Senators introduce new cattle price discovery bill
Sens. Jon Tester, D-Mont., Chuck Grassley, R-Iowa, Deb Fischer, R-Neb., and Ron Wyden, D-Ore., on Monday released the Cattle Price Discovery and Transparency Act of 2022, a revised version of similar legislation introduced last year.
According to a release from Fischer’s office, the updated bill would:
1.Require the Secretary of Agriculture to establish 5-7 regions encompassing the entire continental U.S. and then establish minimum levels of fed cattle purchases made through approved pricing mechanisms. This does NOT change the Livestock Mandatory Reporting (LMR) reporting regions. Approved pricing mechanisms are fed cattle purchases made through negotiated cash, negotiated grid, at a stockyard, and through trading systems that multiple buyers and sellers regularly can make and accept bids. These pricing mechanisms will ensure robust price discovery and are transparent.
2.Establish a maximum penalty for covered packers of $90,000 for mandatory minimum violations. Covered packers are defined as those packers that during the immediately preceding five years have slaughtered five percent or more of the number of fed cattle nationally.
3.The bill also includes provisions to create a publicly available library of marketing contracts, mandating box beef reporting to ensure transparency, expediting the reporting of cattle carcass weights, and requiring a packer to report the number of cattle scheduled to be delivered for slaughter each day for the next 14 days. The contract library would be permanently authorized and specify key details about the contents that must be included in the library like the duration of the contract and provisions in the contract that may impact price such as schedules, premiums and discounts, and transportation arrangements.
The National Farmers Union immediately announced it supports the bill and urged Congress “to act quickly to pass this critically important legislation.”
“Rampant consolidation in the cattle industry has made pricing in the cattle market increasingly opaque,” said NFU President Rob Larew. “Fair and competitive markets rely on price discovery and transparency. For farmers and ranchers to bargain effectively with packers, they need access to reliable, accurate pricing information. This bill would shed light on the market and bring about greater fairness.”
“The updated bill comes after hours of deliberation with leaders of the Senate Agriculture Committee and weeks of technical feedback from the U.S. Department of Agriculture,” said the U.S. Cattlemen’s Association (USCA).
USCA president Brooke Miller said in a press release, “There has never been this much momentum for industry change, both in the countryside and in the Capitol. USCA stands with county, state, and national producer associations across the U.S. in supporting mandatory cash trade minimums – a concept that is also supported by the majority of Senate Agriculture Committee members.”
R-CALF USA CEO Bill Bullard said, in a statement, “We asked Congress to take decisive action to restore the competition purged from our cattle markets by the largest packers that shifted large volumes of cattle out of the competitive cash market and placed them in non-competitive captive supply arrangements. Some or all of these captive supply arrangements are akin to packer ownership and control of cattle.
“While we reserve our opinion regarding the modified compromise bill pending our ongoing analysis, we remain concerned that at its heart, the proposal authorizes the USDA to take up to two more years before it even establishes minimum cash volume requirements; to set those minimum requirements at the same inappropriate level that they’ve been at during the past two years; and then to keep them at that inappropriate level following the required review after the first two years of implementation and periodic reviews after each five-year increment.
“We were hoping Congress would provide a measured response to this serious crisis and we will continue wading through this complicated proposal to determine if it provides any meaningful reform worthy of America’s independent cattle producers’ support.”
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