ICA Submits Letter to Keep Cattle Contracts Library

Note: The following letter was sent to both House and Senate Ag Committee leaders as well as key leaders at USDA.

Dear Chairwoman Stabenow and Ranking Member Boozman:    

Re: Cattle Contracts Library Pilot Program Expiration    

The Iowa Cattlemen’s Association (ICA) is a grassroots organization representing nearly 8,000 independent cattle producers and stakeholders affiliated with the beef cattle industry. Today, we write to express the importance of continuing the Cattle Contracts Library despite expiration of the pilot program. While imperfect, this resource can be improved with time and some modifications based on industry stakeholder feedback.    

Cash Trade & Transparency 

Over many years, we’ve witnessed the declining use of cash trade across the entire beef belt. In Iowa, however, price discovery remains strong because of the use of cash trade and transparency provided by required reporting of negotiated transactions. In Livestock Mandatory Reporting regions where it has become common practice for buyers and sellers to utilize alternative marketing arrangements to price fed cattle, this is not the case. Cash market prices are needed to drive formula and grid prices in those regions—without them, how do we know what’s really setting the market?   

A Brief Timeline 

• In February 2020, ICA worked with other state affiliates to encourage the National Cattlemen’s Beef Association (NCBA) to support initiatives to increase transparency of formula contracts and require the U.S. Department of Agriculture (USDA) to publicly report details, including the net price, base price, and any premiums. This ultimately resulted in the development of NCBA policy advocating for the establishment of a library or catalog of the types of contracts and details offered by packers to producers.
• In April 2022, ICA provided stakeholder feedback regarding the development of a Cattle Contracts Library Pilot Program to Administrator Summers, USDA Agricultural Marketing Service (AMS). ICA’s comments outlined the information that Iowa cattlemen wanted to see in the library and shared additional thoughts on confidentiality, functionality, and educational outreach to producers.
• The Consolidated Appropriations Act of 2022 directed USDA to create a pilot library to increase market transparency for cattle producers.   
• USDA AMS officially launched the Cattle Contracts Library on January 31, 2023.
• Beginning in May 2023, USDA AMS began hosting a series of listening sessions (in-person and virtual) for industry stakeholders to learn about the library.   

Getting to this point—the point where producers can better inform themselves on purchases of contract cattle and the number of active contracts available—has been a long haul. The creation of this pilot program, in response to the requests of cattle producers in Iowa and across the country, was a significant investment made by Congress and USDA. While we understand this library was created as a pilot program, we ask that this not fall by the wayside.    

The library has not reached its full potential as a resource for cattle producers. We believe there is more work to be done through the partnership between USDA and industry stakeholders. We respectfully ask that this be considered as Congress works through appropriations, and in the near future, reauthorization of the farm bill.   

Thank you for your time and consideration. Questions related to ICA and this letter may be directed to Cora Fox, director of government relations, at (515) 296-2266 or at [email protected].    

Respectfully,       

Bob Noble
President, Iowa Cattlemen’s Association