A pair of representatives has introduced the Cattle Contract Library Act, which would create a cattle contract library within the Agricultural Marketing Service (AMS). The legislation was recently unveiled by Reps. Dusty Johnson (R-SD-At large) and Henry Cuellar (D-TX-28).
The bill would amend the Agricultural Marketing Act of 1946 (Livestock Mandatory Reporting) and direct AMS to regularly update the library in a user-friendly format. The legislation also authorizes USDA to issue grants to universities, associations or other institutions to work with producers to distribute and analyze data to drive marketing decisions.
In a summary produced by Johnson, he notes the concept of a contract library is not new, as USDA currently operates a pork contract library. He added that the idea of a contract library for cattle has been supported through research and producer engagement.
“Data drives marketing decisions, and a contract library will provide much-needed leverage for independent producers,” Johnson said.
The contract library would contain the information of each type of contract offered by packers to producers for fed cattle, including cattle for delivery and any premiums or discounts associated with the contract. The library would also contain the duration of the contract, provisions that may affect the base price of cattle covered and transportation agreements.
The library would also publish material regarding the total number of cattle solely committed to the packer each week within the six-month and 12-month periods following the date of the contract. If the number of cattle was not specified in the contract, then there must be included an indication that the contract is an open commitment, as well as any limitations on the number of cattle that may be delivered.
In addition, there must be a description of the provisions in the contract that provide for expansion in the committed numbers of fed cattle to be delivered for the six-month and 12-month periods following the contract date.
If the bill passes, the secretary of Agriculture will have 90 days to create a library and 30 days after the library is created to publish weekly or monthly reports. If a packer refuses to provide accurate information or to comply with the library, then they will be in violation of the act.
The bill is co-sponsored by more than a dozen bipartisan representatives.
The National Cattlemen’s Beef Association (NCBA) celebrated the legislation, saying it comes after more than a year of pushing for the library.
“There is no single, silver bullet solution to the wide variety of needs among our diverse membership, but lawmakers can start by focusing on viable solutions that have broad-base support across the industry,” said NCBA President Jerry Bohn.
“The cattle contract library is one such solution, and it will help our producers command more leverage in negotiations with the packers.”
The U.S. Cattlemen’s Association (USCA) also praised the bill.
“A cattle contract library is sorely needed, and this bill is one step closer to bringing that concept to fruition,” said USCA Vice President Justin Tupper.
However, while NCBA and USCA expressed their support for the bill, Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America (R-CALF USA) did not endorse the measure. The group said the bill does not address the “competition-disrupting leverage the highly concentrated beef packers now hold over the cattle market,” and the packers’ procurement methods used today may fall outside the scope of the bill.
“The problem with our broken market is not that we don’t know the details of the contracts that confer market leverage to the packers; the problem is there are too many contracts, and because of that, our price discovery market is being destroyed,” said R-CALF USA Director Eric Nelson.
R-CALF USA instead expressed their support for Sen. Chuck Grassley’s (R-IA) 50/14 bill, which would mandate the amount of cash trade purchases.
The Cattle Contract Library Act was fast-tracked to the House Agriculture Committee, where they planned to mark it up on Oct. 21, after WLJ press time. Additional companion legislation will need to be proposed in the Senate for the bill to move toward enactment. — Anna Miller,WLJ managing editor
