Additional legislation has been introduced to help increase cattle markets transparency, improve risk management, and support meat processors. Rep. Dusty Johnson (R-SD-At large) announced the Price Reform in Cattle Economics (PRICE) Act Oct. 1 in response to USDA’s investigation into the spread between boxed beef and fed cattle prices last fall and earlier this year.
The investigation looked into the volatility of the cattle markets following the Tyson Holcomb, KS, fire last fall as well as the COVID-19 pandemic. The report was released in late July, and ultimately found no wrongdoing by individual entities or groups.
Johnson’s bill “provides greater price reporting and transparency, comprehensive risk management solutions, bolsters small processor and producer-owned cooperative processing opportunities, and updates the Packer and Stockyards Act to create a cattle contract library,” according to a released statement by the congressman.
“Cattle country is hurting and has not fully recovered,” Johnson said. “USDA laid out several areas where Congress can implement real solutions to improve the market—the PRICE Act is the answer to many of the issues our ranchers have faced for years. Our producers want a fair market and fair prices and that’s what this bill delivers. Congress needs to deliver for cattle country.”
Components of the bill
The bill includes several sections to increase transparency and improve efficiency in the beef chain.
• The legislation would formally place the USDA secretary as a member of the Committee on Foreign Investment in the United States (CFIUS). This would ensure CFIUS is operating effectively and if a transaction might impair the national security of the U.S.
• Small and very small meat, poultry, and egg processing plants would also be provided overtime and holiday fee relief from the Food Safety and Inspection Service (FSIS), prorating the fees charged when overtime and holiday inspection services are requested. Very small processors are defined as establishments with fewer than 10 employees or annual sales of less than $2.5 million, and small processors are defined as establishments with 10 or more employees but fewer than 500.
Very small establishments would pay 25 percent of the currently approved overtime and holiday user fee rates and FSIS would cover the remaining 75 percent of the fee. Small establishments would pay 70 percent of the currently approved overtime and holiday user fee rate and FSIS would cover the remaining 30 percent of the fee.
•The bill would also amend the Retail Exemption under the Federal Meat Inspection Act and the Poultry Products Inspection Act to allow state-inspected meat and poultry to be sold in interstate commerce directly to consumers through e-commerce.
• A stand-alone direct and guarantee loan program at USDA Rural Development would be developed for new and expanding meat processors capacity to “improve marketing options for livestock producers, further competitive markets and facilitate value-added opportunity for livestock producers.” Financing would be allowed for cooperative stock in producer-owned processing facilities and refinancing for expanded processing capacity.
• The secretary of agriculture would also be granted the authority to create a rural development grant program and award grants to governmental entities, public, private, or cooperative organization organized on a for-profit or nonprofit basis, or an Indian tribe. Grants would help with business opportunities, training employees, providing technical assistance, and other assistance.
• The bill would direct the National Institute of Food and Agriculture (NIFA) to commission research to determine if and where there are new opportunities for new or expanding plants, what challenges there are to entry, and implications for compliance with federal inspection requirements.
• NIFA would also be funded for a grant program to permit land-grant universities to create marketing tools to help producers utilize the futures market through partnerships with trade associations and other outreach groups.
• Under the bill, the USDA Office of the Chief Economist would conduct feasibility studies and cost-benefit analyses for how to increase price discovery through mandatory price reporting. This would include researching cash/spot market solutions—including proposals such as 50-14 and 30-14 mandatory trade—spot market targets on regional differences, a pool of negotiated cash market traders, changes to confidentiality rules, and other proposals.
• The Packers and Stockyards Act would also be amended to include beef contracts in USDA’s existing reporting on swine contracts, and the secretary of agriculture would be directed to create a library of the types of contracts offered by packers to beef producers for the purchase of cattle.
• The Rural Health and Safety Education Grant Program would be amended to allow nonprofits, cooperative extension services, land-grant universities, state/local governments, processors and handlers, and farm families resources to distribute best practices and training to help farm and agricultural workers respond to the COVID-19 pandemic.
• The bill would create a waiver to allow for grazing or harvest of a cover crop before Nov. 1 in the event of a feed shortage or increased demand due to excessive moisture, flood, drought, or supply chain disruption.
• Finally, USDA would be allowed to open up acres under the Conservation Reserve Program to haying and grazing for producers in need of forage because of the COVID-19 pandemic.
The bill has the support of industry groups, including National Cattlemen’s Beef Association (NCBA) and United States Cattlemen’s Association (USCA).
Ethan Lane, NCBA vice president of government affairs said, “This legislation is a significant step in the right direction as we continue to explore ways to support producers who have been impacted by two major black swan events, in an already volatile cattle market.”
USCA Vice President Justin Tupper remarked, “The provisions laid out in the PRICE Act provide a solid foundation with which to build out a Livestock Title in the next farm bill. Both the 2018 and 2014 Farm Bills failed to include a specific title for livestock, instead dumping those programs into the ‘miscellaneous’ bin.” — Anna Miller, WLJ editor