Fischer, Grassley, Tester, Wyden reach cattle market compromise |

Fischer, Grassley, Tester, Wyden reach cattle market compromise

Sens. Deb Fischer, R-Neb., Chuck Grassley, R-Iowa, Jon Tester, D-Mont., and Ron Wyden, D-Ore., last week reached a compromise cattle market proposal known as the Cattle Price Discovery and Transparency Act.

In a joint news release, the senators said the legislation would:

▪ Establish regional mandatory minimum thresholds of negotiated cash and negotiated grid trades based on each region’s 18-month average trade to enable price discovery in cattle marketing regions.

In order to establish regionally sufficient levels of negotiated cash and negotiated grid trade, the secretary of agriculture, in consultation with the chief economist, would seek public comment on those levels, set the minimums, and then implement them. No regional minimum level could be more than three times that of the lowest regional minimum, and no regional minimum could be lower than the 18-month average trade at the time the bill is enacted.

▪ Require the Agriculture Department to create and maintain a publicly available library of marketing contracts between packers and producers in a manner that ensures confidentiality.

▪ Prohibit the USDA from using confidentiality as a justification for not reporting, and make clear that USDA must report all Livestock Mandatory Reporting information, and they must do so in a manner that ensures confidentiality.

▪ Require more timely reporting of cattle carcass weights as well as requiring a packer to report the number of cattle scheduled to be delivered for slaughter each day for the next 14 days.

The American Farm Bureau Federation, the U.S. Cattlemen’s Association, and National Farmers Union endorsed the bill, but the North American Meat Institute, which represents meat processors, criticized it.

U.S. Cattlemen’s Association Region (Nebraska and Iowa) Director Lee Reichmuth said, “The Cattle Price Discovery and Transparency Act will deliver on its promise to restore robust price discovery and provide market participants with the information they need to make savvy marketing decisions. It also mandates that every packer required to report to USDA AMS is also required to participate in the cash market each week.”

But the North American Meat Institute said the bill “will have unintended consequences that will hurt livestock producers and consumers.”

“Beef and cattle markets are dynamic. This fall prices cattle producers received for their livestock have risen without any government interference,” said NAMI President and CEO Julie Anna Potts.

“In a rush to do ‘something,’ this bill would replace the free market with government mandates and harm those it is intended to protect: livestock producers.”

Potts noted that the text of the bill has not been released and maintained that no economic analysis of the bill’s effects has been offered to support the legislation.

“If this bill becomes law,” said Potts, “there will be cattle producers who want alternative marketing arrangements, but will instead be forced to sell on the cash market, and the industry will turn back time to the days of commodity cattle.”


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