WASHINGTON, D.C. – Sens. Chuck Grassley (R-Iowa), Deb Fischer (R-Neb.), Jon Tester (D-Mont.) and Ron Wyden (D-Ore.) have released an updated version of their legislation, the Cattle Price Discovery and Transparency Act.
The bipartisan group of senators has revamped legislation that they hope will ensure more price transparency in the cattle markets. Grassley, Tester and Fischer first proposed similar legislation, originally in two separate bills, in the summer of 2020 after cattle markets crashed because COVID-19 had shut down packer processing, yet boxed beef prices soared.
Iowa Senator Chuck Grassley, who has accused his own party’s staff on the Senate Ag Committee of working with meat processors to scuttle the cattle market reform bill, says the latest version keeps regional cash trade requirements but adds more regions across the U.S. to include all cattle producers.
Under the updated Cattle Price Discovery and Transparency Act, USDA will conduct a rulemaking process to determine 5-7 regions that will cover the continental U.S. and reasonably reflect similar fed cattle purchases.
The sticking point over the bill remains a conflict about mandating levels of cash trade. The American Farm Bureau Federation voted in January to oppose government mandates that would require packers to purchase a percentage of live cattle via cash bids. AFBF was divided among its own membership regionally when the group’s delegates voted on the policy change at its annual meeting.
The National Farmers Union (NFU) immediately announced it supports the new bill language on Monday and urged Congress “to act quickly to pass this critically important legislation.”
“Rampant consolidation in the cattle industry has made pricing in the cattle market increasingly opaque,” said NFU President Rob Larew. “Fair and competitive markets rely on price discovery and transparency. For farmers and ranchers to bargain effectively with packers, they need access to reliable, accurate pricing information. This bill would shed light on the market and bring about greater fairness.”
The U.S. Cattlemen’s Association said its Marketing and Competition Committee will review the proposed revisions. “USCA stands with county, state, and national producer associations across the U.S. in supporting mandatory cash trade minimums – a concept that is also supported by the majority of Senate Agriculture Committee members,” said USCA President Brooke Miller. “We are hopeful that the proposed changes will strengthen the intent of the bill’s authors in establishing a fair cattle marketplace, but must thoroughly review the language first.”
Karina Jones, R-CALF USA Field Director, said in a recent news release, “Sen. Grassley has not answered many specific questions regarding the bill. If no one can answer these questions, it seems safe to stay loyal to S. 949, the 50/14 spot market protection bill.”
Tanner Beymer, senior director of government affairs, with the National Cattlemen’s Beef Association (NCBA) told Brownfield Ag News even with the updates, NCBA’s members can’t support the bill. “Unfortunately, things like government mandates on the methods that cattle producers choose to use to market cattle is not something that our members have expressed interest in. As a matter of fact, they have been very clear up to this point about the fact that they are opposed to that prescription.”
Grassley says he’s “confident” that there are enough votes to move the bill out of the Senate Ag Committee, into markup and will be asking for a hearing. “Our latest proposal comes after months of working with staff at the U.S. Department of Agriculture to make technical changes that will allow them to best implement the bill. It takes several steps to improve cattle price transparency,” he said.
The bill would also:
- Requires USDA to establish 5-7 regions covering the continental United States and that reasonably reflect similar fed cattle purchases.
- Designates a set of approved pricing mechanisms for covered packers that contribute
to price discovery and transparency. These include fed cattle purchases through
negotiated cash, negotiated grid, at stockyards, and through trading systems where
multiple buyers and sellers can make and accept bids. - Requires USDA to set minimum levels of purchases through approved pricing
mechanisms that covered packers – those controlling five percent or more of fed cattle
slaughter – must make. - Mandates that each regional mandatory minimum be not less than the average of that
region’s negotiated trade for the two year period of 2020-2021. Additionally, sets a
maximum threshold for any region at 50 percent. - Requires USDA to conduct an initial review of mandatory minimums after two years.
- Allows USDA to work with the cattle and beef industry to periodically review and
modify regional minimums after a public notice and comment period.
