Grassley, Tester introduce bill for transparency in cattle pricing | TheFencePost.com
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Grassley, Tester introduce bill for transparency in cattle pricing

Senate Finance Committee Chairman Chuck Grassley, R-Iowa, Sen. Jon Tester, D-Mont., and other senators on May 12 introduced legislation to require that a minimum of 50% of a meat packer’s weekly volume of beef slaughter be purchased on the open or spot market.

“The lack of transparency in cattle pricing isn’t a new problem, but the negative effects of the fire in Holcomb, Kan., and COVID-19 have highlighted the need for additional price transparency measures to ensure producers are getting a fair price for the hard work of raising cattle. Food doesn’t come from the grocery store, it comes from tens of thousands of farmers and independent producers who work day and night to ensure families across the country have an abundant supply of food. Independent producers deserve to be paid what their beef is worth,” Grassley said, noting that he first introduced the bill in 2002 with former Sen. Russ Feingold, D-Wis.

“Market consolidation in the livestock industry is making it harder and harder for producers to meet their bottom lines, especially as large packers rely on fewer spot transactions to purchase live cattle at the farm gate,” Tester said. “This bill will force meat packers to engage in more spot transactions, bringing up formula prices and making them more accurate while giving Montana producers and feeders more flexibility and transparency when they bring their livestock to market.”

“The lack of cash negotiated sales in recent years has decimated price discovery and undercut the fundamentals of the CME cattle futures contracts,” the U.S. Cattlemen’s Association said in a statement. “This bill would allow the Livestock Mandatory Reporting system to be better utilized as a mechanism for accurate and transparent reporting, which will advance price discovery and shore up the fundamentals of the CME cattle futures contracts.”

USCA President Brooke Miller said, “The Livestock Mandatory Reporting program will expire on Sept. 30, 2020. As Congress and industry stakeholders work together on needed changes to the program in the months ahead, we expect this bill will play a large role in those conversations.

“We would like to thank the nearly 4,400 individual producers and state and local organizations for undertaking this truly grassroots effort in support of #FairCattleMarkets,” Miller added. “USCA will be calling on these advocates in the near future to continue pushing forth a workable solution.”

R-CALF USA CEO Bill Bullard said, “Our industry is grateful for the swift action by Senators Grassley, Tester and others to halt the ongoing erosion of our cattle industry’s most critical market – the competitive cash market where beef packers purchase cattle for beef production and where price discovery occurs for the entire cattle industry.

“The largest beef packers have progressively shifted large numbers of cattle out of the competitive cash market and into contract arrangements where no price discovery can occur. However, the beef packers continue tying the price they pay for their contracted cattle to the razor-thin cash market that is no longer capable of establishing a competitive price for cattle.

“This has contributed to the disconnect between the prices that cattle producers receive for their cattle and the prices that consumers are now paying for their beef.

“Today, consumers are paying near-record to record prices for beef while cattle producers are receiving seriously depressed prices for their cattle. This is an indication of market failure, and Senator Grassley’s and Tester’s bill represents one of the first meaningful steps that Congress and the president must take to begin restoring competition to our broken markets.

“We are further encouraged by the non-preemption provision in the bill that allows individual states to require an even higher percentage of cattle to be procured from the cash market as this empowers states to get more involved in their respective cattle industries.”

NCBA opposed

The National Cattlemen’s Beef Association announced May 13 it is opposed to the bill.

NCBA Policy Division Chair and South Dakota rancher Todd Wilkinson said in a news release, “Currently, cattle producers utilize a multitude of methods to market their livestock, including the cash market. Increased price discovery will benefit all segments of the cattle industry — that is why NCBA has been closely working with key stakeholders, industry experts, and our partners in academia to develop tangible means to meet that end. Any solution must not restrict an individual producer’s freedom to pursue marketing avenues that they determine best suit their business’ unique needs. Government mandates, like that being proposed by Sen. Grassley, would arbitrarily force many cattle producers to change the way they do business. We will continue to work toward a more equitable solution and invite Sen. Grassley, and other lawmakers interested in this conversation, to join us in the search for an industry-led solution based in free market principles.”

Grassley acknowledged to reporters Tuesday NCBA had opposed the legislation in the past. ❖


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Sen. Kamala Harris, D-Calif., former Vice President Joe Biden’s choice as a vice presidential candidate, has said she is not a protectionist and believes in trade.But she has also said she would not have voted for the North American Free Trade Agreement, voted against the U.S.-Mexico-Canada Agreement due to environmental concerns, and opposed the Trans Pacific Partnership negotiations from which President Donald Trump withdrew, according to media reports.At a primary debate in September 2019 when she was campaigning for president, Harris said, “I am not a protectionist Democrat. Look, we need to sell our stuff. And that means we need to sell it to people overseas. That means we need trade policies that allow that to happen.”Harris has also been critical of Trump’s trade policies, calling increased tariffs a tax on the American people.Responding to a Council on Foreign Relations questionnaire, Harris said,Trump’s “trade war is crushing American farmers, killing American jobs, and punishing American consumers.”“I would work with our allies in Europe and Asia to confront China on its troubling trade practices, not perpetuate Trump’s failing tariff war that is being paid for by hard‐working Americans,” she said.Harris’s rural platform also said that she would take executive action to re-establish the Grain Inspection, Packers and Stockyards Administration as an independent office at the Agriculture Department and “appoint an Agriculture secretary who will prioritize enforcement of the Packers & Stockyards Act.”Re-establishing GIPSA has been a goal of groups that are critical of U.S. beef imports.Note: Links to Harris’s presidential campaign website have been redirected to the Biden campaign site, but the text of her “Partnership With Rural America” policy page may still be read through a web cache, at https://www.cato.org/blog/kamala-harris-trade-policy.In an analysis of Harris’s trade statements, Simon Lester of the Cato Institute wrote this week, “Where does all of that leave us? She does not seem to be an economic nationalist or isolationist, and she makes clear that she believes the United States should engage with the world economically.”“At the same time, though, the terms of that engagement are a bit uncertain. What exactly would she want to see in a trade agreement before she would sign on to it? She clearly wants more labor and environment provisions in trade agreements, although USMCA had quite a lot and she still voted against it, arguing that climate change should be covered as well.“Maybe the answer is simply that she wants to change the scope of trade agreements, so that they still promote trade liberalization, but at the same time continue their expansion towards general global governance of non‐trade issues. Vice presidents sometimes take on specific issue areas in which to play an active role. If Biden wins and Harris as VP has trade in her portfolio, we will find out more.”

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