I 116TH CONGRESS 2D SESSION H. R. 8557 To amend the Packers and Stockyards Act, 1921, to establish a cattle contract library, and for other purposes. IN THE HOUSE OF REPRESENTATIVES OCTOBER 9, 2020 Mrs. HARTZLER introduced the following bill; which was referred to the Committee on Agriculture 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 2020’’. 5 SEC. 2. CATTLE CONTRACT LIBRARY. 6 Title II of the Packers and Stockyards Act, 1921, 7 is amended by inserting after section 223 (7 U.S.C. 198b) 8 the following: 9 VerDate Sep 11 2014 20:28 Oct 31, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H8557.IH H8557 jbell on DSKJLSW7X2PROD with BILLS 2 •HR 8557 IH ‘‘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 20:28 Oct 31, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H8557.IH H8557 jbell on DSKJLSW7X2PROD with BILLS 3 •HR 8557 IH ‘‘(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 20:28 Oct 31, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H8557.IH H8557 jbell on DSKJLSW7X2PROD with BILLS 4 •HR 8557 IH ‘‘(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 30 days after the 25 VerDate Sep 11 2014 20:28 Oct 31, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H8557.IH H8557 jbell on DSKJLSW7X2PROD with BILLS 5 •HR 8557 IH date on which the agreement for purchase is 1 made. 2 ‘‘(9) PACKER.—The term ‘packer’, with respect 3 to a contract, means a packer that slaughters cattle 4 at 1 or more federally inspected processing plants, 5 each of which— 6 ‘‘(A) slaughters an average of not less than 7 125,000 head of cattle per year during the 5 8 calendar years immediately preceding the date 9 on which the contract is executed; or 10 ‘‘(B) has not slaughtered cattle during 11 those immediately preceding 5 calendar years 12 but has the capacity to slaughter not less than 13 125,000 head of cattle per year, as determined 14 by the Secretary. 15 ‘‘(10) PRODUCER.—The term ‘producer’ means 16 a person engaged, directly or through an inter- 17 mediary, in the business of selling cattle to a packer 18 for slaughter. 19 ‘‘(11) STEER.—The term ‘steer’ means a bovine 20 male castrated before reaching sexual maturity. 21 ‘‘(12) TYPE OF CONTRACT.— 22 ‘‘(A) IN GENERAL.—The term ‘type of con- 23 tract’ means the classification of a contract for 24 the purchase of cattle— 25 VerDate Sep 11 2014 20:28 Oct 31, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H8557.IH H8557 jbell on DSKJLSW7X2PROD with BILLS 6 •HR 8557 IH ‘‘(i) into 1 of the categories described 1 in subparagraph (B); and 2 ‘‘(ii) by determining the base price of 3 the cattle. 4 ‘‘(B) CATEGORIES.—The categories for 5 classification of a type of contract are the fol- 6 lowing: 7 ‘‘(i) Formula marketing arrangement. 8 ‘‘(ii) Forward contract. 9 ‘‘(iii) Negotiated grid purchase con- 10 tract. 11 ‘‘SEC. 232. CATTLE CONTRACT LIBRARY. 12 ‘‘(a) IN GENERAL.—Subject to the availability of ap- 13 propriations to carry out this section, the Secretary shall 14 establish and maintain a library or catalog of each type 15 of contract offered by packers to producers for the pur- 16 chase of all or part of the production of the producers 17 of fed cattle (including cattle that are purchased or com- 18 mitted for delivery), including any schedules of premiums 19 or discounts associated with the contract. 20 ‘‘(b) INFORMATION COLLECTION.— 21 ‘‘(1) IN GENERAL.—To maintain the library or 22 catalog established under subsection (a), the Sec- 23 retary shall obtain information from each packer on 24 each type of existing contract of the packer by re- 25 VerDate Sep 11 2014 20:28 Oct 31, 2020 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H8557.IH H8557 jbell on DSKJLSW7X2PROD with BILLS 7 •HR 8557 IH quiring a filing or other form of information submis- 1 sion from each packer. 2 ‘‘(2) CONTRACTED CATTLE NUMBERS.—Infor- 3 mation that shall be submitted to the Secretary by 4 a packer under paragraph (1) shall include, with re- 5 spect to each existing contract of a packer— 6 ‘‘(A) the type of contract; and 7 ‘‘(B) a description of the provisions in the 8 contract that provide for expansion in the num- 9 bers of fed cattle to be delivered under the con- 10 tract for the 6-month and 12-month periods fol- 11 lowing the date of the contract. 12 ‘‘(c) AVAILABILITY OF INFORMATION.— 13 ‘‘(1) IN GENERAL.—The Secretary shall make 14 available to producers and other interested persons 15 information on the types of contracts in the library 16 or catalog established under subsection (a), includ- 17 ing notice (on a real-time basis, if practicable) of the 18 types of contracts that are being offered by packers 19 to, and are open to acceptance by, producers for the 20 purchase of fed cattle. 21 ‘‘(2) MONTHLY REPORT.— 22 ‘‘(A) IN GENERAL.—Beginning 30 days 23 after the library or catalog is established under 24 subsection (a), the Secretary shall make the in- 25 VerDate Sep 11 2014 20:28 Oct 31, 2020 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H8557.IH H8557 jbell on DSKJLSW7X2PROD with BILLS 8 •HR 8557 IH formation obtained each month in the library or 1 catalog available in a monthly report to pro- 2 ducers and other interested persons. 3 ‘‘(B) CONTENTS.—The monthly report de- 4 scribed in subparagraph (A) shall include— 5 ‘‘(i) an estimate by the Secretary of 6 the total number of fed cattle committed 7 under contracts for delivery to packers 8 within the 6-month and 12-month periods 9 following the date of the report, organized 10 by reporting region and type of contract; 11 and 12 ‘‘(ii) an estimate by the Secretary of 13 the total maximum number of fed cattle 14 that may be delivered within the 6-month 15 and 12-month periods following the date of 16 the report, based on the provisions de- 17 scribed in subsection (c)(2)(B) in existing 18 contracts, organized by reporting region 19 and type of contract. 20 ‘‘(d) MAINTENANCE OF LIBRARY OR CATALOG.—In- 21 formation in the library or catalog established under sub- 22 section (a) about types of contracts that are no longer of- 23 fered or in use shall be removed from the library or cata- 24 log. 25 VerDate Sep 11 2014 20:28 Oct 31, 2020 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H8557.IH H8557 jbell on DSKJLSW7X2PROD with BILLS 9 •HR 8557 IH ‘‘(e) CONFIDENTIALITY.—The reporting require- 1 ments for packers under this section shall be subject to 2 the confidentiality protections provided under section 251 3 of the Agricultural Marketing Act of 1946 (7 U.S.C. 4 1636). 5 ‘‘(f) VIOLATIONS.—It shall be unlawful and a viola- 6 tion of this Act for any packer to willfully fail or refuse— 7 ‘‘(1) to provide to the Secretary accurate infor- 8 mation required under this section; or 9 ‘‘(2) to comply with any other requirement of 10 this section. 11 ‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There 12 are authorized to be appropriated to the Secretary such 13 sums as are necessary to carry out this section.’’. 14 SEC. 3. CASH MARKET ACQUISITION OF CATTLE. 15 Title II of the Packers and Stockyards Act, 1921 (7 16 U.S.C. 191 et seq.) (as amended by section 2), is amended 17 by adding at the end the following: 18 ‘‘Subtitle D—Cash Market 19 Acquisition of Cattle 20 ‘‘SEC. 241. DEFINITIONS. 21 ‘‘In this subtitle: 22 ‘‘(1) NEGOTIATED GRID PURCHASE.—The term 23 ‘negotiated grid purchase’ means a purchase of cat- 24 tle by a packer from a producer under which— 25 VerDate Sep 11 2014 20:28 Oct 31, 2020 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H8557.IH H8557 jbell on DSKJLSW7X2PROD with BILLS 10 •HR 8557 IH ‘‘(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 cattle are scheduled for delivery 4 to the packer not more than 14 days after the 5 date on which the agreement for purchase is 6 made. 7 ‘‘(2) NEGOTIATED PURCHASE.—The term ‘ne- 8 gotiated purchase’ means a purchase of cattle (com- 9 monly known as a ‘cash’ or ‘spot market’ purchase) 10 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 cattle are scheduled for delivery 16 to the packer not more than 30 days after the 17 date on which the agreement for purchase is 18 made. 19 ‘‘(3) PACKER.—The term ‘packer’ does not in- 20 clude a packer that owns only 1 livestock processing 21 plant. 22 ‘‘(4) PRODUCER.—The term ‘producer’ has the 23 meaning given the term in section 212 of the Agri- 24 cultural Marketing Act of 1946 (7 U.S.C. 1635a). 25 VerDate Sep 11 2014 20:28 Oct 31, 2020 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H8557.IH H8557 jbell on DSKJLSW7X2PROD with BILLS 11 •HR 8557 IH ‘‘(5) REGIONAL MANDATORY MINIMUM.—The 1 term ‘regional mandatory minimum’ means, for each 2 reporting region (as designated by the Agricultural 3 Marketing Service), of the quantity of cattle pur- 4 chased for slaughter by a packer in that region each 5 slaughter week, the minimum percentage of such 6 cattle that is required to be purchased through nego- 7 tiated purchases or negotiated grid purchases from 8 producers. 9 ‘‘(6) SLAUGHTER WEEK.—The term ‘slaughter 10 week’ has the meaning given the term ‘current 11 slaughter week’ in section 212 of the Agricultural 12 Marketing Act of 1946 (7 U.S.C. 1635a). 13 ‘‘SEC. 242. REGIONAL MANDATORY MINIMUMS. 14 ‘‘(a) IN GENERAL.—Not later than 1 year after the 15 date of enactment of this subtitle, the Secretary shall es- 16 tablish regional mandatory minimums for the purpose of 17 enhancing price discovery and transparency for cattle 18 market participants. 19 ‘‘(b) PUBLIC INPUT.—In carrying out subsection (a), 20 the Secretary shall make each proposed regional manda- 21 tory minimum subject to a notice and comment period. 22 ‘‘(c) CONSIDERATIONS.—In carrying out subsection 23 (a) for each reporting region, the Secretary shall consider 24 the following factors: 25 VerDate Sep 11 2014 20:28 Oct 31, 2020 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H8557.IH H8557 jbell on DSKJLSW7X2PROD with BILLS 12 •HR 8557 IH ‘‘(1) The number of packers in the reporting re- 1 gion. 2 ‘‘(2) The availability of cattle in the reporting 3 region. 4 ‘‘(3) Pre-existing contractual arrangements of 5 packers in the reporting region. 6 ‘‘(d) ENFORCEMENT.—On establishing regional man- 7 datory minimums under subsection (a), the Secretary 8 shall— 9 ‘‘(1) regularly monitor compliance by packers 10 with those regional mandatory minimums; and 11 ‘‘(2) enforce this section in accordance with sec- 12 tion 203.’’. 13 SEC. 4. 14-DAY CATTLE SLAUGHTER. 14 (a) DEFINITION OF CATTLE COMMITTED.—Section 15 221(1) of the Agricultural Marketing Act of 1946 (7 16 U.S.C. 1635d(1)) is amended by striking ‘‘7-day’’ and in- 17 serting ‘‘14-day’’. 18 (b) DAILY REPORTING.—Section 222(c)(1) of the 19 Agricultural Marketing Act of 1946 (7 U.S.C. 20 1635e(c)(1)) is amended by adding at the end the fol- 21 lowing: 22 ‘‘(E) Packer purchase commitments, which 23 shall be equal to the number of cattle, orga- 24 nized by cattle type, scheduled for delivery to a 25 VerDate Sep 11 2014 20:28 Oct 31, 2020 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H8557.IH H8557 jbell on DSKJLSW7X2PROD with BILLS 13 •HR 8557 IH packer for slaughter for each of the next 14 cal- 1 endar days.’’. 2 SEC. 5. PUBLIC AVAILABILITY OF INFORMATION. 3 Section 251(a) of the Agricultural Marketing Act of 4 [Text truncated for display. Full text available on Congress.gov.]