Dusty Johnson leads effort in Washington D.C. to assist smaller cattle producers in pricing leverage

Published: Oct. 20, 2021 at 10:53 AM MDT
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WASHINGTON, D.C. (KEVN) - This morning Dusty Johnson (R-S.D), who is the Today, Ranking Member of the Livestock and Foreign Agriculture Subcommittee, and Representative Henry Cuellar (D-TX-28) introduced the bipartisan Cattle Contract Library Act of 2021 (H.R. 5609), which would create a library of cattle contracts within the U.S.D.A’s Agriculture Marketing Service Department.

At present, cattlemen are unaware of contract terms being offered by meat-packers, which is directly affecting the market leverage for the smaller producers. This market manipulation has, up until now, caused an unfair advantage for large producers by keeping smaller business out of the loop during price negotioations.

Currently, USDA maintains a pork contract library, and following significant volatility in the cattle market and the release of the July 2020 Boxed Beef & Fed Cattle Price Spread Investigation Report, the creation of a library for cattle contracts was recommended by experts and stakeholders. In response to this investigation, Johnson introduced sweeping cattle reform legislation to provide more transparency in the market, including the creation of a contract library.

“Producers have been asking for increased transparency and leverage in the cattle market for years, the Cattle Contract Library Act will provide granular data in near real time, ensuring producers understand the value of marketing agreements,” said Johnson. “Data drives marketing decisions and a contract library will provide much-needed leverage for independent producers.”

“Throughout my time in Congress, I have worked hard to ensure the success of the agriculture industry—one that is a critical facet of our nation’s economy. The bipartisan Cattle Contract Library Act will further this agenda through the creation of a contract library that will provide cost transparency in the cattle market,” said Cuellar. “We must support all of our cattle businesses, including our small producers, who are indispensable for our country’s food supply chain. I thank Rep. Johnson for his leadership on this critical legislation for Texas farmers, ranchers, and the agriculture industry as a whole.”

Johnson has been a leader on cattle market reform since 2019 and has worked to secure a number of legislative priorities for producers. In July, USDA implemented two of Johnson’s bills aimed at increasing capacity space for small producers and curbing steep overtime fees small processing facilities incurred during the peak of the COVID-19 pandemic.

“After months of record-breaking drought and volatile markets, ranchers in South Dakota and across the country are struggling to get by. We need to act,” said National Cattleman’s Beef Association Vice President and South Dakota Rancher Todd Wilkinson.

“Market transparency is a critical component of price discovery in cattle marketing. As the industry has evolved, most sales are now taking place through alternative market agreements,” said South Dakota Cattlemen’s Association President Eric Jennings. “We need a contract library to create transparency in those agreements to achieve better price discovery in the live cattle market. The South Dakota Cattlemen’s Association has been advocating for a contract library and we applaud and thank Representative Johnson for putting forth the legislation to fill this need.”

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