Last year’s omnibus package included a one-year extension for the Livestock Mandatory Reporting reauthorization. However, an influential Senate staffer does not anticipate Congress will open up full debate for reauthorization when it’s set to expire later this year.
The Livestock Mandatory Reporting rule, established in 1999, mandates price reporting for cattle, boxed beef swine and lamb. It is reauthorized every five years, with the current program expiring on September 30, 2021 after last year’s extension.
During a webinar hosted by the North American Meat Institute May 11, Martha Scott Poindexter, minority staff director of the Senate Committee on Agriculture, says there are several members who want to amend LMR, but it is hard to know if the full Congress will have the time for debate given its busy agenda. Many members and groups see this as an opportunity to make meaningful change to the program to increase transparency and true price discovery, however there is not widespread support for many of the proposals on the table.
Poindexter says Sen. Chuck Grassley, R-Iowa, and Sen. Deb Fischer, R-Neb., each have requested for a hearing on the cattle market. Grassley, along with Sen. Jon Tester, D-Mont., introduced a bill that would require a 50% minimum of cash sales of each packer processing plant’s weekly volume of beef slaughter to come as a result of purchases made on the open market or spot market. Fisher also has been working on a legislative approach to increasing transparency to the cattle market.
Related: Senators introduce fix for cattle market price discovery
The two bills, while different, both focus on changes and enhancements to the cattle marketplace struggling to reconcile the conditions that were revealed following the Holcomb, Kansas, fire at a Tyson’s facility, to the widely-reported closures of processing plants due to coronavirus outbreaks. Grassley says these incidents continue to reveal a wide disparity between the cash-price of fed cattle and the price for boxed beef.
Price discovery is where a buyer and a seller agree on a price and a transaction occurs. Producers in the Midwest reporting regions already provide ample price discovery by putting in hard work and selling cattle using negotiated means at nearly 60%. However, other regions have much lower numbers of producers who trade on the cash market.
The National Cattlemen’s Beef Association has not supported a mandatory change to the cattle markets, but instead supports a voluntary approach first to increased negotiated trade. If a voluntary approach is unsuccessful, NCBA policy approved by its members provides guidance toward a legislative solution that more closely resembles Senator Fischer’s Cattle Market Transparency Act, NCBA Vice President of Government Affairs Ethan Lane said following their introductions.