WASHINGTON — Members of the U.S. Senate were sent a letter on Jan. 22 by the National Cattlemen’s Beef Association that states the group’s opposition of an effort being made to include a dairy buyout in the stimulus package, which, in turn, they say would glut the beef market and reduce beef prices.
According to the proposal, taxpayer dollars would be used to raise dairy prices by buying older dairy cows from farmers. Although this move will remove approximately 6.5 billion gallons of milk form the market, it would also result in approximately 320,000 additional head of cattle entering the beef market, which NCBA claims could drastically reduce the price of beef cattle.
Buyout proponents have suggested lessening the consequences for the cattle industry by using United States Department of Agriculture Section 32 funds to purchase ground beef. However, NCBA points out a similar plan was implemented in 1986 and it did not prevent the cattle market from crashing. What’s more, the 1986 buy-out resulted in a 25% decrease in the price paid to producers for beef cattle and sent the cattle markets to the lowest point in the last 30 years. In total, the beef industry suffered a $1 billion loss from the 1986 buy-out.
"NCBA does not support utilizing taxpayer dollars to both fund this proposed buy-out and to try and mitigate its ill effects on the cattle business," said Andy Groseta, president of the NCBA. "This is a flawed proposal and we urge Congress not to include it in the stimulus package."
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