Large meat packers may have to purchase at least a half of their weekly column on the spot market thanks to bill introduced in the U.S. Senate Wednesday.
The measure intends to create more efficient markets while increasing competition and transparency in the packing industry. As we have previously reported, several lawmakers seek an investigation from the Department of Justice on the issue of price manipulation.
Iowa Senator Chuck Grassley first introduced a similar bill 18 years ago, but he says that now more than ever independent producers deserve to be paid what their beef is worth. The bill has bipartisan support from Sens. Jon Tester (D-Mont.), Tina Smith (D-Minn.), Joni Ernst (R-Iowa), Mike Rounds (R-S.D.), Cindy Hyde-Smith (R-Miss.) and Steve Daines (R-Mont.).
“The lack of transparency in cattle pricing isn’t a new problem, but the negative effects of the fire in Holcomb, Kansas, and COVID-19 have highlighted the need for additional price transparency measures to ensure producers are getting a fair price for the hard work of raising cattle,” Grassley said. “Food doesn’t come from the grocery store; it comes from tens of thousands of farmers and independent producers who work day and night to ensure families across the country have an abundant supply of food. Independent producers deserve to be paid what their beef is worth.”
The U.S. Cattlemen’s Association approves of the bill saying, “This would allow the Livestock Mandatory Reporting system to be better utilized as a mechanism for accurate and transparent reporting, which will advance price discovery and shore up the fundamentals of the CME cattle futures contracts.”
The NCBA, on the other hand, opposes the opposes the legislation, calling it a government mandate restricting cattle marketing options.