Sen. Grassley talks newly proposed bill aimed at transparency, price discovery for cattle market

Local News

SIOUX CITY, Iowa (KCAU) — The state of Iowa is home to nearly four million head of cattle according to a 2021 estimation by the USDA.

With recent efforts from Senator Chuck Grassley and others, Iowan producers may have an easier time bringing their commodities to market at a fair price.

Grassley met with members of the Iowa Cattlemen’s Association Monday in Ames to discuss why this newly proposed Cattle Price Discovery and Transparency Act is so necessary for producers. The Iowa Farm Bureau backed up that notion stating:

“Iowa cattle producers welcome this proposal that will help alleviate the discrepancies and concerns in the cattle market that have long plagued the industry.”

If approved, the bill would require the USDA to disclose information about cattle sales to a library system similar to what’s already used in the hogs market, while still maintaining confidentiality of who the buyer and seller is, so that producers can get a better idea of what fair market value is at that time.

It would also limit how many cattle are sold through AMA’s, or alternative marketing agreements, which are essentially contracts between producers and the meat packing giants like Tyson and National. They are the ones who drive the price through formulas and instead the bill would create more cash-negotiated pricing. ICA member Brad Kooima was in attendance to speak with Sen. Grassley Monday and spoke on how the bill will drive beef prices in a more equitable manner.

“This bill has a component in there that establishes a mandatory minimum of how many cattle need to be negotiated for, trying to pair down this percentage of how many cattle are formula-priced compared to how many cattle are cash-priced, trying to improve that number,” said Kooima.

As an independent producer like Craig Moss, regulation for the major meat packers is something he’s wanted to see for years even though it means some form of government involvement.

“There’s been laws on the book for a long time as far as anti-competitive behavior and ignoring those and kind of letting things slide is why we’re to this point. It’s not because we want to ask the government for help,” said Moss. “We need to ensure that there’s still price discovery, that a guy that wants to go out there and try to negotiate a price with his cash has an opportunity to do that.”

Kooima estimates that about 75% of cattle are currently sold via AMA’s, something he hopes will change if the bill passes in Washington D.C. That could be determined soon as the senators involved in proposing this bill are hoping to add it to the Livestock Mandatory Reporting Act reauthorization that sunsets December 3.

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Local News

More Local News

Trending Stories