Sens. Deb Fischer (R-NE), Chuck Grassley (R-IA), Jon Tester (D-MT) and Ron Wyden (D-OR) have released a revised version of their Cattle Price Discovery and Transparency Act. The legislation was first introduced in November and would mandate negotiated trade levels and require reporting of marketing contracts.
The senators said in a new one-pager that a regional approach is needed to address “the declining negotiated cash market and the resulting thinness of accurate price information.” The senators note there was a 40 percent decrease in cash sales from 2005-2018 in the Texas/Oklahoma/New Mexico region, yet transactions dropped only 16 percent in the Iowa/Minnesota region.
“Absent government intervention, or any way to enforce a voluntary approach, cash market volumes are unlikely to return on their own—despite the fact that both parties in an (alternative marketing agreement) rely heavily on the information that is produced by cash market participants,” the one-pager read.
The revised legislation would create five to seven regions in the country and establish minimum levels of fed cattle trade through approved pricing methods (negotiated cash, negotiated grid, at a stockyard, etc.). The secretary of Agriculture would work with the USDA chief economist to set these levels, and then the public would have the opportunity to comment on the levels. USDA would also be authorized to periodically modify regional minimums after a public notice and comment period.
Regional mandatory minimums would not be less than the current 18-month average for each region—except in the case that a region’s mandatory minimum exceeds three times that of the lowest regional mandatory minimum. The bill would prohibit a region’s minimum from exceeding three times that of the lowest region’s minimum, “ensuring that no region disproportionately shoulders the responsibility of price discovery.”
The bill would also establish a maximum penalty for covered packers of $90,000 for mandatory minimum violations. A covered packer is one that has slaughtered 5 percent or more of the number of fed cattle nationally during the immediately preceding five years.
Finally, the bill would create a cattle contract library, mandate boxed beef reporting to ensure transparency, expedite the reporting of cattle carcass weights and require a packer to report the number of cattle scheduled to be delivered for slaughter each day for the next 14 days, according to the bill text.
Fischer said she hopes to see a hearing on the legislation in the coming weeks. “Our family farmers and ranchers have told us about the need for both robust price discovery and transparency in the cattle markets,” Fischer said in a release. “The updates to our legislation incorporate a variety of stakeholder feedback to achieve our goal of ensuring more fairness in cattle markets.”
Industry reactions
The legislation has received mixed reactions from the industry.
“Despite overwhelming feedback in opposition to a cash mandate, this latest version of the Fischer/Grassley bill expands the concept to ensure that every single producer in the country selling fat cattle would be subject to a business-altering government edict,” Ethan Lane, National Cattlemen’s Beef Association vice president of government affairs, told WLJ in an email.
“This is an indication of just how far the sponsors of this bill have strayed from the wishes of the majority of cattle producers around the country. It is time for the sponsors to finally consider the perspectives of all those who this bill would impact, not just those in their own backyards—and we are ready to have that conversation whenever they are,” Lane concluded.
“U.S. Cattlemen’s Association looks forward to reviewing the updated legislation and providing our feedback in the days ahead,” the group said in a press release. “We are hopeful that the proposed changes will strengthen the intent of the bill’s authors in establishing a fair cattle marketplace, but must thoroughly review the language first.”
Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America (R-CALF USA) expressed their dissatisfaction with the bill.
“While we reserve our opinion regarding the modified compromise bill pending our ongoing analysis, we remain concerned that at its heart, the proposal authorizes the USDA to take up to two more years before it even establishes minimum cash volume requirements; to set those minimum requirements at the same inappropriate level that they’ve been at during the past two years; and then to keep them at that inappropriate level following the required review after the first two years of implementation and periodic reviews after each five-year increment,” said R-CALF USA CEO Bill Bullard in a statement.
Bullard said R-CALF USA will “continue wading through this complicated proposal to determine if it provides any meaningful reform worthy of America’s independent cattle producers’ support.” — Anna Miller, WLJ managing editor
