[Congressional Record Volume 142, Number 100 (Tuesday, July 9, 1996)]
[Senate]
[Pages S7493-S7494]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     SENATE RESOLUTION 277--RELATIVE TO THE BEEF AND CATTLE MARKETS

  Mr. CRAIG (for himself, Mr. Baucus, Mr. Pressler, Mr. Burns, Mr. 
Grassley, Mr. Domenici, Mr. Thomas, Mr. Bond, and Mr. Kempthorne) 
submitted the following resolution; which was referred to the Committee 
on Agriculture, Nutrition, and Forestry:

                              S. Res. 277

       Whereas historically high cattle supplies, low cattle 
     prices, and high feed costs have brought hardship to United 
     States cattle producers: Now, therefore, be it
       Resolved,

     SECTION 1. MONITORING AND EVALUATION OF ANTITRUST RELATED 
                   ISSUES.

       It is the sense of the Senate that the Secretary of 
     Agriculture and the Attorney General should--
       (1) increase monitoring of mergers and acquisitions in the 
     fed and nonfed beef packing sectors for potential antitrust 
     violations; and
       (2) investigate possible barriers to entry or expansion in 
     the beef packing sector.

     SEC. 2. COLLECTION AND REPORTING FUNCTIONS.

       It is the sense of the Senate that the Secretary of 
     Agriculture should--
       (1) to the extent practicable on a regional basis, improve 
     the collection, timeliness, and reporting of--
       (A) contract, formula, and live cash cattle;
       (B) captive supply cattle, including a definitional change 
     from every 14 to every 7 days;
       (C) boxed beef prices;
       (D) price differentials within Department of Agriculture 
     quality grades;
       (E) all beef and live cattle exports and imports; and
       (F) weekly fed cattle value matrix; and
       (2) cooperate with the industry to improve collection and 
     reporting of--
       (A) retail scanner data to develop a retail price series 
     that reflects both volume and price of all beef sold at 
     retail; and
       (B) price and quantity data for United States beef sold for 
     consumption in the away-from-home market.

     SEC. 3. SELF-REGULATION WITHIN THE PRIVATE SECTOR.

       It is the sense of the Senate that--
       (1) in the case of cattle that are not sold on a live cash 
     basis, a ``grid'' pricing structure should be utilized to 
     determine prices and spreads through competitive bidding not 
     more than 7 days prior to shipment; and
       (2) agricultural lenders should consider the total asset 
     portfolio, instead of merely the cash flow, of an entity 
     participating in the cattle and beef markets when evaluating 
     loan performance.

     SEC. 4. INTERNATIONAL BARRIERS TO TRADE.

       It is the sense of the Senate that--
       (1) the Secretary of Agriculture should continue to 
     identify and seek to eliminate unfair trade barriers and 
     subsidies affecting United States beef markets;
       (2) the United States and Canadian Governments should 
     expeditiously negotiate the elimination of animal health 
     barriers that are not based on sound science; and
       (3) the import ban on beef from cattle treated with 
     approved growth hormones imposed by the European Union should 
     be terminated.

     SEC. 5. EMERGENCY LOAN GUARANTEES.

       It is the sense of the Senate that funding for emergency 
     loan guarantees, which assist

[[Page S7494]]

     agricultural producers who have suffered economic loss due to 
     a natural disaster or other economic conditions, should be 
     funded.

  Mr. CRAIG. Mr. President, I rise to submit a resolution of critical 
importance to our Nation's cattle producers. The beef industry 
assistance resolution is designed to address the short-term problems 
that plague the cattle industry because of the prolonged down cycle of 
the beef market.
  A number of my colleagues share my concerns, and I am pleased to 
announce that original cosponsors of this resolution are Senator Max 
Baucus, Senator Chuck Grassley, Senator Larry Pressler, Senator Pete 
Domenici, Senator Conrad Burns, Senator Dirk Kempthorne, and Senator 
Craig Thomas.
  As a former rancher, I have a first-hand understanding of the 
challenges that face the cattle industry. The prolonged down cycle is 
especially troubling because it affects the livelihoods of thousands of 
ranching families in Idaho and across the country.
  These beef producers are the largest sector of Idaho and American 
agriculture. Over 1 million families raise over 100 million head of 
beef cattle every year. This contributes over $36 billion to local 
economies. Even with the extended cycle of low prices, direct cash 
receipts from the Idaho cattle industry were almost $620 million in 
1995. These totals only represent direct sales; they do not capture the 
multiplier effect that cattle ranches have in their local economies 
from expenditures on labor, feed, fuel, property taxes, and other 
inputs.
  Over the years, cattle operations have provided a decent living and 
good way of life in exchange for long days, hard work, and dedication. 
While the investment continues to be high, the returns have been low in 
recent years.
  The problems facing the cattle industry in recent years are complex. 
The nature of the market dictates that stable consumption combined with 
increased productivity and growing herd size yield lower prices to 
producers. This, combined with high feed prices and limited export 
opportunities, has caused a near crisis.
  Many Idahoans have contacted me on this issue. Some suggest the 
Federal Government intervene in the market to help producers. However, 
many others have expressed fear that Federal intervention, if 
experience is any indication, will only complicate matters and may also 
create a number of unintended results. I tend to agree with the latter. 
Time and again, I have seen lawmakers and bureaucrats in Washington, 
DC, albeit well-intentioned, take a difficult situation and make it 
worse. This does not mean that I believe Government has no role to 
play. I have supported and will continue to support measures of proven 
value. However, I will continue to follow this situation closely with 
the hope that free market forces will, in the long run, aid in making 
cattle producers more efficient, productive, and profitable.
  The cattle industry is part of a complex, long-term cycle; however, 
there are producers who might not survive the short term consequences. 
The beef industry assistance resolution addresses a number of these 
short-term issues. These are issues that were raised at a hearing of 
the Agriculture Committee that I chaired a few weeks ago.

  The resolution has five sections--antitrust monitoring, market 
reporting, private sector self-regulation, recognition of barriers to 
international trade, and emergency loan guarantees.
  Section 1 encourages the Secretary of Agriculture and Department of 
Justice to increase the monitoring of mergers and acquisitions in the 
beef industry. Investigation of possible barriers in the beef packing 
sector for new firms and with other commodities is encouraged.
  Section 2 directs the Secretary of Agriculture to expedite the 
reporting of existing beef categories and add additional categories. 
These categories include contract, formula and live cash cattle prices 
and boxed beef prices. The Secretary is also encouraged to increase the 
frequency of captive supply cattle from every 14 to 7 days. I am 
especially interested in the improved reporting of all beef and live 
cattle exports and imports. The second section also directs the 
Secretary to capture data on a previously unrecorded segment of the 
market--away from home consumption. While this market consumes 
approximately half of the Nation's beef production, very little is 
known about it.
  Section 3 encourages two very important measures within the private 
sector. First, meat packing companies are encouraged to fully utilize a 
grid pricing structure which will provide producers with a more 
complete picture for the particular type of the cattle they produce. 
Second, agricultural lenders are encouraged to consider the total asset 
portfolio, not just cash-flow, when evaluating this year's beef loans. 
Even the best operators will have great difficulty cash-flowing a 
cattle outfit because of the prolonged period of low prices.
  Section 4 recognizes a number of barriers to international trade that 
adversely affect American beef producers. The section is meant to 
elevate the importance of all trade issues and specifically references 
the elimination of the European Union hormone ban and animal health 
barriers between the United States and Canada.
  Section 5 recommends that emergency loan guarantees be made available 
to agricultural lenders with cattle industry loans. I am disappointed 
that the President zeroed out funding for this program in his fiscal 
year 1997 proposal. I have heard from a number of lenders that a high 
number of loans are questionable for this fall.
  The beef industry assistance resolution is a measure designed to 
provide immediate, short-term solutions to some of the serious problems 
facing the cattle industry. I know that a number of my colleagues have 
legislation pending in regard to the cattle market. I would comment 
that I see this resolution as a starting point, not an ending point for 
cattle industry issues.

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