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The Midwest Cattleman · August 6, 2020 · P10
                 California bill will                                       CATTLE ON FEED                    lion head, 1 percent above

       effectively ban feeding food                                         continued from page 3             2019.
                                                                                                                 Other disappearance to-
            byproducts to livestock                                         counted for 4.41 million head,    taled  62,000  head during
                                                                                                              June, 6 percent below 2019.
                                                                            down 1 percent from 2019.
                                 By Todd Fitchette                             Placements      in   feedlots  All Cattle on Feed Unchanged
                                                                            during June totaled 1.80 mil-        Cattle and calves on feed
                                                                            lion head, 2 percent above        for slaughter market in the
                                                                            2019. Net placements were         United States for all feed-
                                                                            1.74 million head. During         lots totaled 13.6 million head
                                                                            June, placements of cattle        on    July 1, 2020. The inven-
                                                                            and calves weighing less than     tory  was unchanged  from
                                                                            600 pounds were 430,000           the July 1, 2019 total of 13.6
                                                                            head,    600-699 pounds were      million head. Cattle on feed
                                                                            310,000      head,      700-799   in feedlots with capacity of
                                                                            pounds were 360,000 head,         1,000 or more head account-
                                                                            800-899 pounds were 413,000       ed for 84 percent of the total
                                                                            head,    900-999 pounds were      cattle on feed on July 1, 2020,
                                                                            200,000 head, and 1,000           down slightly from the previ-
                                                                            pounds and greater were           ous year.
                                                                            85,000 head.
         Farms that use agricultur- Livestock producers                        Marketings  of  fed  cattle    USDA
      al byproducts for animal feed,        Frank Konyn owns a dairy        during June totaled 1.97 mil-
      bedding materials, and dust  near Escondido, Calif. and uses
      control may lose those through  the feed byproducts from local
      a bill now in the California  companies to  feed his cows.  If        USDA
      Senate.                            approved, the proposed law         continued from page 3             demic. The investigation into
                                                                                                              potential violations under the
         Assembly Bill 2959 will force  would ban him from hauling
      the unfranchised hauling of or- those byproducts to his farm.         ket conditions before, during  Packers and Stockyards Act is
                                                                            and  after  each  of  these  two  continuing.”
      ganic byproducts from grocery  Under current practices, live-
      stores, restaurants, breweries,  stock producers pay a nominal        black swan events, confirm-          The AMS report does men-
                                                                            ing extreme volatility in both  tion several policy consider-
      and wineries to be subjected to  fee to haulers to have organic
      the same franchise agreements  byproducts  delivered.  These          the futures and cash markets  ations “in light of the desire by
                                                                            and providing some narrative  many market participants for
      municipalities now have with  products tend to be less expen-
      select companies. Some fear the  sive than other feed sources         of the market dynamics that  improved price discovery, re-
                                                                            were at play to help explain  invigorated competition and
      bill will go further as unintend- while providing proper nutri-
      ed consequences are realized.      tion for livestock.                the drastic changes in cattle  a more transparent relation-
                                                                                                              ship between the prices for
         Louie Brown, a lobbyist            For Konyn, who buys the or-     and boxed beef prices.
                                                                               AMS findings regarding  live cattle and the resulting
      representing the California  ganic byproducts and sells it to         the Tyson plant fire indicated  products.” One of those con-
      Grocers  Association, says the  livestock producers, this would
      bill addresses grocers, retail- destroy a business model oth-         the uncertainty surrounding  siderations is the potential
                                                                            when the plant would reopen  to  rearrange  the Livestock
      ers, and restaurants.  There  ers like him successfully em-
      remains some confusion about  ploy.                                   and the ease at which cattle  Mandatory Reporting regions
                                                                            could be rerouted was respon- to reduce instances of non-re-
      the bill's effect on the sale of      This turns the business
      hulls and shells from tree nuts,  model of paying the producers       sible for a significant amount  porting due to confidential-
                                                                            of volatility in the market.  ity  limitations.  The report
      though most agree it will in- of organic byproducts for their
      clude the byproducts of wine  materials on its head. The bill         The investigation into the  also highlighted that some
                                                                            market dynamics during the  external stakeholders were
      making, citrus juice processing  will force these producers –
      and breweries.                     wineries, breweries, and juice     first two months of the pan- proposing minimum thresh-
         What he does know is the  processors – to pay to remove            demic found economic uncer- olds of purchases through
      bill will further compound the  these byproducts, rather than         tainty and sudden and dra- negotiated trade, but USDA
      challenges of meeting state  being paid for them. Only the            matic changes in beef demand  cautioned that there existed
      mandates to divert organic  franchise companies with li-              each played a substantial role  “concerns with these propos-
                                                                                                              als and potential unintend-
      waste away from landfills.         censes  issued  by  local  munic-  in the market reaction.
         "California cannot meet its  ipalities would have the au-             The report does not address  ed consequences throughout
      organic diversion goals now,"  thority to haul these products.        the ongoing investigation into  the industry, especially if re-
      Brown said. "Let's do the best  Konyn says these companies do         potential      anticompetitive gional considerations are not
      we can with the waste we now  not have the infrastructure or          practices by the Department  adequately  considered.” Ad-
      have without making the prob- ability to effectively haul these       of Justice, nor does it explore  ditionally, USDA discussed
      lem worse."                        byproducts.                        potential  violations  of  the  developing better risk man-
         Small hauling companies            Where will these byproducts     Packers  and  Stockyards  Act.  agement products and edu-
      and those who represent them  wind up if they cannot be sold          It does, however, include the  cation for small and medi-
      say the bill is even more trou- to livestock operations? Konyn        following  statement: “Find- um-sized cattle producers,
      bling as it furthers the monop- says it will end up in landfills      ings thus far do not preclude  improving small to very small
      oly solid waste companies now  in California or neighboring           the possibility  that  individu- meat processor outreach and
      have through their franchise  states. He says he has evidence         al entities or groups of enti- enhancements to the Packers
      agreements  with municipali- to support that some of these            ties violated the Packers and  and Stockyards Act investiga-
      ties.                              materials are being diverted by    Stockyards Act during the af- tive and enforcement tools.
                                                                            termath of the Tyson Holcomb      KLA
                                                                            fire and the COVID-19 pan-
                                                      continued on page 12
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