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NCBA Legislative Updates
ADDITIONAL CATTLE MARKETS
LEGISLATION INTRODUCED IN U.S. HOUSE
WASHINGTON (June 8, 2021) — Today, Representative Vicky Hartzler (R-MO-4) introduced the Optimizing the Cattle Market Act of 2021 in the U.S. House. The legislation builds on a growing consensus among cattle producers, industry leaders, and Members of Congress that the current market dynamics — which stunt producer profitability and put undue market leverage on the side of meatpackers — are not sustainable for the beef supply chain. If enacted, the bill would direct the U.S. Department of Agriculture (USDA) to create a cattle formula contracts library, and increase the reporting window for “cattle committed” from seven to 14 days. These measures would increase transparency in the industry and improve the opportunity for robust price discovery. Rep. Hartzler’s legislation also reiterates the need for expedited reauthorization of USDA’s Livestock Mandatory Reporting (LMR) program, a step NCBA has long pushed for and reached agreement on with other industry groups. The bill would also require USDA, in consultation with the Chief Economist, to establish mandated minimums for regional negotiated cash and negotiated grid live cattle trade. Minimums would be set within two years of passage of the bill, and would invite stakeholder input through a public comment period and the consideration of key, peer-reviewed research from land grant universities.
NCBA’s member-driven, grassroots policy does not support mandated minimums at this time, opting instead for a voluntary solution. NCBA’s grassroots policy also provides for a change in direction should certain conditions be met, which would mean pursuing a legislative or regulatory solution determined by membership. “The growing momentum we’re seeing in the House and Senate behind addressing these critical concerns in the cattle markets is reflective of the urgency producers are feeling across the country. Extreme market volatility, unpredictable input costs, a shifting regulatory landscape, and natural crises like drought leave cattle farmers and ranchers with a growing list of threats to their continued financial viability. Something needs to give,” said NCBA Vice President of Government Affairs Ethan Lane. “NCBA, alongside our affiliates and other industry associations, shares Rep. Hartzler’s objectives and welcomes the discussion this bill will bring. While a government mandate on regional minimums for negotiated trade continues to be a hotly debated topic among producers, we are encouraged to see a proposal that builds on past efforts and moves us closer toward a realistic finish line.”
BACKGROUND
Cattle producers have long witnessed the decline of negotiated fed cattle trade, and NCBA has been the leading industry voice discussing how to increase opportunities for producer profitability in this landscape. While the use of formulas and grids help cattle producers manage risk and capture more value for their product, these methods depend upon the price discovery that occurs in the direct, buyer-seller interactions of negotiated transactions. Current academic research has shown that more negotiated trade is needed to achieve “robust” price discovery within the industry. NCBA’s grassroots policy — formed through debate and discussion among members from every sector of the supply chain — states that, “NCBA supports a voluntary approach that 1) increases frequent and transparent negotiated trade to regionally sufficient levels... and 2) includes triggers to be determined by a working group of NCBA producer leaders.” The policy further states, “if the voluntary approach does not achieve robust price discovery... and triggers are activated, NCBA will pursue a legislative or regulatory solution determined by the membership.”
NCBA ECHOES GROWING DEMANDS
FOR DOJ INVESTIGATION RESULTS
WASHINGTON (June 8, 2021) – Today, Representative Mike Guest (R-MS-3) and Representative Darren Soto (D-FL-9) led a bipartisan group of 52 lawmakers in pushing the U.S. Department of Justice (DOJ) to complete their investigation into the meatpacking sector, and whether or not anticompetitive practices have contributed to a persistent imbalance in the cattle markets.
This letter is the latest result of a recent groundswell of bipartisan, bicameral attention into the need to return market leverage to the side of cattle farmers and ranchers and address the startling price disparity between live cattle and boxed beef.
Last week, NCBA — with the support of 39 state cattle groups — called yet again for a swift conclusion to DOJ’s investigation into the packing sector. “Market volatility leaves our producers with extreme uncertainty, and this lack of stability and profitability is problematic for the entire beef supply chain,” said NCBA Vice President of Government Affairs Ethan Lane. “The growing motivation in Congress to hasten the conclusion of the DOJ investigation and take action on the issues plaguing our industry’s marketplace is the result of grassroots consensus among cattle producers. Across the country, in sale barns and state affiliate meetings, we’re hearing the same frustration from our members — no matter how the pendulum swings, the leverage always seems to be on the side of the packers. We thank Rep. Guest and Rep. Soto for adding their leadership to this critical effort at a time when cattle producers need stability.” Last month, NCBA worked with Senator John Thune (R-SD) and Congressman Dusty Johnson (R-SD-AL) to deliver a similar, bicameral letter to DOJ.
The National Cattlemen’s Beef Association (NCBA) has represented America’s cattle producers since 1898, preserving the heritage and strength of the industry through education and public policy. As the largest association of cattle producers, NCBA works to create new markets and increase demand for beef. Efforts are made possible through membership contributions. To join, contact NCBA at 1-866-BEEF-USA or membership@beef.org.
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NCBA AND PLC READY TO DEFEND
PROGRESS ON CLEAN WATER ACT
WASHINGTON (June 10, 2021) — Today, the National Cattlemen’s Beef Association (NCBA) and Public Lands Council (PLC) issued the following statement in response to Environmental Protection Agency (EPA) Administrator Michael Regan’s announcement that the agency intends to revise the Navigable Waters Protection Rule (NWPR). “Livestock producers, who manage both their private lands and safeguard public lands, have a deep-seated commitment to protecting and improving our waterways — which is why it is so deeply frustrating when EPA opts for government overreach instead of effective, proven publicprivate partnerships. The NWPR was an immense step forward in rectifying the egregious overreach of the 2015 rule,” said NCBA Executive Director of Natural Resources and PLC Executive Director Kaitlynn Glover. “Any changes to the NWPR that limit or restrict agricultural exclusions, or regulate waterbodies on farm and ranchland, will hinder ranchers’ ability to continue making vital investments in their land that restore waterways, conserve riparian areas, and protect wildlife habitat. We will engage fully with EPA as they move forward to ensure that their revisions respect private property rights and do not squeeze out Western communities and producers who are entrenched, by necessity, in responsible water stewardship.” NCBA and PLC have long fought for workable solutions for cattle producers under the Clean Water Act. Both organizations were instrumental in the repeal of the 2015 Waters of the United States (WOTUS) rule and are currently engaged in litigation to defend the NWPR. The NWPR empowered states to manage waterbodies, solidified important agricultural exemptions, and eliminated federal control over isolated waterbodies that do not contribute to downstream water quality. EPA has outlined the following priorities for their intent to revise the WOTUS definition: • Protecting water resources and communities consistent with the Clean Water Act. • The latest science on the effects of climate change on our waters. • Practical implementation for state and Tribal partners. • Reflecting the experience of and input received from landowners, the agricultural community that fuels and feeds the world, states, Tribes, local governments, community organizations, environmental groups, and disadvantaged communities with environmental justice concerns.
NCBA JOINS DIALOGUE WITH SEC. VILSACK
ON BUILD BACK BETTER INITIATIVE
WASHINGTON (June 9, 2021) — Today, the National Cattlemen’s Beef Association joined an agriculture industry call with U.S. Department of Agriculture (USDA) Secretary Vilsack to discuss the path forward for the recently-announced $4 billion Build Back Better initiative.
During the coalition call, there was a productive, positive dialogue on how funds could best be utilized to strengthen the security of the beef supply chain and increase opportunities for profitability for all sectors of the cattle industry. In yesterday’s announcement, USDA outlined four areas of focus for the program — food production, food processing, aggregation and distribution, and consumers and markets. The prevailing theme on the call was processing capacity, and Sec. Vilsack specifically cited the urgent need to expand capacity in the cattle and beef industry. “I’m extremely optimistic about the priorities Sec. Vilsack expressed today, and the targeted interest he and his team have shown in improving business conditions for cattle producers,” said NCBA CEO Colin Woodall. “The fact that the focus of his comments was on processing capacity signals that the Build Back Better initiative could be directly beneficial for NCBA members. We discussed new local and regional processing facilities, bringing federal inspection within reach for more state-inspected facilities, and maintaining open, transparent markets. A nimble, durable beef supply chain is good for cattle producers and consumers alike, and NCBA looks forward to working with Sec. Vilsack and his team as they build out these resources for producers.” Woodall also reiterated to Sec. Vilsack that demand for U.S. beef is high and cattle supply is high, but the chokepoint in the middle — caused by a lack of hook space — has stifled producer profitability and created unsustainable market dynamics.
NCBA TAKES ACTION TO INCREASE
WASHINGTON (June 10, 2021) — Today, the National Cattlemen’s Beef Association (NCBA) filed a petition with the U.S. Department of Agriculture’s Food Safety and Inspection Service (USDA-FSIS) to eliminate the use of “Product of the USA” (POTUSA) and other broad U.S. origin labeling claims for beef products that are potentially misleading to consumers. NCBA believes that current “Product of the USA” labels are a disservice to American consumers and cattle producers alike. The claim implies that a beef product is entirely of U.S. origin. However, in reality, imported beef products are eligible to be labeled “Product of the USA” as long as the product has been minimally processed or repackaged in a USDA-inspected facility. It is not subject to source verification, is not tied to any kind of food safety standard, and is applied by packers and retailers in a manner that does not deliver value back to the cattle producer. “The Product of the USA label does not meet the expectations of today’s consumers and disincentivizes the use of voluntary, sourceverified claims that allow cattle and beef producers to more effectively distinguish their product in the marketplace,” said NCBA President Jerry Bohn. “There is a growing desire among consumers to know more about the origin of the food they purchase, and it is critical that producers are empowered with opportunities to market their high-quality beef in a way that allows them to differentiate the source of their product from competitors and potentially increase profitability.” For many years, NCBA has supported voluntary efforts which provide producers the opportunity to capture more value through origin labels and corresponding marketing initiatives that are voluntary and source-verified. In lieu of the “Product of the USA” label, NCBA is advocating for a more appropriate generic label, such as “Processed in the USA.” Further, NCBA hopes to work with USDA’s Agricultural Marketing Service (AMS) to proactively educate cattle producers, processors, and retailers about the various opportunities that exist to develop voluntary, verifiable origin marketing claims that deliver tangible benefits to cattle producers without violating rules of trade. The voluntary labels that NCBA supports represent investments made by producers to continually improve their product and meet consumer demand. Marketing through sourceverification will provide a more accurate and truthful description of the product, which will reduce the potential for consumer confusion while increasing the ability for cattle producers to capture additional premiums for their product. BACKGROUND
In 2019, NCBA established the Transparency in Labeling Working Group to investigate producer concerns about the “Product of the USA” label. After several months of investigation, research, and discussion, the producer-led working group recommended new policy for NCBA to address these concerns. NCBA producer members approved the policy in 2020, strengthening NCBA’s support for the use of voluntary source of origin claims, and USDA verification of any source of origin claim or label. Moving forward, NCBA’s policy team will work with USDA to ensure origin claims and source labels can only be used if they are from voluntary and verified programs.
