Cattle Market Transparency Act Introduced
This summer, the U.S. Department of Agriculture concluded its investigation into potential market manipulation in the cattle industry following a fire at a Tyson Foods plant in Holcomb, Kansas, and the COVID-19 pandemic.
Following that investigation, Senator Fischer committed to introducing legislation to resolve ongoing challenges in the cattle market. The Cattle Market Transparency Act of 2020 will:
1. Establish regional mandatory minimum thresholds of negotiated cash trades to enable price discovery in cattle marketing regions. It requires the Secretary of Agriculture to establish regionally sufficient levels of negotiated cash trade, seek public comment on those levels, then implement.
2. Require USDA to create and maintain a library of marketing contracts between packers and producers, and require packers to supply this information to USDA.
3. Make clear that all information should be reported in a manner that ensures confidentiality, and note, “Nothing in this section permits the Secretary, or any officer or employee of the Secretary, to withhold from the public the information [required to be reported under LMR].”
3. Mandate that a packer report the number of cattle scheduled to be delivered for slaughter each day for the next 14 days. This requirement already exists for the swine industry.
United States Cattlemen's Association Board Member Lee Reichmuth issued the following statement on the bill:
"As a Nebraska cattle producer, I echo the same sentiments expressed by Senator Fischer on the impacts to our livelihood of increased packer competition, decreased competition, and a declining cash market. This bill builds off the recommendations provided by the U.S. Department of Agriculture in its Boxed Beef and Fed Cattle Price Spread Investigation Report and discussions producers across the U.S. are having in response to historically low cattle prices and a dysfunctional marketplace.
In a statement NCBA said, “Price discovery is an issue of critical importance to cow/calf producers, stockers, backgrounders, and feeders across the United States, and more negotiated trade is needed throughout the cattle feeding regions to ensure sufficient price discovery. That is why all of NCBA’s 46 state affiliate organizations unanimously adopted a fed cattle price discovery policy at our 2020 Summer Business Meeting. This policy directs NCBA to pursue a voluntary approach to price discovery that includes triggers established by a working group of producer members which, if tripped due to a lack of regionally sufficient negotiated trade, would prompt NCBA to seek legislative or regulatory solutions—such as those outlined in Sen. Fischer’s bill—to achieve robust price discovery.”
“Sen. Fischer’s bill explores many avenues to improve transparency in the cattle markets. The creation of a cattle contracts library and clarification of confidentiality rules will provide crucial data to cattle producers as they seek to make informed marketing decisions. However, our policy dictates that the voluntary framework we are developing be allowed the opportunity to succeed or fail before we can lend our support to regional mandatory minimums for negotiated trade. We welcome a continued dialogue with Sen. Fischer and her colleagues on ways to achieve robust price discovery for all cattle producers.”
For more information on these provisions, click here. Full text of the bill is available here.
Source: Sen. Deb Fischer & USCA & NCBA