Tester Leads Legislation to Bring More Transparency, Accuracy to Livestock Markets as Part of Rancher Relief Plan

Second plank of Senator’s Rancher Relief Plan is bipartisan legislation to increase proportion of ‘spot’ payments meat packers are required to negotiate

Rolling out the second plank of his Rancher Relief Plan to bring critical support to Montana cattle producers who have been hit hard by the coronavirus pandemic, U.S. Senator Jon Tester, the Senate’s only working farmer, today introduced bipartisan legislation to increase the proportion of cash payments in the cattle market to improve pricing transparency and provide stability to independent producers and small feeders.

Tester’s bipartisan bill would require large-scale meat packers to increase the proportion of negotiable transactions that are cash, or ‘spot,’ to 50 percent of their total cattle purchases. This would improve accuracy of formula pricing—which currently accounts for a significant portion of transactions—and increase transparency for producers and feeders.

“Market consolidation in the livestock industry is making it harder and harder for producers to meet their bottom lines, especially as large packers rely on fewer spot transactions to purchase live cattle at the farm gate,” said Tester. “This bill will force meat packers to engage in more spot transactions, bringing up formula prices and making them more accurate while giving Montana producers and feeders more flexibility and transparency when they bring their livestock to market.”

Market consolidation by large scale meat packers has enabled them to artificially lower prices of cattle per hundredweight while turning record profits, hurting Montana’s small-scale ranchers and feeders in the process. Packers have been accused using the small percentage of spot transactions they accept to help set formula prices far lower than they should be. Tester’s legislation aims to increase the proportion of spot transactions used in livestock sales, allowing producers more ability to negotiate prices and creating larger, more accurate formulas and futures.

Tester’s Rancher Relief Plan is made up of a series of initiatives to help provide certainty to Montana’s small and medium sized cow calf operators. These bipartisan initiatives include:

1. Increasing interstate commerce and diversifying meat production in Montana and neighboring states;
2. Legislation to ensure fair prices at the farm gate from large packers;
3. And the first bipartisan Senate push for mandatory Country of Origin Labeling since Congress repealed it in 2015.

In recent weeks, Tester has led the fight to provide certainty for Montana ranchers in the face of the coronavirus pandemic. Late last month, Tester demanded that Attorney General William Barr, in coordination with the U.S. Department of Agriculture, open an investigation into reports of price fixing in the cattle market in the wake of the coronavirus pandemic. Additionally, after Montana’s ranchers recently saw the steepest price decline for cattle in forty years, Tester pushed Secretary of Agriculture Sonny Perdue to take immediate action to stabilize beef markets.

Senator Tester has been an outspoken critic of Brazilian beef imports after reports that the country was exporting rotten beef and attempting to cover it up with cancer-causing acid products in 2017. Tester led a bipartisan group of 13 of his colleagues in sending a letter to USDA Secretary Sonny Perdue requesting that the agency reevaluate the decision to lift the Brazilian beef import ban, which was implemented in 2017.

Visit tester.senate.gov/coronavirusresources for a list of resources for Montanans during the COVID-19 outbreak