A bill to amend the Agricultural Marketing Act of 1946 to foster efficient markets and increase competition and transparency among packers that purchase livestock from producers.

II 117TH CONGRESS 1ST SESSION S. 949 To amend the Agricultural Marketing Act of 1946 to foster efficient markets and increase competition and transparency among packers that purchase livestock from producers. IN THE SENATE OF THE UNITED STATES MARCH 24, 2021 Mr. GRASSLEY (for himself, Mr. TESTER, Mr. HOEVEN, Ms. SMITH, Ms. ERNST, Mr. WYDEN, Mr. ROUNDS, Mr. BOOKER, and Mr. DAINES) intro- duced the following bill; which was read twice and referred to the Com- mittee on Agriculture, Nutrition, and Forestry A BILL To amend the Agricultural Marketing Act of 1946 to foster efficient markets and increase competition and trans- parency among packers that purchase livestock from pro- ducers. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SPOT MARKET PURCHASES OF LIVESTOCK BY 3 PACKERS. 4 Chapter 5 of subtitle B of the Agricultural Marketing 5 Act of 1946 (7 U.S.C. 1636 et seq.) is amended— 6 VerDate Sep 11 2014 20:09 Apr 17, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S949.IS S949 pbinns on DSKJLVW7X2PROD with BILLS 2 •S 949 IS (1) by redesignating section 260 (7 U.S.C. 1 1636i) as section 261; and 2 (2) by inserting after section 259 the following: 3 ‘‘SEC. 260. SPOT MARKET PURCHASES OF LIVESTOCK BY 4 PACKERS. 5 ‘‘(a) DEFINITIONS.—In this section: 6 ‘‘(1) COVERED PACKER.— 7 ‘‘(A) IN GENERAL.—The term ‘covered 8 packer’ means a packer that is required under 9 this subtitle to report to the Secretary each re- 10 porting day information on the price and quan- 11 tity of livestock purchased by the packer. 12 ‘‘(B) EXCLUSION.—The term ‘covered 13 packer’ does not include a packer that owns 14 only 1 livestock processing plant. 15 ‘‘(2) LIVESTOCK.—The term ‘livestock’ does not 16 include— 17 ‘‘(A) pork; 18 ‘‘(B) poultry; 19 ‘‘(C) a dairy-bred, dairy-bred cross, or beef 20 animal over 30 months of age; or 21 ‘‘(D) a foreign-born beef animal. 22 ‘‘(3) NONAFFILIATED PRODUCER.—The term 23 ‘nonaffiliated producer’ means a producer of live- 24 stock— 25 VerDate Sep 11 2014 20:09 Apr 17, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S949.IS S949 pbinns on DSKJLVW7X2PROD with BILLS 3 •S 949 IS ‘‘(A) that sells livestock to a covered pack- 1 er; and 2 ‘‘(B)(i) that has less than 1 percent equity 3 interest in that covered packer; 4 ‘‘(ii) in which that covered packer has less 5 than 1 percent equity interest; 6 ‘‘(iii) that has no officers, directors, em- 7 ployees, or owners that are officers, directors, 8 employees, or owners of that covered packer; 9 and 10 ‘‘(iv) that has no fiduciary responsibility to 11 that covered packer. 12 ‘‘(4) SPOT MARKET SALE.— 13 ‘‘(A) IN GENERAL.—The term ‘spot mar- 14 ket sale’ means a purchase and sale of livestock 15 by a covered packer from a nonaffiliated pro- 16 ducer— 17 ‘‘(i) under an agreement that specifies 18 a firm base price that may be equated with 19 a fixed dollar amount on the date on which 20 the agreement is entered into; 21 ‘‘(ii) under which the livestock are 22 slaughtered not more than 14 days after 23 the date on which the agreement is entered 24 into; and 25 VerDate Sep 11 2014 20:09 Apr 17, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S949.IS S949 pbinns on DSKJLVW7X2PROD with BILLS 4 •S 949 IS ‘‘(iii) under which a reasonable com- 1 petitive bidding opportunity exists on the 2 date on which the agreement is entered 3 into, as determined under subparagraph 4 (B). 5 ‘‘(B) REASONABLE COMPETITIVE BIDDING 6 OPPORTUNITY.—For the purposes of subpara- 7 graph (A)(iii), a reasonable competitive bidding 8 opportunity is considered to exist if— 9 ‘‘(i) no written or oral agreement pre- 10 cludes the nonaffiliated producer from so- 11 liciting or receiving bids from other cov- 12 ered packers; and 13 ‘‘(ii) no circumstance, custom, or 14 practice exists that— 15 ‘‘(I) establishes the existence of 16 an implied contract (as determined in 17 accordance with the Uniform Com- 18 mercial Code); and 19 ‘‘(II) precludes the nonaffiliated 20 producer from soliciting or receiving 21 bids from other covered packers. 22 ‘‘(b) GENERAL RULE.—Of the quantity of livestock 23 that is slaughtered by a covered packer during each re- 24 porting week in each plant, the covered packer shall 25 VerDate Sep 11 2014 20:09 Apr 17, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S949.IS S949 pbinns on DSKJLVW7X2PROD with BILLS 5 •S 949 IS slaughter not less than 50 percent of the quantity through 1 spot market sales from nonaffiliated producers. 2 ‘‘(c) NONPREEMPTION.—Notwithstanding section 3 259, this section does not preempt any requirement of a 4 State or political subdivision of a State that requires a 5 covered packer to purchase a greater percentage of live- 6 stock on the spot market than the percentage required 7 under this section. 8 ‘‘(d) RELATIONSHIP TO OTHER PROVISIONS.—Noth- 9 ing in this section affects the interpretation of any other 10 provision of this Act, including section 202.’’. 11 Æ VerDate Sep 11 2014 20:09 Apr 17, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\S949.IS S949 pbinns on DSKJLVW7X2PROD with BILLS