U.S. Representative Dusty Johnson (R-S.D.) re-introduced two cattle-focused bills to improve the industry – his Butcher Block Act with co-lead Rep. Abigail Spanberger (D-VA) and the Amplifying Processing of Livestock in the United States (A-PLUS) Act with lead Rep. Mark Alford (R-MO).
According to a 2020 report, an increase of packing capacity by 5,000-6,000 head of fed cattle per day is needed to get back to the historic baseline. Building new facilities could cost $100-250 million for every 1,000 head of cattle processed daily, according to estimates. The Butcher Block Actwould establish a grant and loan program at USDA for new and expanding meat processors to drive competition within the packing industry.
Currently, regulatory barriers prevent livestock auction market owners from investing in packing facilities. The A-PLUS Act would allow for expanded investment to small and local packers, increasing capacity and diversifying market options for producers.
“Cattle country needs solutions,” said Johnson. “The past few years have taken a toll on the livestock owners who have experienced black swan event after black swan event. The Butcher Block Act and the A-PLUS Act will provide increased capacity to small packers and drive healthy competition to create a more stable market.”
In July 2021, following Johnson’s leadership on the Butcher Block Act, the U.S. Department of Agriculture implemented a pilot program mirroring the legislation, supplying grants to small processors. Additionally, it passed the House in June 2022 as part of a larger package.
Currently, livestock auctions owners are not able to own, invest, or participate in the operation of a packing plant or meat marketing business due to dated Packers and Stockyards Act restriction. This prohibition falls under a 102-year-old law and predates the current method of selling livestock at an open auction to the highest bidder. The A-PLUS Act would allow livestock auction owners to own or invest in cattle and hog packers smaller than the current ten largest packers.
“We greatly appreciate Congressmen Alford, Panetta, and Johnson introducing the A-PLUS Act,” said Livestock Marketing Association President and owner of Kentucky-Tennessee Livestock Market Mark Barnett. “Livestock auction markets, like mine, are in the competition business. Allowing livestock auction owners to invest in small and regional packers will create competition against large packing entities that already exist. The A-PLUS Act could spur additional capacity and especially additional packers to increase competition and improve profitability for producers.”
The Butcher Block Act:
- Assists new and expanded livestock or meat processors to improve marketing options for livestock producers, further competitive markets, and facilitate value-added opportunity for livestock producers.
- Allows for financing of cooperative stock in producer-owned processing facilities and refinancing for expanded processing capacity.
- Establishes a Rural Development grant program for eligible entities to assist with new construction or expansion planning and compliance.
The A-PLUS Act:
- Revises the Packers and Stockyards Act to clarify that livestock auction owners may have an investment interest in small meat packers.
- Allows livestock auction owners to invest in packers that have a slaughter capacity of less than 2,000 head per day and less than 700,000 head per year of cattle and sheep, and less than 10,000 head per day and less than 3,000,000 head per year of hogs.
- This cap aims to exclude investment in the ten largest meat packers in the country.
Rep. Dusty Johnson/LMA