Bills Seek Market Transparency
Rep. Hartzler introduces companion bill to Sen. Fischer’s bill seeking transparency in cattle markets. Industry groups respond.
Congresswoman Vicky Hartzler (R-Mo.) introduced the Cattle Market Transparency Act of 2020. The bill, serving as the companion bill to S.4647 introduced by Senator Deb Fischer (R-Neb.), enables mechanisms for greater price discovery and transparency within the cattle market, while equipping producers with more tools and useful information to succeed.
“Congresswoman Hartzler’s legislation, which is the House companion to Senator Deb Fischer’s bill, gets us closer to where we need to be to achieve robust price discovery and to ensure market transparency,” Missouri Cattlemen’s Association President Marvin Dieckman says. “This legislation does so in a methodical way without a one-size-fits-all, heavy-handed approach. The Missouri Cattlemen’s Association has been laser-focused on ensuring the markets work in such a way that all segments in the industry have the opportunity to be profitable.”
This legislation directs the USDA to create and maintain a library of marketing contracts between packers and producers, mandates that a packer report the number of cattle scheduled to be delivered for slaughter each day for the next 14 days, which is already required for the swine industry; bolsters the public availability of data collected through the Livestock Mandatory Price Reporting Act, while reassuring confidentiality of individuals and proprietar business information; and requires the Secretary of Agriculture to establish regionally sufficient levels of negotiated cash trade and to consider stakeholder input through a public comment period.
This summer, the USDA concluded its investigation into potential market manipulation in the cattle industry following a fire at a Tyson Foods plant in Holcomb, Kan., and the COVID-19 pandemic. Following that investigation, Senator Fischer committed to introducing legislation to resolve ongoing challenges in the cattle market.
On Sept. 22 she introduced the Cattle Market Transparency Act of 2020, which focuses on two main elements: ensuring regionally sufficient negotiated cash trade and equipping producers with more information. It 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 the Livestock Mandatory Reporting program [LMR]).”
- 4. 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.
“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,” comments Lee Reichmuth, United States Cattlemen’s Association (USCA) Board Member. “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.”
The National Cattlemen’s Beef Association (NCBA) released the following statement in response to the introduction of Sen. Fischer’s bill:
“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. …
“Since the adoption of this policy, that producer group has been diligently working to establish these triggers and identify a path to increase negotiated trade across all cattle-feeding regions. We anticipate that the subgroup will meet the Oct. 1 deadline set by the policy to establish regional triggers.
“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.”
Editor’s note: This article is compiled from news releases provided by the Missouri Cattlemen’s Association, USCA, NCBA, and the websites of Rep. Hartzler and Sen. Fischer.
