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Cattle Market Reform Bill Passes Senate Agriculture Committee

Dan Beef, Cattle, Legislative, Marketing, National Cattlemen’s Beef Association (NCBA), Regulation

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The Cattle Price Discovery and Transparency Act passed out of the Senate Agriculture Committee. The legislation, sponsored by U.S. Senators Deb Fischer (R-Neb.), Chuck Grassley (R-Iowa), Jon Tester (D-Mont.), and Ron Wyden (D-Ore.) passed by a voice vote with only two no votes. The bill now moves to the Senate floor.

The senators unveiled the updated version of the legislation back in March, and the updated version 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. 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.
  1. 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.
  1. 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.
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But, the National Cattlemen’s Beef Association (NCBA) has once again voiced opposition to the bill.

“The U.S. cattle industry is home to one of the most complex set of markets in the world. Rather than embrace the freedom of that marketing system, Congress is instituting a one-size-fits-all policy that will hurt cattle producers’ livelihoods. Cattle markets are finally returning to normal after pandemic-fueled uncertainty, but these heavy-handed mandates will stifle innovation and limit marketing opportunities,” said NCBA Vice President of Government Affairs Ethan Lane. “Cattlemen and women deserve the freedom to market their cattle in whatever way they want.”

According to NCBA, the legislation would subject every cattle producer in the country to a business-altering government mandate. The bill would severely restrict the use of Alternative Marketing Arrangements (AMAs), which provide stability to producers and allow them to invest in creating higher-quality and specialty products that command a premium. The bill also fails to consider the unique ways producers raise cattle in different regions of the country. Although the bill was introduced when cattle markets experienced uncertainty because of the COVID-19 pandemic, market conditions have improved on their own without heavy-handed government intervention. NCBA notes this legislation would jeopardize that recovery.