(MAY 12) – On Tuesday, U.S. Senators Chuck Grassley (R-IA) and Jon Tester (D-MT) introduced a bill to require each U.S. meat processing facility that slaughters over 125,000 head of cattle each year to purchase fifty percent of their weekly volume of beef slaughter on the open or ‘spot’ market.
The lack of cash negotiated sales in recent years has decimated price discovery and undercut the fundamentals of the CME cattle futures contracts (see below). This bill would allow the Livestock Mandatory Reporting system to be better utilized as a mechanism for accurate and transparent reporting, which will advance price discovery and shore up the fundamentals of the CME cattle futures contracts.
Joining Senators Grassley and Tester as original co-sponsors of this bill are Senators Joni Ernst (R-IA), Steve Daines (R-MT), Mike Rounds (R-SD), Tina Smith (D-MN) and Cindy Hyde-Smith (R-MS).
United States Cattlemen’s Association (USCA) President Brooke Miller issued the following statement:
“The Livestock Mandatory Reporting program will expire on September 30, 2020. As Congress and industry stakeholders work together on needed changes to the program in the months ahead, we expect this bill will play a large role in those conversations.
“We would like to thank the nearly 4,400 individual producers and state and local organizations for undertaking this truly grassroots effort in support of #FairCattleMarkets. USCA will be calling on these advocates in the near future to continue pushing forth a workable solution.
“Further, we commend Senators Grassley, Tester, Ernst, Daines, Rounds, Smith, and Hyde-Smith for advancing legislation that will have a real and meaningful impact on the U.S. cattle producers’ bottom line.”