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 116TH CONGRESS 2D SESSION S. 3693 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 MAY 12, 2020 Mr. GRASSLEY (for himself, Mr. TESTER, Ms. ERNST, Mrs. HYDE-SMITH, Mr. ROUNDS, Ms. SMITH, and Mr. DAINES) introduced the following bill; which was read twice and referred to the Committee on Agriculture, Nu- trition, 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 21:17 May 26, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S3693.IS S3693 pbinns on DSKJLVW7X2PROD with BILLS 2 •S 3693 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 21:17 May 26, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3693.IS S3693 pbinns on DSKJLVW7X2PROD with BILLS 3 •S 3693 IS ‘‘(A) that sells livestock to a packer; 1 ‘‘(B) that has less than 1 percent equity 2 interest in the packer, which packer has less 3 than 1 percent equity interest in the producer; 4 ‘‘(C) that has no officers, directors, em- 5 ployees, or owners that are officers, directors, 6 employees, or owners of the packer; 7 ‘‘(D) that has no fiduciary responsibility to 8 the packer; and 9 ‘‘(E) in which the packer has no equity in- 10 terest. 11 ‘‘(4) SPOT MARKET SALE.— 12 ‘‘(A) IN GENERAL.—The term ‘spot mar- 13 ket sale’ means a purchase and sale of livestock 14 by a packer from a producer— 15 ‘‘(i) under an agreement that specifies 16 a firm base price that may be equated with 17 a fixed dollar amount on the date the 18 agreement is entered into; 19 ‘‘(ii) under which the livestock are 20 slaughtered not more than 14 days after 21 the date on which the agreement is entered 22 into; and 23 ‘‘(iii) under circumstances in which a 24 reasonable competitive bidding opportunity 25 VerDate Sep 11 2014 21:17 May 26, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3693.IS S3693 pbinns on DSKJLVW7X2PROD with BILLS 4 •S 3693 IS exists on the date on which the agreement 1 is entered into. 2 ‘‘(B) REASONABLE COMPETITIVE BIDDING 3 OPPORTUNITY.—For the purposes of subpara- 4 graph (A)(iii), circumstances in which a reason- 5 able competitive bidding opportunity shall be 6 considered to exist if— 7 ‘‘(i) no written or oral agreement pre- 8 cludes the producer from soliciting or re- 9 ceiving bids from other packers; and 10 ‘‘(ii) no circumstance, custom, or 11 practice exists that— 12 ‘‘(I) establishes the existence of 13 an implied contract (as determined in 14 accordance with the Uniform Com- 15 mercial Code); and 16 ‘‘(II) precludes the producer from 17 soliciting or receiving bids from other 18 packers. 19 ‘‘(b) GENERAL RULE.—Of the quantity of livestock 20 that is slaughtered by a covered packer during each re- 21 porting day in each plant, the covered packer shall slaugh- 22 ter not less than 50 percent of the quantity through spot 23 market sales from nonaffiliated producers. 24 VerDate Sep 11 2014 21:17 May 26, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S3693.IS S3693 pbinns on DSKJLVW7X2PROD with BILLS 5 •S 3693 IS ‘‘(c) NONPREEMPTION.—Notwithstanding section 1 259, this section does not preempt any requirement of a 2 State or political subdivision of a State that requires a 3 covered packer to purchase on the spot market a greater 4 percentage of the livestock purchased by the covered pack- 5 er than is required under this section. 6 ‘‘(d) RELATIONSHIP TO OTHER PROVISIONS.—Noth- 7 ing in this section affects the interpretation of any other 8 provision of this Act, including section 202.’’. 9 Æ VerDate Sep 11 2014 21:17 May 26, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\S3693.IS S3693 pbinns on DSKJLVW7X2PROD with BILLS