[Congressional Record Volume 166, Number 89 (Tuesday, May 12, 2020)]
[Senate]
[Pages S2380-S2381]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY (for himself, Mr. Tester, Ms. Ernst, Mrs. Hyde-
        Smith, Mr. Rounds, Ms. Smith, and Mr. Daines):
  S. 3693. A bill to amend the Agricultural Marketing Act of 1946 to 
foster efficient markets and increase competition and transparency 
among packers that purchase livestock from producers; to the Committee 
on Agriculture, Nutrition, and Forestry.
  Mr. GRASSLEY. Mr. President, Iowa is home to 88,000 family farmers. 
These farmers make up the economic foundation of our rural communities, 
and farmers are the leaders who make up the councils and the school 
boards across our State. So when we see economists estimate a 20-
percent drop in livestock and grain producers' revenue due to COVID-19, 
it isn't just our farmers who are concerned; it is our whole State.
  In the CARES Act, we provided USDA with $24.5 billion to address this 
loss in revenue; however, we know that even with this funding, the 
supply chain disruptions from COVID-19 will force some agriculture 
producers to miss payments, and ultimately some will be forced to sell 
their family farms.
  The consequences of COVID-19 shutdowns have injected uncertainty that 
we haven't seen since the farmer crisis of the 1980s.

[[Page S2381]]

  During my time in the Senate, I have always tried to be a vocal 
advocate for the importance of a safe, affordable, and secure supply of 
food. But now our country's food supply chain is facing disruptions 
never envisioned before. As processing plants have shut down due to 
employees being sick, the supply chain disruptions are being felt by 
farmers and, of course, by consumers.
  I ought to tie the two together because it is so important. The old 
saying that we are only nine meals away from a riot--we haven't had 
that in the United States yet, and I hope we don't have it, but when 
you see short supplies of toilet paper and people fighting over toilet 
paper in the supermarket, it wouldn't surprise you that they would 
fight more for food.
  With as much as 40 percent of the slaughter capacity at our packing 
plants down for the past month, beef prices have doubled for the 
consumer. That has caused meat shortages in fast food chains, and 
grocery stores across the country have been forced to limit meat 
purchases per consumer.
  If that is not bad enough, at the same time, livestock producers with 
livestock that is ready to sell have been turned away by meat 
processors. Even if producers are lucky enough to sell, the prices they 
are getting are well below the cost of production, and they are losing 
money on every animal they sell.
  I have received a large volume of calls and emails from Iowans and 
member organizations expressing concern that the current discrepancy 
between high shelf prices and increased losses for cattle producers 
just doesn't make any sense. I share the concerns of these farmers, and 
I take their claims of market manipulation very seriously.
  President Trump is on top of this issue, and this past week, he 
echoed a request that I made of the Attorney General last month to 
examine the current structure of the beef meatpacking industry and 
investigate potential market and price manipulation. Holding the four 
large meatpacking companies accountable is the least we can ask of 
Federal officials, and I thank President Trump for talking to Barr 
about that as well.
  The fact is, over 80 percent of the feedlot cattle in the United 
States are slaughtered by the four largest meatpacking companies: Tyson 
Foods, JBS, Cargill, and No. 4, National Beef. Because these companies 
control a large percentage of slaughter and processing capacity in the 
United States, they have the unique ability to influence the price of 
live cattle. They use tactics such as bottlenecking processing speeds, 
importing foreign meat, utilizing private forward-formula contracts, 
and piling up meat in cold storage to delay the need to purchase live 
cattle from the family farmer.
  I am glad the President asked the Department of Justice to look into 
these schemes to see if any of this behavior is illegal--the same 
request I made to Barr about a month ago.
  Independent producers will always struggle with negotiating prices 
when there are only four large, multinational corporations that control 
prices; however, in Iowa, it is a little different. Our producers sell 
50 percent of their cattle through negotiated cash prices. This allows 
for market transparency so that producers know the market price of 
cattle, and the price more accurately reflects the cost the producers 
incur when raising livestock. However, this isn't the case across the 
entire United States, as more than 80 percent of all cattle are sold 
through formula contracts and/or the cattle futures market. These 
private contracts don't allow for price transparency and hide the true 
value of production from the rest of the marketplace.
  It happens that this is not a new problem. In fact, 18 years ago, I 
introduced a bill with former Senator Feingold from Wisconsin that 
would have helped producers gain leverage by mandating that a 
percentage of a packer's weekly slaughter come from a negotiated cash 
price. I introduced that bill every Congress until 2009, but, sadly, at 
that time, not enough of my colleagues saw the need for a transparent 
marketplace.
  That need is much more obvious today because conversations across the 
country have started to shift, and people's opinion about four big 
meatpackers controlling 80 percent of the market--it looks like more of 
a problem when farmers are losing a lot of money when they sell their 
cattle and the price for the consumer goes up at the supermarket. 
Lawmakers have begun to realize that in order to have a sustainable 
supply of meat in our country, we need to restore transparency in the 
marketplace and protect the market from collapsing when there is a 
supply chain disruption.
  Let me repeat something I said at the beginning--nine meals away from 
a riot and people fighting about who is going to buy the last roll of 
toilet paper in the supermarket. We can't let that same thing happen 
with food, so today I come to the floor to submit my bill to foster 
efficient markets and increase competition and transparency among 
packers that purchase livestock from our producers. The only change to 
that Feingold-Grassley bill is to increase the amount of mandated 
negotiated cash trade to 50 percent from the original 25 percent in 
that bill that Feingold and I cooperated on. This change is needed to 
increase price discovery for producers across the country.
  I am proud to lead this effort with Senator Tester of Montana and 
will work with my colleagues in the Senate and particularly those on 
the Senate Agriculture Committee to make sure this bill becomes law. 
Without significant action by Congress, our independent beef producers 
will not be able to stay in business. I believe the time to act is now. 
Failure to act is failing our independent producers.
  If there is one silver lining that could come out of COVID-19, it may 
be that consumers will start to understand where their food comes from. 
Food does not come from grocery stores; it comes from the tens of 
thousands of farmers and independent producers who bust their backs day 
and night to ensure families across the country have an adequate supply 
of food.
  Farmers are 2 percent of the population who provide for the other 98 
percent, and they even provide for more than 98 percent of Americans--a 
lot of it is exported
  I urge my colleagues to support my legislation being introduced today 
and do right by the producers who provide the food that we all eat.
                                 ______