The U.S. Senate Agriculture Committee on Wednesday backed a bill sponsored by Nebraska Senator Deb Fischer intended to address the growing disparity between the price ranchers are paid for their livestock and what consumers are paying. for the beef.
Fischer’s Livestock Market Transparency Act aims to increase competition in the industry by requiring beef packers to buy more of their cattle through competitive bidding in open markets.
The committee advanced the bipartisan measure on a voice vote. Fischer noted that only two senators on the 22-member committee had registered formal opposition to the bill — “a good sign” for its chances later before the full Senate, she said.
“The broad support reflects the importance of restoring fairness to the market so that every segment of the livestock supply chain can succeed,” she said. “These reforms are especially needed now, at a time when family ranchers and consumers are all struggling to navigate a slow economy and record inflation.”
As consumers pay record prices for beef — and slaughterhouses often make record profits — farmers and ranchers have endured years of falling prices for their livestock.
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Fischer and many players in the beef industry believe that a lack of competition due to high concentration in the meatpacking industry gives packers too much market power, to the detriment of consumers as well as farmers and breeders.
Of the more than 30 million head of cattle raised for slaughter each year in the United States, approximately 85% are processed by just four major meat packers. And the vast majority of livestock today is not sold in open markets but through contracts between packers and individual producers, which limits competitive bidding.
Cattlemen’s declining share of the beef dollar relative to packers was the subject of a series of articles in The World-Herald last year. The problem is significant in Nebraska, which ranks No. 1 among states in cattle slaughter and No. 2 in cattle numbers, behind only much larger Texas.
The main provision of the Fischer bill, co-sponsored by 10 members of each party, would require beef packers to acquire more of their cattle through negotiated cash markets. The floor level for these purchases would be set by the United States Department of Agriculture and would vary by region.
The bill also aims to promote transparency in the country’s livestock markets by requiring greater public disclosure of what packers pay for livestock.
Packers argue there is nothing inherently wrong with livestock markets, attributing price changes in recent years to natural supply and demand forces and market disruptions like the pandemic.
During the committee debate, Senator John Boozman of Arkansas, the committee’s top Republican, expressed concern about “unintended consequences,” wondering if limits on contract livestock sales could hurt capacity producers to market better quality beef.
Fischer said there are benefits to selling livestock through marketing contracts. But she added that even such sales rely on competitive livestock sales to set the going price, which makes strong cash markets important.
In a related move, the committee also advanced a measure on Wednesday that creates a special investigator’s office within the USDA to investigate and prosecute allegations of anticompetitive business practices by packers. It is also intended to address producers’ concerns about the fairness of livestock markets.
“These bills will move toward a more competitive, transparent and fair supply chain that is better for American farmers and better able to keep food on our tables,” said Senator Debbie Stabenow, Democrat of Michigan who chairs the committee.
Fischer said she will now seek a measure to attach her bill to in order to get it through the full Senate. She said she is optimistic about her chances.
“We’ll be talking to our colleagues on both sides of the aisle,” she said. “I feel really good about it.”
Ranchers like Wade Andrews, 56, fear their way of life is collapsing amid low cattle prices and ever-rising expenses as meatpacking companies reap record profits.
Some farmers sell steaks and burgers directly to consumers, using a pasture-to-plate approach. Others bypass the big packers by establishing their own smaller-scale packing plants.
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Farmers and ranchers have endured years of declining livestock prices. Meanwhile, the big four packers, which control 85% of the fed cattle market, have seen their share soar.