WASHINGTON – Three US House representatives from Iowa recently announced their bill to increase transparency in US cattle markets and spur added price discovery and competition for Iowa producers who use cash markets.
“It’s critical that we increase price transparency and level the playing field for Iowa cattle producers,” said Representative Cindy Axne (D-Iowa). “We’ve seen significant market disruptions from the Holcomb plant fire last year or more recently from COVID-19 that illustrate the need for this legislation. This is not a new problem that Iowa cattlemen have been facing. With nationwide decreases in cash trades, Iowans have been bearing the burden of price discovery for the rest of the cattle industry and it’s about time we address the issue. These reforms will help establish a fair and transparent market for all independent producers, and I’m proud to lead this fight in the House of Representatives.”
The two other co-sponsors for the bill were Representatives Abby Finkenauer and Dave Loebsack.
The bill is a companion piece of legislation with Senate Bill 3693, which was introduced by Iowa Senators Chuck Grassley and Joni Ernst in May. Grassley and former Senator Russ Feingold originally introduced this bill in 2002. When constituents recently began to voice concerns about current inconsistencies in inflated supermarket prices and a simultaneous decrease in cattle prices, Grassley and his colleagues reintroduced the bill.
The legislation requires processors to have a minimum of 50% of their weekly slaughter purchased from cash market sales. According to the representatives, the measure will increase cash markets and give independent producers in Iowa and the rest of the United States a level playing field with formula-contracted cattle purchases and additional leverage with processors.
The legislators said that Iowa producers participate in the cash market around 50% of the time, while nationwide participation has decreased to as low as 5% in some states.
“Recent events have served to accentuate the need for a more equitable seat at the table for all producers,” said Richard Godfrey, Iowa Cattlemen Association president. “Iowa’s cattlemen know that true price discovery comes through competitive bidding and cash trade. The proposal outlined in this bill will help return some much-needed leverage to independent cattle producers in Iowa, and across the nation. The Iowa Cattlemen’s Association sincerely appreciates Congresswoman Axne, Congresswoman Finkenauer and Congressman Loebsack for their leadership and willingness to engage on this important issue.”
Both bills citied the COVID-19 pandemic and the 2019 major fire at the Tyson Foods Inc.’s Holcomb, Kansas, beef facility.