U.S. Sen. Deb Fischer (R-NE) joined a bipartisan group of Senate colleagues to announce a proposal that would improve market conditions for independent cattle producers by improving cattle price transparency.
The senators said on Tuesday they plan to introduce the Cattle Price Discovery and Transparency Act in the coming days. Sen. Fischer announced the proposal with U.S. Sens. Chuck Grassley (R-IA), Jon Tester (D-MT), and Ron Wyden (D-OR).
“Robust price discovery ensures that all members of the beef supply chain — cow-calf producers, feeders, packers, and consumers — can be successful,” Rep. Fischer said.
One challenge facing the cattle industry is the declining number of participants in the negotiated cash market. The senator noted that in the cattle market, negotiated cash sales form the basis of price discovery, adding that one or two regions of the country have been shouldering the burden of price discovery.
“Furthermore, even regions that primarily use alternative marketing arrangements (AMAs) such as formula contracts predominantly rely on negotiated cash sales to set their base prices,” the senator explained.
“Our compromise proposal takes regional differences into account and ensures fairness for every segment of the supply chain,” said Sen. Fischer, a member of the U.S. Senate Agriculture Committee.
The Cattle Price Discovery and Transparency Act addresses the declining negotiated cash market and the resulting lack of accurate price information by creating a more regional approach.
According to a summary of the bill, the legislation would require the Secretary of Agriculture to establish regional mandatory minimum thresholds of negotiated cash and grid trades based on each cattle marketing region’s 18-month average trade. It would also require the U.S. Department of Agriculture (USDA) to create a publicly available library of marketing contracts between packers and producers and make clear the USDA must report all Livestock Mandatory Reporting information confidentially. In addition, the bill would 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 summary said.
Several organizations have endorsed the proposal, including the American Farm Bureau, U.S. Cattlemen’s Association, and National Farmers Union.