Proposed ‘Fed Cattle Set-Aside Program’ Surfaces

Greg Henderson

A proposal that would fund placing feedlot cattle on a maintenance diet for 75 days is being circulated in Washington D.C. The seven-page proposal, called a “Fed Cattle Set-Aside Program,” would seek to “alleviate the risk of massive economic collapse in the beef cattle industry.” The proposal was developed by the Beef Alliance and modeled after a set-aside program used in Canada after the BSE crisis in 2004. The Beef Alliance is an organization of commercial cattle feeders with members in Kansas, Nebraska, Colorado, Texas and the Pacific Northwest. According to the Beef Alliance, the group represents approximately 25% of the U.S. fed cattle supply. According to Pro Farmer policy analyst Jim Wiesmeyer, the proposal is “floating around Washington and the cattle industry.” A Beef Alliance spokesperson told Drovers the proposed fed cattle set-aside program was developed using USDA data with assistance from CattleFax. The Beef Alliance hopes to build a coalition of support for the proposal from other beef industry groups and members of Congress. The Fed Cattle Set-Aside Program proposal would fund placing cattle on a maintenance diet for 75 days. Under the guidelines, an advisory committee would make a weekly recommendation to the program administrator on the number of fed cattle to take into the 75-day program, and the number of cattle which may be released from the program earlier than 75 days. The proposed payment rate for cattle in the set-aside program would be fixed at $2.90 per head per day and is intended to offset additional feed and operating costs incurred by holding cattle back from slaughter for 75 days. For the first enrollment period, the total carryover will be available for enrollment, and through April 30 that carryover was 600,000 head. Other provisions of the proposal include:

• Fed cattle placed in the program may not be offered for slaughter until after 75 program days
• Any decision by the advisory committee regarding number of cattle to take into the program will be based on the weekly backlog of market-ready cattle, and any decision by the advisory committee to release early will be based on a return to 95 percent processing capacity based on the daily harvest total capacity (pre-COVID-19 was approximately 98,000 head per day).
• Cattle released early from the program are exited on a “first-in, first-out” basis on a prorated basis per region – cattle in the program for the longest time will be released before cattle in the program with fewer days.
• Additional feed and operating costs incurred are roughly offset by program payments

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