It has been proven that IBP uses captive supplies, those inventories of cattle available to IBP outside of the competitive market, to lower prices paid to producers. The cash market determines the value of these captive cattle. The big packers do business with each other. In a move that made cattle feeders livid and has drawn attention from government regulators, ConAgra sold cattle to IBP for slaughter in late January. In today's market a sale of this volume causes the entire industry to flush their inventories of cattle at the going low price.
Feeders have only minutes to decide on the take it or leave it offers by the big packers.
A past ConAgra executive recently informed cattle producers and feeders that ConAgra consistently used their own cattle inventories, although not market ready, to stay out of the cash market. I commend the State of Nebraska for taking the important and necessary steps to protect your producers and save your rural communities. Our federal government has proven that left up to them we will be left without a competitive independent agriculture. Many packer promoted studies show there is no problem with captive supplies. Any feedlot manager with a Monday morning showlist knows this is untrue.