Transparent Cattle Markets Getting Muddier

Apr 1, 2022

The cattle market can see clearly now, the bill is done…

Well, maybe. The updated version of the Cattle Price Discovery and Transparency Act is done. Introduced in November 2021, the bill has mixed support. In one corner, the National Cattlemen’s Beef Association says the bill “strayed from the wishes of the majority of cattle producers around the country.” Other groups feel the same.

In the other corner, Iowa Cattlemen’s Association, U.S. Cattlemen’s Association, and others believe this bill is a show of bipartisan support from Congressional leaders to find a solution. The hope is packers will be required to increase competition and fairness in the fed cattle market.

Breaking it down: As the proposed bill would have it, to ensure complete and transparent price discovery, the secretary of agriculture would establish five to seven regions nationwide and then create minimum levels of fed cattle purchases made through approved pricing mechanisms:

  •       Negotiated cash
  •       Negotiated grid
  •       At a stockyard
  •       Trading systems where multiple buyers and sellers regularly can make and accept bids

Oh, and the bill would establish a publicly available library of available marketing contracts and required box beef reporting.

And if packers don’t participate? Covered packers (those that slaughtered 5% or more of the fed cattle nationally in the preceding five years) face a maximum penalty of $90K.

Where this goes: Stakeholder groups will review the updated bill and provide feedback.