Bipartisan Group of Senators To Introduce Cattle Price Discovery and Transparency Act
The open market for livestock producers and buyers is a dance that fewer have been taking part in as contracts and integration have taken much of the volatility out of the marketplace.
That didn’t change much in 2020. In 2021, a group of lawmakers joined forces to introduce another attempt at leveling the playing field at the packing house door.
Josh Buetter reports.
Transcript
This week, a bipartisan group of four U.S. Senators announced a compromise on steps to improve cattle markets by combining parts of previous bills into a new forthcoming Cattle Price Discovery and Transparency Act.
The move comes on the heels of pandemic-driven meatpacking supply chain labor issues which reverberated down to livestock producers.
Sen. Chuck Grassley/R – Iowa: “How do you justify making such low bids when you're turning such a significant profit?”
Senator Chuck Grassley of Iowa, a proponent of the bill, has accused the nation’s four largest meatpacking corporations of operating in the shadows.
Grassley has instigated several recent hearings to highlight the plight of declining cash markets for independent cattle producers, who have wanted to leverage volatility into robust price discovery, while meatpacker-driven contractual agreements grow – the likes of which dominate other sectors like hog and poultry production.
But the bulk of such formula pricing is based on previously negotiated cash prices.
The new proposed legislation takes a regional approach, by establishing mandatory minimum thresholds of negotiated cash and grid trades based on each region’s 18-month average trade and requires USDA to create and maintain a public catalog of marketing contracts between producers and processors while maintaining confidentiality.
The American Farm Bureau and The National Farmers Union are among a number of state and national organizations which have thrown their support behind the measure.
For Market to Market, I’m Josh Buettner.