U.S. Senators Steve Daines (R-MT), Jon Tester (D-MT) and Mike Rounds (R-SD) joined Chuck Grassley (R-IA) and three other senate colleagues in introducing a bill to improve pricing transparency for cattle producers. The legislation will require that a minimum of 50 percent of meat packer’s weekly volume of beef slaughter be purchased on the open or spot market.
“The lack of transparency in cattle pricing isn’t a new problem, but the negative effects of the fire in Holcomb, Kansas, and COVID-19 have highlighted the need for additional price transparency measures to ensure producers are getting a fair price for the hard work of raising cattle,” Senator Grassley said.
Senator Daines said, “It is critical that the market is as transparent as possible. As fewer cattle are sold on a negotiated cash basis, this bill will help support price discovery and increase transparency in the cattle markets and help ensure that Montana ranchers are treated fairly in the marketplace.”
“This bill will force meat packers to engage in more spot transactions, bringing up formula prices and making them more accurate while giving Montana producers and feeders more flexibility and transparency when they bring their livestock to market,” Senator Tester said.
“Cattle prices for South Dakota are affected by the average negotiated cash trade nationwide which has dropped dramatically over the past 15 years,” Senator Rounds said. “The decrease in cash trades has reduced price discovery. In order to establish a fair cattle market for cattle producers, real, vigorous price discovery is needed. This is only one piece of what needs to be fixed in the cattle market, but it’s an important step forward.”
U.S. Cattlemen’s Association President Brooke Miller said, “The Livestock Mandatory Reporting program will expire on September 30, 2020. As Congress and industry stakeholders work together on needed changes to the program in the months ahead, we expect this bill will play a large role in those conversations.” Miller also commended the senators for advancing legislation that will have a real and meaningful impact on the U.S. cattle producers’ bottom line.
R-CALF USA CEO Bill Bullard expressed their group is thankful for the actions taken be these senators. “The largest beef packers have progressively shifted large numbers of cattle out of the competitive cash market and into contract arrangements where no price discovery can occur. However, the beef packers continue tying the price they pay for their contracted cattle to the razor thin cash market that is no longer capable of establishing a competitive price for cattle.”
Office of South Dakota Senator Mike Rounds
Office of Montana Senator Steve Daines
Office of Montana Senator Jon Tester
Northern Ag Network