For quite some time, cattle producers have seen the decline of a negotiated fed cattle trade, an issue the National Cattlemen’s Beef Association (NCBA) has been discussing on how to increase opportunities for producer profitability.
This week, Representative Vicky Hartzler (R-MO-4) introduced the Optimizing the Cattle Market Act of 2021 in the U.S. House of Representatives. If enacted, the bill would direct the U.S. Department of Agriculture (USDA) to create a cattle formula contracts library, and increase the reporting window for “cattle committed” from seven to 14 days. These measures would increase transparency in the industry and improve the opportunity for robust price discovery.
According to NCBA, the legislation builds on a growing consensus among cattle producers, industry leaders, and Members of Congress that the current market dynamics, which stunt producer profitability and put undue market leverage on the side of meatpackers, are not sustainable for the beef supply chain.
“The growing momentum we’re seeing in the House and Senate behind addressing these critical concerns in the cattle markets is reflective of the urgency producers are feeling across the country,” said NCBA Vice President of Government Affairs Ethan Lane. “Extreme market volatility, unpredictable input costs, a shifting regulatory landscape, and natural crises like drought leave cattle farmers and ranchers with a growing list of threats to their continued financial viability. Something needs to give.”
The legislation also reiterates the need for expedited reauthorization of USDA’s Livestock Mandatory Reporting (LMR) program, a step NCBA has long pushed for and reached agreement on with other industry groups.