1.This Act may be cited as the
Livestock Marketing Fairness
Act
.
2.The purpose of the amendments made by this
Act is to prohibit the use of certain anti-competitive forward
contracts—
(1)to require a firm
base price in forward contracts and marketing agreements; and
(2)to require that
forward contracts be traded in open, public markets.
3.Limitation on use
of anti-competitive forward contracts
(a)Section 202 of the Packers and Stockyards Act, 1921 (7
U.S.C. 192), is amended—
(1)by striking
Sec. 202.
It shall be
and inserting the
following:
;
(2)by striking
to:
and inserting to—
;
(3)by redesignating
subsections (a), (b), (c), (d), (e), (f), and (g) as paragraphs (1), (2), (3),
(4), (5), (7), and (8), respectively, and indenting appropriately;
(4)in paragraph (7)
(as redesignated by paragraph (3)), by redesignating paragraphs (1), (2), and
(3) as subparagraphs (A), (B), and (C), respectively, and indenting
appropriately;
(5)in paragraph (8)
(as redesignated by paragraph (3)), by striking subdivision (a), (b),
(c), (d), or (e)
and inserting paragraph (1), (2), (3), (4),
(5), or (6)
;
(6)in each of
paragraphs (1), (2), (3), (4), (5), (7), and (8) (as redesignated by paragraph
(3)), by striking the first capital letter of the first word in the paragraph
and inserting the same letter in the lowercase;
(7)in each of
paragraphs (1) through (5) (as redesignated by paragraph (3)), by striking
or
at the end;
(8)by inserting after
paragraph (5) (as redesignated by paragraph (3)) the following:
(6)except as provided
in subsection (c), use, in effectuating any sale of livestock, a forward
contract that—
(A)does not contain a
firm base price that may be equated to a fixed dollar amount on the day on
which the forward contract is entered into;
(B)is not offered for
bid in an open, public manner under which—
(i)buyers and sellers
have the opportunity to participate in the bid; and
(ii)buyers and
sellers may witness bids that are made and accepted;
(C)is based on a
formula price; or
(D)subject to
subsection (b), provides for the sale of livestock in a quantity in excess
of—
(i)in
the case of cattle, 40 cattle;
(ii)in the case of
swine, 30 swine; and
(iii)in the case of
other types of livestock, a comparable quantity of the type of livestock
determined by the Secretary.
;
and
(9)by adding at the
end the following:
(b)The
Secretary may adjust the maximum quantity of livestock described in subsection
(a)(6)(D) to reflect advances in marketing and transportation capabilities if
the adjusted quantity provides reasonable market access for all buyers and
sellers.
(c)Exemption for
cooperativesSubsection (a)(6) shall not apply to—
(1)a cooperative or
entity owned by a cooperative, if a majority of the ownership interest in the
cooperative is held by active cooperative members that—
(A)own, feed, or
control livestock; and
(B)provide the
livestock to the cooperative for slaughter;
(2)a packer that is
not required to report to the Secretary on each reporting day (as defined in
section 212 of the Agricultural Marketing Act of 1946 (7 U.S.C. 1635a))
information on the price and quantity of livestock purchased by the packer;
or
(3)a packer that owns
only 1 livestock processing
plant.
.
(b)Section
2(a) of the Packers and Stockyards Act, 1921 (7 U.S.C. 182(a)), is amended by
adding at the end the following:
(15)The term firm base price means a transaction
using a reference price from an external source.
(16)
(A)The term formula price means any price term
that establishes a base from which a purchase price is calculated on the basis
of a price that will not be determined or reported until a date after the day
the forward price is established.
(B)The
term formula price does not include—
(i)any price term
that establishes a base from which a purchase price is calculated on the basis
of a futures market price; or
(ii)any adjustment to
the base for quality, grade, or other factors relating to the value of
livestock or livestock products that are readily verifiable market factors and
are outside the control of the packer.
(17)The term forward contract means an oral or
written contract for the purchase of livestock that provides for the delivery
of the livestock to a packer at a date that is more than 7 days after the date
on which the contract is entered into, without regard to whether the contract
is for—
(A)a specified lot of
livestock; or
(B)a specified number
of livestock over a certain period of
time.
.