Cattle producers are hurting and have not yet recovered from market volatility resulting from the COVID-19 pandemic and the Tyson plant fire in Holcomb, Kan., in 2019, says U.S. Rep. Dusty Johnson, R-S.D. He says his Price Reform in Cattle Economics, or PRICE, Act identifies 12 consensus proposals for fixing the systemic issues in the cattle market.
Several aspects of the legislation, which has been introduced in the House, support new and expanding meat processors to level the playing field and avoid the supply chain disruptions that took place during the pandemic.
“We want to make sure that we’re paying overtime fees for small processors, that’s going to help them step up and increase their capacity. We want to make sure that USDA Rural Development programs are better situated, better positioned to help people either get feasibility studies or make investment in new capacity,” Johnson says.
Another goal is to make it easier for small meat processing plants that are state inspected to sell across state lines direct to consumers. The PRICE Act additionally helps small processors by authorizing a grant program to ease the cost of federal, state or local food safety regulation and training.
Johnson says the PRICE Act provides strategies for increasing fed cattle price transparency, such as updating the Packers and Stockyards Act to create a Beef Cattle Contract Library. He says that is as important as knowing what price levels the cash market is trading at.
“You know we’ve got these contracts, we talk about how much we need good data for price discovery, I think understanding the terms and conditions of prices in these beef contracts would also do a lot to making sure the producers are in a good position where they can make decisions in the market,” he says.
The legislation also directs the U.S. Department of Agriculture to provide Congress the cost-benefit and feasibility of ways to enhance price discovery through Mandatory Price Reporting, which will be reauthorized next year.
“That gives us some opportunities to make changes. I don’t think anyone thinks the system as it is right now is perfect. I think we have an opportunity to make sure that we’re getting some additional transparency and some additional fairness in this marketplace. We should not let that opportunity get away,” he adds.
The PRICE Act also provides more comprehensive risk management tools, building on recommendations provided by USDA in its “Boxed Beef and Fed Cattle Price Spread Investigation Report." Plus, it allows access to CRP and prevented planting cover crop forage in times of supply chain disruption and requires comprehensive looks at foreign investment in U.S. agriculture through Committee on Foreign Investment in the United States, or CFIUS, review.
So far there’s no companion legislation in the Senate, but the House bill is co-sponsored by several lawmakers including Mike Conaway, a Republican from Texas and the ranking member on the House Agriculture Committee.
“Our nation’s cattle producers are facing unprecedented market challenges due to supply chain disruptions created by the COVID-19 pandemic as well as last year’s fire at the Holcomb, Kan., beef plant,” Conaway says.
Conaway says he’s proud to help introduce this suite of consensus proposals that will improve the marketplace. Other lawmakers signing on in the region include Greg Gianforte (R-Mont.), Jim Hagedorn (R-Minn.), Tom Emmer (R-Minn.) and Jason Smith (R-Mo.).
The PRICE Act is also supported by several farm groups including the National Cattlemen’s Beef Association, U.S. Cattlemen’s Association and the American Farm Bureau Federation. In a news release from Johnson’s office, South Dakota Cattlemen’s Association President Eric Jennings expressed appreciation on behalf of the organization.
“The PRICE Act addresses many of the issues and challenges beef producers face that have been highlighted by the COVID-19 pandemic. In particular, we have long supported the ability to ship our state-inspected beef products across state lines. It’s also critical to find the right solution to livestock marketing issues. The proposed feasibility study for additional cattle processing facilities along with helping smaller beef processing plants increase their producers are steps in the right direction, “ he says.