House bill

Bill would authorize a library of beef contracts

The House agriculture committee will vote on Thursday on a bipartisan bill that would create a contract library for the beef industry, which producers have asked for more information on cattle transactions.

The bill would put in place a mechanism for the agricultural marketing service of the Ministry of Agriculture to report on the terms of alternative marketing agreements between packers and producers. A similar library currently exists in the pork sector and was widely supported by producer groups in the beef industry following a closed-door meeting earlier this year.

“Producers have been calling for increased transparency and leverage in the livestock market for years, the Cattle Contract Library Act will provide near real-time granular data, ensuring producers understand the value of marketing agreements,” said Representative Dusty Johnson of South Dakota. Republican who introduced the bill. “Data drives marketing decisions and a library of contracts will provide essential leverage for independent producers. “

Representative Henry Cuellar, D-Texas, is co-sponsoring the bill along with 16 other members of the House.

The legislation would require various forms of contractual information, including the type and duration of a contract, summary information, provisions “which may affect the price of cattle covered by the contract”, the total number of head only engaged and not only committed to the packer, and contractual provisions which “provide for an increase in the number of fattened cattle to be delivered”.

The bill is supported by several influential organizations in the agriculture and beef industry, including the American Farm Bureau Federation, the National Cattlemen’s Beef Association, the US Cattlemen’s Association, the National Farmers Union and the Livestock Marketing Association. These groups, along with R-CALF USA, participated in a meeting in May which resulted in a list of actions to be taken, including the creation of a library of contracts.

“There is no single silver bullet to the wide variety of needs among our diverse members, but lawmakers can start by focusing on workable solutions that have broad support across the industry.” , said NCBA President Jerry Bohn. “The Livestock Contract Library is one such solution, and it will help our producers gain more leverage in negotiations with packers. “

US Cattlemen’s Association vice-president Justin Tupper said a contracted library was “critically needed, and this bill is one more step towards making this concept a reality.”

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Johnson and Cuellar’s bill is the latest in a long line of bills introduced after recent upheavals in the protein industry. Senator Deb Fischer, R-Neb., Introduced a bill earlier this year that would create a contract library, but also include other reforms. Senators Chuck Grassley, R-Iowa, and Jon Tester, D-Mont., Ditched legislation that would require a fixed percentage of cattle to be sold in the cash market.

These bills, and a flurry of others, came in reaction to a series of so-called ‘black swan’ industry events that brought down prices and called attention to the price disparity between livestock. live and canned beef. A 2019 factory fire at a Kansas Tyson facility, the COVID-19 pandemic, and the JBS cyberattack all affected packers and producers differently.

A spokesperson for the North American Meat Institute, which represents the country’s meat packers, said NAMI members “are reviewing the details of the bill and have questions about how certain provisions of the contract would be flagged.”

Updated story to include NAMI statement.

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