WASHINGTON, D.C. – Four U.S. senators reached a compromise on what they said are improvements to the cattle market that combined components of previous bills into the new Cattle Price Discovery and Transparency Act.

Debra Fischer, R-Neb., a member of the U.S. Senate Agriculture Committee, who led the measure, joined Sens. Chuck Grassley, R-Iowa, Jon Tester, D-Mont., and Ron Wyden, D-Ore., in announcing the new cattle market proposal.

The measure comes three weeks ahead of the Dec. 3 expiration of livestock mandatory price reporting, which was developed to facilitate open, transparent price discovery, and provide comparable levels of market information.

“Robust price discovery ensures that all members of the beef supply chain – cow-calf producers, feeders, packers, and consumers – can be successful,” Fischer said. “The foundation of price discovery in the cattle market is negotiated cash sales. One or two regions of the country should not have to shoulder the burden of price discovery, and that’s exactly what has been happening.”

Under the Cattle Price Discovery and Transparency Act, negotiated cash trade for cattle would be expanded, and a library would be provided to producers for details of marketing contract premiums and discounts being set by meatpackers.

The senators plan to introduce the Cattle Price Discovery and Transparency Act in the coming days.

“Furthermore, even regions that primarily use alternative marketing arrangements such as formula contracts predominantly rely on negotiated cash sales to set their base prices,” Fischer said. “Our compromise proposal takes regional differences into account and ensures fairness for every segment of the supply chain.”

The senators said the legislation will:

• Establish regional mandatory minimum thresholds of negotiated cash and negotiated grid trades based on each region’s 18-month average trade to enable price discovery in cattle marketing regions. In order to establish regionally sufficient levels of negotiated cash and negotiated grid trade, the USDA Secretary, in consultation with the USDA chief economist, would seek public comment on those levels, set the minimums, and then implement them. 

• Require the USDA to create and maintain a publicly available library of marketing contracts between meatpackers and producers in a manner that ensures confidentiality.

• Prohibit the USDA from using confidentiality as a justification for not reporting and make clear that the USDA must report all livestock mandatory reporting information, and they also must do so in a manner that ensures confidentiality.

• Require more timely reporting of cattle carcass weights, as well as requiring a meatpacker to report the number of cattle scheduled to be delivered for slaughter each day for the next 14 days.

The following groups have endorsed the bill: The American Farm Bureau, the U.S. Cattlemen’s Assoc., and the National Farmers Union.

Grassley, a member of the U.S. Senate Agriculture Committee and ranking member of the U.S. Senate Judiciary Committee, said, “I frequently hear from Iowa’s independent cattle producers about their struggle to get a fair price for their cattle, while the nation’s four largest packers operate in the shadows. 

“I pushed for hearings in the Senate’s Agriculture and Judiciary committees to shine a light on the market unfairness and now have partnered with a bipartisan group of senators to develop a solution,” added Grassley, who still farms 750 acres of corn and soybeans with his son and grandson on his Butler County, Iowa, farm. “This bill takes several steps to improve cattle price transparency, and will improve market conditions for independent producers across the country.”

Lee Reichmuth, U.S. Cattlemen’s Assoc. region director, and a Lindsay, Neb., farmer, said, “The Cattle Price Discovery and Transparency Act will deliver on its promise to restore “robust price discovery and provide market participants with the information they need to make savvy marketing decisions.”

“It also mandates that every packer required to report to the USDA is also required to participate in the cash market each week,” he said. “We commend Sens. Fischer, Grassley, Tester, and Wyden for coming together on a bipartisan solution that has broad support from both lawmakers and producer groups.

“Reforming the cattle marketplace to drive transparency and true price discovery is a core tenet of how we can strengthen the U.S. cattle producer’s bottom line, and we look forward to working with members of the Senate and House Agriculture Committees to quickly advance this bill,” he added.

Ethan Lane, National Cattle Beef Assoc. vice president of government affairs, said, “While we are still reviewing the new language and comparing it against our producer-passed policy on this issue, it would appear that – as in previous versions – we can support much of this bill.

“That being said, that same policy book directs us to oppose government mandates on cattle marketing methods,” he added. “We take the discussions and deliberations that go into our grassroots policy process seriously, and we will hold this bill – as we would any other – up against the policy of this association.”