Beef Contract Library Bill Introduced in House
The House Agriculture Committee will vote Thursday on a proposed bill that would create a contract library for the beef industry. The “Cattle Contract Library Act of 2021” would amend the Agricultural Marketing Act of 1946 and establish a library of contracts for the Agricultural Marketing Service to report terms of alternative marketing agreements between packers and producers.
Introduced by Rep. Dusty Johnson (R-SD) and Rep. Henry Cuellar (D-TX), the bill is designed to provide cattlemen with the market data needed to make more informed marketing decisions and exert greater leverage in negotiations with major meatpackers. The USDA library would provide producers with key details on cattle contracts, including the type and duration. A similar library currently exists for the pork sector.
“Producers have been asking for increased transparency and leverage in the cattle market for years. The Cattle Contract Library Act will provide granular data in near real time, ensuring producers understand the value of marketing agreements,” said Johnson. “Data drives marketing decisions and a contract library will provide much-needed leverage for independent producers.”
The bipartisan legislation, with 16 co-sponsors, would also require publishing the total number of cattle solely committed to the packer each week within the six-month and 12-month period following the date of the contract by reporting region.
The cattle contract library is widely supported by industry groups such as the American Farm Bureau Federation and the National Cattlemen’s Beef Association.
"After more than a year of upheaval, facing everything from extreme drought to supply chain disruptions, many cattle producers have been backed against a wall. We need to act urgently to provide them with relief," said NCBA President Jerry Bohn. "There is no single, silver bullet solution to the wide variety of needs among our diverse membership, but lawmakers can start by focusing on viable solutions that have broad-base support across the industry. The cattle contract library is one such solution, and it will help our producers command more leverage in negotiations with the packers. We appreciate the work of Congressman Johnson and Congressman Cuellar to move the ball forward on this urgent issue."
Earlier this month, NCBA Vice President and South Dakota rancher Todd Wilkinson testified before the House Agriculture Committee and underscored the need for greater transparency in cattle markets. One of the solutions he advocated for was the creation of the cattle contract library, as well as full reauthorization of Livestock Mandatory Reporting (LMR).
Texas representative Cuellar said he has worked in Congress to ensure the success of agriculture.
“The bipartisan Cattle Contract Library Act will further this agenda through the creation of a contract library that will provide cost transparency in the cattle market,” Cuellar said. “We must support all of our cattle businesses, including our small producers, who are indispensable for our country’s food supply chain. I thank Rep. Johnson for his leadership on this critical legislation for Texas farmers, ranchers and the agriculture industry as a whole.”
NCBA says it has long advocated for increased transparency in the cattle and beef supply chain. In August 2021, NCBA succeeded in pushing USDA to make more market data publicly available. The agency began publishing a new daily report on the foundational prices used in cattle market formulas, grids, and contracts, and a new weekly report on the volume of cattle purchased at each different level of pricing.
In June 2021, NCBA led a letter with the support of more than 36 state affiliate groups urging Congress to act on the reauthorization of LMR. LMR is the legislative mandate that requires large meat processors to regularly report information on their transactions, such as the price they pay for livestock and the volume of purchases.
In May 2021, NCBA met with American Farm Bureau Federation, Livestock Marketing Association, National Farmers Union, R-CALF and U.S. Cattlemen's Association to discuss urgent concerns and the need for a cattle contract library was one of three priorities agreed upon by these disparate groups.
The introduction of the Cattle Contract Library Act follows months of NCBA engagement to ensure Members of Congress understand the most urgent needs facing cattle producers, the complex cattle market conditions influencing these outcomes, and the risks of adopting one-size-fits-all policy solutions that may hurt producers' bottom line, the organization said in a statement.
