Cattle bill aims to improve market transparency

Deb Fischer, Nebraska Republican Senator alongside senators Chuck Grassley, R-Iowa, John Tester, D-Mont and Ron Wyden D-Ore announced the Cattle Market Price Discovery and Transparency Act. 

This act will establish minimum thresholds based on 18 months of average trade prices in negotiated cash and grid trades. The Secretary of Agriculture and the Chief Economist will be responsible for establishing this minimum with the allowance for public comment before the it is finalized. 

The United States Department of Agriculture (USDA) will also be required to have a public library, that is easy to access containing contracts between packer and producers. The act requires that the USDA does this without breaking confidentiality. The USDA will also be prohibited from using confidentiality to prevent transparent reporting.  

“Robust price discovery ensures that all members of the beef supply chain — cow-calf producers, feeders, packers, and consumers — can be successful,” said Fischer in a press release. “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.”  

Section 3 of the act describes a new 14 day slaughter reporting requirement. Reporting will be required to be done with predictions of cattle numbers scheduled at the packer in 14 days.  

According to Grassley’s website the act was created to help improve the cattle market for independent cattle producers and help prevent the increase in beef prices that has occurred over the last 20 years.  

“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,” said Grassley in a press 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 bill also has support from American Farm Bureau, U.S. Cattlemen’s Association and National Farmers Union. 

 “The hearings on cattle markets in the House and Senate again highlight the complexity of the challenges facing cattle producers,” Mark McHargue, Nebraska farm bureau president. “Clearly there’s no silver bullet that would immediately lead to higher cattle prices. NEFB supports legislative, regulatory and private sector solutions that will provide more price discovery and transparency for cattle producers and provides a boost to create more processing capacity that is desperately needed. Sen. Fischer’s Cattle Market Transparency Act must be signed into law. It remains the best legislative approach to addressing the marketing issues regularly discussed by Nebraska’s cattle producing families.”