SACRAMENTO (October 21, 2021) — The California Cattlemen’s Association (CCA) applauds the introduction of legislation in the U.S. House that would establish a cattle contract library within USDA’s Agricultural Marketing Service (AMS). The bill is being led by Rep. Dusty Johnson (R-S.D.) and Rep. Henry Cuellar (D-Texas).
CCA has long advocated at the federal level for greater market transparency alongside our partners at the National Cattlemen’s Beef Association (NCBA). Providing a clearer window into the price and volume of cattle purchases is essential to helping California ranchers negotiate more confidently for competitive prices. The creation of a contract library would equip cattle producers with the market data they need to make informed business decisions and exert greater leverage in negotiations with the packers.
The cattle contract library is also much-needed as a tool for oversight, and would give lawmakers, agency officials and producers critical information on activity taking place in the packing sector.
“We are currently trying to establish what a cattle contract library would look like,” CCA Price Discovery Subcommittee Chair and San Luis Obispo County rancher Seth Scribner explained following the introduction of the legislation. “The only example we have to follow is the Swine Contract Library (SCL) introduced in 2003. The SCL releases monthly reports and there are upwards of 250 different contracts. In the beef industry we have many more Alternative Marketing Agreements and variations in fed cattle trade. Therefore, merely following the format of the SCL is not ideal.”
“In its simplest version, a cattle contract library could merely break down the transactions presently collected in the ‘carry-all bucket’ for ‘formula trade.’ Or on the other extreme it can be overly complex when tracking every transaction mechanism, so that once the confidentiality clause is applied much of the data will be withheld. As a cattle industry, this is an opportunity to ask ourselves what the data from a cattle contract library should look like and more importantly, how we can design it to help with adequate price discovery,” Scribner said.
The need for a cattle contract library was one of three priorities agreed upon by NCBA, American Farm Bureau Federation, Livestock Marketing Association, National Farmers Union, R-CALF and U.S. Cattlemen’s Association at a meeting in Phoenix, Arizona in May 2021.
“Many cattle producers have been backed against a wall. We need to act urgently to provide them with relief,” NCBA President Jerry Bohn said. “There is no single, silver bullet solution to the wide variety of needs among NCBA’s diverse membership, but lawmakers can start by focusing on viable solutions that have broad-base support across the industry. The cattle contract library is one such solution, and it will help our producers command more leverage in negotiations with the packers.”