The U.S. Senate’s agriculture committee on Wednesday backed a bill sponsored by Nebraska Sen. Deb Fischer intended to address the growing disparity between the price that ranchers are paid for their cattle and what consumers pay for beef.
Fischer’s Cattle Market Transparency Act seeks to increase competition in the industry by requiring beef packers to purchase more of their cattle through bidding in open markets.
The committee advanced the bipartisan measure on a voice vote. Fischer noted only two senators on the 22-member committee registered their official opposition to it — “a good sign” for its chances later before the full Senate, she said.
“The broad support reflects the importance of restoring market fairness so that every segment of the cattle 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 are paying record prices for beef — and packers are often making record profits — farmers and ranchers have endured years of declining prices for their cattle.
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Fischer and many in the cattle industry believe a lack of competition due to heavy concentration in the meatpacking industry is giving packers too much market power, to the detriment of consumers as well as farmers and ranchers.
Of the more than 30 million head of cattle raised for slaughter each year in the United States, about 85% is processed by just four leading meatpackers. And the vast majority of cattle today are not sold through open markets but through contracts between packers and individual producers, which limits competitive bidding.
Cattle producers’ shrinking share of the beef dollar compared to packers was the subject of a series of stories in The World-Herald last year. The issue is a big one in Nebraska, which ranks No. 1 among states in cattle slaughter and No. 2 in number of cattle, trailing only much larger Texas.
The primary provision of the Fischer bill that’s 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 such purchases would be set by the U.S. Department of Agriculture and vary by region.
The bill also seeks to promote transparency in the nation’s cattle markets by requiring more public disclosure of what packers are paying for cattle.
Packers argue there is nothing inherently wrong with cattle markets, attributing the price changes of recent years to natural supply and demand forces and market disruptions like the pandemic.
During committee debate, Sen. John Boozman of Arkansas, the top Republican on the committee, said he was concerned about “unintended consequences,” questioning whether limits on contracted cattle sales could harm producers’ ability to market higher quality beef.
Fischer said there are advantages to selling cattle through marketing contracts. But she said even such sales rely on competitive cattle sales to set the going price, making robust cash markets important.
In a related move, the committee Wednesday also advanced a measure that creates an Office of Special Investigator within the USDA to investigate and prosecute claims of anti-competitive business practices by packers. It is likewise intended to address producers’ concerns about fairness in cattle markets.
“These bills will make progress 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 Sen. Debbie Stabenow, the Michigan Democrat who chairs the committee.
Fischer said she will now look for a measure to attach her bill to in order to get it to the full Senate. She said she’s optimistic about its chances.
“We will be talking to our colleagues on both sides of the aisle,” she said. “I feel really good about it.”
Ranchers like Wade Andrews, 56, worry that their way of life is slipping away amid low cattle prices and ever-rising expenses while the meatpacking firms are earning record profits.
Some farmers are marketing steaks and hamburger directly to consumers, the pasture-to-plate approach. Others are bypassing large packers by establishing their own, smaller-scale packing plants.
If UNL’s “methane barn” can help reduce the beef industry’s global environmental hoofprint, it could one day help save the planet. It could also help preserve Nebraska’s biggest agricultural sector.
One proposal under discussion is a bill from Nebraska Republican Sen. Deb Fischer that would require packers to acquire more of the cattle they slaughter through bidding on open livestock markets.
California has found success reducing methane emissions and establishing financial incentives for dairy farmers to capture the greenhouse gas. Could similar incentives aid Nebraska’s beef industry?
Farmers and ranchers have endured years of declining prices for their cattle. Meanwhile, the four big packers, who control 85% of the market for fattened cattle, have seen their share skyrocket.
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