The National Cattlemen’s Beef Association released its proposal over the weekend for voluntary cattle market price discovery. In a letter to NCBA members, NCBA President Marty Smith says the proposal “lays out a plan to increase negotiated trade and incentivize each of the major packers’ participation in such negotiated trade.”
An NCBA working group came up with the report, “A Voluntary Framework to Achieve Price Discovery in the Fed Cattle Market.” The framework explains in detail what the organization calls the “75 Percent Plan,” which is designed to provide negotiated trade and packer participation benchmarks for the industry to strive toward.
Smith says the plan seeks to achieve no less than 75 percent of the weekly negotiated trade volume that current academic literature indicates is necessary for “robust” price discovery in a specific region, among other thresholds. In the event that defined triggers are tripped in any two out of four rolling quarters, the Subgroup will recommend that NCBA pursue a legislative or regulatory solution to compel robust price discovery.