This past week, U.S Department of Agriculture (USDA) Secretary Tom Vilsack announced additional steps “to promote fair and competitive markets for American farmers and ranchers, and lower food prices for American families.” The following actions were rolled-out at a Farmers and Ranchers in Action event hosted by the White House:
- First, USDA is leveraging its funding and research capacity, as well as interagency partnerships, to increase transparency and improve access to seed germplasm.
- Second, USDA published an interim report that assesses competitive conditions in the meat retail industry. According to USDA, it identifies hidden fees and unjust/anticompetitive pricing strategies present in the beef market as a case study.
- Third, USDA announced the next steps in a new rulemaking effort under the Packers & Stockyards Act of 1921 to enhance price discovery and fairness in cattle markets. USDA issued an Advanced Notice of Proposed Rulemaking (ANPR) which was published today in the Federal Register to seek comment on several possible interventions to develop new benchmarks as Alternative Marketing Agreement (AMA) base prices and approaches to trading when using benchmarks.
“If adopted, USDA’s regulatory approach for fed cattle marketing would single-handedly dismantle decades of value-based marketing progress made by producers across the supply chain in response to consumers’ demand for high quality beef,” said Ben Weinheimer, TCFA President & CEO. “This announcement makes it evident that it is no longer just a policy discussion for seedstock and cow/calf producers, stocker operators and cattle feeders to weigh the pros and cons on whether the government should get involved in dictating how producers can market cattle. The threat to producers’ freedom to market cattle becomes obvious when a federal regulatory agency emphasizes ‘regulatory options’ and ‘proposed interventions’ to dictate fed cattle marketing practices.”
The ANPR focuses on how base prices in AMAs are developed, and whether there are better ways to develop those base prices than simply the price of cash negotiated live cattle in specific regions, which make up the majority of AMA base prices. It also explores possible ways to overcome other potential obstacles to price discovery.
“Our members fully understand and appreciate the role that targeted levels of negotiated trade, as recommended by reputable livestock economists, play in price discovery and base price determination.” Weinheimer stated. “Over the past several years, TCFA members have demonstrated that those targeted levels can be achieved without government intervention, and industry-led solutions will continue to be the preferred approach for TCFA members in the future.”
The proposal was accompanied by a fact sheet stating that the Agricultural Marketing Service’s Packers and Stockyards Division “requests comment on a range of targeted options designed to ensure that base prices in fed cattle AMAs are broadly representative of general market conditions and are not vulnerable to distortion or strategic behavior that could cause prices to shift for reasons other than changes in supply and demand.”
TCFA staff and legal counsel will review the proposal in detail and develop written comments. The initial comment deadline is Dec. 10, 2024. TCFA takes issue with such a short period of time to develop comprehensive comments on a proposed rule the Administration has been working on for almost four years. TCFA will request an extension of the comment period.
