The Senate Agriculture Committee marked up and passed two bills that aim to restore fairness and competition in the cattle industry. The Cattle Price Discovery and Transparency Act and Meat Packing Special Investigator Act have been heavily debated on Capitol Hill and amongst cattle producers and will now go to the Senate floor for consideration.
Iowa Republican Senator Chuck Grassley has been one of the main proponents of the bills. Grassley commented that, “With the passage of these two important bills, my years-long beef with Big Cattle is one step closer to being settled. Iowa cattle producers have struggled to receive a fair price for years – long before inflation hit a 40-year high. It’s past time for Congress to stand with independent cattle producers and put an end to the cozy relationship between large meat packers and big cattle feedlots.”
The U.S. Cattlemen’s Association has supported the legislation from the start. USCA President Dr. Brooke Miller issued the following statement:
”USCA is proud to stand with Senators Deb Fischer, Chuck Grassley, Jon Tester, and 17 other Senate cosponsors in support of the Cattle Price Discovery and Transparency Act. This bill is one of the much-needed solutions to an increasingly consolidated meat industry. Studies have shown that, without government intervention, negotiated trade in the U.S. marketplace will fall to zero percent by 2026 in parts of the country. When producers don’t have the ability to negotiate a fair price for their cattle based on current market conditions, it results in a vertically integrated, corporate-controlled beef supply chain. This threatens the livelihoods of producers and the security of our national food system.”
The cattle industry has been divided on whether the bills will improve the situation for cattle producers. The National Cattlemen’s Beef Association again voiced opposition to both bills.
“The U.S. cattle industry is home to one of the most complex set of markets in the world. Rather than embrace the freedom of that marketing system, Congress is instituting a one-size-fits-all policy that will hurt cattle producers’ livelihoods. Cattle markets are finally returning to normal after pandemic-fueled uncertainty, but these heavy-handed mandates will stifle innovation and limit marketing opportunities,” said NCBA Vice President of Government Affairs Ethan Lane. “Cattlemen and women deserve the freedom to market their cattle in whatever way they want.”
“The Cattle Price Transparency Act of 2022 would subject every cattle producer in the country to a business-altering government mandate. The bill would severely restrict the use of Alternative Marketing Arrangements (AMAs), which provide stability to producers and allow them to invest in creating higher-quality and specialty products that command a premium. The bill also fails to consider the unique ways producers raise cattle in different regions of the country.”
“Unfortunately, the Meat Packing Special Investigator Act is duplicative and only creates additional bureaucracy for investigating anticompetitive behavior. NCBA supports oversight of the market, but creating a duplicative, bureaucratic new special investigator role is the wrong approach. Congress should be focused on the issues that are hurting producer profitability now—rising food, fuel, and feed prices,” said Lane.
Background
It’s been a years-long process to reach this point of getting the bills approved by the Senate Ag Committee. Chuck Grassley introduced a proposal to increase transparency in cattle pricing in May of 2020, during the height of the coronavirus pandemic. After working with colleagues on both sides of the aisle, Grassley joined Sens. Deb Fischer (R-Neb.), Jon Tester (D-Mont.) and Ron Wyden (D-Ore.) in introducing the Cattle Price Discovery and Transparency Act last November. They continued worked with USDA to make technical changes that ensure the Ag Department can effectively implement the bill – introducing an updated version last month.
The bill would require the Secretary of Agriculture to establish 5-7 regions and then establish minimum levels of fed cattle purchases made through approved pricing mechanisms. Approved pricing mechanisms are fed cattle purchases made through negotiated cash, negotiated grid, at a stockyard, and through trading systems that multiple buyers and sellers regularly can make and accept bids.
The bill also implements a mandatory penalty for packers for violations and creates a library of fed cattle marketing contracts.
The 2nd piece of legislation passed by the Senate Ag Committee is the Meat Packing Special Investigator Act. In June of 2021, Senator Tester was joined by Grassley and Mike Rounds (R-SD) in introducing the bill to address anticompetitive practices in the meat and poultry industries. The bill seeks to create the “Office of the Special Investigator for Competition Matters” within the USDA’s Packers and Stockyards Division.
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NCBA/USCA/Sen. Chuck Grassley
