U.S. Senators introduce cattle processing bill

Mar 25, 2021

If passed, processors would be required to buy 50 percent of their weekly volume on the open market

By Diego Flammini
Staff Writer
Farms.com

A new bill introduced by two U.S. Senators would require cattle processors to make changes to the way they purchase their animals for processing.

Sens. Jon Tester (D-Mt.) and Chuck Grassley (R-Iowa) tabled a “50/14” bill on Wednesday.

If passed, beef processors would be required to purchase a minimum of 50 percent of their weekly processing volume on the open or spot market. The 14 in the bill refers to the 14-day window for cattle delivery.

Some of America’s largest beef processors use their own cattle supply for processing rather than buying off the open market.

Unless a mechanism like the one outlined in the bill in place, U.S. beef producers will not receive fair price for their livestock, Sen. Grassley said.

“Without a mandated amount of cash trade, producers will continue to be residual suppliers and will lack the leverage to fairly negotiate with packing companies,” he said on the Senate floor Wednesday.

U.S. cattle organizations have different views on the bill.

The U.S. Cattlemen’s Association (USCA) supports Sens. Grassley and Tester’s bill.

“This legislation, the ’50-14’ or spot market bill, follows legislation already supported by USCA, the Cattle Market Transparency Act of 2021 introduced by Senator Deb Fischer of Nebraska,” Brooke Miller, president of USCA, said in a statement. “The two bills, while different, both focus on necessary changes and enhancements to the cattle marketplace. USCA supports both pieces of legislation and will be working with both offices on paths forward.

Sen. Fischer’s bill helps ensure regionally negotiated cash trade and provides producers will more pricing information.

The National Cattlemen’s Beef Association (NCBA), however, opposes the “50-14” legislation.

A broad approach to cattle markets doesn’t take market uniqueness into account, the organization said.

“Senator Grassley’s bill misses the mark. The industry – from leading livestock economists to NCBA state affiliates – agrees that any legislative solution to increased price discovery must account for the unique dynamics within each geographic region,” Ethan Lane, vice president of government affairs, said in a statement. “As we have seen in other sectors, a one-size-fits-all government mandate rarely achieves the intended goal.”

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