To: R-CALF USA Members, Affiliates, and Friends
From: Bill Bullard, CEO
Date: April 11, 2022
Subject: Reject the Cattle Price Discovery and Transparency Act
Background: We asked Congress to introduce and pass a bill to require packers to compete once again by purchasing at least 50% of their cattle in the competitive marketplace. Senate Bill 949 (S.949) was introduced and did that, but the Senate Ag Committee would not hold a vote on it.
Instead, the Senate Ag Committee asked for a compromise. What resulted was the Fischer-Grassley compromise bill (S.3229) that other organizations said we had to support because it was “the best bill we could get”. R-CALF USA vigorously opposed the compromise bill because it was a weak, minimalist approach to a severe crisis in the cattle market.
Because we opposed it, Congress attempted to improve “the best bill we could get,” and slight improvements were made in some areas of the bill. The new modified compromise bill is now being introduced as the Cattle Price Discovery and Transparency Act of 2022 (modified compromise bill).
Since the modified compromise bill was drafted, two new economic studies emerged. Both studies suggest that alternative marketing arrangements (AMAs), which the modified compromise bill attempts to protect, are causing your cattle prices to be depressed. One study found that a 1% increase in AMAs is associated with at 5.9% decrease in cattle prices – that’s a decrease of about $100 per head for a fat steer. The other study says that packers with multiple plants are coordinating their purchases among their multiple plants and with the use of AMAs are causing wider spreads between cattle prices and beef prices.
USDA data shows we lost 1,020 more feedlots between 2020 and 2021. That’s an additional loss of about 4% of all feedlots in one year, and most of them are smaller farmer feeders. We don’t have the data, but if we’re losing cattle operations at the same rate of feedlots, then we’ve lost 30,000 more cattle farmers and ranchers in one year.
The modified compromise bill is Not an appropriate response to the serious crisis in today’s cattle market. It will take up to two years to implement and meanwhile it locks in the same market conditions now under investigation by the U.S. Department of Justice and complained of in our class action antitrust lawsuit. To learn more of its weaknesses, go here: review and recommendation.
Action: Please call your two U.S. Senators right away and urge them Not to support the Cattle Price Discovery and Transparency Act of 2022. Tell them Congress must do much more to restore competition to the U.S. cattle market. Tell them to support S.949 (known as the 50/14 bill).
You can reach your Senators at their Washington, D.C. offices by calling the Capitol Switchboard at 202-224-3121 and asking for them by name.
We’ll be in touch!
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R-CALF USA (Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America) is the largest producer-only lobbying and trade association representing U.S. cattle producers. It is a national, nonprofit organization dedicated to ensuring the continued profitability and viability of the U.S. cattle industry. Visit www.r-calfusa.com or call 406-252-2516 for more information.
