Cattle Contract Library Act Passes Ag Committee

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(Tyson Narjes)

By a unanimous vote on Thursday, the U.S. House Agriculture Committee passed the bipartisan Cattle Contract Library Act of 2021 (H.R. 5609). The bill must be approved by the full House and would also need Senate consideration before it could be signed into law.

Introduced earlier this week by Rep. Dusty Johnson (R-SD) and Rep. Henry Cuellar (D-TX), the Cattle Contract Library Act would establish a library of contracts for the Agricultural Marketing Service to report terms of alternative marketing agreements between packers and producers. Supporters of the bill say it would greatly increase transparency in cattle markets.

Rep. Johnson said the bill is the result of nearly a year of work with producers and industry leaders following the July 2020 Boxed Beef & Fed Cattle Price Spread Investigation Report. The investigation recommended the creation of a cattle contract library.

According to a statement from Rep. Johnson, this is the first cattle market transparency bill to pass out of the Agriculture Committee since the July 2020 report was released. The Cattle Contact Library Act is supported by the American Farm Bureau Federation, National Cattlemen’s Beef Association, U.S. Cattlemen’s Association, National Farmers Union, Livestock Marketing Association, South Dakota Cattlemen’s Association, South Dakota Farm Bureau, and the South Dakota Farmers Union.

“Producers want action – they want more transparency in the cattle market – this bill is a step in the right direction,” Rep. Johnson said. “The Cattle Contract Library Act ushers in greater transparency and competition to an industry that desperately needs it. I’m grateful to the farmers & ranchers for their critical input to come to a consensus and I’m glad the committee answered this request. I’m going to fight like hell to get this bill passed out of the House.”

During an interview with Chip Flory on AgriTalk Thursday, Tanner Beymer, NCBA director of government affairs and government regulatory policy, said the cattle contract library has “broad support from all sectors” and has been a longstanding priority for NCBA.

“Members of Congress recognize this broad support,” Beymer said.

The cattle contract library will give cattlemen valuable information about “what attributes are being incentivized by packers and at what (price) levels,” he said. Such information will help producers gain more marketing leverage.

“Information is power, and this bill allows cattle producers to compare their agreements with other (packer/producer) agreements and allows them the opportunity to negotiate more favorable terms,” Beymer said.

The only cattle producer group that has not endorsed the Cattle Market Transparency Act is R-CALF USA, the group said in a statement. R-CALF directors reviewed the bill and determined it “does not address the competition-disrupting leverage” the beef packers now have.

“The problem with our broken market is not that we don’t know the details of the contracts that confer market leverage to the packers, the problem is there are too many contracts and because of that, our price discovery market is being destroyed,” said Iowa cattle feeder and R-CALF USA Director Eric Nelson. “Putting a contract library ahead of taking action to preserve our price discovery market sends a signal that more contracts are good and more producers should try to access them. This is not what is needed.”

Prior to Thursday’s vote, the North American Meat Institute urged the House Ag Committee to pause.

“Members of the Meat Institute are still analyzing the bill and how it might affect their operations,” said Julie Anna Potts, President and CEO. Due to the limited time allowed to consider the legislation, “we ask the House to pause and include packers in the conversation, since the packers would bear the burden of complying with this new government mandate.”

The bill must be approved by the full House and would also need Senate consideration before it could be signed into law.

“There is already robust price discovery provided by beef packers on a daily basis,” Potts said. “We urge members of Congress to slow down and to first do no harm.”

Related stories:

Beef Contract Library Bill Introduced In House

 

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