A bipartisan group of senators has rolled out an updated piece of legislation that they hope will solve price discovery issues for beef producers. But the new legislation includes language that has already elicited opposition from some of the nation's leading farm groups.
Sens. Deb Fischer, R-Neb., Chuck Grassley, R-Iowa, Jon Tester, D-Mont., and Ron Wyden, D-Ore., released an updated version of the Cattle Price Discovery and Transparency Act Monday, tweaking a bill first introduced in November following consultation with Agriculture Department officials and others on Capitol Hill.
The legislation maintains the calls for mandated regional cash trade requirements, but how the bill goes about defining a region might be the biggest change to the legislation.
Under the prior bill introduced last year, USDA was to set trading requirements in the five established regions recognized by USDA’s Agricultural Marketing Service. The new legislation calls on USDA to conduct a rulemaking to determine 5-7 regions “covering the continental United States and that reasonably reflect similar fed cattle purchases,” a one-pager accompanying the new legislation reports.
A title-by-title summary of the bill says the regions will need to achieve regional minimums — set through USDA rulemaking via “approved pricing mechanisms” that would include “fed cattle purchases through negotiated cash, negotiated grid, at stockyards, and through trading systems where multiple buyers and sellers can make and accept bids.”
The price formula was also tweaked in the updated legislation. The bill now calls on USDA to set levels that will be “not less than the average of that region’s negotiated trade for the two-year period of 2020-2021” but no more than 50% in any one region.
The bill’s former text was put through the wringer on the recent ag convention circuit, with two major producer groups — the American Farm Bureau Federation and National Cattlemen’s Beef Association — both announcing their opposition to the bill over the regional cash trade mandate.
The National Farmers Union and U.S. Cattlemen’s Association remained supportive of the bill; a release announcing the new bill text did not specify organizations endorsing the new language.
USCA President Brooke Miller said the organization plans to review the new legislation and provide feedback "in the days ahead."
"USCA is pleased that this legislation will provide additional economic analysis to define robust cash trade, based on current market conditions," he said. "We are hopeful that the proposed changes will strengthen the intent of the bill's authors in establishing a fair cattle marketplace, but must thoroughly review the language first."
Fischer, Grassley and others have acknowledged the opposition of the national organizations that emerged in recent months but pointed to the support of their local affiliates. Ethan Lane, NCBA's chief lobbyist, criticized the latest version of the bill for its inclusion of the cash trade mandate "despite overwhelming feedback in opposition." He said the newest version, in fact, "expands the concept to ensure that every single producer in the country selling fat cattle would be subject to a business-altering government edict.
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"This is an indication of just how far the sponsors of this bill have strayed from the wishes of the majority of cattle producers around the country," Lane added. "It is time for the sponsors to finally consider the perspectives of all those who this bill would impact, not just those in their own backyards – and we are ready to have that conversation whenever they are.”
Also included in the update was a change in the definition of a packer that would be subject to compliance — a facility controlling five percent or more of fed cattle slaughter — and institutes a $90,000 maximum penalty (per facility) for violations of the mandatory minimum language.
Gone from the new bill, however, is the confidentiality language that was included in the November legislation. That bill required USDA “to find ways to regularly disclose information” required by Livestock Mandatory Reporting requirements, but said all information needed to be reported “in a manner that ensures confidentiality.”
Consistent in both bills is the creation of a beef cattle contract library, changes to carcass weight reporting, and a requirement for packers to report the cattle they have scheduled for slaughter in the upcoming 14-day window.
In a statement, Fischer — a beef producer before her time in the Senate — said the updates “incorporate a variety of stakeholder feedback to achieve our goal of ensuring more fairness in cattle markets.
“It’s encouraging to see our bill gain momentum and I am hopeful we will have a hearing on this important legislation in the Senate Agriculture Committee in the coming weeks,” she said.
For his part, Grassley said the bill is the “best opportunity we have to make real reform in the cattle market this year.”
Tester and Wyden both also welcomed the changes to the bill, with Tester calling improved price discovery “a key step in making markets more competitive.”
Story updated to include NCBA comment.
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