[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7639 Introduced in House (IH)]
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117th CONGRESS
2d Session
H. R. 7639
To amend the Agricultural Marketing Act of 1946 to establish a cattle
contract library, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 3, 2022
Mrs. Axne (for herself, Mr. Feenstra, Mrs. Hinson, Mrs. Miller-Meeks,
and Mrs. Hartzler) introduced the following bill; which was referred to
the Committee on Agriculture
_______________________________________________________________________
A BILL
To amend the Agricultural Marketing Act of 1946 to establish a cattle
contract library, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Cattle Price Discovery and
Transparency Act of 2022''.
SEC. 2. DEFINITIONS.
(a) In General.--Section 212 of the Agricultural Marketing Act of
1946 (7 U.S.C. 1635a) is amended--
(1) in paragraph (5), by striking ``cattle,'' and inserting
``cattle (including fed cattle),'';
(2) by redesignating paragraphs (1) through (14) as
paragraphs (2), (3), (4), (6) through (8), (10), and (12)
through (18), respectively;
(3) by inserting before paragraph (2) (as so redesignated)
the following:
``(1) Approved pricing mechanism.--The term `approved
pricing mechanism' means a purchase of fed cattle made--
``(A) through a negotiated purchase;
``(B) through a negotiated grid purchase;
``(C) at a stockyard (as defined in section 302 of
the Packers and Stockyards Act, 1921 (7 U.S.C. 202));
or
``(D) through a trading system or platform for the
purchase or sale of cattle, or for an arrangement to
purchase or sell cattle, through any means in which
multiple buyer and seller participants have the ability
to, and regularly and consistently, make and accept
bids and offers on or at the trading system or
platform.'';
(4) by inserting after paragraph (4) (as so redesignated)
the following:
``(5) Fed cattle.--The term `fed cattle' means a steer or
heifer that has been finished on a ration of roughage and feed
concentrates, such as grains, protein meal, grass (forage), and
other nutrient-rich feeds, prior to slaughter.'';
(5) by inserting after paragraph (8) (as so redesignated)
the following:
``(9) Mandatory minimum.--The term `mandatory minimum'
means, of the quantity of fed cattle purchased for slaughter by
a covered packer (as defined in section 221) for each
processing plant, the minimum percentage of such cattle that
are required to be purchased through approved pricing
mechanisms from producers that are not packers.''; and
(6) by inserting after paragraph (10) (as so redesignated)
the following:
``(11) Negotiated grid purchase.--The term `negotiated grid
purchase', with respect to cattle, means a purchase--
``(A) involving the negotiation of a base price
from which premiums are added and discounts are
subtracted, determined by seller-buyer interaction and
agreement on a delivery day; and
``(B) under which the cattle are scheduled for
delivery to the packer not later than 14 days after the
date on which the cattle are committed to the
packer.''.
(b) Cattle Reporting Definitions.--Section 221 of the Agricultural
Marketing Act of 1946 (7 U.S.C. 1635d) is amended--
(1) in paragraph (1), by striking ``7-day'' and inserting
``14-day'';
(2) in paragraph (8)(B), by striking ``market'' and
inserting ``marketing'';
(3) by redesignating paragraphs (3), (4), (5), (6), (7),
and (8) as paragraphs (5), (6), (8), (9), (11), and (12),
respectively;
(4) by inserting after paragraph (2) the following:
``(3) Covered contract.--
``(A) In general.--The term `covered contract'
means any agreement, written or oral, between a packer
and a producer for the purchase of fed cattle for
slaughter.
``(B) Exclusion.--The term `covered contract' does
not include a contract for a negotiated purchase.
``(4) Covered packer.--The term `covered packer' means a
packer that has slaughtered during the immediately preceding 5
calendar years an average of not less than 5 percent of the
number of fed cattle slaughtered nationally during the
immediately preceding 5 calendar years.'';
(5) by inserting after paragraph (6) (as so redesignated)
the following:
``(7) Heifer.--The term `heifer' means a bovine female that
has not given birth to a calf.''; and
(6) by inserting after paragraph (9) (as so redesignated)
the following:
``(10) Steer.--The term `steer' means a bovine male
castrated before reaching sexual maturity.''.
SEC. 3. 14-DAY CATTLE SLAUGHTER REPORT.
Section 222(c) of the Agricultural Marketing Act of 1946 (7 U.S.C.
1635e(c)) is amended--
(1) in paragraph (1)--
(A) by striking subparagraphs (B) and (C); and
(B) by redesignating subparagraph (D) as
subparagraph (B);
(2) in paragraph (2), by striking ``the information'' and
inserting ``information reported under this subsection'';
(3) by redesignating paragraph (2) as paragraph (3); and
(4) by inserting after paragraph (1) the following:
``(2) Prior day reporting.--
``(A) In general.--The corporate officers or
officially designated representatives of each packer
processing plant shall report to the Secretary, for
each business day of the packer processing plant, not
later than 10:00 a.m. Central Time on each reporting
day, the information from the prior business day
described in subparagraph (B).
``(B) Information required.--The information
required under subparagraph (A) shall be, with respect
to the prior business day, the number of cattle
scheduled for delivery to a packer processing plant for
slaughter for each of the next 14 calendar days.''.
SEC. 4. EXPEDITED CARCASS WEIGHTS REPORTING.
Section 222 of the Agricultural Marketing Act of 1946 (7 U.S.C.
1635e) is amended by adding at the end the following:
``(f) Expedited Carcass Weights.--
``(1) Determination.--Not later than 180 days after the
date of enactment of the Cattle Price Discovery and
Transparency Act of 2022, the Secretary shall determine the
minimum amount of time needed by the Secretary to publicly
report the daily average carcass weight of cattle slaughtered
by packer processing plants.
``(2) Reporting.--Not later than 180 days after the
Secretary has made a determination under paragraph (1), the
Secretary shall begin publicly reporting the information
described in that paragraph within the time determined under
that paragraph.''.
SEC. 5. MANDATORY REPORTING OF CUTOUT YIELD.
Section 223 of the Agricultural Marketing Act of 1946 (7 U.S.C.
1635f) is amended--
(1) in subsection (a)--
(A) in the subsection heading, by striking ``Daily
Reporting'' and inserting ``In General'';
(B) in paragraph (3)--
(i) in subparagraph (C), by striking the
period at the end and inserting ``; and''; and
(ii) by redesignating subparagraphs (A)
through (C) as clauses (i) through (iii),
respectively, and indenting appropriately;
(C) by redesignating paragraphs (1) through (3) as
subparagraphs (A) through (C), respectively, and
indenting appropriately;
(D) in the matter preceding subparagraph (A) (as so
redesignated), by striking ``Secretary at least'' and
inserting the following: ``Secretary--
``(1) at least''; and
(E) by adding at the end the following:
``(2) at least once each year, at a time determined by the
Secretary, cutout yield data.''; and
(2) in subsection (b)--
(A) by striking ``the information required to be
reported under subsection (a)''; and
(B) by striking ``day.'' and inserting the
following: ``day--
``(1) the information required to be reported under
subsection (a)(1); and
``(2) a composite price using the information required to
be reported under paragraphs (1) and (2) of subsection (a).''.
SEC. 6. CATTLE CONTRACT LIBRARY.
The Agricultural Marketing Act of 1946 is amended--
(1) by redesignating section 223 (7 U.S.C. 1635f) as
section 224; and
(2) by inserting after section 222 (7 U.S.C. 1635e) the
following:
``SEC. 223. CATTLE CONTRACT LIBRARY.
``(a) In General.--Not later than 120 days after the date of
enactment of the Cattle Price Discovery and Transparency Act of 2022,
the Secretary shall establish and maintain, through the Livestock
Mandatory Price Reporting program, a library or catalog (referred to in
this section as the `library'), of each type of covered contract
entered into between packers and producers for the purchase of fed
cattle (including cattle that are purchased or committed for delivery),
including any schedules of premiums or discounts associated with the
covered contract.
``(b) Information Collection.--
``(1) In general.--To maintain the library, the Secretary
shall obtain information from each packer on each type of
existing covered contract of the packer by requiring a filing
or other form of information submission from each packer.
``(2) Contract information.--Information submitted to the
Secretary by a packer under paragraph (1) shall include, with
respect to each existing covered contract of a packer--
``(A) the type of contract;
``(B) the duration of the contract;
``(C) a summary of the contract terms;
``(D) provisions in the contract that may affect
the price of cattle covered by the contract, including
schedules, premiums and discounts, financing and risk-
sharing arrangements, and transportation arrangements;
``(E) the total number of cattle covered by the
contract solely committed to the packer each week
within the 6-month and 12-month periods following the
date of the contract and the percentage of cattle each
week that may vary for delivery or nondelivery at the
discretion of the packer, organized by reporting region
or in such other manner as the Secretary may determine;
``(F) in the case of a contract in which a specific
number of cattle are not solely committed to the
packer--
``(i) an indication that the contract is an
open commitment; and
``(ii) any weekly, monthly, annual, or
other limitations or requirements on the number
of cattle that may be delivered to the packer
under the contract, including the percentage of
cattle that may vary for delivery or
nondelivery in a given time period at the
discretion of the packer; and
``(G) a description of the provisions in the
contract that provide for expansion in the numbers of
fed cattle to be delivered under the contract for the
6-month and 12-month periods following the date of the
contract.
``(c) Availability of Information.--
``(1) In general.--The Secretary shall make publicly
available to producers and other interested persons information
(including the information described in subsection (b)(2)), in
a user-friendly format, on the types of covered contracts in
the library, including notice (on a real-time basis, if
practicable) of the types of covered contracts that are entered
into between packers and producers for the purchase of fed
cattle.
``(2) Monthly report.--
``(A) In general.--Beginning 30 days after the
library is established, the Secretary shall make the
information obtained each month in the library
available in a monthly report to producers and other
interested persons.
``(B) Contents.--The monthly report described in
subparagraph (A) shall include--
``(i) based on the information collected
under subsection (b)(2)(E), an estimate by the
Secretary of the total number of fed cattle
committed under covered contracts for delivery
to packers within the 6-month and 12-month
periods following the date of the report,
organized by reporting region and type of
contract;
``(ii) based on the information collected
under subsection (b)(2)(F), the number of
covered contracts with an open commitment and
any weekly, monthly, annual, or other
limitations or requirements on the number of
cattle that may be delivered under such
contracts, including the percentage of cattle
that may vary for delivery or nondelivery in a
given time period at the discretion of the
packer; and
``(iii) based on the information collected
under subsection (b)(2)(G), an estimate by the
Secretary of the total maximum number of fed
cattle that may be delivered within the 6-month
and 12-month periods following the date of the
report, organized by reporting region and type
of contract.
``(d) Maintenance of Library.--Information in the library about
types of contracts that are no longer offered or in use shall be
removed from the library.
``(e) Confidentiality.--The reporting requirements for packers
under this section shall be subject to the confidentiality protections
provided under section 251.
``(f) Violations.--It shall be unlawful and a violation of this Act
for any packer to willfully fail or refuse--
``(1) to provide to the Secretary accurate information
required under this section; or
``(2) to comply with any other requirement of this section.
``(g) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary such sums as are necessary to carry out
this section.''.
SEC. 7. MARKET ACQUISITION OF FED CATTLE.
(a) Sense of the House of Representatives.--It is the sense of the
House of Representatives that--
(1) all participants in the fed cattle market have a
responsibility to contribute to sufficient levels of negotiated
trade of fed cattle in all cattle feeding regions in order to
achieve competitive bidding and maximum transparency in all
relevant markets and robust price discovery for the benefit of
all market participants;
(2) covered packers that use negotiated market prices or
internal formulations thereof as the basis for formula
marketing arrangements may have incentives to not participate
in price discovery in fed cattle markets, including in order to
influence the price, especially if the majority of the cattle
purchases are under fed cattle formula marketing arrangements
under which it is particularly important to have minimum
participation; and
(3) the Department of Agriculture should examine academic
literature regarding minimum levels of negotiated transactions
necessary to achieve robust price discovery, eliminate the
potential for price manipulation, and enhance cattle producer
leverage in the marketplace in each of the cattle marketing
regions.
(b) Penalties.--Section 253(a) of the Agricultural Marketing Act of
1946 (7 U.S.C. 1636b(a)) is amended--
(1) in paragraph (1)--
(A) by striking the paragraph designation and
heading and all that follows through ``Any packer'' and
inserting the following:
``(1) Penalty amount.--
``(A) In general.--Except as provided in
subparagraph (B), any packer''; and
(B) by adding at the end the following:
``(B) Mandatory minimum violation.--Any packer or
other person that violates section 259 may be assessed
a civil penalty by the Secretary of not more than
$90,000 for each violation (as adjusted for
inflation).''; and
(2) in paragraph (2)--
(A) by striking ``Each day'' and inserting the
following:
``(A) In general.--Except as provided in
subparagraph (B), each day''; and
(B) by adding at the end the following:
``(B) Mandatory minimum violation.--Each week
during which a violation of section 259 continues shall
be considered to be a separate violation.''.
(c) Mandatory Minimums.--The Agricultural Marketing Act of 1946 is
amended--
(1) by redesignating sections 259 and 260 (7 U.S.C. 1636h,
1636i) as sections 260 and 261, respectively; and
(2) by inserting after section 258 (7 U.S.C. 1636g) the
following:
``SEC. 259. MANDATORY MINIMUMS.
``(a) Purpose.--The purpose of this section is to establish
mandatory minimums--
``(1) to enhance price discovery, transparency, and cattle
producer leverage for cattle market participants; and
``(2) to minimize and mitigate conflicts of interest and
other incentives for a covered packer to influence the base
price of formula marketing arrangements for the benefit of the
covered packer through action or inaction in the market in
which the base price is determined.
``(b) Establishment.--
``(1) In general.--Not later than 2 years after the date of
enactment of the Cattle Price Discovery and Transparency Act of
2022, the Secretary shall establish--
``(A) 5 to 7 contiguous regions (referred to in
this section as `covered regions') that--
``(i) together encompass the entire
continental United States; and
``(ii) to the extent practicable,
reasonably reflect similar fed cattle purchase
practices;
``(B) a mandatory minimum--
``(i) for each covered region established
under subparagraph (A); and
``(ii) that shall be applicable with
respect to each processing plant of a covered
packer located in that covered region; and
``(C) a time period within which a covered packer
shall be required to meet the applicable mandatory
minimum, which shall be not less than 1 week but not
more than 30 days.
``(2) Modifications.--The Secretary--
``(A) shall review the mandatory minimums
established under paragraph (1) not later than 2 years
after the date of establishment and periodically
thereafter, but not less frequently than once every 5
years; and
``(B) modify any such mandatory minimum, as
necessary, after consulting with representatives of the
United States cattle and beef industry and in
accordance with paragraph (4).
``(3) Public input.--In carrying out this subsection, the
Secretary shall make all proposed mandatory minimums subject to
notice and comment rulemaking and a cost-benefit analysis.
``(4) Considerations.--In establishing or modifying
mandatory minimums under this subsection for any covered
region, the Secretary shall consider the following factors:
``(A) The number of covered packers in the covered
region.
``(B) The availability of fed cattle in the covered
region.
``(C) Pre-existing contractual arrangements of
packers in the covered region.
``(D) The number of pricing transactions (pens of
cattle sold) in the covered region.
``(E) The proportion of fed cattle purchased in the
covered region through negotiated purchases or
negotiated grid purchases relative to the number of
formula marketing arrangements that use the negotiated
prices or negotiated grid prices as base prices.
``(5) Initial mandatory minimum requirement.--The initial
mandatory minimum established under paragraph (1)(B) for each
covered region shall be--
``(A) not less than the average percentage of
negotiated purchases and negotiated grid purchases made
in that covered region between January 1, 2020, and
January 1, 2022; and
``(B) not more than 50 percent.
``(c) Purchases.--A covered packer shall, with respect to each
processing plant of the covered packer, purchase through an approved
pricing mechanism not less than the percentage of fed cattle required
under the mandatory minimum established under subsection (b) for the
covered region in which the processing plant is located.
``(d) Enforcement.--
``(1) In general.--On establishing mandatory minimums under
subsection (b), the Secretary--
``(A) shall regularly monitor compliance by covered
packers with those mandatory minimums; and
``(B) in the case of noncompliance by a covered
packer in a given period, may allow the covered packer
to remedy the noncompliance by purchasing the
applicable shortfall in the approved pricing mechanism
in 1 or more subsequent periods, subject to paragraph
(2).
``(2) Nonremedy.--The Secretary shall not allow a covered
packer to remedy noncompliance under paragraph (1)(B) if the
covered packer has a pattern or practice of noncompliance, as
determined by the Secretary.
``(e) Effect on Premiums.--Nothing in this section prohibits a
formula marketing arrangement from including a premium in addition to
the base price, including a premium for meat quality, consistency,
breed, production method, branding, or any other value-added effort.''.
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