It’s been an interesting couple of years for the cattle markets, particularly in relation to the amount of related legislation that has been proposed.
Chelsea Good, Livestock Marketing Association (LMA) vice president of government and industry affairs, told WLJ there are a few key pieces of legislation they have been working on that are of interest to not just producers, but the industry as a whole. In particular, LMA has focused its efforts on supporting the House’s Amplifying Processing of Livestock in the U.S. (A-PLUS) Act and its companion legislation in the Senate.
“Because of some dated Packers and Stockyards (P&S) Act regulations, it is actually illegal for a livestock auction owner or manager to own or operate a packing plant,” Good said. “We want to see more processing capacity, and yet our markets are being told they can’t be part of the solution, and that’s really frustrating.”
Good said the A-PLUS Act and its companion legislation would get rid of that regulation and allow livestock auctions to own or invest as a packer, as long as they are below a certain size.
Regarding the recent news that Walmart has invested in Sustainable Beef’s proposed packing plant in Nebraska, Good said it is unfair and frustrating that a large retailer can invest in a packing plant, but livestock auctions cannot.
“It feels like we’re being held to a very different standard,” she said. “I think for most people, a livestock auction owner and individual who’s in the business is going to be a better option.”
She added that these individuals have a more vested interest in competition compared to an entity that is trying to vertically integrate the supply chain and stray further away from competition.
The bills have been introduced in Congress but have not made much movement yet. LMA will be having a Washington, D.C., fly-in later this month and plans to talk with those on Capitol Hill to encourage the bills’ progression.
“It is difficult to get things to move in the fall of an election year, but I think that there’s still some possible routes forward, ideally this Congress, but if not, we are persistent and we’ll keep working on it next Congress,” she said.
Good also mentioned they are keeping tabs on a bill that is not yet introduced and doesn’t directly related to the cattle markets but will have an impact on producers nonetheless. LMA is interested in some early legislation that might incentivize people to choose to pay electronically through something like an automated clearing house or a wire transfer.
“Mail services have really slowed down, and that’s been a problem for livestock auctions because probably about 90% of our money is checks in the mail that get mailed either to the auction or producer,” Good said. “It’s gotten so much slower that we are actually trying to find ways to incentivize electronic payment instead of checks in the mail.”
Trust, P&S Act
Good also spoke of the progress of the dealer statutory trust signed into law in December 2020. The trust was created with the intent to provide livestock sellers with payment protection during dealer payment defaults, and it was widely supported by LMA.
Good said USDA has yet to publish any data about the trust, but she has heard anecdotes of people who have filed dealer trust claims and have had a better payout than if the trust had not existed.
USDA has also only released the first of its three new rules to the P&S Act, with the first rule relating to the poultry tournament system. The other two rules will relate more to the cattle sector and cover deception and unfair practices. Good said the second rule is at the Office of Management and Budget, out of USDA’s hands, but it may be slow to move through the office. She noted the poultry system rule spent about four months in the agency’s hands.
Good concluded that through all of the issues that have plagued the industry over the past few years, “It’s been really eye opening for a lot of people to realize how important the livestock options are; how we really do need to have that competitive method of selling to get true price discovery. And it’s great that we continue to have that in the auction setting.” — Anna Miller, WLJ managing editor
