Q: What is the basic overview of the Cattle Market Transparency Act of 2021 that was introduced by Senator Fischer (R-NE) and Senator Ron Wyden (D-OR)?
The Cattle Market Transparency Act of 2021 establishes a regional mandatory minimum threshold of negotiated cash trade. The thresholds will be reviewed on a yearly basis. The Secretary of Agriculture, in consultation with USDA’s Chief Economist, will set the regional mandatory minimums and the methodology will be published and subject to public comment. The bill will be implemented within two years and reviewed in five years.
Q: Do you think this bill will make its way through Congress?
Republicans generally support ranchers and this piece of legislation is right up the Democrats’ alley; it is a classic David and Goliath story with the little guys going up against the big corporates. This bill seems to have all the ingredients necessary to obtain bipartisan support.
Q: There has been pushback within the industry from individuals saying this bill won’t do enough to restore competition in the cattle market and increase negotiated cash trade. What is your response to such a statement?
The goal here is price discovery, not to increase one type of trade over another. Price discovery will give those who negotiate cash trade the information they need to price their animals accordingly.
Data has shown that only increasing negotiated cash trade won’t necessarily increase prices.
Q: Have other industry groups/organizations come forward supporting this bill?
It is unclear where NCBA stands with this bill. They came out with a statement saying they support the goals, but how to go about achieving those goals is hotly contested and they plan to rely on a grassroots effort going forward. This statement probably means that they haven’t received enough feedback from their valued members to come out with a concrete response.
NCBA represents the whole beef industry, so you have to remember that large feedlots and packers are part of their membership. This puts NCBA’s leadership in a contentious position.
USCA focuses on cattle producers, specifically cow-calf, stocker and small feedlots. This narrow focus makes it easy for the association to whole-heartedly support this legislation.
RCALF USA will oppose everything that isn’t 50/14 because that has been their goal all along and they aren’t going to back off of it.
This is a good opportunity for NCBA and U.S. Cattlemen’s Association to come together and support the Cattle Market Transparency Act of 2021.
Q: Any additional comments regarding this bill?
There are three key components that need to be remembered with this legislation:
- Transparency is provided by all contracts between packers and producers being made public.
- This bill defines cash as the number of cattle scheduled to be delivered for slaughter within 14 days.
- The USDA cannot use confidentiality as a justification for not reporting.
Through this bill, we would have a mandatory negotiated cash trade that is based on numbers, data and statistical analysis that ensure the industry has enough transactions and numbers. The 30/14 and 50/14 proposals have been good, but this proposal has a solid foundation behind economics and statistics that gives us the foundation we need for it to move forward.