Today, the U.S. Department of Agriculture (USDA) published for public inspection a final rule in the Federal Register to secure the contract information needed to populate a Cattle Contracts Library. The official publication of the final rule is scheduled for Wednesday, Dec. 7, 2022, with full implementation of the rule planned for Jan. 6, 2023. The final rule will require packers that slaughtered an average of not less than five percent of the number of fed cattle slaughtered nationally during the immediately preceding five calendar years to submit contractual information for the purchase of cattle.
The Consolidated Appropriations Act of 2022 directed the USDA’s Agricultural Marketing Service (AMS) to create a Cattle Contracts Library Pilot Program (library) to increase market transparency for cattle producers. AMS hosted a listening session in April 2022 to begin the process of gathering feedback from stakeholders. Feedback gleaned from the meeting and over the subsequent months informed the development of the pilot library, including comments related to content, frequency of reporting, and usability, USDA said. From there, AMS developed a working library model which was primarily populated with inactive contracts. The model was presented to a wide range of stakeholders and end users, with a focus on content and usage.
The National Cattlemen’s Beef Association (NCBA) welcomed the news after its ongoing advocacy efforts to improve cattle market transparency.
“We are pleased that USDA listened to feedback from stakeholders like NCBA while crafting the final rule on the Cattle Contract Library Pilot Program. We are hopeful that this pilot program will strike an appropriate balance between offering cattle producers additional insight into the market while also protecting their proprietary business information,” said NCBA Senior Director of Government Affairs Tanner Beymer. “A Cattle Contract Library is just one of many tools NCBA has advocated for to help producers make informed business decisions and capture the most value possible for their cattle.”
NCBA has long advocated for market transparency tools and worked closely with congressional leaders like Senator John Hoeven, R-N.D., to secure congressional authorization to launch the pilot program.
NCBA said its staff worked closely with USDA to provide feedback throughout the testing phase of the program and looks forward to continued engagement and evaluation as the pilot program launches.
According to the USDA, the publication of the final rule, will ensure complete reporting of contractual information and volumes purchased against the contracts, including: supplemental information on cattle requirements; associated schedules of premiums and discounts; delivery and transportation terms and payments; appendices and agreements of financing, risk-sharing, or profit sharing; or other financial arrangements associated with such contracts, whenever new contracts are offered, or existing contracts are updated.
After publication, AMS will work directly with those entities required to report to ensure they understand what type of information is required, and how and when it must be provided. AMS expects to have a working pilot for public consumption in early 2023 with plans to hold an industry briefing session prior to release. Once that occurs, AMS will engage in producer education through webinars, meetings, and other opportunities. Ensuring that the information is readily available, accessible, and understood by those who stand to benefit from it is of critical importance, the agency said.