Nov 09 2021

Fischer Leads Cattle Market Price Discovery and Transparency Bill

Bipartisan Legislation Will Ensure Fairness Across Beef Supply Chain

WASHINGTON, D.C. – Today, U.S. Senator Deb Fischer (R-Neb.), a member of the Agriculture Committee, today announced the Cattle Price Discovery and Transparency Act. Sen. Fischer has long worked to facilitate price discovery and address the lack of transparencyin the cattle market. The bipartisan compromise legislation includes a series of provisions toensure every segment of the beef supply chain can succeed. 

Senators Chuck Grassley (R-Iowa), Jon Tester (D-Mont.), and Ron Wyden (D-Ore.) joined Fischer in announcing the compromise legislation.

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

“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. 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,” said Senator Grassley.

“Price discovery is a public good. Cash and negotiated grid market participants invest resources to discover cash market prices for their respective regions and the entire industry. Until price discovery participation is better valued by some market participants at all points in the supply chain, live cattle market price negotiation will continue to decrease until there is little to no negotiated trade left and outside markets will have to be relied upon for price determination. Thank you to Senator Fischer for her continued focus on this important issue,” said William H. Rhea III, President of the Nebraska Cattlemen.

“For nearly two years, Nebraska’s cattle producers have been asking for needed reform within the cattle marketplace. The Cattle Price Discovery and Transparency Act delivers that reform which will provide more price discovery and needed transparency to arguably one of the more complex agricultural marketing systems which exist. Cash cattle transactions are one of the truest ways to provide price discovery, yet a one size fits all approach rarely works to address any issue. The sound public policy concepts developed and the overall leadership provided by Senator Deb Fischer is truly appreciated by Nebraska’s cattle producing families. Now is the time to move this important piece of legislation forward to ensure our nation’s cattle industry maintains a bright economic future,” said Mark McHargue, President of the Nebraska Farm Bureau Federation.

The senators plan to introduce the Cattle Price Discovery and Transparency Act in the coming days. The legislation will:

  1. Establish regional mandatory minimum thresholds of negotiated cash and negotiated grid trades based on each region’s 18 month average trade to enable price discovery in cattle marketing regions. In order to establish regionally sufficient levels of negotiated cash and negotiated grid trade, the Secretary of Agriculture in consultation with the Chief Economist, would seek public comment on those levels, set the minimums, and then implement them. No regional minimum level can be more than three times that of the lowest regional minimum, and no regional minimum can be lower than the 18-month average trade at the time the bill is enacted.
  1. Require the U.S. Department of Agriculture (USDA) to create and maintain a publicly available library of marketing contracts between packers and producers in a manner that ensures confidentiality.
  1. Prohibit the USDA from using confidentiality as a justification for not reporting and make clear that USDA must report all LMR information, and they must do so in a manner that ensures confidentiality. 
  1. Require more timely reporting of cattle carcass weights as well as requiring a packer to report the number of cattle scheduled to be delivered for slaughter each day for the next 14 days.

The following national groups have endorsed the bill: American Farm Bureau, U.S. Cattlemen’s Association, and National Farmers Union.

Click here to read an Omaha World-Herald story outlining the issues with the beef supply chain and Senator Fischer’s efforts to address the problem.

Click here for a one-pager on the regional mandatory minimum provision. 

Click here for a section by section summary of the bill. 

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