On Tuesday May 12, Senator Rounds joined a bipartisan coalition of senators introducing legislation to increase market competition and transparency within the fed cattle market. The South Dakota Stockgrowers fully support this effort to restore greater price discovery for harvest ready cattle and realize the trickle-down effect this will have on the entire supply chain.
This bill as introduced will require each meat packing facility that harvests over a certain number of cattle each year and must already participate in Mandatory Price Reporting daily, to ascertain at least 50% of the cattle they buy weekly through a negotiated cash deal and take delivery of those animals within 14 days.
“Even before COVID-19 hit our country, we had serious concerns about price discrepancies in the cattle market,” said Rounds. “Cattle prices in South Dakota are affected by the average negotiated cash trade nationwide which has dropped dramatically over the past 15 years. The decrease in cash trades has reduced price discovery. In order to establish a fair cattle market for cattle producers, real, vigorous price discovery is needed. Our legislation will provide much-needed transparency to the cattle industry to make sure producers are paid fairly for their product. This is only one piece of what needs to be fixed in the cattle market, but it’s an important step forward.”
There has been a recent grass-roots push for a minimum cash trade mandate as more people have taken note of how much the industry has moved towards private formula deals with no price reporting over the past several years. “We support this bill and have publicly supported the “30/14 push as well,” said SDSGA President, Scott Edoff, eluding the to recent push by many organizations to have a 30% minimum cash trade per plant and 14 day delivery window. “Any mandated increase in cash trade can only help our independent producers. The fact that these senators think we can get 50% is even better.” He added.
The 50/14 bill as introduced will likely get tied to the reauthorization of the Mandatory Price Reporting Act that will be up for a vote again this fall. “We understand this isn’t a done deal and will undoubtedly go through much negotiation in the Senate Ag Committee,” said SDSGA Executive Director James Halverson. “We will continue to lead the fight to get a bill passed with a mandated cash trade set as high as possible. We are fervently working with Senator Thune as well and believe he will be supportive as we move forward,” He added. Senator Chuck Grassely (R-IA), a key member of the Senate Agriculture Committee, led the introduction of the 50/14 bill. He has been championing this issue for many years. Senator Grassley was joined by Senators Mike Rounds (R-SD), Steve Daines (R-MT), Tina Smith (D-MN), Cindy Hyde-Smith (R-MS), Joni Ernst (R-IA), and Jon Tester (D-MT). Senator Grassley commented, “The lack of transparency in cattle pricing isn’t a new problem, but the negative effects of the fire in Holcomb, Kansas, and COVID-19 have highlighted the need for additional price transparency measures to ensure producers are getting a fair price for the hard work of raising cattle. Food doesn’t come from the grocery store, it comes from tens of thousands of farmers and independent producers who work day and night to ensure families across the country have an abundant supply of food. Independent producers deserve to be paid what their worth.”