Optimizing the Cattle Market Act of 2021
This bill directs the Department of Agriculture (USDA) to establish and maintain a library or catalog of each type of contract offered by packers to producers for the purchase of all or part of the production of fed cattle (including cattle that are purchased or committed for delivery). Fed cattle means a steer or heifer that has been feeding on a ration of roughage and feed concentrates prior to slaughter, including grains, protein meal, grass, and other nutrient-rich feeds.
USDA must create and maintain a publicly available library or catalog of the types of contracts that are being offered by packers to, and are open to acceptance by, producers for the purchase of fed cattle. It must also conduct educational outreach activities for producers on how best to use the library or catalog.
Additionally, USDA must also establish (1) regional mandatory minimum thresholds to enhance price discovery and transparency for cattle market participants; and (2) methods for establishing such thresholds, which shall be publicly available.
Further, the bill revises daily reporting requirements for packer processing plants by requiring them to include the number of cattle scheduled to be delivered for slaughter each day for the subsequent 14 days.
[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3766 Introduced in House (IH)]
<DOC>
117th CONGRESS
1st Session
H. R. 3766
To amend the Packers and Stockyards Act, 1921, to establish a cattle
contract library, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 8, 2021
Mrs. Hartzler (for herself and Mr. Cleaver) introduced the following
bill; which was referred to the Committee on Agriculture
_______________________________________________________________________
A BILL
To amend the Packers and Stockyards Act, 1921, to establish a cattle
contract library, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Optimizing the Cattle Market Act of
2021''.
SEC. 2. SENSE OF CONGRESS.
It is the sense of the Congress that there is a need for expedited
reauthorization of the Livestock Mandatory Reporting program of the
Department of Agriculture, including formula base prices subject to the
same reporting requirements as negotiated cash and the creation of a
contract library.
SEC. 3. CATTLE CONTRACT LIBRARY.
(a) In General.--Title II of the Packers and Stockyards Act, 1921,
is amended by inserting after section 223 (7 U.S.C. 198b) the
following:
``Subtitle C--Cattle Contracts
``SEC. 231. DEFINITIONS.
``In this subtitle:
``(1) Base price.--The term `base price' means the price
paid for cattle delivered to a packer, before application of
any premiums or discounts, expressed in dollars per hundred
pounds of carcass weight.
``(2) Contract.--
``(A) In general.--Subject to subparagraph (B), the
term `contract' means any agreement, written or oral,
between a packer and a producer for the purchase of fed
cattle for slaughter.
``(B) Exclusion.--The term `contract' does not
include a contract for a negotiated purchase.
``(3) Fed cattle.--The term `fed cattle' means a steer or
heifer that has been finished on a ration of roughage and feed
concentrates, such as grains, protein meal, grass (forage), and
other nutrient-rich feeds, prior to slaughter.
``(4) Formula marketing arrangement.--The term `formula
marketing arrangement' means the advance commitment of cattle
for slaughter--
``(A) by any means other than through a negotiated
purchase, negotiated grid purchase, or forward
contract; and
``(B) using a method for calculating price--
``(i) under which the price is determined
at a future date;
``(ii) the basis of which is a price
established for a specified market, which may
be based on any publicly reported price,
including plant average price, regional price,
downstream price, or some other mutually
agreeable price source; and
``(iii) that may include a grid or nongrid
price.
``(5) Forward contract.--The term `forward contract'
means--
``(A) an agreement for the purchase of fed cattle,
executed in advance of slaughter, under which the base
price is established by reference to--
``(i) prices quoted on the Chicago
Mercantile Exchange; or
``(ii) other comparable publicly available
prices; or
``(B) any other contract for the purchase of fed
cattle, executed in advance of slaughter, as determined
by the Secretary.
``(6) Heifer.--The term `heifer' means a bovine female that
has not given birth to a calf.
``(7) Negotiated grid purchase.--The term `negotiated grid
purchase' means a purchase of fed cattle by a packer from a
producer under which--
``(A) the buyer-seller interaction results in a
negotiated base price, which may be adjusted by
premiums and discounts; and
``(B) the cattle are scheduled for delivery to the
packer not more than 14 days after the date on which
the agreement for purchase is made.
``(8) Negotiated purchase.--The term `negotiated purchase'
means a purchase of fed cattle (commonly known as a `cash' or
`spot market' purchase) by a packer from a producer under
which--
``(A) the buyer-seller interaction that results in
the purchase and the agreement on the actual base price
for the purchase occur on the same day; and
``(B) the cattle are scheduled for delivery to the
packer not more than 30 days after the date on which
the agreement for purchase is made.
``(9) Packer.--The term `packer' has the meaning given the
term in section 221 of the Agricultural Marketing Act of 1946
(7 U.S.C. 1635d).
``(10) Producer.--The term `producer' means a person
engaged in the business of selling cattle to a packer for
slaughter.
``(11) Steer.--The term `steer' means a bovine male
castrated before reaching sexual maturity.
``(12) Type of contract.--
``(A) In general.--The term `type of contract'
means the classification of a contract for the purchase
of cattle--
``(i) into 1 of the categories described in
subparagraph (B); and
``(ii) by determining the base price of the
cattle.
``(B) Categories.--The categories for
classification of a type of contract are the following:
``(i) Formula marketing arrangement.
``(ii) Forward contract.
``(iii) Negotiated grid purchase contract.
``SEC. 232. CATTLE CONTRACT LIBRARY.
``(a) In General.--Subject to the availability of appropriations to
carry out this section, the Secretary shall establish and maintain a
library or catalog of each type of contract offered by packers to
producers for the purchase of all or part of the production of the
producers of fed cattle (including cattle that are purchased or
committed for delivery), including any schedules of premiums or
discounts associated with the contract.
``(b) Information Collection.--
``(1) In general.--To maintain the library or catalog
established under subsection (a), the Secretary shall obtain
information from each packer on each type of existing contract
of the packer by requiring a filing or other form of
information submission from each packer.
``(2) Contracted cattle numbers.--Information that shall be
submitted to the Secretary by a packer under paragraph (1)
shall include, with respect to each existing contract of a
packer--
``(A) the type of contract; and
``(B) a description of the provisions in the
contract that provide for expansion in the numbers of
fed cattle to be delivered under the contract for the
6-month and 12-month periods following the date of the
contract.
``(c) Availability of Information.--
``(1) In general.--The Secretary shall make available to
producers and other interested persons information on the types
of contracts in the library or catalog established under
subsection (a), including notice (on a real-time basis, if
practicable) of the types of contracts that are being offered
by packers to, and are open to acceptance by, producers for the
purchase of fed cattle.
``(2) Monthly report.--
``(A) In general.--Beginning 30 days after the
library or catalog is established under subsection (a),
the Secretary shall make the information obtained each
month in the library or catalog available in a monthly
report to producers and other interested persons.
``(B) Contents.--The monthly report described in
subparagraph (A) shall include--
``(i) an estimate by the Secretary of the
total number of fed cattle committed under
contracts for delivery to packers within the 6-
month and 12-month periods following the date
of the report, organized by reporting region
and type of contract; and
``(ii) an estimate by the Secretary of the
total maximum number of fed cattle that may be
delivered within the 6-month and 12-month
periods following the date of the report, based
on the provisions described in subsection
(c)(2)(B) in existing contracts, organized by
reporting region and type of contract.
``(d) Maintenance of Library or Catalog.--Information in the
library or catalog established under subsection (a) about types of
contracts that are no longer offered or in use shall be removed from
the library or catalog.
``(e) Educational Outreach Activities.--The Secretary shall conduct
educational outreach activities for producers on how best to use the
cattle contract library or catalog established under subsection (a).
``(f) Confidentiality.--The reporting requirements for packers
under this section shall be subject to the confidentiality protections
provided under section 251 of the Agricultural Marketing Act of 1946 (7
U.S.C. 1636).
``(g) Violations.--It shall be unlawful and a violation of this Act
for any packer to willfully fail or refuse--
``(1) to provide to the Secretary accurate information
required under this section; or
``(2) to comply with any other requirement of this section.
``(h) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary such sums as are necessary to carry out
this section.''.
(b) Conforming Amendment.--Section 201 of the Packers and
Stockyards Act, 1921 (7 U.S.C. 191), is amended by striking ``When used
in this Act'' and inserting ``Unless specified otherwise, in this
Act,''.
SEC. 4. CASH MARKET ACQUISITION OF CATTLE.
Title II of the Packers and Stockyards Act, 1921 (7 U.S.C. 191 et
seq.) (as amended by section 2), is amended by adding at the end the
following:
``Subtitle D--Cash Market Acquisition of Cattle
``SEC. 241. DEFINITIONS.
``In this subtitle:
``(1) Negotiated grid purchase.--The term `negotiated grid
purchase' means a purchase of cattle by a packer from a
producer under which--
``(A) the buyer-seller interaction results in a
negotiated base price, which may be adjusted by
premiums and discounts; and
``(B) the cattle are scheduled for delivery to the
packer not more than 14 days after the date on which
the agreement for purchase is made.
``(2) Negotiated purchase.--The term `negotiated purchase'
means a purchase of cattle (commonly known as a `cash' or `spot
market' purchase) by a packer from a producer under which--
``(A) the buyer-seller interaction that results in
the purchase and the agreement on the actual base price
for the purchase occur on the same day; and
``(B) the cattle are scheduled for delivery to the
packer not more than 30 days after the date on which
the agreement for purchase is made.
``(3) Packer.--The term `packer'--
``(A) has the meaning given the term in section 221
of the Agricultural Marketing Act of 1946 (7 U.S.C.
1635d); and
``(B) for calendar years beginning on or after
January 1, 2022, includes only a federally-inspected
cattle processing plant that slaughtered an average of
125,000 head of cattle per year during the immediately
preceding 5 calendar years.
``(4) Producer.--The term `producer' means a person engaged
in the business of selling cattle to a packer for slaughter.
``(5) Regional mandatory minimum.--The term `regional
mandatory minimum' means, for each reporting region (as
designated by the Agricultural Marketing Service), of the
number of transactions and quantity of cattle purchased for
slaughter by a packer in that region each slaughter week, the
minimum number of such transactions and the minimum percentage
of such cattle, respectively, that are required to be purchased
through negotiated purchases or negotiated grid purchases from
producers.
``(6) Slaughter week.--The term `slaughter week' has the
meaning given the term `current slaughter week' in section 212
of the Agricultural Marketing Act of 1946 (7 U.S.C. 1635a).
``SEC. 242. REGIONAL MANDATORY MINIMUMS.
``(a) In General.--Not later than 2 years after the date of
enactment of this subtitle, the Secretary, in consultation with the
Chief Economist, shall establish--
``(1) regional mandatory minimums for the purpose of
enhancing price discovery and transparency for cattle market
participants; and
``(2) methods for establishing those regional mandatory
minimums, which shall be publicly available.
``(b) Duration.--Regional mandatory minimums established for each
reporting region under subsection (a)(1)--
``(1) may be weekly or on another periodic basis, as
determined by the Secretary;
``(2) shall account for improbable events with profound
consequences (commonly referred to as `black swan events'); and
``(3) shall be applicable for not more than a 24-month
period.
``(c) Public Input.--In carrying out subsection (a), the Secretary
shall make all proposed regional mandatory minimums and proposed
methods for establishing those minimums subject to a notice and comment
period.
``(d) Considerations.--In carrying out subsection (a) for each
reporting region, the Secretary, in consultation with the Chief
Economist, shall consider the following factors:
``(1) The number of packers in the reporting region.
``(2) The availability of cattle in the reporting region.
``(3) Pre-existing contractual arrangements of packers in
the reporting region.
``(4) The number of pricing transactions (pens of cattle
sold) in the reporting region.
``(e) Land-Grant Research.--In carrying out subsection (a), the
Secretary, in consultation with the Chief Economist, shall take into
account relevant research conducted by land-grant colleges and
universities (as defined in section 1404 of the National Agricultural
Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3103)).
``(f) Biannual Review.--On establishing regional mandatory minimums
under subsection (a)(1), the Secretary--
``(1) shall review the regional mandatory minimums not less
frequently than once every 2 years; and
``(2) may, in consultation with the Chief Economist, modify
the regional mandatory minimums after--
``(A) making the proposed modification subject to a
notice and comment period; and
``(B) consulting with representatives of the United
States cattle and beef industry.
``(g) Enforcement.--On establishing regional mandatory minimums
under subsection (a)(1), the Secretary shall--
``(1) regularly monitor compliance by packers with those
regional mandatory minimums; and
``(2) enforce this section in accordance with section 203.
``(h) Cost-Benefit Analysis.--Not later than 3 years after
establishing regional mandatory minimums under subsection (a)(1), the
Secretary, in consultation with the Chief Economist, shall conduct a
quantifiable, data-driven cost-benefit analysis regarding the operation
and effect of those regional mandatory minimums.''.
SEC. 5. 14-DAY CATTLE SLAUGHTER.
(a) Definition of Cattle Committed.--Section 221(1) of the
Agricultural Marketing Act of 1946 (7 U.S.C. 1635d(1)) is amended by
striking ``7-day'' and inserting ``14-day''.
(b) Mandatory Reporting for Live Cattle.--Section 222(c) of the
Agricultural Marketing Act of 1946 (7 U.S.C. 1635e(c)) is amended--
(1) in paragraph (1)--
(A) by striking subparagraphs (B) and (C); and
(B) by redesignating subparagraph (D) as
subparagraph (B);
(2) by redesignating paragraph (2) as paragraph (3); and
(3) by inserting after paragraph (1) the following:
``(2) Prior day reporting.--
``(A) In general.--The corporate officers or
officially designated representatives of each packer
processing plant shall report to the Secretary, for
each business day of the packer processing plant, not
later than 10:00 a.m. Central Time on each reporting
day, the information from the prior business day
described in subparagraph (B).
``(B) Information required.--The information
required under subparagraph (A) shall be, with respect
to the prior business day, the number of cattle,
organized by cattle type, scheduled for delivery to a
packer processing plant for slaughter for each of the
next 14 calendar days.''.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Agriculture.
Referred to the Subcommittee on Livestock and Foreign Agriculture.
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