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Senators reach cattle market compromise

Senators reach cattle market compromise

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Fall calving

Livestock specialists say fall calving can be beneficial for cattle producers, taking advantage of weather and forage patterns.

WASHINGTON, D.C. — U.S. Senators Deb Fischer (R-Neb.), Chuck Grassley (R-Iowa), Jon Tester (D-Mont.) and Ron Wyden (D-Ore.) announced a compromise cattle market proposal Nov. 10, known as the Cattle Price Discovery and Transparency Act.

“I frequently hear from Iowa’s independent cattle producers about their struggle to get a fair price for their cattle while the nation’s four largest packers operate in the shadows,” Grassley, a member of the Senate Agriculture Committee and ranking member of the Senate Judiciary Committee, said in a news release.

“I pushed for hearings in the Senate’s Agriculture and Judiciary committees to shine a light on the market unfairness and now have partnered with a bipartisan group of senators to develop a solution.

“This bill takes several steps to improve cattle price transparency and will improve market conditions for independent producers across the country.”

The legislation will:

  • Establish regional mandatory minimum thresholds of negotiated cash and negotiated grid trades based on each region’s 18-month average trade to enable price discovery in cattle marketing regions. To establish regionally sufficient levels of negotiated cash and negotiated grid trade, the Secretary of Agriculture, in consultation with the Chief Economist, would seek public comment on those levels, set the minimums, and then implement them. No regional minimum level can be more than three times that of the lowest regional minimum, and no regional minimum can be lower than the 18-month average trade at the time the bill is enacted.
  • Require the USDA to create and maintain a publicly available library of marketing contracts between packers and producers in a manner that ensures confidentiality.
  • Prohibit the USDA from using confidentiality as a justification for not reporting and make clear that USDA must report all Livestock Mandatory Reporting information, and they must do so in a manner that ensures confidentiality.
  • Require more timely reporting of cattle carcass weights as well as requiring a packer to report the number of cattle scheduled to be delivered for slaughter each day for the next 14 days.

“Robust price discovery ensures that all members of the beef supply chain — cow-calf producers, feeders, packers, and consumers — can be successful,” Fischer, a member of the Senate Agriculture Committee, said. “The foundation of price discovery in the cattle market is negotiated cash sales. One or two regions of the country should not have to shoulder the burden of price discovery, and that’s exactly what has been happening.

“Furthermore, even regions that primarily use alternative marketing arrangements (AMAs) such as formula contracts predominantly rely on negotiated cash sales to set their base prices. Our compromise proposal takes regional differences into account and ensures fairness for every segment of the supply chain.”

Tester said more market transparency and fairer prices are “essential to fighting consolidation and keeping smaller operations strong.”

“Increasing spot transactions will give producers more control and better information when they sell their livestock, which is critical to helping them meet their bottom line. That’s how we keep markets fair and ensure Montana’s producers remain competitive,” he said.

Wyden said he has seen Oregon ranchers struggling as they recover from the fallout of the pandemic “on top of a cattle market that sets them up at a disadvantage and delivers big for corporate meat packers.”

“Our bipartisan coalition has one aim: level the playing field for the cattle ranchers in our states and allow them to grow their small businesses by restoring market fairness, efficiency and transparency,” he said.

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