Reps. Axne, Finkenauer, Loebsack Introduce Legislation to Improve Price Transparency in Cattle Markets
Today, Reps. Cindy Axne (IA-03), Abby Finkenauer (IA-01), and Dave Loebsack (IA-02) introduced legislation in the U.S. House of Representatives to increase transparency in U.S. cattle markets and spur added price discovery and competition for Iowa producers using cash markets.
“It’s critical that we increase price transparency and level the playing field for Iowa cattle producers. We’ve seen significant market disruptions from the Holcomb plant fire last year or more recently from COVID-19 that illustrate the need for this legislation,” said Rep. Axne. “This is not a new problem that Iowa cattlemen have been facing. With nationwide decreases in cash trades, Iowans have been bearing the burden of price discovery for the rest of the cattle industry and it’s about time we address the issue. These reforms will help establish a fair and transparent market for all independent producers, and I’m proud to lead this fight in the House of Representatives.”
“Iowa’s small and family-owned ranches deserve a fair chance to compete and thrive in the marketplace,” Congresswoman Abby Finkenauer said. “Markets work best when every player has equal information and equal opportunity — which is exactly what this bill provides. I’m proud to join Congresswoman Axne and Congressman Loebsack in ensuring independent ranchers a chance to compete on a level playing field.”
“Iowa cattle producers have been operating at a disadvantage for far too long, and it is imperative that we ensure they have access to equal market opportunities,” said Rep. Loebsack. “The COVID-19 pandemic and last year's Holcomb plant fire illustrate just how quickly that disadvantage can become a disaster for Iowa cattle producers, and this legislation will create meaningful reform and help bring about a more transparent and stable market for cattle producers across the country. I am proud to join my fellow Iowans in advocating for Iowa's cattlemen.”
The bill would require processors to have a minimum of 50% of their weekly slaughter purchased from cash market sales. The increase in cash market sales would give independent producers in Iowa and around the country a level playing field with formula-contracted cattle purchases and additional leverage with processors.
Iowa producers typically participate in the cash market around 50%, while nationwide participation has steadily been decreasing to as low as 5% in some states. A strong cash market allows for robust price discovery, greater transparency, and more fair and accurate pricing. Market disruptions, such as from COVID-19 or the Holcomb fire, demonstrate the issue as many independent producers are disproportionately harmed from these events.
“Recent events have served to accentuate the need for a more equitable seat at the table for all producers,” said Iowa Cattlemen Association President Richard Godfrey. “Iowa's cattlemen know that true price discovery comes through competitive bidding and cash trade. The proposal outlined in this bill will help return some much-needed leverage to independent cattle producers in Iowa, and across the nation. The Iowa Cattlemen’s Association sincerely appreciates Congresswoman Axne, Congresswoman Finkenauer, and Congressman Loebsack for their leadership and willingness to engage on this important issue.”
The House bill introduced today is a companion to S. 3693, which was introduced earlier this year by Iowa Senators Chuck Grassley and Joni Ernst.