The American Farm Bureau Federation has released its new position on a piece of legislation to reform the cattle markets, saying it supports the majority of the legislation but cannot back its effort to mandate cash trade requirements in the beef industry.
The organization announced its updated stance Friday following action to update the group’s policies earlier this month at its annual convention in Atlanta. There, Farm Bureau delegates voted to maintain their support for regional approaches to approve livestock industry price discovery, but voted to oppose any mandates “that force any livestock slaughter facility to purchase a set percentage of their live animal supply via cash bids.”
That approach is key to a bill authored by Sens. Deb Fischer, R-Neb., and Chuck Grassley, R-Iowa, and backed by a bipartisan contingent of 16 other senators. The legislation, formally dubbed the Cattle Price Discovery and Transparency Act, would create regional cash trade requirements in the beef sector. That, the bill’s proponents argue, would improve price transparency in the sector and, ideally, lead to a better economic environment for producers.
However, Farm Bureau members balked at the philosophy of mandating market activity during their debate in Atlanta. On Friday, Zippy Duvall, the group’s president, said the organization supports “the majority of this legislation, but we cannot support mandatory cash sales.
“We are committed to working with the sponsors of the bill to make revisions to ensure it aligns with the priorities outlined by our membership,” he said.
In addition to the cash trade mandates, the bill also makes other changes to the sector’s laws, including creating a contract library to better track alternative marketing agreements between producers and packers.
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In statements released Friday afternoon, Fischer and Grassley underscored Farm Bureau’s support for many of the bill’s provisions and said they plan to press on with the legislation.
“Though there are differences of opinion within their own organization on the solution, family farmers and ranchers have been clear,” Fischer said. “Robust negotiated cash sales are integral to facilitating price discovery in the market.”
For his part, Grassley said he is “confident” the bill would advance out of the Senate Ag Committee if it was brought up for a vote; of the committee’s 22 members, 10 have signed onto the legislation.
“When packers limit their ability to negotiate a fair price, especially when consumers are seeing prices skyrocket at the grocery store, the market clearly isn’t working,” he said. “I understand that the cartel of four meatpackers, which controls 85% of the beef market, is pressuring others in the ag community to oppose this bill. However, I remain focused on providing the most complete solution to improve price transparency and market access to the independent producers I hear from each day.”
Aside from Farm Bureau’s now-partial support, the legislation is also backed by the National Farmers Union and U.S. Cattlemen’s Association. The North American Meat Institute has opposed the bill, with Julie Anna Potts, NAMI’s president and CEO, saying in a recent Agri-Pulse op-ed that the solution to price discovery concerns “must benefit the entire industry, not just Iowa.”
The National Cattlemen’s Beef Association, the nation’s largest beef industry group, has yet to take an official position on the bill and had been trying to make a voluntary price discovery framework function throughout 2021. However, that framework was unsuccessful in meeting the group’s predetermined standards, sending the organization back to its members for an update to its policy stance. The group is expected to discuss the issue at its upcoming February gathering in Houston.
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