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Legislation Designed to Improve Price Transparency in Cattle Markets

Clint Thompson Alabama, Cattle, Florida, Georgia

Iowa Representatives Cindy Axne, Abby Finkenauer and Dave Loebsack introduced legislation in the House that would increase price transparency in U.S cattle markets. It would spur additional price discovery and competition for producers using cash markets.

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File photo of cattle.

“We must increase price transparency and level the playing field for cattle producers,” says Axne. “We’ve seen significant market disruptions from the fire in Holcomb, Kansas, last year, and more recently from COVID-19, which illustrates the need for this legislation.”

The Iowa representatives note that this isn’t a new problem for cattlemen. With the nationwide decreases in cash trades, producers who use the cash markets are bearing the burden of price discovery for the rest of the cattle industry. The bill would require processors to have a minimum of 50% of their weekly slaughter purchased from cash market sales. The increase in cash market sales would give independent cattle producers around the country a level playing field with formula-contracted cattle purchases and additional leverage with processors.

Iowa producers typically participate in the cash market around 50% of the time, while nationwide participation is down as low as 5% in some states. The House bill introduced is a companion to Senate Bill 3693, which was introduced earlier this year by Iowa Senators Chuck Grassley and Joni Ernst.

(From the National Association of Farm Broadcasters)