Federal

Cattle Price Discovery and Transparency Act of 2023

Source: Congress.gov · 4,425 words in original text

What This Bill Does

This bill changes how cattle are bought and sold between meat processing companies (called packers) and cattle farmers. It creates new rules requiring packers to buy a certain percentage of cattle through direct negotiations rather than contracts, and establishes a public library showing what types of contracts packers offer to farmers. The bill also requires packers to report information about cattle scheduled for slaughter and creates penalties for companies that do not follow the new rules. ##

Who It Affects

- Meat processing companies (packers) that slaughter at least 5 percent of the nation's fed cattle - Cattle farmers and ranchers who sell cattle to packers - The U.S. Department of Agriculture - Producers and other people interested in cattle market information - Cattle feeding regions across the continental United States ##

Key Provisions

- Packers must establish a public library cataloging all types of contracts they use to buy cattle from farmers, including contract terms, premiums, discounts, and delivery requirements within 120 days of the bill becoming law (Sec. 6) - Corporate officers at packing plants must report daily by 10 a.m. Central Time on information from the previous business day about the number of cattle scheduled for delivery to the plant over the next 14 calendar days (Sec. 3) - The Secretary of Agriculture must determine how quickly carcass weight data can be publicly reported and then begin reporting it within that timeframe, no later than 360 days total after the bill becomes law (Sec. 4) - Within 2 years, the Secretary must establish 5 to 7 geographic regions and require covered packers to purchase a minimum percentage of cattle through direct negotiations or approved trading platforms, with initial minimums based on historical negotiation levels between January 1, 2020 and January 1, 2022 but not exceeding 50 percent (Sec. 7) - Packers that willfully fail to provide accurate contract information to the Secretary or violate mandatory minimum requirements face civil penalties of up to $90,000 per violation, adjusted for inflation, with each week of continued violation counting as a separate violation (Sec. 7) ##

What Changes

If this bill becomes law, meat packers will be required to publicly disclose the contracts they offer to cattle farmers instead of keeping them private. Farmers will be able to see what contracts other packers are offering in a public monthly report. Packers will be required to buy a certain percentage of their cattle directly from farmers through price negotiations rather than using pre-set formulas. This percentage will vary by geographic region but will be based on how much negotiated trading happened in that region between 2020 and 2022. The government will publish new cattle slaughter reports showing what cattle are scheduled for delivery to processing plants over the next 14 days, and will begin publishing average carcass weight data on a faster schedule. Packers that do not follow these new rules can be fined up to $90,000 per violation. ##

Important Definitions

- **Fed cattle**: A steer or heifer finished on a diet of roughage and feed concentrates such as grains, protein meal, grass, and other nutrient-rich feeds, before slaughter (Sec. 2) - **Approved pricing mechanism**: A purchase of fed cattle made through a negotiated purchase, negotiated grid purchase, at a stockyard, or through a trading system where multiple buyers and sellers regularly make and accept bids and offers (Sec. 2) - **Covered packer**: A meat processing company that slaughtered an average of at least 5 percent of the nation's fed cattle during the previous 5 calendar years (Sec. 2) - **Negotiated grid purchase**: A purchase involving negotiation of a base price with premiums added and discounts subtracted based on seller-buyer agreement, with cattle scheduled for delivery within 14 days of commitment (Sec. 2) - **Covered contract**: Any agreement, written or oral, between a packer and a farmer for buying fed cattle for slaughter, except for negotiated purchases (Sec. 2) - **Mandatory minimum**: The minimum percentage of fed cattle a covered packer must purchase through approved pricing mechanisms from farmers at each processing plant (Sec. 2) - **Steer**: A male bovine castrated before reaching sexual maturity (Sec. 2) - **Heifer**: A female bovine that has not given birth to a calf (Sec. 2) ##

Effective Date

Not specified in bill text

II 118TH CONGRESS 1ST SESSION S. 228 To amend the Agricultural Marketing Act of 1946 to establish a cattle contract library, and for other purposes. IN THE SENATE OF THE UNITED STATES FEBRUARY 2, 2023 Mrs. FISCHER (for herself, Mr. GRASSLEY, Mr. TESTER, Mr. WYDEN, Ms. ERNST, Mr. BRAUN, Ms. SMITH, Mrs. HYDE-SMITH, Mr. DAINES, Mr. CASSIDY, Mr. LUJA´N, Mr. DURBIN, Mr. HEINRICH, Mr. WARNOCK, Mr. BLUMENTHAL, Mrs. GILLIBRAND, Ms. LUMMIS, Mr. HAWLEY, Mr. BROWN, Mr. ROUNDS, Mr. KENNEDY, and Mr. RICKETTS) introduced the following bill; which was read twice and referred to the Committee on Ag- riculture, Nutrition, and Forestry A BILL To amend the Agricultural Marketing Act of 1946 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 Price Discovery 4 and Transparency Act of 2023’’. 5 SEC. 2. DEFINITIONS. 6 (a) IN GENERAL.—Section 212 of the Agricultural 7 Marketing Act of 1946 (7 U.S.C. 1635a) is amended— 8 VerDate Sep 11 2014 22:17 Feb 13, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S228.IS S228 kjohnson on DSK79L0C42PROD with BILLS 2 •S 228 IS (1) in paragraph (5), by striking ‘‘cattle,’’ and 1 inserting ‘‘cattle (including fed cattle),’’; 2 (2) by redesignating paragraphs (1) through 3 (14) as paragraphs (2), (3), (4), (6) through (8), 4 (10), and (12) through (18), respectively; 5 (3) by inserting before paragraph (2) (as so re- 6 designated) the following: 7 ‘‘(1) APPROVED PRICING MECHANISM.—The 8 term ‘approved pricing mechanism’ means a pur- 9 chase of fed cattle made— 10 ‘‘(A) through a negotiated purchase; 11 ‘‘(B) through a negotiated grid purchase; 12 ‘‘(C) at a stockyard (as defined in section 13 302 of the Packers and Stockyards Act, 1921 14 (7 U.S.C. 202)); or 15 ‘‘(D) through a trading system or platform 16 for the purchase or sale of cattle, or for an ar- 17 rangement to purchase or sell cattle, through 18 any means in which multiple buyer and seller 19 participants have the ability to, and regularly 20 and consistently, make and accept bids and of- 21 fers on or at the trading system or platform.’’; 22 (4) by inserting after paragraph (4) (as so re- 23 designated) the following: 24 VerDate Sep 11 2014 22:17 Feb 13, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S228.IS S228 kjohnson on DSK79L0C42PROD with BILLS 3 •S 228 IS ‘‘(5) FED CATTLE.—The term ‘fed cattle’ 1 means a steer or heifer that has been finished on a 2 ration of roughage and feed concentrates, such as 3 grains, protein meal, grass (forage), and other nutri- 4 ent-rich feeds, prior to slaughter.’’; 5 (5) by inserting after paragraph (8) (as so re- 6 designated) the following: 7 ‘‘(9) MANDATORY MINIMUM.—The term ‘man- 8 datory minimum’ means, of the quantity of fed cat- 9 tle purchased for slaughter by a covered packer (as 10 defined in section 221) for each processing plant, 11 the minimum percentage of such cattle that are re- 12 quired to be purchased through approved pricing 13 mechanisms from producers that are not packers.’’; 14 and 15 (6) by inserting after paragraph (10) (as so re- 16 designated) the following: 17 ‘‘(11) NEGOTIATED GRID PURCHASE.—The 18 term ‘negotiated grid purchase’, with respect to cat- 19 tle, means a purchase— 20 ‘‘(A) involving the negotiation of a base 21 price from which premiums are added and dis- 22 counts are subtracted, determined by seller- 23 buyer interaction and agreement on a delivery 24 day; and 25 VerDate Sep 11 2014 22:17 Feb 13, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S228.IS S228 kjohnson on DSK79L0C42PROD with BILLS 4 •S 228 IS ‘‘(B) under which the cattle are scheduled 1 for delivery to the packer not later than 14 2 days after the date on which the cattle are com- 3 mitted to the packer.’’. 4 (b) CATTLE REPORTING DEFINITIONS.—Section 221 5 of the Agricultural Marketing Act of 1946 (7 U.S.C. 6 1635d) is amended— 7 (1) in paragraph (1), by striking ‘‘7-day’’ and 8 inserting ‘‘14-day’’; 9 (2) in paragraph (8)(B), by striking ‘‘market’’ 10 and inserting ‘‘marketing’’; 11 (3) by redesignating paragraphs (3), (4), (5), 12 (6), (7), and (8) as paragraphs (5), (6), (8), (9), 13 (11), and (12), respectively; 14 (4) by inserting after paragraph (2) the fol- 15 lowing: 16 ‘‘(3) COVERED CONTRACT.— 17 ‘‘(A) IN GENERAL.—The term ‘covered 18 contract’ means any agreement, written or oral, 19 between a packer and a producer for the pur- 20 chase of fed cattle for slaughter. 21 ‘‘(B) EXCLUSION.—The term ‘covered con- 22 tract’ does not include a contract for a nego- 23 tiated purchase. 24 VerDate Sep 11 2014 22:17 Feb 13, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S228.IS S228 kjohnson on DSK79L0C42PROD with BILLS 5 •S 228 IS ‘‘(4) COVERED PACKER.—The term ‘covered 1 packer’ means a packer that has slaughtered during 2 the immediately preceding 5 calendar years an aver- 3 age of not less than 5 percent of the number of fed 4 cattle slaughtered nationally during the immediately 5 preceding 5 calendar years.’’; 6 (5) by inserting after paragraph (6) (as so re- 7 designated) the following: 8 ‘‘(7) HEIFER.—The term ‘heifer’ means a bo- 9 vine female that has not given birth to a calf.’’; and 10 (6) by inserting after paragraph (9) (as so re- 11 designated) the following: 12 ‘‘(10) STEER.—The term ‘steer’ means a bovine 13 male castrated before reaching sexual maturity.’’. 14 SEC. 3. 14-DAY CATTLE SLAUGHTER REPORT. 15 Section 222(c) of the Agricultural Marketing Act of 16 1946 (7 U.S.C. 1635e(c)) is amended— 17 (1) in paragraph (1)— 18 (A) by striking subparagraphs (B) and 19 (C); and 20 (B) by redesignating subparagraph (D) as 21 subparagraph (B); 22 (2) in paragraph (2), by striking ‘‘the informa- 23 tion’’ and inserting ‘‘information reported under this 24 subsection’’; 25 VerDate Sep 11 2014 22:17 Feb 13, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S228.IS S228 kjohnson on DSK79L0C42PROD with BILLS 6 •S 228 IS (3) by redesignating paragraph (2) as para- 1 graph (3); and 2 (4) by inserting after paragraph (1) the fol- 3 lowing: 4 ‘‘(2) PRIOR DAY REPORTING.— 5 ‘‘(A) IN GENERAL.—The corporate officers 6 or officially designated representatives of each 7 packer processing plant shall report to the Sec- 8 retary, for each business day of the packer 9 processing plant, not later than 10:00 a.m. 10 Central Time on each reporting day, the infor- 11 mation from the prior business day described in 12 subparagraph (B). 13 ‘‘(B) INFORMATION REQUIRED.—The in- 14 formation required under subparagraph (A) 15 shall be, with respect to the prior business day, 16 the number of cattle scheduled for delivery to a 17 packer processing plant for slaughter for each 18 of the next 14 calendar days.’’. 19 SEC. 4. EXPEDITED CARCASS WEIGHTS REPORTING. 20 Section 222 of the Agricultural Marketing Act of 21 1946 (7 U.S.C. 1635e) is amended by adding at the end 22 the following: 23 ‘‘(f) EXPEDITED CARCASS WEIGHTS.— 24 VerDate Sep 11 2014 22:17 Feb 13, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S228.IS S228 kjohnson on DSK79L0C42PROD with BILLS 7 •S 228 IS ‘‘(1) DETERMINATION.—Not later than 180 1 days after the date of enactment of the Cattle Price 2 Discovery and Transparency Act of 2023, the Sec- 3 retary shall determine the minimum amount of time 4 needed by the Secretary to publicly report the daily 5 average carcass weight of cattle slaughtered by pack- 6 er processing plants. 7 ‘‘(2) REPORTING.—Not later than 180 days 8 after the Secretary has made a determination under 9 paragraph (1), the Secretary shall begin publicly re- 10 porting the information described in that paragraph 11 within the time determined under that paragraph.’’. 12 SEC. 5. MANDATORY REPORTING OF CUTOUT YIELD. 13 Section 223 of the Agricultural Marketing Act of 14 1946 (7 U.S.C. 1635f) is amended— 15 (1) in subsection (a)— 16 (A) in the subsection heading, by striking 17 ‘‘DAILY REPORTING’’ and inserting ‘‘IN GEN- 18 ERAL’’; 19 (B) in paragraph (3)— 20 (i) in subparagraph (C), by striking 21 the period at the end and inserting ‘‘; 22 and’’; and 23 (ii) by redesignating subparagraphs 24 (A) through (C) as clauses (i) through 25 VerDate Sep 11 2014 22:17 Feb 13, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S228.IS S228 kjohnson on DSK79L0C42PROD with BILLS 8 •S 228 IS (iii), respectively, and indenting appro- 1 priately; 2 (C) by redesignating paragraphs (1) 3 through (3) as subparagraphs (A) through (C), 4 respectively, and indenting appropriately; 5 (D) in the matter preceding subparagraph 6 (A) (as so redesignated), by striking ‘‘Secretary 7 at least’’ and inserting the following: ‘‘Sec- 8 retary— 9 ‘‘(1) at least’’; and 10 (E) by adding at the end the following: 11 ‘‘(2) at least once each year, at a time deter- 12 mined by the Secretary, cutout yield data.’’; and 13 (2) in subsection (b)— 14 (A) by striking ‘‘the information required 15 to be reported under subsection (a)’’; and 16 (B) by striking ‘‘day.’’ and inserting the 17 following: ‘‘day— 18 ‘‘(1) the information required to be reported 19 under subsection (a)(1); and 20 ‘‘(2) a composite price using the information re- 21 quired to be reported under paragraphs (1) and (2) 22 of subsection (a).’’. 23 VerDate Sep 11 2014 22:17 Feb 13, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S228.IS S228 kjohnson on DSK79L0C42PROD with BILLS 9 •S 228 IS SEC. 6. CATTLE CONTRACT LIBRARY. 1 The Agricultural Marketing Act of 1946 is amend- 2 ed— 3 (1) by redesignating section 223 (7 U.S.C. 4 1635f) as section 224; and 5 (2) by inserting after section 222 (7 U.S.C. 6 1635e) the following: 7 ‘‘SEC. 223. CATTLE CONTRACT LIBRARY. 8 ‘‘(a) IN GENERAL.—Not later than 120 days after 9 the date of enactment of the Cattle Price Discovery and 10 Transparency Act of 2023, the Secretary shall establish 11 and maintain, through the Livestock Mandatory Price Re- 12 porting program, a library or catalog (referred to in this 13 section as the ‘library’), of each type of covered contract 14 entered into between packers and producers for the pur- 15 chase of fed cattle (including cattle that are purchased or 16 committed for delivery), including any schedules of pre- 17 miums or discounts associated with the covered contract. 18 ‘‘(b) INFORMATION COLLECTION.— 19 ‘‘(1) IN GENERAL.—To maintain the library, 20 the Secretary shall obtain information from each 21 packer on each type of existing covered contract of 22 the packer by requiring a filing or other form of in- 23 formation submission from each packer. 24 ‘‘(2) CONTRACT INFORMATION.—Information 25 submitted to the Secretary by a packer under para- 26 VerDate Sep 11 2014 22:17 Feb 13, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S228.IS S228 kjohnson on DSK79L0C42PROD with BILLS 10 •S 228 IS graph (1) shall include, with respect to each existing 1 covered contract of a packer— 2 ‘‘(A) the type of contract; 3 ‘‘(B) the duration of the contract; 4 ‘‘(C) a summary of the contract terms; 5 ‘‘(D) provisions in the contract that may 6 affect the price of cattle covered by the con- 7 tract, including schedules, premiums and dis- 8 counts, financing and risk-sharing arrange- 9 ments, and transportation arrangements; 10 ‘‘(E) the total number of cattle covered by 11 the contract solely committed to the packer 12 each week within the 6-month and 12-month 13 periods following the date of the contract and 14 the percentage of cattle each week that may 15 vary for delivery or nondelivery at the discretion 16 of the packer, organized by reporting region or 17 in such other manner as the Secretary may de- 18 termine; 19 ‘‘(F) in the case of a contract in which a 20 specific number of cattle are not solely com- 21 mitted to the packer— 22 ‘‘(i) an indication that the contract is 23 an open commitment; and 24 VerDate Sep 11 2014 22:17 Feb 13, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S228.IS S228 kjohnson on DSK79L0C42PROD with BILLS 11 •S 228 IS ‘‘(ii) any weekly, monthly, annual, or 1 other limitations or requirements on the 2 number of cattle that may be delivered to 3 the packer under the contract, including 4 the percentage of cattle that may vary for 5 delivery or nondelivery in a given time pe- 6 riod at the discretion of the packer; and 7 ‘‘(G) 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 publicly available to producers and other interested 15 persons information (including the information de- 16 scribed in subsection (b)(2)), in a user-friendly for- 17 mat, on the types of covered contracts in the library, 18 including notice (on a real-time basis, if practicable) 19 of the types of covered contracts that are entered 20 into between packers and producers for the purchase 21 of fed cattle. 22 ‘‘(2) MONTHLY REPORT.— 23 ‘‘(A) IN GENERAL.—Beginning 30 days 24 after the library is established, the Secretary 25 VerDate Sep 11 2014 22:17 Feb 13, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S228.IS S228 kjohnson on DSK79L0C42PROD with BILLS 12 •S 228 IS shall make the information obtained each 1 month in the library available in a monthly re- 2 port to producers and other interested persons. 3 ‘‘(B) CONTENTS.—The monthly report de- 4 scribed in subparagraph (A) shall include— 5 ‘‘(i) based on the information collected 6 under subsection (b)(2)(E), an estimate by 7 the Secretary of the total number of fed 8 cattle committed under covered contracts 9 for delivery to packers within the 6-month 10 and 12-month periods following the date of 11 the report, organized by reporting region 12 and type of contract; 13 ‘‘(ii) based on the information col- 14 lected under subsection (b)(2)(F), the 15 number of covered contracts with an open 16 commitment and any weekly, monthly, an- 17 nual, or other limitations or requirements 18 on the number of cattle that may be deliv- 19 ered under such contracts, including the 20 percentage of cattle that may vary for de- 21 livery or nondelivery in a given time period 22 at the discretion of the packer; and 23 ‘‘(iii) based on the information col- 24 lected under subsection (b)(2)(G), an esti- 25 VerDate Sep 11 2014 22:17 Feb 13, 2023 Jkt 039200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S228.IS S228 kjohnson on DSK79L0C42PROD with BILLS 13 •S 228 IS mate [Text truncated for display. Full text available on Congress.gov.]

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