Livestock News

Bipartisan bill seeks to increase transparency in cattle market

Published:

Yesterday, Sens. Chuck Grassley (R-Iowa) and Jon Tester (D-Mont.) introduced a bipartisan bill would require a minimum of 50 percent of a meat packer’s weekly volume of beef slaughter be purchased on the open or spot market. The new bill also states that the cattle must be delivered in a 14-day window.

The senators, along with their colleagues, Sens. Joni Ernst (R-Iowa), John Hoeven (R-N.D.), Tina Smith (D-Minn.), Mike Rounds (R-S.D.), Ron Wyden (D-Ore.), Steve Daines (R-Mont.), and Cory Booker (D-N.J.) introduced the legislation with the intent of fostering efficient markets while increasing competition and transparency among meat packers who purchase livestock directly from independent producers.

“The lack of transparency in cattle pricing isn’t a new problem. Unfortunately, the COVID-19 pandemic has only highlighted the need for additional price transparency measures to ensure producers are getting a fair price for the hard work of raising cattle,” Grassley said. “Food doesn’t come from the grocery store, it comes from tens of thousands of farmers and independent producers who work day and night to ensure families across the country have an abundant supply of food. Independent producers deserve to be paid what their beef is worth.”

“Montana livestock producers have made it clear: there needs to be more transparency in the cattle market to ensure ranchers get a fair shake, especially as market consolidation continues to rise,” Tester said. “This bill is about putting Montana family ranchers first, instead of tying their bottom lines to the whims of multi-national corporations.”

Grassley first introduced this bill in 2002 with former Sen. Russ Feingold (D-Wis.). After hearing from constituents expressing concern that there is currently a discrepancy between high grocery store shelf prices and simultaneous decreased cattle prices, Grassley reintroduced this legislation. This bill will make systemic changes to the cattle industry to ensure longevity of independent producers, which will protect our country’s beef supply. The new bill is nearly identical to S.3693 that was first introduced in May 2020, with the notable exception that the new bill requires at least 50% of the cattle purchases in the negotiated cash market to occur on a weekly rather than daily basis.

While the bipartisan bill had some support from livestock organizations, the National Cattlemen’s Beef Association did not stamp their approval. 

The National Cattlemen’s Beef Association said, “NCBA has and will continue to work alongside our affiliates, Congress, and USDA to increase price discovery and improve the business climate for producers across the country. However, simply put, Senator Grassley’s bill misses the mark. The industry — from leading livestock economists to NCBA state affiliates — agrees that any legislative solution to increased price discovery must account for the unique dynamics within each geographic region. As we have seen in other sectors, a one-size-fits-all government mandate rarely achieves the intended goal. Per our grassroots policy, NCBA supports a voluntary approach first to increased negotiated trade. If a voluntary approach is unsuccessful, that same policy provides guidance toward a legislative solution that more closely resembles Senator Fischer’s Cattle Market Transparency Act. We will continue to work toward a more level-playing field for producers, and we invite Senator Grassley to join the majority of stakeholders in reaching a collaborative solution,” said NCBA Vice President of Government Affairs Ethan Lane.

However, other livestock groups showed their appreciation and support. R-CALF USA CEO Bill Bullard said, “Congress must act swiftly to pass this important bill into law to preserve the integrity of the cattle industry’s most important price discovery market — the negotiated cash market for fed cattle. Though alternative solutions to the ever-thinning cash market have been offered, none will be as effective as this new bill; nor can any of the alternatives be implemented in time to reverse the catastrophic disconnect between cattle prices and beef prices that has persisted for the past six years.”

United States Cattlemen’s Association (USCA) President Brooke Miller said, “This legislation, the ’50-14’ or spot market bill, follows legislation already supported by USCA, the Cattle Market Transparency Act of 2021 introduced by Senator Deb Fischer of Nebraska. The two bills, while different, both focus on necessary changes and enhancements to the cattle marketplace. USCA supports both pieces of legislation and will be working with both offices on paths forward.

Sponsored Content on AGDaily
Any views or opinions expressed in this article are those of the author and do not reflect those of AGDAILY. Comments on this article reflect the sole opinions of their writers.