by Brett DeBruycker
I appreciate the article in the January 16, 2020 Western Ag Reporter titled, “The Price of Irons in the Fire.” It touches on the Board of Livestock’s October discussion for the coming brand re-record and the potential fee increase. There will be further discussion of a likely fee increase along with conversation of the ‘roll out’ and how to accomplish the brand re-record with as few glitches and as much producer awareness as possible. While I understand there may be apprehension about an increased fee, I believe there are more impactful issues the Montana cattle industry should be concerned with.
First, to touch on a few points about a fee increase, we need to remember that along with all of our ranch costs having increased in the last 20 years, so have the costs of brand re-record and operation of the Montana Department of Livestock (DOL) Brands Department. Some of the numerous benefits producers receive via the DOL through these monies are:
- Dedicated district investigators who actively work in our communities to deter theft and fraud, deal with stray livestock and respond to landowner conflicts.
- Administrative staff that ensures a secure, accurate and accepted registry of marks used to definitively identify livestock and the rightful agents who can move or sell those animals.
- Recording of brands provides a proven tracking and tracing system used for animal disease control as an alternative to mandatory RFID tagging.
- Recording of brands provides basis for financial institutions to secure loans needed by livestock owners to successfully operate their businesses.
The DOL will be conducting a cost analysis as it approaches the fee determination, and I would like to lay out some information for producers to consider.
- The fee for the last 20 years to record a producer brand has been $10/year.
- Expenses are considerably higher today than they were 20 years ago.
- I suggested in the October Board of Livestock (BOL) meeting that the DOL increase the upcoming brand re-record fee to $200/brand, which equals $20/year for the ten years it covers.
- Remember, the BOL/DOL must look out 10 years into the future to what these costs may be in determining the amount of the fee for today’s brand re-record. Even if today’s cost analysis finds that the current cost is less than $20/year, we have to consider what expenditures will be 5-10 years down the road as well.
- Another thing to think about is that producers have paid $10/year for the last 20 years, so what I proposed is simply an increase of $0.50/year over that 20 year timeline.
If one were to take the additional $10/year that I suggest and amortize it out over the pounds of calf a producer will sell in a year, it would look similar to the following:
Assuming a $10/year increase in the fee and a 600 pound calf marketed each year:
- Marketing 1 calf = $0.0167/pound/year
- Marketing 50 calves = $0.0003/pound/year
- Marketing 100 calves = $0.000167/pound/year
- Marketing 500 calves = $0.00003/pound/year
- Marketing 1,000 calves = $0.000017/pound/year
Although representatives of Montana Farm Bureau and Montana Stockgrowers indicated an increase “would not be well received by producers,” you can see this price is still not even in the pasture of being considered a hefty burden on small or large producers.
I suggest instead that organizations such as Montana Farm Bureau and Montana Stockgrowers focus on the issues that have material effects on producer profitability. These issues include:
- Packer ownership of cattle and Contract cattle;
- Chicago Mercantile Exchange Cattle Futures contract allowing for fat cattle delivery 15 days after contract expiration;
- USDA’s National Animal Identification System (NAIS) added producer costs along with the significant information the corporate world will garner from NAIS about cattle numbers;
- Walmart’s Fully Integrated Model (see page 6 of WAR, January 16, 2020); and
- Loss of United States small/medium size cattle feeders.
All of these issues I list have a much larger impact on producer profitability and the long-term viability for Montana ranching families than a potential increase of the Montana Brands re-record fee of $10/year.
I ask that you give serious consideration to my points above and support a likely DOL fee increase.BACK