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Cattle Contract Library Act introduced for more transparency in cattle markets

WASHINGTON, D.C. – A bipartisan effort to introduce legislation that would create  a library for cattle contracts within the U.S. Department of Agriculture’s (USDA’s) Agriculture Marketing Service Department was announced yesterday.

Currently, cattlemen are unaware of contract terms being offered by packers, leading to a decline in leverage for smaller producers during price negotiations.

The Cattle Contract Library Act of 2021 (H.R. 5609), was introduced by Dusty Johnson (R-SD) and Representative Henry Cuellar (D-TX-28)

Currently, USDA maintains a pork contract library, and following significant volatility in the cattle market and the release of the July 2020 Boxed Beef & Fed Cattle Price Spread Investigation Report, the creation of a library was recommended by experts and stakeholders. In response to this investigation, Johnson introduced sweeping cattle reform legislation to provide more transparency in the market, including the creation of a contract library.

“Producers have been asking for increased transparency and leverage in the cattle market for years, the Cattle Contract Library Act will provide granular data in near real time, ensuring producers understand the value of marketing agreements,” said Johnson. “Data drives marketing decisions and a contract library will provide much-needed leverage for independent producers.”

“Throughout my time in Congress, I have worked hard to ensure the success of the agriculture industry—one that is a critical facet of our nation’s economy. The bipartisan Cattle Contract Library Act will further this agenda through the creation of a contract library that will provide cost transparency in the cattle market,” said Cuellar. “We must support all of our cattle businesses, including our small producers, who are indispensable for our country’s food supply chain. I thank Rep. Johnson for his leadership on this critical legislation for Texas farmers, ranchers, and the agriculture industry as a whole.”

In July, USDA implemented two of Johnson’s bills aimed at increasing capacity space for small producers and curbing steep overtime fees small processing facilities incurred during the peak of the COVID-19 pandemic.

“After months of record-breaking drought and volatile markets, ranchers in South Dakota and across the country are struggling to get by. We need to act,” said National Cattleman’s Beef Association Vice President and South Dakota Rancher Todd Wilkinson.

“As we heard during the recent hearing in the House Agriculture Committee, the cattle contract library is a popular and necessary element of the broader push to bring relief to cattle producers. It would equip our producers with the data they need to make competitive marketing decisions and exert leverage in negotiations with the packers, and it would also serve as an oversight tool.

The Cattle Contract Library Act of 2021 is supported by the American Farm Bureau Federation, National, Cattlemen’s Beef Association, U.S. Cattlemen’s Association, National Farmers Union, Livestock Marketing Association, SD Cattlemen’s Association, South Dakota Farm Bureau, and the South Dakota Farmers Union.

Accoring to U.S. Cattlemen’s Association Vice Presient Justin Tupper,  St. Onge, SD, it’s time for meaningful changes to the Livestock Mandatory Reporting (LMR) program that will increase transparency in the cattle marketplace.  “A cattle contract library is sorely needed, and this bill is one step closer to bringing that concept to fruition.”

Eric Jennings, President of the South Dakota Cattlemen’s Association sai, “Market transparency is a critical component of price discovery in cattle marketing. As the industry has evolved, most sales are now taking place through alternative market agreements.”

He added, “We need a contract library to create transparency in those agreements to achieve better price discovery in the live cattle market.

Also weighing in was South Dakota Farm Bureau President Scott VanderWal. “In meetings with ranchers and feeders across the state, there is agreement that we need cattle market transparency, including reporting details of all cattle marketing arrangements. The Cattle Contract Library is common sense and I hope we can get it quickly moved out of committee and passed in the House.”

The Cattle Contract Library Act is cosponsored by Reps. Tracey Mann (R-KS-01), Frank Lucas (R-OK-03), Rick Allen (R-GA-12), Ashley Hinson (R-IA-01), Kelly Armstrong (N.D.-AL), Jason Smith (R-MO-08), Trent Kelly (R-MS-01), Michelle Fischbach (R-MN-07), Angie Craig (D-MN-02), Mariannette Miller-Meeks (R-IA-02)Jim Hagedorn (R-MN-01), David Rouzer (R-NC-07), Vicky Hartzler (R-MO-04), Adrian Smith (R-NE-3), Abigail Spanberger (D-VA-07), and Darren Soto (R-FL-09).

Read the full bill here and the one-pager here.

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