USDA is releasing its long-awaited Cattle Contracts Library Pilot Program, which will run through Sept. 30. The program was created through the Consolidated Appropriations Act of 2022 in order to increase market transparency for cattle producers.
“This pilot library will provide new disclosure to the industry and public regarding the key terms, conditions and volumes under which cattle are contracted, bringing sunshine to practices in what is now the largest part of the cattle market,” USDA said.
The library will look like the model developed and shared with stakeholders last year but will now have information from active contracts.
Packers that slaughtered 5% or more of the fed cattle slaughtered nationally will be required to submit contract information to USDA to be put into the library. The rule became effective on Jan. 6.
“With the library, producers will be able to see a much more complete picture of marketing practices and trends, including upcoming volumes,” USDA said. “This transparency will empower producers to take advantage of new economic opportunities, improve their marketing strategies and manage risks relating to contractual terms including pricing references on which they rely.”
The link to the online dashboard was set to go live on Feb. 6 at www.ams.usda.gov/market-news/livestock-poultry-grain/cattle-contracts-library.
USDA will host a listening session at 11 a.m. ET on Feb. 8 to discuss the Cattle Contracts Library Pilot Program after its public release. To register for the webinar, visit the aforementioned link and sign up for the Zoom webinar.
NCBA discussion
At the 2023 National Cattlemen’s Beef Association (NCBA) Convention & Trade Show, USDA Agricultural Marketing Service Administrator Bruce Summers spoke on the pilot program at the Live Cattle Marketing Committee meeting held on Feb. 1.
Summers stressed the priority of keeping all of the data in the library confidential. At stakeholder input sessions held last year, this was one of the primary concerns.
The initial program release allows users to browse information contained in active contracts used for the purchase of fed cattle, Summers said.
“It will provide information on things such as base price determination, base price adjustments, and selling basis options and contract specifications for things such as quality, delivery, financing, profit sharing and more,” he said. The program will also contain information on premiums or discounts used in the final price determination.
Data will continue to be added as the program gets up and running. The pilot program will run through Sept. 30 and feedback will be gathered to determine how useful the program is and what adjustments could be made. Upon the pilot program’s completion, Congress will ultimately decide the future of the program.
During the Q&A portion of the presentation, a cattleman asked why the program was now mandatory instead of voluntary, as originally planned. Summers replied that in order to have a complete dataset, mandatory enforcement is necessary so producers can see the full range of options out there.
Another cattleman asked whether the program would expand to include more processors other than those of the Big Four. Summers emphasized that the program is a pilot program and any expansions will be decided by Congress upon completion of the pilot.
“It will be up to Congress to decide whether to pass a law or bill that will allow the contract (library) to have different wording in the statute based on how the pilot went and the comments and feedback we get,” Summers said.
USDA is requesting any feedback on the pilot program and is especially concerned with the user friendly aspect of the site.
In a released statement, NCBA Senior Director of Government Affairs Tanner Beymer said, “We have been looking forward to the launch of the Cattle Contract Library pilot program and will review the product to determine if its current format provides value to cattle producers. We will continue engaging with officials at the U.S. Department of Agriculture and providing feedback on this resource.” — Anna Miller, WLJ managing editor
