From concerns about broadband to rural jobs and health care, there are dozens of different topics that come up on a daily basis in Sen. Roger Marshall’s office. However, in recent months, the calls from his Kansas constituents about cattle markets have been topping the list.
“My phone is blowing up with concerns over price divergence issues in the meat industry,” he told me during a recent interview in his Capitol Hill office.
“The people I grew up with are fifth sixth, seventh generation ranchers - people that I've known for my whole life — and other folks, acquaintances that I've known for 10 or 20 years, are just screaming concern that they can't make a living,” he added. “These ranchers are sharp business people. They’re not heavily leveraged, and they’ve always done it right. So, if these folks can’t make a living doing it, then no one can."
It’s the same situation in Mississippi for Sen. Cindy Hyde Smith.
“We’re hearing from all of our producers about the packers and the amount of money they are making per head on cattle right now,” said Hyde-Smith. It’s a topic that’s surfacing in every state, she added.
The topic has surfaced many times in the past but seems to have gained a new sense of urgency. And a May meeting between six cattle industry groups — which produced a list of action items for further consideration — showed lawmakers that a group of fiercely independent cowboys might actually be able to reach some consensus.
“It’s pretty phenomenal. I’ve never seen it in my lifetime.” noted Hyde-Smith about the cattlemen’s meeting. “I think they are willing to work with us and come up with a solution. We all just want a fair, competitive market.”
The issue was front and center at the Senate Ag Committee’s confirmation hearing last month for USDA General Counsel-nominee Janie Simms Hipp.
Several GOP senators led by the committee’s ranking member, John Boozman, brought up the pricing issue.
USDA needs “to be very connected, if you will, with DOJ” as the issue is reviewed, Hipp told committee members about her desire to work with the Department of Justice.
“I've been hearing these issues for as long as I've been an agricultural lawyer, and they seem to ebb and flow in terms of spikes of concern, but I believe that I’m seeing a bipartisan approach to this issue that has risen to level I haven't seen it before,” Hipp told Sen. Deb Fischer, R-Neb.
Boozman said it was time for a hearing, and Chairwoman Debbie Stabenow, D-Mich., said she agreed that the committee needs to understand “what been happening with the supply chain in the livestock industry” and to “look for solutions.”
She told Agri-Pulse after the hearing that many committee members have “serious concerns. And so, we want to … do a deep dive on this.”
The nation’s largest beef producer group outlined its top near-term policy goals in a recent letter to lawmakers that calls for reauthorization of the mandatory livestock price reporting system with at least one new provision to help producers with marketplace leverage.
In the five-page document sent to the leaders of the House and Senate Ag Committees, the National Cattlemen’s Beef Association and 37 of its state affiliates also called for expanded processing capacity, a fix to the labor squeeze at existing packing plants, and better guidance for what constitutes a “product of the USA.”
“We’ve been seeing increased attention being given to cattle market issues by folks on Capitol Hill,” NCBA lobbyist Tanner Beymer told Agri-Pulse. “We wanted to go on the record outlining the areas of critical concern for NCBA and the cattle industry in the context of all the discussions that are going on right now.”
Beymer said it’s unclear at this point what a hearing, should one even take place, would focus on. A broad oversight gathering could be in play, but there’s also the possibility a discussion could take the form of a committee markup of a bill to reauthorize Livestock Mandatory Reporting, which will require action by the end of its current authorization in September.
Sen. Chuck Grassley, R-Iowa, has been pushing for the Ag Committee to take up a bill he introduced to mandate changes in beef markets, but was unsuccessful in convincing former committee Chairman Pat Roberts, R-Kan., to take up the issue. Now, he says Stabenow has told him she will “see what can be done for a hearing.”
While the livestock market reporting bill could prove to be a vehicle for some of the reform mechanisms, adding additional provisions to that effort could prove to be a delicate balancing act. It’s a bill both producers and packers will want to see passed, but that desire could also keep some language off the table in negotiations. The reporting system is currently operating under a one-year extension rather than the customary five-year reauthorization law.
“Our position has been ‘don’t let the program expire,'” Beymer said. “It’s too critical of a market transparency tool to be allowed to expire and we don’t have access to that information all the sudden. I can’t think of a single thing that would be of greater impact to market transparency than not having access to that information.”
The reporting system provides tons of livestock pricing information for cash transactions in the beef, pork and poultry sectors. A recent gathering of beef producer groups firmed up a desire to also produce a contract library that would include information on formula trades taking place in the industry. NCBA’s letter voiced its support of a contract library “so that producers can compare their marketing methods to those of others.”
The organization also spells out a desire to build out more processing infrastructure and make better utilization of the capacity already in place. A provision in a year-end spending measure in December created grants for state-inspected facilities to become federally inspected, thus allowing their products to be shipped across state lines; NCBA says that funding should be distributed “without delay.”
“The problem with this is that no one has yet to show me, here's the fix, here's the magic bullet,” Marshall emphasized. “This has been a problem for decades because we have four packing plants that control 80 or 90% of the of the business, and then it's been exacerbated by COVID.”
As far as potential solutions, Marshall said “everything's on the table.
“Certainly, there’s an opportunity for whatever we can do to encourage more capacity and packing plants. But we really need competition as well.” He said the committee will likely consider legislation that would make it easier to sell meat across state lines and perhaps provide smaller meat processors with some type of tax credit to boost expansion.
Editor’s note: Philip Brasher and Spencer Chase contributed to this column. Wyant is president and founder of Agri-Pulse Communications Inc. For more news, go to www.Agri-Pulse.com.