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Cattle Contracts Library starts in January, reports more marketing information but is it enough?

WASHINGTON, D.C. – The U.S. Department of Agriculture (USDA) has published a final rule in the Federal Register to secure the contract information needed to populate a Cattle Contracts Library. And while it should provide more marketing information to ranchers and feeders, there will those who are not satisfied with the final rule that will require packers that slaughtered an average of not less than five percent of the number of fed cattle slaughtered nationally during the immediately preceding five calendar years to submit contractual information for the purchase of cattle.

“The contract clauses required to be submitted include contract method, contract start and end dates, base price source and adjustment, selling basis, premiums and discounts, specifications relating to cattle attributes, delivery and transportation terms and payments, financing, risk-sharing, profit-sharing or other financial arrangements, and volume provisions,” AMS says in the rule being published Wednesday in the Federal Register.

Among those trade organizations that are pleased with the final rule, the National Cattlemen’s Beef Association (NBA) said it welcomed the release of the final language. “We are pleased that USDA listened to feedback from stakeholders like NCBA while crafting the final rule on the Cattle Contract Library Pilot Program,” said NCBA Senior Director of Government Affairs Tanner Beymer.  “We are hopeful that this pilot program will strike an appropriate balance between offering cattle producers additional insight into the market while also protecting their proprietary business information.”

He added, “A Cattle Contract Library is just one of many tools NCBA has advocated for to help producers make informed business decisions and capture the most value possible for their cattle.”

The Consolidated Appropriations Act of 2022 directed the USDA’s Agricultural Marketing Service (AMS) to create a Cattle Contracts Library Pilot Program (library) to increase market transparency for cattle producers.

AMS hosted a listening session in April 2022 to begin the process of gathering feedback from stakeholders. Feedback gleaned from this meeting and over the subsequent months has informed the development of the pilot library, including comments related to content, frequency of reporting, and usability.

From this process, AMS developed a working library model which was primarily populated with inactive contracts. The model was presented to a wide range of stakeholders and end users, with a focus on content and usage.

Beymer  told Brownfield Ag News  the USDA updated the language to the rule following stakeholder feedback.  The original proposed rule would have allowed the USDA to obtain all active contracts from packers, which the industry thought was problematic from a privacy perspective.

“This rule has announced that they are going to look for the information that is in those contracts,” he says.  “But they are going to acquire it through summary report, which is very similar to other functions of livestock mandatory reporting.”

This will likely not set well with the U.S. Cattlemen’s Association (USCA).  In its recommendations for the pilot program, it specifically argued against aggregated summaries. In its remarks, USCA said the library should be constructed as a searchable database of individual contracts, not just as a
static PDF document like the swine contract library, and not presented as aggregated summaries.

The Library will be housed on the USDA’s website and will be unveiled in early January. All information related to the library pilot is posted on the AMS Cattle Contract Library


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