Live cattle prices are shooting higher and higher as the nation's herd contracts, but South Dakota Republican Dusty Johnson doesn't want that shift in market dynamics to keep Congress from considering steps to bring more transparency to the marketplace in the upcoming farm bill.
Johnson, a member of the House Ag Committee who was a vocal proponent of added transparency measures in recent years, said lawmakers still need to address “underlying frailties within the marketplace” even though current prices for live cattle are reaching record highs.
“When prices are low, it seems like everybody wants to do something … Then when prices recover — kind of all of that energy dissipates. It doesn't make any sense,” Johnson said on this week’s Agri-Pulse Newsmakers. “Low prices are not an excuse for us to overreact and high prices are not an excuse for us to underreact.”
Johnson had been active on the subject as the cattle industry grappled with thin margins for many producers while the nation's beef packers reported robust profits. Among the bills he introduced was legislation to create a cattle contract library at USDA, which is currently in a pilot phase.
The pilot program set up guidelines for USDA's Agricultural Marketing Service to report the terms of alternative marketing agreements between packers and producers. AMS has been holding listening sessions to gain feedback on the program and will accept written comments about the program through Sept. 30.
Johnson says the cattle contract library should be made permanent in the next farm bill, stating it is “keeping people more honest.”
“It is not a silver bullet — transparency alone can only cure so much — but clearly the cattle contract library is giving us a better insight into how that market works,” he said.
But not everyone is on board with efforts to address transparency measures in the next farm bill.
Members of the National Cattlemen's Beef Association met in San Diego this week to discuss policy changes for the organization; Ethan Lane, the group's head lobbyist, said there hasn’t been “any real discussion about price discovery in [NCBA’s] policy committees for several years now.”
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“We don't have any states that are looking for additional policy work at NCBA on that topic. I think we sort of exhausted that conversation at the height of COVID,” said Lane.
Lane said the conversation has instead shifted toward the “transparency tools that have been put into place” like the cattle contract library, which NCBA supports.
Farm Credit Council President and CEO Todd Van Hoose also appeared on this week's Newsmakers to discuss the rural development language in the upcoming farm bill as well as this week's interest rate hikes at the Federal Reserve. He said producer margins will be key economic indicators going forward and stressed the role of updating the nation's farm policy
“If there were ever an argument for another strong farm bill, it's right now,” he said. “As you look forward, things are going to get tougher in agriculture. So we need that good strong farm bill to create the kind of safety net that will keep our producers moving.”
This week's episode of Agri-Pulse Newsmakers can be viewed on Agri-Pulse.com.
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