[Congressional Record Volume 142, Number 101 (Wednesday, July 10, 1996)]
[Senate]
[Pages S7671-S7673]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

        By Mr. CONRAD (for himself, Mr. Dorgan and Mr. Kerrey):

  S. 1939. A bill to improve reporting in the livestock industry and to 
ensure the competitiveness of livestock producers, and for other 
purposes; to the Committee on Agriculture, Nutrition, and Forestry.


            The Livestock Market Revitalization Act of 1996

  Mr. CONRAD. Mr. President, I rise today to introduce the Livestock 
Market Revitalization Act of 1996. My colleagues, Senator Dorgan and 
Senator Kerrey of Nebraska, are cosponsors of this legislation.
  I offer this legislation at a time of tremendous challenges within 
the livestock sector. The occupant of the Chair knows full well what we 
are facing in the livestock industry. His State is a major producer, as 
is mine. From long, drawn-out battles over meat inspection to sudden 
flareups like ``mad cow disease'' in England, to the debilitating price 
declines we have been experiencing for the last several months, the 
industry is facing repeated and difficult challenges.
  The biggest challenge facing individual producers is the need to 
climb out of the downturn in the market and ensure a stable income long 
into the future. I know the occupant of the Chair knows full well, as 
other of my colleagues do, what has happened to the prices of livestock 
over the last year. It has been in precipitous and dramatic decline. 
The pressure this is putting on producers is enormous.
  Let me just say that according to North Dakota State University, in 
1995 net farm income in my State of North Dakota was down 24 percent. 
That is a 24-percent reduction in farm income, its lowest level in 6 
years, largely because of the steep drop in cattle prices. In fact, for 
some, net farm income dropped as much as 30 percent from the previous 
year.
  I was recently in my home State talking to some of my closest 
friends, many of them cattle producers. One after another related to me 
the extraordinary economic pressure they are under as a result of this 
steep decline in prices. These price declines are occurring at the same 
time concentration

[[Page S7672]]

within the livestock industry is at record levels. The top four 
meatpacking firms in America controlled 82 percent of the market in 
1994, the latest statistic available. When Congress last took action to 
address this industry in 1920, the level of concentration was only 49 
percent.

  Mr. President, producers are deeply frustrated because they lack 
confidence in the livestock market and find it difficult to obtain 
timely, reliable market information.
  Mr. President, I believe that is the least that we can do to ensure 
that market participants are engaged in a level playing field.
  For this reason, I am introducing the Livestock Market Revitalization 
Act of 1996. This bill will restore confidence to the livestock market 
by achieving the following objectives:
  First, define captive supplies to include livestock controlled by or 
committed to a packer more than 7 days prior to slaughter through 
standing arrangements, instead of the current 2 weeks.
  Second, strengthen the position of the seller in the livestock market 
by providing them daily information on the demand for his or her 
livestock.
  Third, collect and disseminate data on national, regional, and local 
market activities to monitor possible anticompetitive behavior.
  Fourth, promote the use of a value-based pricing system that is 
equitable to all cattle dealers and packers.
  Fifth, improve collection and dissemination of data on imports and 
exports of cattle and meat.
  If there is one thing my producers have said to me, it is, ``We 
deserve to know what is going on in this market on a regional basis and 
on a local basis. We deserve to know what is happening with imports and 
exports. We deserve that information more readily.
  Sixth, recognize that the USDA may need additional resources to 
achieve the objectives of the bill and ask the USDA to report its needs 
in this area.
  Seventh, protect the interests of farmer-owned cooperatives by 
strengthening their ability to compete in the livestock market.
  Eighth, improve labeling of cattle and meat so producers and 
consumers have more information about the origins of meat and meat 
products in retail markets.
  Let me say that is not just in the interest of producers, that is in 
the interest of consumers as well. Where is the meat that they are 
buying coming from? What is the country of origin? I think that has 
been something that has been delayed for a little too long.
  Ninth, encourage the livestock industry to review its efforts on 
product development to improve the demand for red meat.
  Mr. President, now is the time to act. We must make action possible 
now. There should be no further delay.
  The current depressed cattle market is devastating producers in all 
cattle producing States. While Members on both sides of the aisle, and 
the administration, have been actively seeking ideas to solve this 
problem, it is time to turn those ideas into action.
  My bill addresses real concerns about an industry no one can argue is 
perfect, and many can argue has serious problems.
  I have specifically designed this bill to be one which Republicans 
and Democrats can support--one that can achieve quick passage.
  I would prefer to make the bill broader but I understand that in the 
interest of getting legislation through Congress in this shortened and 
busy year, lean and targeted legislation has better prospects.
  Some of the items in my bill will bolster the authorities currently 
held by the USDA, and will complement the actions the administration 
has already taken. Those actions include the President's and the 
Secretary of Agriculture's decision to open the Conservation Reserve 
Program for haying and grazing, to accelerate the purchase of beef for 
the School Lunch Program, and to continue to maintain our net-exporter 
status on beef with an expected 16 percent increase in total beef 
exports from 1995 to 1996.
  But while administrative actions are good, in a period as serious as 
this in which prices are depressed and market behaviors are troubling, 
it is incumbent on Congress to take action.
  I believe the first action we should take is to get the best possible 
information. That is the main focus of my bill. It is not burdensome. 
It is not invasive. It does not point fingers. It is focused and 
forward-thinking.
  It is an effort to help everyone understand the pressures at each 
level of the livestock industry, from producing to marketing to packing 
to retailing.
  I hope my colleagues will join me in this very important effort.
  I ask unanimous consent that a section-by-section description of the 
bill as well as the bill itself be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1939

       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 ``Livestock Market 
     Revitalization Act of 1996''.

     SEC. 2. CAPTIVE SUPPLY.

       (a) Definition of Captive Supply.--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:
       ``(12) Captive supply.--The term `captive supply' means 
     livestock acquired for slaughter by a packer (including 
     livestock delivered 7 days or more before slaughter) under a 
     standing purchase arrangement, forward contract, or packer 
     ownership, feeding, or financing arrangement, as determined 
     by the Secretary.''.
       (b) Annual Report on Livestock Marketed or Slaughtered.--
     Section 407 of the Packers and Stockyards Act, 1921 (7 U.S.C. 
     228), is amended by adding at the end the following:
       ``(f) Annual Report on Livestock Marketed or Slaughtered.--
       ``(1) In general.--The Secretary shall make available to 
     the public an annual statistical report on the number and 
     volume of livestock marketed or slaughtered in the United 
     States, including--
       ``(A) information collected on the date of enactment of 
     this Act; and
       ``(B) information on transactions involving livestock in 
     regional and local markets.
       ``(2) Administration.--In carrying out paragraph (1), the 
     Secretary shall ensure that--
       ``(A) a significant share of regional and local livestock 
     transactions are reported; and
       ``(B) the confidentiality of individual livestock 
     transactions is maintained.''.
       (c) Information on Captive Supply Transactions.--Section 
     407 of the Packers and Stockyards Act, 1921 (7 U.S.C. 228), 
     as amended by subsection (b), is amended by adding at the end 
     the following:
       ``(g) Information on Captive Supply Transactions.--
       ``(1) In general.--Not later than 24 hours after a 
     transaction involving captive supply is recorded, the 
     Secretary shall make information concerning the transaction 
     (including the specific standing arrangement) available to 
     the public using electronic and other means that will ensure 
     wide availability of the information.
       ``(2) Ongoing livestock transactions.--Any information 
     collected on captive supply under paragraph (1) shall be 
     reported in conjunction with ongoing livestock 
     transactions.''.

     SEC. 3. MONITORING OF ANTITRUST AND ANTICOMPETITIVE BEHAVIOR 
                   AMONG PACKERS AND STOCKYARDS.

       (a) In General.--Section 407 of the Packers and Stockyards 
     Act, 1921 (7 U.S.C. 228) (as amended by section 2(c)), is 
     amended by adding at the end the following:
       ``(h) Monitoring of Antitrust and Anticompetitive 
     Behavior.--
       ``(1) In general.--The Secretary shall--
       ``(A) review and monitor the degree of antitrust and 
     anticompetitive behavior on a national, regional, and local 
     basis (as defined by the Secretary) among packers, stockyard 
     owners, market agencies, and dealers to ensure compliance 
     with Federal law and to ensure that actions taken by packers, 
     stockyard owners, market agencies, and dealers will enhance, 
     and not diminish, competitiveness; and
       ``(B) report the results of the review and monitoring to 
     Congress, the Attorney General, and the public.
       ``(2) Coordination.--The Secretary and the Attorney General 
     shall coordinate efforts to ensure that packers, stockyard 
     owners, market agencies, and dealers do not violate Federal 
     law relating to antitrust and anticompetitive behavior.''.
       (b) Reports.--Not later than 60 days after the date of 
     enactment of this Act, the Secretary of Agriculture shall 
     submit to the Committee on Agriculture of the House of 
     Representatives and the Committee on Agriculture, Nutrition, 
     and Forestry of the Senate--
       (1) a report that--
       (A) assesses the resource needs of the Department of 
     Agriculture for effectively carrying out section 407(h) of 
     the Packers and Stockyards Act, 1971 (7 U.S.C. 228(h)) (as 
     added by subsection (a)); and
       (B) includes a request for any additional funding that may 
     be required for effectively carrying out section 407(h) of 
     the Act; and
       (2) a report that assesses progress in implementing 
     additional monitoring activities

[[Page S7673]]

     identifying geographical procurement markets described in the 
     report entitled ``Monitoring by Packers and Stockyard 
     Administration'', dated October 1991 (GAO/RCED-92-36).

     SEC. 4. COLLECTION AND DISSEMINATION OF MARKETING 
                   INFORMATION.

       Section 204(g) of the Agricultural Marketing Act of 1946 (7 
     U.S.C. 1622(g)) is amended by adding at the end the 
     following: ``In carrying out this subsection, on a national, 
     regional, and local basis (as defined by the Secretary), the 
     Secretary shall--
       ``(1) provide price information, with emphasis on providing 
     the information at the point of sale;
       ``(2) provide price and other information on a regular and 
     timely basis;
       ``(3) make the information available to the public 
     electronically;
       ``(4) collect and disseminate information supplied by 
     packers (as defined in section 201 of the Packers and 
     Stockyards Act, 1921 (7 U.S.C. 191)) on contract pricing 
     related to captive supply (as defined in section 2 of the Act 
     (7 U.S.C. 182));
       ``(5) to the extent practicable, promote the use of 
     consistent, value-based pricing methodology throughout the 
     meat industry; and
       ``(6) report, on a weekly basis, the volume of cattle and 
     meat products imported into the United States.''.

     SEC. 5. COOPERATIVE BARGAINING.

       Section 4 of the Agricultural Fair Practices Act of 1967 (7 
     U.S.C. 2303) is amended by adding at the end the following:
       ``(g) To fail to engage in good-faith negotiations with 
     producer cooperatives (including new cooperatives), or to 
     unfairly discriminate among producer cooperatives (including 
     new cooperatives), with respect to the purchase, acquisition, 
     or other handling of agricultural products.''.

     SEC. 6. LABELING OF MEAT AND MEAT FOOD PRODUCTS.

       Section 7(b) of the Federal Meat Inspection Act (21 U.S.C. 
     607(b)) is amended by striking ``require,'' and all that 
     follows through the period at the end and inserting 
     ``require--
       ``(1) the information required under section 1(n); and
       ``(2) if it was imported (or was produced from an animal 
     that was located in another country for at least 120 days) 
     and is graded, a grading labeling that bears the words 
     `imported', `may have been imported', `this product contains 
     imported meat', `this product may contain imported meat', 
     `this container contains imported meat', or `this container 
     may contain imported meat', as the case may be, or words to 
     indicate its country of origin.''.

     SEC. 7. LIVESTOCK INDUSTRY COMMISSION.

       (a) In General.--The Secretary of Agriculture shall, in 
     consultation with representatives of the livestock industry, 
     establish a national commission composed of non-governmental 
     members appointed by the Secretary to study and recommend 
     means of modernizing the livestock industry and responding to 
     the consumer demand for red meat.
       (b) Study.--In carrying out this section, the commission 
     shall analyze costs and benefits, and make recommendations 
     with respect to--
       (1) value-added livestock products;
       (2) the impact of antitrust and anticompetitive behavior on 
     cattle prices;
       (3) the grading system for meat used by the Secretary; and
       (4) refunds of assessments collected under the Beef 
     Research and Information Act (7 U.S.C. 2901 et seq.).
       (c) Report.--Not later January 1, 2000, the commission 
     shall submit a report the describes the results of the study 
     required under this section to the Committee on Agriculture 
     of the House of Representatives and the Committee on 
     Agriculture, Nutrition, and Forestry of the Senate.
                                                                    ____


                     Section-by-Section Description


                         section 1. short title

       The bill is titled Livestock Market Revitalization Act of 
     1996 to convey the sense that more information and monitoring 
     is needed on a regional and local basis to ensure the 
     competitiveness of the livestock industry.


                      section 2. captive supplies

       (a) The intent is to respond to concerns that information 
     about captive supplies is inadequate. The bill requests that 
     the Secretary defines captive supply transactions to be when 
     packers use any standing arrangement to procure cattle to be 
     delivered for slaughter more than 7 days out. It is also 
     intended that efforts to monitor anticompetitive and 
     antitrust behavior be improved by collecting data nationally, 
     regionally and locally on the types of standing arrangements 
     used, so as a distribution of standing arrangements is 
     provided.
       (b) The intent is to provide guidance to packers using 
     captive supplies to ensure that markets are as competitive as 
     possible. The extent to which captive supplies are utilized 
     nationally, regionally and locally are unknown.
       (c) The intent is to ensure that the USDA reports 
     statistics on livestock transactions in a regular and timely 
     fashion, at least annually. In addition, the reports need to 
     provide for more disaggregate information on the industry, 
     maintaining all confidentially concerns. Specifically, the 
     intent is to define and report by geographical procurement 
     markets.
       (d) The intent is to provide information on captive 
     supplies in a more timely fashion and with the advancement 
     and availability of technology, report no later than 24 hours 
     after a transaction. This reporting requirement is not 
     intended to be burdensome to any of the parties involved. It 
     is intended to strengthen the position of the seller in the 
     market with respect to knowing the demand for his/her 
     livestock.


 section 3. monitoring of antitrust and anticompetitive behavior among 
                         packers and stockyards

       (a) It is the intent to recognize the high level of 
     concentration in the packing industry, and to ensure that the 
     proper data is collected and disseminated to the industry so 
     that cattlemen and stockmen can have the necessary data to go 
     to Justice or USDA for enforcing the Sherman and Clayton and 
     P&S Acts. Data on more disaggregate levels in needed for the 
     Department to better monitor and report on anticompetitive 
     and antitrust behavior.
       (b) The intent is to allow the Secretary to recognize and 
     request additional funding because this bill requires new 
     efforts data be undertaken to ensure the competitiveness of 
     the livestock industry and may have to review its resources 
     on hand.
       In addition to the resource report, the Secretary will 
     report on progress made after the GAO report recommending 
     that the Secretary of Agriculture determine a feasible and 
     practical approach for monitoring the activity in regional 
     livestock markets. In defining the relevant markets, P&SA 
     must determine the types of data and analysis it needs and 
     the cost-effectiveness of obtaining and analyzing the data. 
     The GAO study reports that P&SA officials agree that 
     effective monitoring for anticompetitive behavior depends 
     upon knowing the relative boundaries for geographical 
     livestock procurement markets. By focusing on calculating 
     national statistics on concentration in the meat packing 
     industry and not defining regional livestock procurement 
     markets, P&SA may in its data be understanding the potential 
     risks associated with concentration in some areas.


    SECTION 4. COLLECTION AND DISSEMINATION OF MARKETING INFORMATION

       The intention is to direct the Secretary to collect and 
     disseminate more timely and relevant information to the 
     industry and to utilize existing technologies which enhance 
     the timeliness of delivery. The red meat sector pricing 
     system is largely based on visual quality characteristics and 
     not measurable value. It is intended that the Secretary work 
     with the industry to develop a value based pricing 
     methodology that is equitable to all cattle dealers and 
     packers. Producers also need to have timely information on 
     imports and exports of cattle and meat in order to better 
     schedule their sales.


                   SECTION 5. COOPERATIVE BARGAINING

       The intent is to strengthen the ability of cooperatives 
     ability to bargain with the large packers on the terms of 
     sale. It is important to ensure that packers utilize the 
     supplies from cooperatives in the same fashion as other 
     feedlots.


           SECTION 6. LABELING OF MEAT AND MEAT FOOD PRODUCTS

       The intent here is to provide the consumer with information 
     about the country of origin of meat and meat food products so 
     as to eliminate any confusion about the USDA grade label 
     implying the beef was produced in the United States. It also 
     requires that cattle entering the United States to be 
     slaughter be label as having resided in other countries 
     unless it has resided here for 120 days.


                SECTION 7. LIVESTOCK INDUSTRY COMMISSION

       It is the intent to set up an industry lead Commission to 
     research and report on the more contentious issues swirling 
     around in the industry. The red meat industry lags behind 
     poultry and pork in investments and product development. Many 
     reasons exists, but it is time to identify the most important 
     ones and design a strategy to improve the demand for red 
     meat.
                                 ______