Senators Introduce Spot Market Bill, MFU Approves

On March 24th, U.S. Senators Jon Tester (D-MT) and Chuck Grassley (R-IA) introduced a bill to require each U.S. meat processing facility that slaughters over 125,000 head of cattle each year to purchase fifty percent of their weekly volume of beef slaughter on the open or ‘spot’ market.

Other co-sponsors of the bill include Senators Tina Smith (D-MN); Ron Wyden (D-OR); Cory Booker (D-NJ); John Hoeven (R-ND); Joni Ernst (R-IA); Mike Rounds (R-SD); and Steve Daines (R-MT).

United States Cattlemen’s Association (USCA) President Brooke Miller issued the following statement:

“We commend Senator Grassley for continuing to champion legislation that seeks to strengthen the U.S. cattle producer’s bottom line.

“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. 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.

“As Congress looks to the reauthorization of the Livestock Mandatory Reporting Program (LMR) prior to its expiration on September 30, 2021, USCA appreciates any and all efforts to reform the program. LMR must be better utilized as a mechanism for accurate and transparent reporting in order to advance price discovery and shore up the fundamentals of the CME cattle futures contracts.

“USCA looks forward to working with members of the Senate and House Agriculture Committees to realign the cattle marketplace with its true fundamentals and level the playing field in producer-packer relationships.”

Montana Farmers Union Praises Tester, Grassley for Introducing Spot Market Bill

Last week Senators Tester and Grassley introduced legislation to deter big meat packers from manipulating the market. The ‘50-14’ Spot bill would amend the Agricultural Marketing Act of 1946. It would require 50% cash or spot trading with delivery of cattle within 14 days. Currently, foreign owned packers are contracting cattle months out with secret formulas based on a cash price at delivery to avoid the mandatory price reporting requirements. This violates the intent of the Packers and Stockyards Act. Packers are not allowed to own cattle months before slaughter. “MFU appreciates Senator Tester and Senator Grassley for introducing this bipartisan legislation. MFU is also pleased that Senator Daines supports this bill demanding more transparency. “Right now packers give preferential treatment to corporate feeders over family-owned feedlots,” said Walter Schweitzer, President of Montana Farmers Union.

Currently, there is less than 10% cash trade which allows the packers to easily manipulate the price paid on 90% of the cattle. “The lack of transparency is not a new problem. Montana producers would like the USDA and the DOJ to enforce the laws on the books to impose 100% transparency. If they are not going to do their job, MFU appreciates Senator Tester and Grassley stepping up to try to hold the packers halfway accountable, thereby improving the situation.”