SPRING HILL, Tenn. – The USDA has announced it will proceed with its Cattle Contracts Library pilot program in its present form in order to continue reporting “vital market information for farmers and ranchers, while gathering additional information on the effectiveness of the pilot.”

The USDA Cattle Contracts Library pilot program was authorized by the Consolidated Appropriations Act of 2022, which directed the USDA to create a pilot library to increase market transparency for U.S. cattle producers.

“The objective of the Cattle Contracts Library pilot program is to increase market transparency, improve price discovery, and provide information regarding market demand and supply for cattle,” Andrew P. Griffith, University of Tennessee professor of agricultural and resource economics, told Farm World.

The USDA Agricultural Marketing Service established the pilot and outlined the requirements for covered packers in a final rule published Dec. 7, 2022, making the library available to the public Jan. 31.

Although funding provided by Congress for the pilot has ended, the USDA said the final rule remains in effect, and the agency will maintain the current version to the extent that limited existing resources allow.

Derrell Peel, Oklahoma State University professor of agricultural economics in Stillwater, Okla., told Farm World, “The USDA Agricultural Marketing Service administers the Cattle Contract Library in which packers are required to submit information about the various fed cattle purchase contracts that they utilize.

“The library provides weekly information about contract terms, including base prices and base price adjustments; a wide range of contract specifications (i.e., quality, weight, shrink, breed, financing); and volume of cattle purchased under active contracts,” he added.

He said producers can access this information to see more details about specific purchasing contracts used in the fed cattle industry.

“The Cattle Contract Library can be useful to cattle producers interested in specific marketing programs and value-added opportunities that may be available to them,” he said. “The contract library information may be useful to help producers evaluate and compare programs and marketing alternatives, and determine which might be most beneficial to a particular operation or situation.”

Griffith said, “This is the best available information from a broad sense that cattle producers have. The idea is that the increased transparency should ensure competitive pricing for all cattle trading methods. I am not sure cattle producers can expect much different, but it does protect those with limited market information if there was any failure to receive a fair market value.”

When asked about privacy concerns producers may have about the Cattle Contracts Library pilot program, Peel said, “Packers are required to submit contract terms and basic clauses, but not the entire contract.

“The Agricultural Marketing Service has been very careful to protect the identity of the source of information, and to not disclose proprietary information that would hamper the business activities of firms providing information,” he added.

Griffith said, “The issues I perceive have more to do with those required to report. As a business, the government requiring a business to report certain pricing methodologies seems inappropriate. I say this from the standpoint that most people in business would feel like the government is overstepping their bounds by inserting themselves into any business.

“However, given the information is aggregated (collected or gathered into a mass or whole), it is unlikely individual market participants can identify any information with a specific packer,” he added.

For more information on the USDA Cattle Contracts Library pilot program, visit: https://www.ams.usda.gov/market-news/livestock-poultry-grain/cattle-contacts-library.