Captive Supplies

Cattle prices are subject to the whims of the packing industry. Four major meatpackers control 80 percent of the industry, and have been manipulating prices in order to increase their bottom line. They do this using captive supplies, cattle which they own or control through forward contracts. Whenever the price of cattle gets too high (in their eyes), they use the cattle they have under contract to lower the price. These contracts are often done in secret, and ranchers don’t even know how much they’ll be paid until they ship their cattle.

In order to remedy the abuse of forward contracting, DRA has worked with WORC to introduce the Captive Supply Reform Act. In the Senate, S. 960’s primary sponsor is Senator Enzi of Wyoming. South Dakota’s Senator Johnson, Senators Dorgan and Conrad of North Dakota, and Senator Thomas of Wyoming are co-sponsors. H.R. 4257 is a companion bill in the House, introduced by Rep. Earl Pomeroy of North Dakota, Rep. Stephanie Herseth of South Dakota, and Rep. Barbara Cubin of Wyoming. The Captive Supply Reform Act will require contracts to be negotiated in the open market and that packers give producers a firm base price for their cattle. No more secret deals!

For more information contact Stephanie Trask at 605.697.5204.