Cattle Market Transparency Act of 2021

II 117TH CONGRESS 1ST SESSION S. 543 To amend the Packers and Stockyards Act, 1921, to establish a cattle contract library, and for other purposes. IN THE SENATE OF THE UNITED STATES MARCH 2 (legislative day, MARCH 1), 2021 Mrs. FISCHER (for herself, Mr. WYDEN, Mrs. HYDE-SMITH, and Mr. BRAUN) introduced the following bill; which was read twice and referred to the Committee on Agriculture, Nutrition, and Forestry A BILL To amend the Packers and Stockyards Act, 1921, to establish a cattle contract library, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Cattle Market Trans- 4 parency Act of 2021’’. 5 SEC. 2. CATTLE CONTRACT LIBRARY. 6 (a) IN GENERAL.—Title II of the Packers and Stock- 7 yards Act, 1921, is amended by inserting after section 223 8 (7 U.S.C. 198b) the following: 9 VerDate Sep 11 2014 23:53 Mar 31, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S543.IS S543 pbinns on DSKJLVW7X2PROD with BILLS 2 •S 543 IS ‘‘Subtitle C—Cattle Contracts 1 ‘‘SEC. 231. DEFINITIONS. 2 ‘‘In this subtitle: 3 ‘‘(1) BASE PRICE.—The term ‘base price’ 4 means the price paid for cattle delivered to a packer, 5 before application of any premiums or discounts, ex- 6 pressed in dollars per hundred pounds of carcass 7 weight. 8 ‘‘(2) CONTRACT.— 9 ‘‘(A) IN GENERAL.—Subject to subpara- 10 graph (B), the term ‘contract’ means any 11 agreement, written or oral, between a packer 12 and a producer for the purchase of fed cattle 13 for slaughter. 14 ‘‘(B) EXCLUSION.—The term ‘contract’ 15 does not include a contract for a negotiated 16 purchase. 17 ‘‘(3) FED CATTLE.—The term ‘fed cattle’ 18 means a steer or heifer that has been finished on a 19 ration of roughage and feed concentrates, such as 20 grains, protein meal, grass (forage), and other nutri- 21 ent-rich feeds, prior to slaughter. 22 ‘‘(4) FORMULA MARKETING ARRANGEMENT.— 23 The term ‘formula marketing arrangement’ means 24 the advance commitment of cattle for slaughter— 25 VerDate Sep 11 2014 23:53 Mar 31, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S543.IS S543 pbinns on DSKJLVW7X2PROD with BILLS 3 •S 543 IS ‘‘(A) by any means other than through a 1 negotiated purchase, negotiated grid purchase, 2 or forward contract; and 3 ‘‘(B) using a method for calculating 4 price— 5 ‘‘(i) under which the price is deter- 6 mined at a future date; 7 ‘‘(ii) the basis of which is a price es- 8 tablished for a specified market, which 9 may be based on any publicly reported 10 price, including plant average price, re- 11 gional price, downstream price, or some 12 other mutually agreeable price source; and 13 ‘‘(iii) that may include a grid or 14 nongrid price. 15 ‘‘(5) FORWARD CONTRACT.—The term ‘forward 16 contract’ means— 17 ‘‘(A) an agreement for the purchase of fed 18 cattle, executed in advance of slaughter, under 19 which the base price is established by reference 20 to— 21 ‘‘(i) prices quoted on the Chicago 22 Mercantile Exchange; or 23 ‘‘(ii) other comparable publicly avail- 24 able prices; or 25 VerDate Sep 11 2014 23:53 Mar 31, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S543.IS S543 pbinns on DSKJLVW7X2PROD with BILLS 4 •S 543 IS ‘‘(B) any other contract for the purchase 1 of fed cattle, executed in advance of slaughter, 2 as determined by the Secretary. 3 ‘‘(6) HEIFER.—The term ‘heifer’ means a bo- 4 vine female that has not given birth to a calf. 5 ‘‘(7) NEGOTIATED GRID PURCHASE.—The term 6 ‘negotiated grid purchase’ means a purchase of fed 7 cattle by a packer from a producer under which— 8 ‘‘(A) the buyer-seller interaction results in 9 a negotiated base price, which may be adjusted 10 by premiums and discounts; and 11 ‘‘(B) the cattle are scheduled for delivery 12 to the packer not more than 14 days after the 13 date on which the agreement for purchase is 14 made. 15 ‘‘(8) NEGOTIATED PURCHASE.—The term ‘ne- 16 gotiated purchase’ means a purchase of fed cattle 17 (commonly known as a ‘cash’ or ‘spot market’ pur- 18 chase) by a packer from a producer under which— 19 ‘‘(A) the buyer-seller interaction that re- 20 sults in the purchase and the agreement on the 21 actual base price for the purchase occur on the 22 same day; and 23 ‘‘(B) the cattle are scheduled for delivery 24 to the packer not more than 14 days after the 25 VerDate Sep 11 2014 23:53 Mar 31, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S543.IS S543 pbinns on DSKJLVW7X2PROD with BILLS 5 •S 543 IS date on which the agreement for purchase is 1 made. 2 ‘‘(9) PACKER.—The term ‘packer’ has the 3 meaning given the term in section 221 of the Agri- 4 cultural Marketing Act of 1946 (7 U.S.C. 1635d). 5 ‘‘(10) PRODUCER.—The term ‘producer’ means 6 a person engaged in the business of selling cattle to 7 a packer for slaughter. 8 ‘‘(11) STEER.—The term ‘steer’ means a bovine 9 male castrated before reaching sexual maturity. 10 ‘‘(12) TYPE OF CONTRACT.— 11 ‘‘(A) IN GENERAL.—The term ‘type of con- 12 tract’ means the classification of a contract for 13 the purchase of cattle— 14 ‘‘(i) into 1 of the categories described 15 in subparagraph (B); and 16 ‘‘(ii) by determining the base price of 17 the cattle. 18 ‘‘(B) CATEGORIES.—The categories for 19 classification of a type of contract are the fol- 20 lowing: 21 ‘‘(i) Formula marketing arrangement. 22 ‘‘(ii) Forward contract. 23 ‘‘(iii) Negotiated grid purchase con- 24 tract. 25 VerDate Sep 11 2014 23:53 Mar 31, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S543.IS S543 pbinns on DSKJLVW7X2PROD with BILLS 6 •S 543 IS ‘‘SEC. 232. CATTLE CONTRACT LIBRARY. 1 ‘‘(a) IN GENERAL.—Subject to the availability of ap- 2 propriations to carry out this section, the Secretary shall 3 establish and maintain a library or catalog of each type 4 of contract offered by packers to producers for the pur- 5 chase of all or part of the production of the producers 6 of fed cattle (including cattle that are purchased or com- 7 mitted for delivery), including any schedules of premiums 8 or discounts associated with the contract. 9 ‘‘(b) INFORMATION COLLECTION.— 10 ‘‘(1) IN GENERAL.—To maintain the library or 11 catalog established under subsection (a), the Sec- 12 retary shall obtain information from each packer on 13 each type of existing contract of the packer by re- 14 quiring a filing or other form of information submis- 15 sion from each packer. 16 ‘‘(2) CONTRACTED CATTLE NUMBERS.—Infor- 17 mation that shall be submitted to the Secretary by 18 a packer under paragraph (1) shall include, with re- 19 spect to each existing contract of a packer— 20 ‘‘(A) the type of contract; and 21 ‘‘(B) a description of the provisions in the 22 contract that provide for expansion in the num- 23 bers of fed cattle to be delivered under the con- 24 tract for the 6-month and 12-month periods fol- 25 lowing the date of the contract. 26 VerDate Sep 11 2014 23:53 Mar 31, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S543.IS S543 pbinns on DSKJLVW7X2PROD with BILLS 7 •S 543 IS ‘‘(c) AVAILABILITY OF INFORMATION.— 1 ‘‘(1) IN GENERAL.—The Secretary shall make 2 available to producers and other interested persons 3 information on the types of contracts in the library 4 or catalog established under subsection (a), includ- 5 ing notice (on a real-time basis, if practicable) of the 6 types of contracts that are being offered by packers 7 to, and are open to acceptance by, producers for the 8 purchase of fed cattle. 9 ‘‘(2) MONTHLY REPORT.— 10 ‘‘(A) IN GENERAL.—Beginning 30 days 11 after the library or catalog is established under 12 subsection (a), the Secretary shall make the in- 13 formation obtained each month in the library or 14 catalog available in a monthly report to pro- 15 ducers and other interested persons. 16 ‘‘(B) CONTENTS.—The monthly report de- 17 scribed in subparagraph (A) shall include— 18 ‘‘(i) an estimate by the Secretary of 19 the total number of fed cattle committed 20 under contracts for delivery to packers 21 within the 6-month and 12-month periods 22 following the date of the report, organized 23 by reporting region and type of contract; 24 and 25 VerDate Sep 11 2014 23:53 Mar 31, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S543.IS S543 pbinns on DSKJLVW7X2PROD with BILLS 8 •S 543 IS ‘‘(ii) an estimate by the Secretary of 1 the total maximum number of fed cattle 2 that may be delivered within the 6-month 3 and 12-month periods following the date of 4 the report, based on the provisions de- 5 scribed in subsection (c)(2)(B) in existing 6 contracts, organized by reporting region 7 and type of contract. 8 ‘‘(d) MAINTENANCE OF LIBRARY OR CATALOG.—In- 9 formation in the library or catalog established under sub- 10 section (a) about types of contracts that are no longer of- 11 fered or in use shall be removed from the library or cata- 12 log. 13 ‘‘(e) CONFIDENTIALITY.—The reporting require- 14 ments for packers under this section shall be subject to 15 the confidentiality protections provided under section 251 16 of the Agricultural Marketing Act of 1946 (7 U.S.C. 17 1636). 18 ‘‘(f) VIOLATIONS.—It shall be unlawful and a viola- 19 tion of this Act for any packer to willfully fail or refuse— 20 ‘‘(1) to provide to the Secretary accurate infor- 21 mation required under this section; or 22 ‘‘(2) to comply with any other requirement of 23 this section. 24 VerDate Sep 11 2014 23:53 Mar 31, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S543.IS S543 pbinns on DSKJLVW7X2PROD with BILLS 9 •S 543 IS ‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There 1 are authorized to be appropriated to the Secretary such 2 sums as are necessary to carry out this section.’’. 3 (b) CONFORMING AMENDMENT.—Section 201 of the 4 Packers and Stockyards Act, 1921 (7 U.S.C. 191), is 5 amended by striking ‘‘When used in this Act’’ and insert- 6 ing ‘‘Unless specified otherwise, in this Act,’’. 7 SEC. 3. CASH MARKET ACQUISITION OF CATTLE. 8 (a) SENSE OF THE SENATE.—It is the sense of the 9 Senate that all participants in the fed cattle market have 10 a responsibility to contribute to regionally sufficient levels 11 of negotiated trade of fed cattle in all cattle feeding re- 12 gions in order to achieve robust price discovery. 13 (b) CASH MARKET ACQUISITION OF CATTLE.—Title 14 II of the Packers and Stockyards Act, 1921 (7 U.S.C. 191 15 et seq.) (as amended by section 2), is amended by adding 16 at the end the following: 17 ‘‘Subtitle D—Cash Market 18 Acquisition of Cattle 19 ‘‘SEC. 241. DEFINITIONS. 20 ‘‘In this subtitle: 21 ‘‘(1) NEGOTIATED GRID PURCHASE.—The term 22 ‘negotiated grid purchase’ means a purchase of fed 23 cattle by a packer from a producer under which— 24 VerDate Sep 11 2014 23:53 Mar 31, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S543.IS S543 pbinns on DSKJLVW7X2PROD with BILLS 10 •S 543 IS ‘‘(A) the buyer-seller interaction results in 1 a negotiated base price, which may be adjusted 2 by premiums and discounts; and 3 ‘‘(B) the fed cattle are scheduled for deliv- 4 ery to the packer not more than 14 days after 5 the date on which the agreement for purchase 6 is made. 7 ‘‘(2) NEGOTIATED PURCHASE.—The term ‘ne- 8 gotiated purchase’ means a purchase of fed cattle 9 (commonly known as a ‘cash’ or ‘spot market’ pur- 10 chase) by a packer from a producer under which— 11 ‘‘(A) the buyer-seller interaction that re- 12 sults in the purchase and the agreement on the 13 actual base price for the purchase occur on the 14 same day; and 15 ‘‘(B) the fed cattle are scheduled for deliv- 16 ery to the packer not more than 14 days after 17 the date on which the agreement for purchase 18 is made. 19 ‘‘(3) PACKER.— 20 ‘‘(A) IN GENERAL.—The term ‘packer’ has 21 the meaning given the term in section 221 of 22 the Agricultural Marketing Act of 1946 (7 23 U.S.C. 1635d). 24 VerDate Sep 11 2014 23:53 Mar 31, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S543.IS S543 pbinns on DSKJLVW7X2PROD with BILLS 11 •S 543 IS ‘‘(B) EXCLUSION.—The term ‘packer’ does 1 not include a packer that slaughters cattle at 2 only 1 livestock processing plant. 3 ‘‘(4) PRODUCER.—The term ‘producer’ means a 4 person engaged in the business of selling cattle to a 5 packer for slaughter. 6 ‘‘(5) REGIONAL MANDATORY MINIMUM.—The 7 term ‘regional mandatory minimum’ means, for each 8 reporting region (as designated by the Agricultural 9 Marketing Service), of the number of transactions 10 and quantity of cattle purchased for slaughter by a 11 packer in that region each slaughter week, the min- 12 imum number of such transactions and the min- 13 imum percentage of such cattle, respectively, that 14 are required to be purchased through negotiated 15 purchases or negotiated grid purchases from pro- 16 ducers. 17 ‘‘(6) SLAUGHTER WEEK.—The term ‘slaughter 18 week’ has the meaning given the term ‘current 19 slaughter week’ in section 212 of the Agricultural 20 Marketing Act of 1946 (7 U.S.C. 1635a). 21 ‘‘SEC. 242. REGIONAL MANDATORY MINIMUMS. 22 ‘‘(a) IN GENERAL.—Not later than 2 years after the 23 date of enactment of this subtitle, the Secretary, in con- 24 sultation with the Chief Economist, shall establish— 25 VerDate Sep 11 2014 23:53 Mar 31, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S543.IS S543 pbinns on DSKJLVW7X2PROD with BILLS 12 •S 543 IS ‘‘(1) regional mandatory minimums for the pur- 1 pose of enhancing price discovery and transparency 2 for cattle market participants; and 3 ‘‘(2) methods for establishing those regional 4 mandatory minimums, which shall be publicly avail- 5 able. 6 ‘‘(b) PUBLIC INPUT.—In carrying out subsection (a), 7 the Secretary shall make all proposed regional mandatory 8 minimums and proposed methods for establishing those 9 minimums subject to a notice and comment period. 10 ‘‘(c) DURATION.—Regional mandatory minimums es- 11 tablished for each reporting region under subsection 12 (a)(1)— 13 ‘‘(1) may be weekly or on another periodic 14 basis, as determined by the Secretary; and 15 ‘‘(2) shall be applicable for not more than a 24- 16 month period. 17 ‘‘(d) CONSIDERATIONS.—In carrying out subsection 18 (a) for each reporting region, the Secretary, in consulta- 19 tion with the Chief Economist, shall consider the following 20 factors: 21 ‘‘(1) The number of packers in the reporting re- 22 gion. 23 ‘‘(2) The availability of cattle in the reporting 24 region. 25 VerDate Sep 11 2014 23:53 Mar 31, 2021 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S543.IS S543 pbinns on DSKJLVW7X2PROD with BILLS 13 •S 543 IS ‘‘(3) Pre-existing contractual arrangements of 1 packers in th [Text truncated for display. 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