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DC -News Beef bills advance through Senate Ag Committee

published: July 22nd 2022
by: Jennifer Archibald
source: Tester Senate Office

ST. ONGE, S.D. - After nearly two years of political wrangling, a pair of bills that have been in "beef brawl" negotiations, aimed at reducing consolidated power in the cattle market was passed by the Senate Ag Committee Wednesday, June 22, 2022, marking a milestone in a long-running battle in the livestock industry with the "Big Four" meatpackers.

The legislation was initiated in the last three years as live cattle prices fell and meat prices soared.

The first bill, the Cattle Price Discovery and Transparency Act, sponsored by Senator Deb Fischer, R-Neb. and has 19 co-sponsors, including 12 members of the Senate Ag Committee, would require major meatpackers to buy a certain percentage of their cattle through negotiated cash trade sales and would require the United States Department of Agriculture (USDA) to create a public library of marketing contracts between packers and producers.

The USDA would be required to establish minimum levels of negotiated cash trade for fed cattle in five to seven regions of the country. The cash trade volumes would depend on the number of meatpackers in each region, the number of available cattle on feed, and the number of contractual arrangements or alternative marketing agreements in each region. Meatpackers would be required to purchase at least five percent of their daily cattle slaughtered in cash trade. They will also be required to report the number of cattle to be delivered for slaughter each day.

In some of the compromises made in the bill, South Dakota will be included in the Minnesota and Iowa reporting region and Colorado will be included in the Wyoming and Nebraska region.

The bill would also create a library of alternative marketing agreement contracts allowing cattle producers to see the premiums corporate feed yards are receiving. The library would also mandate meatpackers to report boxed beef prices.

The second bill, the Meat and Poultry Special Investigators Act, which was sponsored by Senator Jon Tester, D-MT, and has 12 co-sponsors including South Dakota Republican Senators John Thune and Mike Rounds, would create a special investigator's office in the USDA's Packer and Stockyards Division. The House of Representatives also passed legislation recently that included the special investigator provisions.

This bill would give the USDA a team of investigators with subpoena power, dedicated to investigating and prosecuting violations of the Packers and Stockyards Act. The bill would have the authority to bring civil action against packers and poultry dealers found to have anticompetitive practices. The office also would serve as a liaison to the Department of Justice (DOJ) and the Federal Trade Commission (FTC).

The four big packers are Tyson Foods, JBS, Cargill, and Marfrig, three of which are foreign-owned and control more than 80 percent of the meat processing market which allows them to control the price of cattle and the meat prices in the grocery stores. Cargill is the only company that is U.S. owned. JBS and Marfrig are Brazilian-owned. Tyson Foods is American and Chinese-owned.

While the legislation had good bipartisan support it encountered opposition from the National Cattlemen's Beef Association and the American Farm Bureau Federation, but state representation in both organizations are split on the bills depending on which region of the country in which they are located. The U.S. Cattlemen's Association and the National Farmers Union support the bills.

Not surprisingly, the North American Meat Institute (NAMI) criticized both bills as "heavy-handed government interference."

"The Grassley-Fischer bill being marked-up in the Senate Agriculture Committee this week will cost producers in the largest cattle producing region millions of dollars, and producers around the country will lose the ability to market their cattle as they choose," said Julie Anna Potts, President and CEO of NAMI.