Senate Ag Committee Passes the Cattle Price Discovery and Transparency Act
By: Sydney Sheffield
The United States Senate Agricultural Committee has passed the Cattle Price Discovery and Transparency Act (S. 4030), a bill that would establish pricing mechanisms for live animal purchases. The bipartisan Act is now eligible for a vote in front of the full United States Senate.
“Iowa cattle producers have struggled to receive a fair price for years – long before inflation hit a 40-year high. It’s past time for Congress to stand with independent cattle producers and put an end to the cozy relationship between large meat packers and big cattle feedlots. I’m grateful for the diligent work of Senators Fischer, Tester, Wyden, and all of my colleagues to advance this bill out of committee and I look forward to a floor vote in short order,” said Chuck Grassley (R-IA), a sponsor of the legislation and a member of the Senate Agriculture Committee and ranking member of the Senate Judiciary Committee.
The updated bill would:
Require the Secretary of Agriculture to establish 5-7 regions encompassing the entire continental U.S. and then establish minimum levels of fed cattle purchases made through approved pricing mechanisms. Approved pricing mechanisms are fed cattle purchases made through negotiated cash, negotiated grid, at a stockyard, and through trading systems that multiple buyers and sellers regularly can make and accept bids. These pricing mechanisms will ensure robust price discovery and are transparent.
Establish a maximum penalty for covered packers of $90,000 for mandatory minimum violations. Covered packers are defined as those packers that during the immediately preceding five years have slaughtered five percent or more of the number of fed cattle nationally.
The bill also includes provisions to create a cattle contract library, mandating box beef reporting to ensure transparency, expediting the reporting of cattle carcass weights, and requiring a packer to report the number of cattle scheduled to be delivered for slaughter each day for the next 14 days. The contract library would be permanently authorized and specify key details about the contents that must be included in the library like the duration of the contract and provisions in the contract that may impact prices such as schedules, premiums and discounts, and transportation arrangements.
“The U.S. Cattlemen’s Association would like to thank Senator Tester and his staff for their persistence in working towards legislative solutions that would help create a fairer, more competitive marketplace for Montana’s independent cattle producers,” said Whitney Klasna, Secretary of the United States Cattlemen’s Association.
The bill is not supported by everyone in the meat industry, though. The North American Meat Institute (NAMI) President and CEO Julie Anna Potts said, “Leading agricultural economists have determined Grassley-Fischer bill’s latest draft remains costly to producers, especially producers in Texas, Oklahoma, and Kansas where the majority of US fed cattle are raised. Due to a shrinking herd and sustained consumer demand, cattle prices are at seven-year-highs without federal intervention in the market.”
Read the bill here.