Rep. Johnson co-authors bill to create USDA library of cattle contracts
WASHINGTON – South Dakota Representative Dusty Johnson has co-authored a bill he hopes will provide smaller cattle producers more leverage in pricing negotiations.
On Wednesday, Rep. Johnson and Representative Henry Cuellar (D-TX-28) introduced the bipartisan Cattle Contract Library Act of 2021 (H.R. 5609), which would create a library for cattle contracts within the U.S. Department of Agriculture’s (USDA’s) Agriculture Marketing Service Department.
Under the current regulations, cattlemen have no access to contract terms being offered by packers, leading to a decline in leverage for smaller producers during price negotiations.
According to Johnson, with the USDA maintaining a pork contract library, the 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 was recommended by experts and stakeholders.
In response to this investigation, Johnson introduced 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.”
The Cattle Contract Library Act of 2021 is supported by the American Farm Bureau Federation, National, Cattlemen’s Beef Association, U.S. Cattlemen’s Association, National Farmers Union, Livestock Marketing Association, SD Cattlemen’s Association, South Dakota Farm Bureau, and the South Dakota Farmers Union.
“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.”
The Cattle Contract Library Act is cosponsored by Reps. Tracey Mann (R-KS-01), Frank Lucas (R-OK-03), Rick Allen (R-GA-12), Ashley Hinson (R-IA-01), Kelly Armstrong (N.D.-AL), Jason Smith (R-MO-08), Trent Kelly (R-MS-01), Michelle Fischbach (R-MN-07), Angie Craig (D-MN-02), Mariannette Miller-Meeks (R-IA-02), Jim Hagedorn (R-MN-01), David Rouzer (R-NC-07), Vicky Hartzler (R-MO-04), Adrian Smith (R-NE-3), Abigail Spanberger (D-VA-07), and Darren Soto (D-FL-09).