WASHINGTON – US Senator Deb Fischer introduced legislation aimed at restoring transparency and accountability to the US cattle market.
The Cattle Market Transparency Act of 2020 establishes regional mandatory minimum thresholds of negotiated cash trades to enable price discovery in cattle marketing regions and equips cattle producers with more price information by prohibiting confidentiality guidelines from being used to block disclosure of full market information in Livestock Mandatory Reporting (LMR). By focusing on these two areas, the legislation addresses several interrelated issues that cattle producers say are hurting their profitability such as packer concentration, a declining negotiated cash market, and transparent, accurate price information among other issues.
“The past few years have been very difficult for producers, due to tough conditions and big market disruptions such as the Holcomb plant fire and the outbreak of COVID-19,” Fischer said. “My legislation seeks to bring transparency and accountability to the cattle market. It will ensure there are a sufficient number of cash transactions to facilitate price discovery and equip producers with more price information to assist them with their marketing decisions.”
Fischer said the law will:
- Establish regional mandatory minimum thresholds of negotiated cash trades to enable price discovery in cattle marketing regions. It requires the Secretary of Agriculture to establish regionally sufficient levels of negotiated cash trade, seek public comment on those levels, then implement.
- Require the US Department of Agriculture (USDA) to create and maintain a library of marketing contracts between packers and producers and require packers to supply this information to USDA.
- Mandate that a packer report the number of cattle scheduled to be delivered for slaughter each day for the next 14 days. This requirement already exists for the swine industry.
- Make clear that all information should be reported in a manner that ensures confidentiality, and note, “Nothing in this section permits the Secretary, or any officer or employee of the Secretary, to withhold from the public the information [required to be reported under LMR].”
In response to the proposed legislation, the National Cattlemen’s Beef Association (NCBA) said the organization and its state affiliates are open to dialogue about transparency in cattle pricing. However, NCBA members approved a voluntary price discovery policy during its summer business meeting in July, and they want to move forward with it before giving support to Fischer’s bill.
“Price discovery is an issue of critical importance to cow/calf producers, stockers, backgrounders, and feeders across the United States, and more negotiated trade is needed throughout the cattle feeding regions to ensure sufficient price discovery,” NCBA said. “That is why all of NCBA’s 46 state affiliate organizations unanimously adopted a fed cattle price discovery policy at our 2020 Summer Business Meeting. This policy directs NCBA to pursue a voluntary approach to price discovery that includes triggers established by a working group of producer members which, if tripped due to a lack of regionally sufficient negotiated trade, would prompt NCBA to seek legislative or regulatory solutions —such as those outlined in Senator Fischer’s bill — to achieve robust price discovery.
“Sen. Fischer’s bill explores many avenues to improve transparency in the cattle markets. The creation of a cattle contracts library and clarification of confidentiality rules will provide crucial data to cattle producers as they seek to make informed marketing decisions,” NCBA continued. “However, our policy dictates that the voluntary framework we are developing be allowed the opportunity to succeed or fail before we can lend our support to regional mandatory minimums for negotiated trade. We welcome a continued dialogue with Sen. Fischer and her colleagues on ways to achieve robust price discovery for all cattle producers.”
NCBA anticipates that the working group of producer members working on this issue will meet an Oct. 1 deadline set by the policy to establish regional triggers.
Cattle industry groups in Nebraska, Fischer’s home state, expressed support for the legislation.
“Cattle market transparency — specifically, fed cattle market price discovery — has been a headline issue for Nebraska Cattlemen members over the majority of the past decade,” said Ken Herz, president of Nebraska Cattlemen. “Items in Senator Fischer’s bill such as the cattle contract library and clarification of USDA-LMR confidentiality guidelines to avoid non-reporting of USDA-LMR collected data on a regional and national basis will aid in increasing cattle market transparency for all producers.
“Additionally, directing USDA-AMS to establish regionally negotiated cash plus negotiated grid marketing volume minimum thresholds will enhance price discovery goals and commitments for the betterment of all cattle producers,” Herz added. “We sincerely thank Senator Fisher for her work on this important issue to Nebraska Cattlemen members.”