The House Agriculture Committee will vote Thursday on a bipartisan bill that would create a contract library for the beef industry, something producers have pushed for in order to get more information on cattle transactions.
The bill would set up a mechanism for the Department of Agriculture’s Agricultural Marketing Service to report the terms of alternative marketing agreements between packers and producers. A similar library currently exists in the pork sector and has been widely supported by beef industry producer groups following a closed-door meeting earlier this year.
“Producers have been asking for increased transparency and leverage in the cattle market for years, the Cattle Contract Library Act will provide granular data in near real time, ensuring producers understand the value of marketing agreements,” said Rep. Dusty Johnson, the South Dakota Republican who introduced the bill. “Data drives marketing decisions and a contract library will provide much-needed leverage for independent producers.”
Rep. Henry Cuellar, D-Texas, is cosponsoring the bill with 16 other House members.
The legislation would call for various forms of contract information, including the type and duration of a contract, summary information, provisions “that may affect the price of cattle covered by the contract,” the total number of head solely committed and not solely committed to the packer, and contract provisions that “provide for the expansion in the committed numbers of fed cattle to be delivered.”
The bill is backed by several influential ag and beef industry organizations, including the American Farm Bureau Federation, National Cattlemen’s Beef Association, U.S. Cattlemen’s Association, National Farmers Union and the Livestock Marketing Association. Those groups, along with R-CALF USA, were involved in a May meeting that resulted in a list of action items, including the creation of a contract library.
“There is no single, silver bullet solution to the wide variety of needs among our diverse membership, but lawmakers can start by focusing on viable solutions that have broad-base support across the industry,” NCBA President Jerry Bohn said. “The cattle contract library is one such solution, and it will help our producers command more leverage in negotiations with the packers.”
U.S. Cattlemen's Association Vice President Justin Tupper said a contract library is "sorely needed, and this bill is one step closer to bringing that concept to fruition."
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Johnson and Cuellar’s bill is the latest in a long string of bills introduced after recent upheavals in the protein sector. Sen. Deb Fischer, R-Neb., introduced a bill earlier this year that would create a contract library but also includes other reforms. Sens. Chuck Grassley, R-Iowa, and Jon Tester, D-Mont., have dropped legislation that would call for a set percentage of cattle to be sold on the open cash market.
Those bills, and a flurry of others, came in reaction to a series of so-called “black swan” industry events that rocked prices and drew attention to the price disparity between live cattle and boxed beef. A 2019 plant fire at a Kansas Tyson facility, the COVID-19 pandemic, and the JBS cyberattack all affected packers and producers differently.
A spokesperson for the North American Meat Institute, which represents the nation's meatpackers, said NAMI members “are looking at the details of the bill and have questions about how some contract provisions would be reported.”
Story updated to include NAMI statement.
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