA’s January request, the Senate Judiciary Committee last week requested the Comptroller General of the United States to use his agency, the Government Accountability Office (GAO), to initiate an investigation into the 2015 cattle price collapse.

In a letter signed by the chairman and ranking Member of the U.S. Senate Judiciary Committee, Sens. Chuck Grassley (R-Iowa) and Patrick Leahy (D-Vt.), respectively, along with the chairman and ranking member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights, Sens. Mike Lee (R-Utah) and Amy Klobuchar (D-Minn.), respectively, the GAO is asked to investigate the cause of the sudden 15.1 percent drop in fed cattle prices that occurred during the latter half of 2015.

“We are pleased the Judiciary Committee agrees that the evidence we provided regarding the dysfunctionality of our fed cattle market warrants a careful investigation into the current structure of our industry and our industry’s susceptibility to anticompetitive practices,” said R-CALF USA CEO Bill Bullard.

The Judiciary Committee’s letter specifically requested the GAO to conduct “a review of the structure of the market and of any possible anticompetitive conduct.”

According to the agency’s Website, the GAO is an independent, nonpartisan agency often called the ‘government watchdog’ because it investigates how the federal government spends taxpayer dollars. The Comptroller General of the United States, who heads the GAO, is appointed to a 15-year term by the President. Comptroller General Gene L. Dodaro was appointed by President Barack Obama in 2010.

“This is our last best chance to stop the chickenization of our cattle industry,” said Bullard, referring to the vertically integrated structure of the U.S. chicken industry that is under the complete control of large, corporate meatpackers.

“We don’t want our cattle industry to follow the chicken industry’s path and the only way to reverse our present trajectory towards it is to defend and protect competition in our cattle markets,” he added.

In 2010 the U.S. Department of Agriculture and the U.S. Department of Justice held joint hearings across the country during which both agencies indicated they would begin protecting competition in livestock markets by enforcing antitrust laws and the Packers and Stockyards Act, which prohibits anticompetitive conduct. However, no such actions have been initiated by either agency.

Groups Oppose CME Group’s Discount Plan for South Dakota Cattle Deliveries

Groups Oppose CME Group’s Discount Plan for South Dakota Cattle Deliveries

 

Billings, Mont. – In comments sent today, R-CALF USA and the South Dakota Stockgrowers Association (SDSGA) jointly urged the CME Group to withdraw its plan to impose a seasonal discount of $1.50/cwt on all cattle tendered for delivery at Worthing, S.D., pursuant to the CME Group’s October live cattle futures contract.

The CME Group recently announced its intention to change its live cattle futures contract specifications. The CME Group asserted its proposed financial discount on cattle deliveries to Worthing would “achieve a more equal distribution of cattle deliveries across multiple delivery points.” The deadline for public comments initially set for March 7 has been extended to March 21.

In its own analysis, the CME Group determined that more than 50 percent of all loads of cattle delivered since August 2009 were delivered to Worthing, which is the northern-most delivery point among the CME Group’s 13 centrally located delivery points between Texas and South Dakota.

“This suggests that Worthing is the most competitive delivery point throughout the year for U.S. fed cattle producers that deliver live cattle,” wrote the two cattle groups.

The two cattle groups assert the proposal would disrupt competitive market forces and stymie competition by artificially penalizing cattle producers who find Worthing to be their most profitable delivery point, while simultaneously subsidizing the other 12 delivery points that are not currently competitive with Worthing.

The cattle groups further allege the proposal would lock-in industry inefficiencies, which they say is evidenced by the majority of cattle deliveries now occurring in the north while most packer-plant capacity remains in the south. This, the cattle groups say, could make the U.S. cattle industry less competitive in the global marketplace.

The third criticism leveled against the proposal by the two cattle groups is that the discount constitutes a punitive sanction imposed on certain fed cattle owners for no other reason than the geographic locations of their cattle feeding operations.

“This makes no sense and constitutes an unprecedented, unfair and punitive policy targeted at northern cattle feeders in general and Worthing-area cattle feeders in particular,” the comments state.

“The proposal to impose a discount at Worthing, South Dakota, will harm northern cattle producers, harm competition, lock-in industry inefficiencies and penalize Worthing area cattle feeders. The beneficiaries of this proposal appear only to be fed cattle buyers that have, for whatever reason, resisted long-term competitive market signals that suggest more packing capacity is needed in the north and perhaps less capacity is needed in the south,” concluded the cattle groups.

 

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 R-CALF USA (Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America) is the largest producer-only cattle trade association in the United States. It is a national, nonprofit organization dedicated to ensuring the continued profitability and viability of the U.S. cattle industry. For more information, visit www.r-calfusa.com or, call 406-252-2516.  

 For over 120 years the mission of the South Dakota Stockgrowers Association has remained unchanged, “to promote and protect the South Dakota livestock industry.” The South Dakota Stockgrowers Association is a grassroots organization representing independent livestock producers on local, state and national policies that impact the independent livestock industry. For more information, visit www.southdakotastockgrowers.org, or call 605-342-0429