cattle market

Senators Announce Plan to Improve Cattle Market Fairness

Dan Cattle, Legislative, Regulation

cattle market

Republican Senators Chuck Grassley of Iowa and Deb Fischer of Nebraska joined Democrats Jon Tester of Montana and Ron Wyden of Oregon in announcing the Cattle Price Discovery and Transparency Act. The compromise cattle market bill is an effort to return fairness to the cattle marketplace dominated by four major meatpackers.

The legislation will establish regional mandatory minimum thresholds of negotiated cash and negotiated grid trades based on each region’s 18-month average trade to enable price discovery. It would also require the USDA to create and maintain a publicly-available library of marketing contracts between packers and producers in a manner that ensures confidentiality.

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The proposal is endorsed by a number of state and national organizations, including the American Farm Bureau, the National Farmers Union, and many others.

(From the National Association of Farm Broadcasters)


Grassley, Fischer, Tester, Wyden Announce Plan To Improve Fairness In Cattle Market

(WASHINGTON/Nov. 9, 20-21) — Sens. Chuck Grassley (R-Iowa), Deb Fischer(R-Neb.), Jon Tester (D-Mont.), and Ron Wyden (D-Ore.) are announcing a compromise cattle market proposal, known as the Cattle Price Discovery and Transparency Act. The bill is part of Grassley’s ongoing effort to return fairness to the cattle marketplace dominated by four major meat packers.

“I frequently hear from Iowa’s independent cattle producers about their struggle to get a fair price for their cattle while the nation’s four largest packers operate in the shadows. I pushed for hearings in the Senate’s Agriculture and Judiciary committees to shine a light on the market unfairness and now have partnered with a bipartisan group of senators to develop a solution.  This bill takes several steps to improve cattle price transparency and will improve market conditions for independent producers across the country,” said Grassley, a member of the Senate Agriculture Committee and ranking member of the Senate Judiciary Committee.

“Robust price discovery ensures that all members of the beef supply chain — cow-calf producers, feeders, packers, and consumers — can be successful. The foundation of price discovery in the cattle market is negotiated cash sales. One or two regions of the country should not have to shoulder the burden of price discovery and that’s exactly what has been happening. Furthermore, even regions that primarily use alternative marketing arrangements (AMAs) such as formula contracts predominantly rely on negotiated cash sales to set their base prices. Our compromise proposal takes regional differences into account and ensures fairness for every segment of the supply chain.” said Fischer, a member of the Senate Agriculture Committee.

Montana ranchers raise the best beef in the world, and more market transparency and fairer prices are essential to fighting consolidation and keeping smaller operations strong. Increasing spot transactions will give producers more control and better information when they sell their livestock, which is critical to helping them meet their bottom line. That’s how we keep markets fair and ensure Montana’s producers remain competitive,” Tester said.

“Family ranchers in Oregon are struggling as they continue to recover from the economic fallout of the pandemic, on top of a cattle market that sets them up at a disadvantage and delivers big for corporate meat packers. Our bipartisan coalition has one aim: level the playing field for the cattle ranchers in our states and allow them to grow their small businesses by restoring market fairness, efficiency, and transparency,” Wyden said.

The senators plan to introduce the Cattle Price Discovery and Transparency Actin the coming days. The legislation will:

  • Establish regional mandatory minimum thresholds of negotiated cash and negotiated grid trades based on each region’s 18 month average trade to enable price discovery in cattle marketing regions. In order to establish regionally sufficient levels of negotiated cash and negotiated grid trade, the Secretary of Agriculture in consultation with the Chief Economist, would seek public comment on those levels, set the minimums, and then implement them. No regional minimum level can be more than three times that of the lowest regional minimum, and no regional minimum can be lower than the 18-month average trade at the time the bill is enacted.
  • Require the U.S. Department of Agriculture (USDA) to create and maintain a publicly available library of marketing contracts between packers and producers in a manner that ensures confidentiality.
  • Prohibit the USDA from using confidentiality as a justification for not reporting and make clear that USDA must report all LMR information, and they must do so in a manner that ensures confidentiality.
  • Require more timely reporting of cattle carcass weights as well as requiring a packer to report the number of cattle scheduled to be delivered for slaughter each day for the next 14 days.

 The proposal is endorsed by a number of state and national organizations, including the Iowa Cattlemen’s Association, Iowa Farm Bureau, American Farm Bureau, National Farmers Union and U.S. Cattlemen’s Association.

“The Iowa Cattlemen’s Association affirms the legislative compromise established in the Cattle Price Discovery and Transparency Act. We appreciate Sen. Grassley’s leadership in negotiating a workable solution with his colleagues. The provisions outlined in this legislation are based on feedback from the cattle industry, specifically taking into account testimonies shared by independent cattle producers at the Senate Agriculture Committee and Senate Judiciary Committee hearings this summer. We believe this legislation effectively addresses several challenges within the cattle industry. Congress must take swift action to advance this legislation.” said Bob Noble, president-elect of Iowa Cattlemen’s Association.

“Iowa cattle producers welcome this proposal that will help alleviate the discrepancies and concerns in the cattle market that have long plagued the industry.  Actions that facilitate increased market transparency and a more equitable share of profit for farmers is necessary and welcomed news,” the Iowa Farm Bureau said.

A one-pager summary of the bill is available HERE. A section-by-section summary is available HERE.

From the office of Senator Chuck Grassley (R-Iowa).