#38 - Chelsea Good, More Than Just Marketing

Chelsea Good is the Vice President of Government and Industry Affairs and Legal for the Livestock Marketing Association. She lives and works in the Kansas City area and represents beef producers in a myriad of avenues. 

Raised in a generations-long family dedicated to beef industry progress and leadership, Chelsea takes every opportunity possible to educate folks about today's beef industry. 

Transcript

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Matt 0:02

Well hello there and welcome to episode 38 of practically ranching. I'm your host, Matt Perrier. As always this podcast is brought to you by Dale banks, Angus, the home of practical, profitable genetics for the industry focused cow calf producer. Our guest today is Chelsea good. Chelsea serves as vice president of government and industry affairs and legal at the livestock marketing association. She works tirelessly for their members in the various areas that directly affect livestock markets. But perhaps more importantly, she represents all of us beef producers all day, every day. And just about everything she does. Whether in a congressional office in Washington, DC. Or in the clubhouse after around a golf, Chelsea never misses the opportunity to share our passion. And our dedication of all of our nations cattlemen. And given her pedigree and her upbringing and her education, it shouldn't be a surprise that Chelsea is such a tremendous cheerleader and knowledgeable advocate for the beef community. Chelsea is one of those folks who can carry an intelligent conversation on. On nearly any topic, certainly about any livestock industry issue. So we cover a bunch of them today. Uh, producer perspectives after LMH round tables last fall and winter. Uh, the upcoming farm bill animal identification, new technology adoption. Uh, changes in banking and payment practices. And even the power of communication, personal communication with our consumers and our elected officials. In all the years I've known Chelsea. I don't think she and I have ever had a brief conversation. So it seems fitting that we went a few minutes longer than our normal hour podcast today. So I'm going to let you get right to it. And thank you again for joining us for today's visit with Chelsea. Good. Well, tell us what's going on at the Livestock Marketing Association today.

Chelsea 2:23

you know, there's always a lot of different things going on every day, right. um, are getting ready for an annual convention in June, which is always

Matt 2:32

Where are you going?

Chelsea 2:33

Arcadia, Florida, um, is hosting the World Livestock Auctioneer Champion,

Matt 2:37

Yep.

Chelsea 2:38

so that means, uh, Punta Gorda, Florida is where we're gonna have our meeting. get getting excited about that.

Matt 2:45

So that'll be at a, I always have to get the region of the country correct. When I call the livestock market, that's gonna be a stockyards in the southeast or

Chelsea 2:54

stockyard. depends. You're, you're right, it's, it's very regional, whether they're a stockyard or a sale barn or a livestock auction. Um, but yeah, the, the further southeast you go, the more likely you are that you're gonna be at a stockyard.

Matt 3:08

Yeah. They've always been sale barns to me. And so when I go to the northern plains, they're markets or livestock markets, and of course southeast, they're stockyards. And so yeah, all, all, uh, places that do the very similar business but sometimes get different nomenclature like we so often do in the beef industry. I think.

Chelsea 3:27

Mm-hmm.

Matt 3:28

So specifically, tell us, um, for me, but especially for the listeners, tell us what you do for lma. And I know it's a whole host of things, but, uh, give us, give us, give us the actual job description and then everything you really do.

Chelsea 3:44

Okay, so I'm, I'm our Vice President of Government and industry Affairs and Legal. Um, I, I feel like a lot of my time is spent, representing, their interests of livestock marketing businesses. Um, mostly livestock auctions, but also livestock dealer businesses federal policy. So I spent a lot of time doing the Washington, DC and back. Um, both Congressional and then also working with the US Department of Agriculture. we also do some work on, on the state level as well. A lot of times, um, state veterinarians can make decisions that really impact livestock auctions and how those businesses are run. And so definitely, um, spend a lot of time working on policy topics both federally and with the states. in order to do that, I also need to spend a lot of time with our membership as well, though in order to. Well understand, you know, what their interests are, what their preferences are. So I manage our government industry affairs committee, which is kind of the beginning of our policy making process. And then we, as we pass policies, also engage with our board of directors and then really our membership overall. So that's probably the biggest chunk of what I do. I do have another attorney on our team, uh, jar Settles is our general counsel. She tends to do more of the day-to-day legal work with the livestock auctions. but um, certainly get involved in some of those situations as well. Um, helping our members, comply with different requirements. Packers and stockyards act animal identification requirements. and then also kind of navigate different situations that are a little unique to the livestock auctions. the other thing I think I spend quite a bit of time doing is just the industry component. are so much more effective in DC if we come with a coalition. And so sometimes with throughout the policymaking process, a lot of that time is spent working with partner organizations, livestock associations, farm bureaus, to kind of make sure as we bring something to Congress, it's a well baked idea that we've got some industry, coalesced around

Matt 5:42

Yeah, and that's something that we have talked about on here a lot. In fact, just about a month or a month and a half ago, I had Greg Dowd on, and that was kind of the focus of his whole discussion was that, that we in the livestock industry have maybe not always done a very good job of, of that coalescing around topics, issues, broad perspectives, and that we, we do need to, uh, uh, reach out and, and do a little bit better job of, of, uh, building those. Those alliances and, and both within the industry and and across the industry. You had mentioned working with some of your member, livestock markets and things, and, and that was something that I got the opportunity last, what was it, November when we were in Emporia, Kansas. you all had there at Emporia Livestock, a a really interesting meeting. I thought of some local producers from all segments of the industry and came in there to Brody Peak's place and, and had a really good industry discussion. I thought you did those types of meetings all across the nation, didn't you? And go, where were you and what did you, what did you find out from that little listening tour?

Chelsea 6:56

we did, um, we went to the southeast, we had 'em in, um, Alabama and gave some Mississippi producers there as well. We went to Montana, California, Kansas, where you were engaged, um, and did some, virtual ones in other parts of the country. And the whole thought process from our leadership's perspective was, concerns about, producer, um, longevity, profitability, you know, concern. that our board really holds pretty, highly is, you know, every time they have a dispersal, that's not the kind of business they want, right? Because that is business where they see, someone in their area that's going outta business and they've got concerns about, level that they're seeing that and just an aging producer and not seeing probably as many young people entering the business as they'd like to see. And so that, that's the conversation that kind of kicked off, element going out and having some kind of producer, thought leader round tables in different regions to, to, to ask the questions, to ask, you know, what factors would make somebody, you know, grow, contract or, or stay the same in the next 5, 10, 15 years. And, and what is on minds in different areas?

Matt 8:12

So before we talk about the. Big trends that you heard and and how much those differed region to region, specifically on those, on those herd dispersals as you talked about. did you see, was there any main reason that, that your member markets and, and folks at those round tables across the country, why did they think those were happening? Was it age induced? Was it drought induced? I mean, quite often it's additive, but was there something that was the, the reason?

Chelsea 8:42

the two things you just mentioned are probably the most common reasons, uh, you and drought and, and, and drought in particular. I think in recent years, maybe pushed some producers to make a decision that they weren't otherwise about ready to make. um, it, it kind of got 'em thinking about what are my options? And then, um, ended up selecting the option of, you know, reducing the herd. And, and in some cases, you know, probably. don't plan to build back up. so, uh, I, I think that a age and drought were probably the two most time sensitive things that we heard over and over as it related to dispersals. That that, and a lack of a next generation a, a family standpoint coming into that operation that, that kind of ties to age, but not having the generational transfer that maybe some operations had historically had

Matt 9:40

And did they say, or have you heard as you've had these industry discussions when they dispersed the cow herd? Then what are they restocking with? You know, stocker type cattle that they can graze for a few months and be out. Are they leasing the grass out? Are they selling the ranch? What are you seeing there?

Chelsea 10:01

that, that's a really good question. And, and a little bit of all of that, a little bit of all of that in terms what somebody's next steps are. but in, in some cases, you know, it does end in a land sale. And I think that the most concerning trend that some of our folks see, and and I heard in a lot of these round tables is at that lands transition. that it, it's getting harder and harder for livestock industry to compete values. and I, I heard different pressures in different regions, but that's something I heard over and over again is just, the, the cost of land and it just not penciling for a lot of livestock producers.

Matt 10:43

So I assume in some regions that land is being broken up and, and, farmed. Uh, there's some of it that's probably, if it's close to a metropolitan area that's being subdivided and, and sold for homes and then probably some in our area, I know quite often it's going into some kind of a recreational, either a hunting lease or whatever the case may be and the cows may never come back.

Chelsea 11:08

that tho those were definitely, um, a couple of the things I heard over and over again, I also heard quite a few in some areas, um, experiencing maybe who is not, you know, currently in cattle production that, you know, wants some acreage, the livestock operation is going to be minimal, if at all,

Matt 11:30

Right.

Chelsea 11:31

I uh, necessarily people call it a hobby ranch or, you know, I don't know what you wanna term it, but, people that are wanting a place to spend time that's in the country aren't necessarily, um, going to have that in agriculture Operation

Matt 11:47

Yeah, they're gonna, they're gonna be cattlemen, but it's probably gonna be a byproduct of land ownership.

Chelsea 11:53

Yeah.

Matt 11:54

Yeah. What are the, what are some other big trends that you kind of took away and heard at some of those round tables and, and how much was different from the northern plains, say to the southeast?

Chelsea 12:07

You know, I, I think that the, the access to land was probably everywhere.

Matt 12:14

Okay.

Chelsea 12:14

but some of the pressures were different in different places. in the southeast, timber was one of their main, you know, areas that they have to compete with for land. the hunting definitely is something that, you know, I, I heard in multiple areas, Texas and some areas where, you're able to get your, um, Favorable tax status for, you know, having, that sort of an operation. so I think that that's, that's something I heard kind of across the board. You know, I think that, you know, some of the differences I heard probably, you labor was a challenge everywhere, but in particular, the larger the operations, in in the west that, you know, require, quite a few hired individuals that, that, that is probably something I heard. stronger in the West than maybe I did in the southeast. You know, I had some commentary in the southeast and we really did have at, at that round table in particular, it was interesting because had some producers that, you know, livestock was there full-time. And then we had some producers that were a little more representative of the southeast of, you know, I've got 50 cows, but I also have a job in town. And, you know, in some of those cases said, you know, I, I don't even have to be super profitable. I just don't, I, I can't

Matt 13:31

Don't wanna lose a bunch. Yeah.

Chelsea 13:32

my cows in, in order to keep doing this. Right. And that was, that was interesting feedback.

Matt 13:37

Yeah, and it's, it's always interesting to me, and, and I'll probably step on someone's toes here that's listening, but you know, as we talk about the varying sizes and scales and scopes of the cow herds across the United States, there's always this debate of big breeder, small breeder, big operator, small operator, and, and where, where is big enough to make it work? Well, it appears to me, and especially as we go forth, that we've got the ultra big, that there aren't very many producers, but a whole lot of, you know, whole lot of cows per operator. And then we've got what I would call the hobby herd. That's. Pick the number less than 50 cows or whatever the case may be. Maybe it's less than 200 cows if we're really honest. But, um, they've got something else, whether it be a farm or whether it be a, a job in town that's actually paying the bills and the cattle are hopefully getting close enough to break an even that they can call it a worthwhile venture. The middle is the one that really, really makes me Fred a little bit because, you know, it used to be that you could make that work with a couple hundred cows and, and one family could feed themselves and didn't have to have any outside help. And now today that's probably closer to 500 or a thousand cows and maybe some would say approaching. A couple thousand cows to, to pay for a pickup truck or two and to pay for facilities and a hydraulic shoot and all these things that have come be, kind of become, uh, a necessity on, on a ranch. And so those are the ones, I, I, I think those are the ones that are going one way or the other. They're either getting a job in town and reducing to 50 cows, or they're selling out or leasing out to somebody that's running thousands of cows. And those are the ones that do business with your members. Those are the ones that do business with the local feed store, the local veterinarian or the seed stock producer or whatever else. And, and, you know, I've, we just had Lee Bork on last week and Lee talked about the fact that consolidation has continued throughout the industry for centuries

Chelsea 15:48

Mm-hmm.

Matt 15:49

gonna continue. And, and I, I didn't disagree. I still don't disagree, but it does make it tougher for, like I said, your members and for Main Street USA to, to still. Have some relevance and, and I guess after you heard that that trend is happening, and I think that you heard about every place you went, that that trend's happening, what's some of the feedback of your board, and as you all talk about those challenges, h how do you prepare for that? How do you, how do you live in an area that can now put together 12 truckload, lots of, of calves and, and maybe doesn't necessarily have to go to Eureka livestock or EL rate a livestock or emp import livestock, or wherever the case may be,

Chelsea 16:34

That, that, good question. And I, I, I love your commentary about, you know, kind of that, that mid-size producer, I, I don't love that, that that trends occurring, but I, I think that what you said really hit the nail on the head of what we heard a lot of different places of, you know, you're seeing your really large operators get larger, but they're fewer and far

Matt 16:56

right.

Chelsea 16:57

It's not necessarily that the five 10 cow person, you, maybe some of those are reducing, but the more. reduction is kind of in the middle is it's the a hundred, 150, 200 cow, you know, operation that was a, a full-time business that maybe is not working anymore. And that, that was, that's awfully concerning to our folks. Um, I can't look you in the eyes and say, oh, I've got the solutions for I mean, this is a really, really tough problem. I, I did hear, a variety of, you know, different thoughts that I think are worth, as an industry. I think that the, the first thing that I heard everywhere that I think is important to, to keep in mind is, you know, sometimes part of the answer to the profitability is keeping more of your own money.

Matt 17:46

Sure. Sure.

Chelsea 17:47

you know, it's not, um, it's not gross, but it's net. And so we, we do have some really favorable tax provisions in agriculture that I think that, um, we need to be cognizant of. that current tax status that we have and that some of those things, use value appraisal and, you know, bonus depreciation. Some of those things are set to sunset if doesn't act. And so I think, you know, part of, I don't think this is a solution to the problem, but part of what I think ag needs to consolidate around and, and really push for is making sure we keep some of those favorable things that we currently have. Right?

Matt 18:24

Yeah, for sure.

Chelsea 18:25

not a, that's not a, a, a total solution, but I think that that's, the base we need to start at. Um, from there, I think that there are some other good ideas that have came up could use some additional exploration in terms of, some of them are really focused on bringing young people in, people into the business. and I, I think that, that's an interesting question. You know, how do you incentivize somebody to make this choice, right? Especially with, they don't have a family operation. I think it's an even, it's an even more difficult thing to think through, you know? How do you get the, Amanda Capital even needed? was at a, a farm Bill listening session this week. Tracy Mann had House Ag Committee Chairman GT Thompson in town, and one of the things you heard multiple producers get up and talk about is FSA lending limits and how the, you know, those lending limits don't, don't match with what it costs to be in production not livestock specific, you know,

Matt 19:23

No, it's cross ag. Yeah.

Chelsea 19:24

Yeah, that's across agriculture. But, that, that makes you really stop and think, how, how do we sure that this is a, um, industry that's accessible for young people.

Matt 19:37

Yeah. And, and that's, that's always been a challenge and gets to be even more so when we look at all costs, but especially the capital costs of land and equipment. and even cattle today, I mean, you know, uh, yeah, there are some options in terms of leasing ground and leasing equipment and even, you know, custom grazing and things like that. but yeah, new young folks coming into production ag. whether or not really they're part of a family operation are going to have to have some type of additional incentives. I think, um, whether that be, and I'm not, I'm a market guy and so I'm usually the last one to say, well, uncle Sam, we need some help. But like you mentioned, I mean there are certain areas tax provisions and things like that, that I think are very sensible solutions that we need to maintain. If not, maybe get them up to 2023 standards. you mentioned the farm bill. You've spent a lot of time in DC and your, uh, in your career and, and both working for the LMA and, and also even before that and, and maybe during, what are you seeing on the horizon in terms of the farm bill in general and its progress and are they gonna get it done in time and or, livestock provisions inside there?

Chelsea 20:58

Really good question. the current farm Bill expires into September. Um, we last authorized a farm bill in 2018. Um, the House and Senate Ag Committee are working really hard to, uh, make progress on a farm Bill. An on-time farm bill is, is really, really tall. Order it, it's a tough thing to get done. and we also have a little bit of an interesting political environment. And so, um,

Matt 21:21

To put it politely,

Chelsea 21:23

Yeah, those are, those are my, my, my, uh, churchy words to, to describe, of the challenges going on in DC

Matt 21:30

we like, we like churchy words on practically ranching.

Chelsea 21:35

So, um, you know, I, I think that I'm seeing progress being made for sure. If, if there is some sort of a short term extension of the current farm bill, do not be absolutely shocked. think that, uh, chairman Thompson had some really good commentary just this week about, you know, the most important thing is that it's effective, come up with is something that, that that works for And so, if, if that takes a little bit longer to get, uh, consensus so long as it's effective and, um, an able ability to do an extension of the current farm bill. I think that that is a situation we've seen historically quite a few times. And, um, a situation that certainly, is something folks can live with. The livestock conversation within the farm Bill is a really interesting one. you know, I was at that listening session on, on, on Tuesday and, um, you know, had the representative, for KLA stood up and the, their first request is, please do no harm. Right. You know, at, at times the Farm Bill has been a, avenue for, um, controversial topics in the livestock sector to competition, as it relates to some things like that. And so I think that, that, that's one thing that the sector is always pretty aware of is, is making sure that we don't see the Farm bill become a vehicle for, you know, ideas. People are not excited to move forward. I think that things that, are pretty consensus based that we saw in the Last Farm Bell that people probably want to see, not just, again, but maybe even, um, given a little bit more emphasis are some animal health related provisions. in the last Farm Bill, there was, authorization for the, testing laboratories, but also, um, we got funding for a vaccine bank. And I think that, um, there's been a recognition that, that vaccine based funding is a really good start. If there was ever something like, you know, heaven forbidden an FMD the United States, we don't have nearly enough vaccine in that bank. And so that's something people are wanting to continue to maybe build out, um, on a larger degree. There's also, a side program I've been a little interested in watching. called the, um, the Animal Disease Preparedness and Response, grants and essentially, universities associations, anybody who wants to work on animal disease preparedness can apply for these funds. And I, I think it's a, a good way to incentivize focus and work in that area because it's, it's really important work. It's, um, the thing about an emergency and, you know, planning for an emergency is, um, it's always important, but it's never urgent until it is.

Matt 24:18

Right.

Chelsea 24:19

ways that we can make sure we're prioritizing that sort of work within our industry is really important. And I think that that'll definitely be part of the conversation. Again, for, for the livestock sector.

Matt 24:30

And those are two or three different programs that are included in the Farm Bill. I think a lot of us sometimes think Farm Bill and we think immediately subsidies and handouts and, and money directly to producers and um, you know, I'm just old enough that I grew up remembering, you know, some of the. The wheat programs, and I don't even remember all the different acronyms through the seventies and eighties and, and basically paying people not to plant anything and not to farm anything even before C R P and things like that, and saw the damage that that did to what I would call the free market and letting the market work. I get awfully anxious when we start even talking about as livestock industry groups, asking for something to be included in the farm bill, whether it's a direct payment or whether it's a, a program or anything else. And yet, here we are after a couple rounds of drought payments and things like that in the ranching industry.

Chelsea 25:34

Mm-hmm.

Matt 25:35

we have increased, whether we knew it or not, we've increased our reliance on. Uncle Sam in, in the beef industry. And, and that I never thought I'd see the day when we were going to DC asking to get some type of a program included in the farm Bill. Cuz usually the livestock folks were like, we don't want anything in the farm bill. but saying that when we're talking about programs like you were talking about, I mean, preparing for disease, preparing for an emergency disaster, and, and figuring out ways that that's truly in my mind, a public private partnership that

Chelsea 26:12

Mm-hmm.

Matt 26:13

organizations, allows like you said, academia and, and universities, associations, things like that, to get a few dollars to put into place an industry focused and member driven type of, of program. And I think that makes a lot of sense. I, I do get nervous when we start inviting the government in to say, you know, this this is how we should or shouldn't use the land. This is how we should or shouldn't, manage these cattle. This is how we should or shouldn't market these cattle. Um, that, that usually makes me a little bit nervous,

Chelsea 26:47

Well, and there was, there's a lot of conversation about that kinda across those different listening sessions that LMA had. And, you know, as you, as you talked about, you know, how you manage land, um, environmental conversations know, sustainability are, um, really at the forefront. Um, have been for a while, but I think that I. I feel like it's a, so something that's continuing to get a lot of focus and you know, the, the classic example is, you know, people are all excited about sustainability and they, they're, they're going to a producer and they're saying, you know, have you thought about no-till? And it's like, well I've, I've been no-till forever. Right? You're trying to incentivize a practice that, you know, I have voluntarily implemented. Uh, that, that's awfully challenging to, to end. I think that there's, good about some of the leadership we have currently. and Senator Bozeman actually was also in Kansas very recently. He was in Kansas last week know, had some really good commentary about, let's focus on sustainability and doing the right thing for the environment cause it's the right thing to do, but let's not tie these other programs to something that is, is unrelated.

Matt 27:55

that's always a fine line to, to walk because like you said, there's so many of these practices that a lot of us have been using. For years, for whatever reason, but primarily because it's the right thing to do for the longevity of the land and for soil health and for the environment and et cetera, et cetera. And now all of a sudden, you know, if you weren't doing that and you're 10 years late to the party, then there may be dollars for you to change, but not necessarily dollars for somebody that's been doing it forever and ever. And, and, um, that that never sets well in rural America. When, when that happens.

Chelsea 28:34

bad public policy. public policy to, to incentivize somebody to maybe do something they should have already been doing. Or I mean, think the harsher way to put that is to, um, to penalize people for

Matt 28:47

Doing the right thing.

Chelsea 28:48

been, who've been doing the right thing.

Matt 28:50

Yeah. Yeah. I just had this conversation last night at a, actually a local. athletic achievement banquet for high school kids, but I was talking with a friend of mine and, and we were chuckling about some of these, um, drought disaster payments that are, that have at least some portion of it based on the number of cattle under your care during this time of, of excess drought. For those of us who not necessarily saw it coming, but realized that, hey, we probably need to scale this cow herd down because it's not looking good. There'll be less dollars for folks that probably prepared for a drought than someone for instance, find out they're in a D four drought or whatever the case may be, they go out and buy some more cattle because there'll be more government funds coming in. I mean, that's that's where when you get government involved, the people that are gonna play the system, unfortunately get more opportunities to do exactly that.

Chelsea 29:52

that, that, that's a good example of how we have to be really careful working on working on any sort of programs. for, for our industry, we gotta really think through unintended consequences and um, you know, cause you, you want it to have the stated, benefit, but without affecting the way people make production decisions. that's, you know, one of the lenses we try to. Work policy through is, you know, anything we do shouldn't be something that causes people to, make different production choices just for a government program.

Matt 30:28

Yeah. as you said, the KLA rep said at that, at that listening session, do no harm. I mean, you know, that's, we, we can't just revert to inaction, but at the same time, it's usually those unintended consequences that, that get us right. Uh, when time, whether it's public policy or whether it be management decisions, you know, we may think we're doing the right thing and, and we yeah, improve something here and make something worse there. And that's always a challenge. So, can I ask you,

Chelsea 30:58

a tough

Matt 30:59

uh, let's hear it.

Chelsea 31:00

It may or may not be a tough question, but so is, is livestock risk protection? Is l r p government involvement in the cattle industry?

Matt 31:07

Yeah. And that's one of those. And, and personally we haven't used it, but I think that's one of those that probably makes sense. I mean, this term public private partnership, you know, you, it's like crop insurance in on the farming side to me, um, you probably couldn't afford, or most, would, would say that they wouldn't likely afford the premiums of crop insurance if those weren't subsidized by some government funds. I would say the same thing. The little that I know about l p, um, I don't think there are a lot of producers that are gonna go out and pay those full premiums for a put option, for instance. Um, but with L R P you can share that and hopefully if used correctly, and if enough people adopt that. then Uncle Sam doesn't, I mean, FSA or whoever doesn't have to come in and just write blank checks because there was a disaster. They set up a tool for ranchers to use. Ranchers have to put a little bit of skin in the game and, and pay a little upfront or at least do a little legwork up front. to me that's probably better than just these blanket payouts whenever we have a drought or whenever we have some kind of a, uh, black swan event or whatever. So, yeah, I, I don't think I have any big qualms with L R P. I've watched crop insurance from a distance for long enough that, it does cause me a little heartburn. just how, again, if people are gonna. Try to game the system. It doesn't matter whose rules they are, they're gonna figure out ways that they can game the system. And I, and you hate that, but I think, I think LRP probably makes a lot of sense for a lot of producers. and yeah, it, it wouldn't work as well as it does if people were having to go out there and, and buy those split options on their own. Or worse yet, or say worse yet, or go along the market and have to pay margin calls or whatever the ca case may be, if it, if it's, uh, going in a favorable way.

Chelsea 33:20

And the data kind of shows that LRPs been around for a long time. It's just grown in popularity really significantly since, um, I think it was mid 2019 U S D A, adjusted, the subsidy rate of that premium and they made an adjustment that made it start to make sense for more people. It seems, you know, the, the usage of the product has definitely gone up quite a bit.

Matt 33:42

Yep. Yep. And that's something I'm, I've had on, on my list of future guests, a couple different folks that, uh, could probably teach me a lot. Well, he's,

Chelsea 33:52

Cavon is who you should call.

Matt 33:54

he, I talked to him in December and we were gonna get it done in January, and then he and I both got busy and, and we haven't gotten it down done yet. But, uh, but he came highly recommended by a couple of our mutual friends, I think. And so I'll, I'll make sure that he moves to the top of the list. So, Joe, if you're listening, get ready, screen, screen your phone.

Chelsea 34:17

job. Yeah. He does a really good job of explaining it in ways that I think land with folks, both that have, you know, traditionally risk managed and also, you know, with people who have not traditionally risk managed. Because that's, that's something kind of unique about the L R P product you can utilize it on, on a much smaller number of animals. You don't have to have a contract to, you know, worth of, of livestock to do, risk management through that You just have to have ahead

Matt 34:42

again, we talked about different sizes of operations and challenges there in, I mean, that, that does open that opportunity to a lot more folks, if you don't have to be putting a 50,000 pound, 40,000 pound, whatever the case may be, contract together, so,

Chelsea 34:58

although I'm not positive there, the, the uptake has, has occurred in that level. I, I think the people that I've seen, did. I know personally utilizing it or people who are fairly sophisticated and probably have, you know, some background in other risk management is seem to be the earlier adopters.

Matt 35:17

Yeah. And I think that's the case with a lot of these types of decisions. I mean, those who are a little bit more risk tolerant are gonna step out there and try it. The other thing is, I would assume that it takes you about as long to do the application and, and get signed up for 40 head as it does for 400 or 4,000 or 40,000 head. And, and so, um, there's always that too. I mean, is, Do I have enough time to make a few hundred bucks? Maybe not. But if it's several tens of thousands or at least manage risk on several, on a hundred thousand or a million, uh, yeah, that makes, it makes it a little more worthwhile the, the time that's invested. So we had touched a little bit as we were talking about different things that got talked about, um, animal identification. That's something that we read a lot about. I, for now, I hate to even admit it, but 25 years have been watching this thing unfold. in fact, I, now that I say that out loud, when I first started going to animal ID meetings, and I think I've talked about it on this podcast, but as well, I was working for the Angus Association and it would've been like 2001, and there was a lady, a predecessor, different job, but at l Nancy,

Chelsea 36:38

May, Nancy Robinson. Yep.

Matt 36:40

Nancy Robinson and I went to meeting after meeting together, and as frustrated as I got with the whole deal, she got way more frustrated. And, and it is, it's a, it's a tough deal, especially when you're challenging the status quo of, of the way livestock markets do their business, the way ranchers and farmers do their business. where do you see animal ID and I guess take it from whatever perspective you want. Take it from a broad industry perspective, take it from a member markets perspective, ranchers, whatever the case may be. Where do you see it going?

Chelsea 37:13

the, the first thing I might do is kind of do, uh, like what's going on at this

Matt 37:18

There you go. That'd be good.

Chelsea 37:19

there are some things that, um, are moving right now that, are, a little So, you know, since 2013, we have had an animal disease traceability program in the United States, uh, requirement for official identification, but it's only cows and bulls that are 18 months of age and older moving across state lines dairy cattle of any age moving across state lines. Um, U S D A actually has a proposed rule that, Comment period just closed a couple weeks ago. right now a lot of those animals are identified with those metal bright tags. Um, what U S D A is proposing is transitioning those currently covered cattle to electronic ID and requiring that in order for something to be official ID, that it needs to be able to be both electronically and visually readable. this is something we've been talking about for quite some time. It has, was suggested by a previous administration. There was a lawsuit. Um, so it, it's almost like the boy who cried wolf that I've been folks this is coming enough times that when it actually comes, I know I'm gonna get that phone call where they're like, why didn't you say? And I no. I said over and over again until you stopped listening to me that we were probably gonna see some sort of an electronic ID transition. so the, the way this will work procedurally, is there were lots of comments. U SDAs reviewing those. They will publish a final rule. If the final rule is similar to the proposed rule months after that, any identification of an animal that requires official identification, mostly those cows and bulls moving interstate will have to be electronic identification. one we have at this point in time that we, we've posed to U S D A and I know Congress has as well, is, a funding conversation about you know, obviously those electronic tags are more expensive than those metal bright tags. The metal bright tags have actually been provided for free.

Matt 39:17

Right,

Chelsea 39:18

actually, U s D has even started to provide electronic tags for free over the last three or so years. A, a, a decent amount of those. But if we transition and we're all electronic, I think that the best way to get good, adoption is for those to continue to be provided. So that, that is one thing that I'm hopeful to see going forward. But, um, I think that that's an ongoing conversation of what that's gonna look like. And we're just focused on those currently covered animals. not classes of animals, feeder cattle in particular, which is, it was kind of a whole nother conversation.

Matt 39:56

right. And I haven't kept up recently. What would your prediction, if at all, for a timeline of feeder cattle being included in that instead of just those breeding cattle 18 months and older crossing state lines?

Chelsea 40:11

I, I don't have that crystal ball. Um, the only thing I can tell you is it would require rule making. and so, you know, that requires U S D A to go through a whole new process again.

Matt 40:21

So another, another 25 years, huh?

Chelsea 40:25

Yeah. Um, I, you know, it depend, depends on who I'm talking to, but I, I definitely can tell you if I ask a livestock market operator that question, many of them say, just hold off until I retire.

Matt 40:38

Ha ha.

Chelsea 40:39

that's their one ask. And like they're, uh, you know, sometimes I get asked that by people that, that aren't quite old enough to be saying, hold off until I retire. But, and, and I think that, you know, one of the reasons the auctions have been a big part of this conversation is we know we're a pinch point. We know we're a challenge as it relates to, well, uh, uh, I say a challenge, but also in some ways an

Matt 41:03

That's what I used to tell Nancy. I said

Chelsea 41:06

I bet she just totally bought that,

Matt 41:07

she never did, I never got her convinced this, but I said, Nancy, if these folks don't have a shoot at home,

Chelsea 41:14

mm-hmm.

Matt 41:14

how much could I make as a livestock operator to provide that service, to put that tag in the air as soon as it gets off the trailer and comes down my alleyway? Um, and, and you know, I understand that any, anytime we have something new, it's gonna be looked at as either a challenge by one or an opportunity by another. But they're, they're, they're both markets are both a pinch point, but also a place that has the facilities or could have the facilities to possibly provide a service.

Chelsea 41:44

Which, you know, we've seen that happen in sheep and goats with

Matt 41:47

Right. Right.

Chelsea 41:48

got markets that if you don't bring your animals in with a scrape tag already, it's a $6 fee to, to tag that animal. And, um,

Matt 41:56

And you start tagging them at home then,

Chelsea 41:58

Yeah. Well, even then, the markets are saying, I mean, that's why they, they, they do that like, I don't, I don't have the labor for this. I the facilities for this as, as it relates to feeder cattle. I think with cows and bulls, we've kind of come up with a process. We've got the ability to do it. of those animals are already, you know, gonna get preg checked or, you know, there's a reason that those animals are gonna be in a shoot,

Matt 42:20

Right.

Chelsea 42:21

Um, with, with feeder cattle, I think that of the markets would have to change when those animals come in, would have to change, um, their facilities, in some cases, their staffing in order to, if, if they were the location where those animals were being tagged, I think would prefer that they come in already tagged, which. It gets us to another really interesting conversation in this space, and that is about technology. a lot of the, a lot of the electronic IDs right now are a low frequency R F I D. Um, so you kind of have to be single file pretty close to the animal to read those tags. Um, the ultra high frequency RFIDs have, have been for a lot of people. If you've got a K ttag and you're driving down the highway, the U H F technology. It can read, um, groups of animals at a distance. And so, um, could do a sighting at a livestock auction without having to animals go one at a time. interesting technology for sure, but we already have a lot of people on the low frequency and we don't know what's coming down the road either. That's the other interesting thing U S D A did they first talked about transitioning to electronic id. They said R F I D. Um, and when they re propose the rule this, this last time, that feels like it's probably moving forward. They just said electronic

Matt 43:44

Hmm.

Chelsea 43:45

and it's because that's gonna be R F I D in the future, maybe it's gonna be something else.

Matt 43:50

Yeah, that's interesting. And, and I remember some of the same conversations again. And, and, you know, for folks who haven't listened to past podcasts here, um, we, Callahan GRD was on here from Cattle Tracee, gosh, it's been several months ago. But, uh, we had the same conversation and, and it's, you know, the high frequency that's coming about. There's even, there's, there's gonna be new technologies from there, but at some point we have to, at least, I think as an industry, except the fact that there is value, there's value in terms of disease, traceback. There's value in terms of telling the beef industry's story to consumers and saying, we know every place that this animal was throughout its life. and, and that's not, in my mind, that's not a mandatory type of thing that is a demand pull type of, market driven scenario. But if there becomes value in either of those scenarios, the technology will take care of itself in, in my opinion, the tagging and, and everything else will take care of itself because you put. you put dollars out there to be made, and we're pretty quick to adopt a lot of those technologies when there's, there's a buck to be made. And so I, I hope that we can get that. It's just getting the logistics, like you said, set up, you know, what kind of reader do we have, a low frequency or high frequency, and obviously they're universal readers that will take care of both of those technologies. But some of these newer electronic IDs that aren't, aren't the old radio frequency, but are totally different. They're gonna require something totally different to read. Uh, but it's a mindset that probably first that, and it's not just livestock markets, it's, it's ranchers, it's feed yards, it's vet clinics, it's everybody that's, that's, um, part of that that's probably gonna have to realize. And I think, you know, as we talk about labor being an issue, I think there's some places that we actually save. On some labor. I mean, you think about pulling up, I mean let's, let's, let's put the livestock market owner operator's hat on. Um, you pull up, open the trailer gate and dump 40 cows out of a big truck and they've all got our fids and they can all be read. nobody has hopefully be back tagged. Nobody has to write down numbers and, and counts and everything else. Now granted, we're probably gonna do that to double check, but there are some, I think, places that we could actually see some time and labor savings and hopefully improved information, things like that.

Chelsea 46:42

Well, one thing that that requires is integration with the, uh, auction software system and their sales system. I've been a little surprised, even some of my members that have been doing a lot of e i d work for a long time haven't taken that step to integrate the, um, the electronic identification with their auction software system, which I, I find to be interesting.

Matt 47:05

So just out of my ignorance or curiosity, are most of them using a software system that you all provide or that they get through you, or do they all have a different system in house?

Chelsea 47:18

uh, LMA does not, um, have any sort of a software system. There are probably. three or four major providers I would say of of software systems that lots of auctions tend to use. Um, there's another chunk of smaller providers, and then you have a decent amount of auctions that have more of a system that's, you know, worked for them. But, no, that, that is one of the challenges is, you know, it's not like this, this huge marketplace to sell software to, and it's already kind of, you know, broken up into a, a handful of different companies.

Matt 47:50

it's going to be an interesting dynamic to see shift and, and I think that as we turn into the next cattle cycle, I mean this is a time when as we see calf prices increase and hopefully we see revenue increase that we see more adoption of technology, uh, generally speaking, cuz people have. Enough money to actually think about investing in, whether it be a software application or, or new tags or whatever the case may be, readers, things like that. Uh, I, I really think this may be a, a point, at least on the cal calf level, that we see more adoption of this, this type of technology, not because it's being forced on us in terms of A U S D A mandate, but because we see some opportunity to a better tell a story b, manage these livestock and, and keep information about 'em,

Chelsea 48:46

I do think you, you make a good point about if there's value add there, people will do know, and I, we, we saw that with Agent Source in Uh, that's, you know, the classic example there. Um, but even if you, you watch a video sale, you know, n htc, all the different bells and whistles, um, there, there are more cattle being sold with more information attached to it that, has some value. So long as, that continues. I see more and more people participating in, in, in programs that allow them to, to be a part of that. And we even have, you know, some markets in, in certain places, California in particular working on, you know, is there ways to do a, a value added program where they bring, you know, multiple customers together that might be smaller producers to, you know, become part, some part of a system like that that, you know, involves the auction throughout that system.

Matt 49:38

Yeah. And I think that's an opportunity that we've seen, you know, a lot of your, a lot of your member markets take that opportunity to have, you know, commingled sales or whatever the case may, may be. And, and I think when they have that type of technology in there, that probably is, makes it that much easier to be able to, to sort and have those cattle into similar groups that also they can. Track back and say, you know, what program they qualify, where they've been come from, and things like that. So that, that one will be an interesting one to me across the industry, not just cattle going through markets, but across the industry to see how that, how that, um, aids in, in producers telling the story.

Chelsea 50:22

Well, and you, you talking about producers telling the story. I think that one other challenge we talked about markets being a pinch point. Packers are the other

Matt 50:31

Sure. Big time.

Chelsea 50:32

go to you know, um, it, it's. It's not super difficult to keep a, a carcass and ear tag together. It's really, really difficult to keep. Um, you know, after you, you start to break that carcass up, that becomes a lot more difficult.

Matt 50:47

Yeah. Yeah. And this, I mean, the whole muscle cuts, I think they can probably get to the trolley tracking system, but when we start talking about grinds and things that have got multiple carcasses in one pound or one chub or box, um, yeah, that, that's when, that's when that identity is pretty quickly and easily lost,

Chelsea 51:08

Yeah.

Matt 51:08

at least individual identity. Now maybe, maybe a group is different, but, uh, yeah. else have we missed?

Chelsea 51:15

You know, I think, um, one, one other thing I, I see. You know, as we, as we look at, you changes in our industry that I, I think are interesting is, um, technology on a, finance side as well. that, you know, I think that that's, that's another thing that we're spending time talking about internally and part of it's just the, the speed of the mail service has caused us to have conversations internally

Matt 51:40

Mm-hmm.

Chelsea 51:41

um, you know, if you sell auction, one of the great things is you can pick up your check that day. got a custodial account, they're bonded, they're paying you, and then they're in charge of making sure they're paid on the other side. A lot of that money coming in is checks in the mail and, um, I see more and more interest in working on ACH and wire and trying to incentivize you moving to, systems where money moves faster. and so that, that's another area. I think that it'll be interesting to, to see how, how the livestock sector pro progresses in, in, in that area. And I think that, the world's changing and, you know, as it relates to electronic payments, I think that we've gotta find ways to, as an industry, you know, continue to move, move that direction to the, to the extent we can. Um, but at the same time that there, there's, risks with that as well. And something that, uh, I'm not gonna be surprised. I don't think this is the animal id, I don't think that this is, you know, look back in 25 years and say, Hey, we have not moved very far. but I do think it will, I think it will be a, a slow, slower adjustment in our, in our sector than it is in a lot of others.

Matt 52:51

Yeah. Well, I mean, it's, let's face it, like you said with, with online bill pay, online, you know, everything. that's what. everyone else in the world has become accustomed to. And so waiting on a paper check that may or may not been have been mailed when when, when the Sino said that they had mailed it, um, you know, the, the checks in the mail line has become more problematic as, as we moved into a faster financial economy, no doubt about it. So we've talked about a bunch of different, challenges that you've seen both in the past and now in the beef industry. What would something that excites you the most be, as you look forth as a young culturalist, um, what, what gets you excited?

Chelsea 53:41

Oh, that is a wonderful question. I, I think that, you know, at the end of the day, the livestock business is still a people business. And so, am excited about, you know, the, the people we've got involved in our industry and of the, you know, thought process in terms of innovation and how do we, you know, how do we make sure, you know, at the end of the day, I think we all have a goal that, you know, stake is what people wanna put on their the, you know, that that is, you know, the gold standard. And I, I think it, that it, it is the gold standard and can remain so in the future. But I, I get a little excited about, thinking about how do we as an industry continue to, do that with consumer base that's changing that, you know, that is a couple generations removed from the farm. And maybe that's, maybe that seems daunting to others. Maybe that doesn't seem exciting. But to me it's exciting because it's a, a new group of people that we have an opportunity to make a connection with. not just about our product, but where it comes from. And I, I think that, that's something that when I think about, you know, what matters and, you know, what are we gonna, um, you know, need to be focused on that, that's something that always comes to mind for me.

Matt 54:58

Well, I think that, that you're showing your, your youth and enthusiasm when you say that you're excited about that instead of fearful of it. And, and that's what I notice. Um, it's almost directly correlated with a person's age and probably therein their comfort level with things like technology and social media and the ability to reach out and immediately record what it is that. We're doing, whether it's farming, ranching, working with member organizations, whatever the case may be, and post that somewhere and tell some, tell everybody. I mean, it's for goodness sake, this podcast is a classic example. I mean, the number of people, especially my age and older that go, what in the world would you, what are you doing? Why? Why would you want that? That's out there for everyone forever to hear your stupid opinions and everything that you got wrong over the last however many months or years. And they're right. But if we don't tell that story, who in the world is going to because we know it better than anybody else. Um, yeah. We may not get it perfect every time. The photo may be a little fuzzy. The language may be a little bit contrary to political correctness. In some of the marketplaces, we try to sell beef. but it's, it's real and it's raw. And it's, I think what people, when we talk about the people business, what people who are, are consumers today actually want and actually expect, um, they don't, I don't think they want it all perfectly polished through a PR agency anymore. I think they want actually what's happening. I mean, for goodness sake, Yellowstone is not a great, um, great way to promote beef, but as dramatized as Taylor Sheridan makes that story, it resonates and people, it starts a conversation with somebody like you or me about, so does that really happen? And you get to say, you know, maybe, or absolutely not, or whatever, you know, depending on what part of Yellowstone they're referring to. But, but yeah, I mean, that's, that's where it's at.

Chelsea 57:13

mm-hmm. and part of what I think, um, excites me about this, or just, you know, makes it really relevant to me is just where I sit, right. Kansas City is home for lma, you know, I, I live in, in Johnson County, and I, I golf, I've got friends in my ladies' golf league that, you know, grew up on a farm, very familiar with our industry. I've got friends that are a couple generations removed that the, they'll sit down next to me on a Wednesday night and they'll be like, you know, I, I wanna understand this, you know, should I feel comfortable eating beef from the grocery store, or do I need to go to the farmer's market and get it someplace else? helps them to, you know, be able to have those conversations. Uh, Kansas Beef Council has a campaign, you know, just this week they put up a Tara Rooney Barnhart's, a good friend of mine, and she's a veterinarian, and a mom. Right? And just kind of some of that, like you're talking about, pretty authentic, you know, th this is what we're doing, this is why we're doing it. And I think, my opinion, what folks are after is conversation. They're, you know, they're, they're after information and conversation, but I, I agree with you. They don't want something, you know, polished by an ad agency, and here's, you know, just the part we want you to see. kind of want that back and forth.

Matt 58:24

Yeah. That's, that's what the people within our industry are so good at, and, and we don't realize how good we are at just given the unpolished facts. We may not speak in, I mean, in the exact same terms. We may not, again, this, this cowboy, colloquial that we, that we sometimes have, we are often embarrassed by that. And now I think we're finding out thanks to Yellowstone, thanks to the folks in your golf league that are asking those questions. They're dying to hear that story and they're dying to hear it. From us. And so I think, you know, whether we use technology through animal edification or social media or a podcast or whatever the case may be, whatever it takes to be able to tell that real world story and, and tell it independently, uh, we're, we're, we don't all do the same thing. We don't all have the exact same perspective. We're not all raising the exact same type of beef. And that's part of what's so cool about the beef industry is, is that independence and, and that fierce comp, competitive, independent nature that, that we still have.

Chelsea 59:40

A absolutely. I think that that is totally the best voice for consumers to hear from, and then I'll tie it to my day job as well. Um, I am so much more effective in DC I, you know, walk into a member of Congress's office and, you know, I'm not just Chelsea good with the livestock auctions, but they know the name of their local livestock auction owner and, you know, they've had a chance to tour the sale barn, or I've brought them back to DC on a fly in. And so I think that getting engaged, you know, and being willing to, you know, it takes, um, takes a commitment and some investment, but, uh, being willing to be engaged in, you know, associations, being willing to, you know, make those connections with policy leaders as well is super, super important for the success of our industry because we, um, as kind of staff are so much better we do when we're able to make those connections with, know, people that are on boots on the ground.

Matt 1:00:38

And this is probably diving off in a, uh, topic that we definitely don't still have time for, but I'm sure it gets tougher for you when you need those connections between elected officials, appointed, you know, uh, administration, whoever the case may be in dc. That connection between them and your members and the boots on the ground folks, when I would guess that most of your members, most of the members of N C B A K L A pick the organization have become more and more disenchanted with the political process

Chelsea 1:01:15

Mm-hmm.

Matt 1:01:15

probably more disengaged. And, and that makes it even tougher for you to be able to go and do what you need to do because the rest of us are going, you know what? I've had it, I'm not, I'm not sending a letter, I'm not sending an email. I'm not, I'm not going to DC cuz I'm sick of seeing it. We can't be, we can't let ourselves do that. We have to stay engaged. As ugly as it is, we do have to have at least enough engagement so that they know who we are and, and there's, there's a lot of value in that.

Chelsea 1:01:43

a Absolutely. And I, I, you're, you're totally right that I think, um, yeah, we've had a, you know, a wild handful of years know, in the political environment and, for some people it does just kind of become a turnoff and you just, you know, oh, that's what we've got the association for. They've got Well, we, we only have it if we've got our, membership kind of lockstep with us making that engagement happen. So I, I would argue it's even more important than it ever has been. We were talking about the farm bill earlier of, of the members of Congress. 240 of them have never voted on a farm bill. that is, that's, you know, that's more than 40%. Uh, the members of Congress have never voted on a farm bill. And so, you know, even just the level of, understanding our businesses and what we do there, there's a lot of education process that sometimes people are, oh yeah, you know, I've, I've done that. I, I, I checked the box. I you went to dc and it's like, yeah. But with the amount of turn that we have both in members and staff, it's almost a, a constant work to just have that groundwork laid

Matt 1:02:49

Well, I think whether it is those voting elected officials in DC or Topeka or wherever the case may be, or our buying consumer, I think that we've established that it's probably more important than ever that we do maintain and, and maybe improve those lines of communication because they are interested in hearing that story. And if we don't tell it to 'em, uh, there are plenty of groups that are against what it is we do every day on farms and ranches that are willing to give their very jaded, uh, versions. So I think, that's, that's well said. And we appreciate, uh, appreciate everything you do when you're in DC and, and working on. Livestock producer's behalf and appreciate you being on here and sharing some of those thoughts.

Chelsea 1:03:42

Absolutely. Well, thanks so much for having me. If you don't have your seat at the table, then you're on the menu, but not in the, on the menu in the way we want

Matt 1:03:50

Yeah, exactly. Exactly.

Chelsea 1:03:52

yeah, I appreciate that perspective and thanks. Thanks for all you do. And even, you know, the willingness to lean in to have this podcast to, you know, engage in conversations that push our industry to, to keep thinking and keep working forward. I, I think it's really productive.

Matt 1:04:07

Well, appreciate it and, um, can't, can't do it without everybody that's involved, so thanks a bunch, Chelsea.

1:04:13

Thanks again for joining us this week, we've added a bunch of new listeners the last few weeks. So if you enjoy the podcast, please follow or subscribe on your favorite platform and leave your comments any time to let us know what you think of practically ranching. You know, there's a lot of cattle country. That is in desperate need of moisture. So, uh, if you will. Please continue to pray for favorable weather to sustain our life and our livelihoods thanks and god bless you all