[House Report 117-203]
[From the U.S. Government Publishing Office]


117th Congress    }                                    {        Report
                        HOUSE OF REPRESENTATIVES
 1st Session      }                                    {       117-203

======================================================================



 
                  CATTLE CONTRACT LIBRARY ACT OF 2021

                                _______
                                

December 7, 2021.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. David Scott of Georgia, from the Committee on Agriculture, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 5609]

    The Committee on Agriculture, to whom was referred the bill 
(H.R. 5609) to amend the Agricultural Marketing Act of 1946, to 
establish a cattle contract library, and for other purposes, 
having considered the same, reports favorably thereon without 
amendment and recommends that the bill do pass.

                           Brief Explanation

    This legislation directs USDA's Agricultural Marketing 
Service (AMS) to establish a publicly available library of 
cattle contracts. The legislation also establishes a grant 
program, to be administered in coordination with USDA's 
National Institute of Food and Agriculture, for producer 
education on how to best use cattle market information.

                    Purpose and Need for Legislation

    Given the long-term trend towards the sale of cattle 
through specialized alternative marketing agreements, rather 
than through traditional negotiated trades, there has been 
growing concern from parts of the cattle industry--specifically 
cattle producers--that there is not enough transparency in 
cattle markets. In creating a contract library, the goal is to 
increase transparency and improve price discovery by giving 
producers access to more information regarding these marketing 
agreements. Additional transparency will be achieved by 
requiring USDA to maintain publicly available data regarding 
the various types of contracts offered by packers to producers 
for the sale of fed cattle. The library will include summarized 
information for each type of contract including price terms, 
premiums and discounts, and associated transportation costs.
    USDA already maintains a contract library for the swine 
industry. The cattle contract library is modeled off the swine 
contract library but with some alterations to improve utility.

             H.R. 5609, Cattle Contract Library Act of 2021


                           SECTION-BY-SECTION

Section 1. Short title

    Section 1 provides the short title of the bill as the 
``Cattle Contract Library Act of 2021.''

Section 2. Cattle Contract Library

    This section amends chapter 2 of subtitle B of the 
Agricultural Marketing Act of 1946 by adding a new section at 
the end. Subsection (a) of the new section requires the 
Secretary to establish and maintain a library or catalog of 
each type of contract offered by packers to producers for the 
purchase of fed cattle, including any schedules of premiums or 
discounts associated with the contract. Subsection (b) requires 
the Secretary to obtain such information by requiring each 
packer to submit a form of information that includes: (1) the 
type of contract; (2) the duration of the contract; (3) all 
contract summary information; (4) the provisions in the 
contract that may affect the price of cattle covered by the 
contract including base price, schedules of premiums or 
discounts, and transportation arrangements; (5) 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; (6) for contracts that do 
not specify a number of cattle committed to the packer, an 
indication that the contract is an open commitment and any 
weekly, monthly, annual, or other limitations on the number of 
cattle that may be delivered to the packer under the contract; 
and (7) a description of the provisions in the contract that 
provided for expansion in the committed numbers of fed cattle 
to be delivered under the contract for the 6-month and 12-month 
periods following the date of the contract.
    Subsection (c) requires the Secretary to make a summary of 
the information collected for each type of contract publicly 
available in a user-friendly format. Within 30 days after the 
establishment of the library or catalog, the Secretary is 
required to make weekly or monthly reports available for the 
public that include: (1) the total number of fed cattle 
committed under contracts for delivery to packers within the 6-
month and 12-month periods following the date of the report; 
(2) the number of contracts with an open commitment along with 
weekly, monthly, annual, or other limitations on the number of 
cattle that may be delivered under such contracts; and (3) 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. Subsection (d) requires that contracts in the library 
or catalog that are no longer offered or in use be labeled as 
inactive.
    Subsection (e) requires the publication of information be 
subject to confidentiality protections provided under section 
251 of the Agricultural Marketing Act of 1946 which protect 
proprietary business information and the identity of all 
parties to a contract. Subsection (f) makes it unlawful and a 
violation of the Act for any packer to willfully fail or refuse 
to provide the Secretary accurate information required under 
this section or to comply with any other requirement of this 
section. Subsection (g) requires the Secretary, through the 
Administrator of the Agricultural Marketing Service and in 
coordination with the Director of the National Institute of 
Food and Agriculture, to make competitive grants to eligible 
entities, as defined as an entity listed in subsection (b)(7) 
of the Competitive, Special, and Facilities Research Grant, for 
producer outreach and education efforts on best uses of cattle 
market information. Subsection (h) authorizes to be 
appropriated such sums as are necessary to carry out this 
section.

Section 3. Definitions

    Section 3 amends section 221 of the Agricultural Marketing 
Act to define ``formula marketing arrangement'' as the advance 
commitment of cattle for slaughter: (1) by any means other than 
through a negotiated purchase, negotiated grid purchase, or a 
forward contract; and (2) using a method for calculating price 
under which the price is determined at a future date. It also 
defines ``negotiated grid purchase'' as a purchase of fed 
cattle by a packer from a producer under which: (1) the base 
price for the cattle is determined by seller-buyer interaction 
on a day; (2) the cattle are scheduled for delivery to the 
packer not more than 14 days after the date on which the 
agreement for purchase is made; and (3) the base price is 
subject to adjustment by premiums and discounts after delivery. 
It also defines ``type of contract'' as the classification of 
contracts for the purchase of fed cattle based on the mechanism 
used to determine the base price for the fed cattle committed 
to a packer under contract, including formula purchases, 
negotiated grid purchases, forward contracts, and other 
purchase agreements, as determined by the Secretary.

                        Committee Consideration


                               I. HEARING

    The Committee on Agriculture has held two hearings in the 
117th Congress to examine issues facing the cattle industry and 
hear various perspectives on how to address industry and market 
challenges.
    On July 28, 2021, the Subcommittee on Livestock and Foreign 
Agriculture held a hearing titled, State of the Beef Supply 
Chain: Shocks, Recovery, and Rebuilding where some of the 
following witness testified on matters addressed in H.R. 5609:
           Dr. Jayson Lusk, Distinguished Professor and 
        Head of the Department of Agricultural Economics, 
        Purdue University, West Lafayette, IN
           Dr. Jennifer van de Ligt, Director, Food 
        Protection and Defense Institute, University of 
        Minnesota, St. Paul, MN
           Dr. Keri Jacobs, Associate Professor of Ag & 
        Applied Economics, Division of Applied Social Sciences, 
        College of Agriculture, Food and Natural Resources, 
        University of Missouri, Columbia, MO
           Dr. Dustin Aherin, Vice President and Rabo 
        Research Animal Protein Analyst, Rabo AgriFinance, 
        Chesterfield, MO
    In response to questions from Members of the Committee, 
witnesses discussed the potential for disclosing more 
information about alternative marketing arrangements to 
increase transparency in the cattle markets.
    On October 7, 2021, the full Committee held a hearing 
titled, A Hearing To Review the State of the Livestock Industry 
where the following witnesses testified on some matters that 
were subsequently addressed in H.R. 5609:
    Panel 1:
           The Honorable Chuck Grassley (R), United 
        States Senator, Iowa Panel 2:
           The Honorable Thomas J. ``Tom'' Vilsack, 
        Secretary, U.S. Department of Agriculture
    Panel 3:
           Mr. Todd Wilkinson, Vice President, National 
        Cattlemen's Beef Association, DeSmet, SD
           Mr. Francois Leger, Owner, FPL Food, on 
        behalf of the North American Meat Institute, Augusta, 
        GA
           Mr. Scott Blubaugh, President, Oklahoma 
        Farmers Union, on behalf of National Farmers Union, 
        Tonkawa, OK
           Mr. Scott Hays, Vice President, National 
        Pork Producers Council, Monroe City, MO
           Mr. Brad Boner, Vice President, American 
        Sheep Industry Association, Glenrock, WY
    This hearing examined various aspects of the livestock 
industry, but related to a cattle contract library, Members of 
the Committee heard testimony and answers to questions 
regarding the potential for a cattle contract library to 
enhance market transparency and improve the negotiating 
position of producers when they market their cattle.

                           II. FULL COMMITTEE

    On October 21, 2021, the Committee on Agriculture met 
pursuant to notice, with a quorum present, to consider H.R. 
5609, the Cattle Contract Library Act of 2021. Chairman Scott 
made an opening statement as did Ranking Member Thompson. 
Chairman Scott requested other Members submit their opening 
statements for the record. Without objection, H.R. 5609 was 
placed before the Committee for consideration, a first reading 
of the bill was waived, and it was opened for amendment at any 
point.
    Chairman Scott recognized Mr. Johnson, the bill's sponsor 
to speak on the bill. Discussion occurred and without 
objection, the Committee considered the bill. There being no 
amendments, a voice vote was conducted, and the bill was 
reported favorably from Committee.
    At the conclusion of the meeting, Chairman Scott advised 
Members that pursuant to the Rules of the House of 
Representatives, Members had until October 28, 2021 to file any 
supplemental, additional, dissenting, or minority views with 
the Committee. Without objection, staff was given permission to 
make any necessary technical, clarifying, or conforming changes 
to reflect the intent of the Committee. Chairman Scott thanked 
all the Members and adjourned the meeting.

                            Committee Votes

    In compliance with clause 3(b) of rule XIII of the House of 
Representatives, H.R. 5609 was reported by voice vote with a 
majority quorum present. There was no request for a recorded 
vote.

                      Committee Oversight Finding

    In compliance with clause 3(c)(1) of rule XIII and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the Committee's oversight findings and recommendations are 
reflected in the descriptive portions of this report.

          Cost of Legislation and the Congressional Budget Act

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the Rules of the House of Representatives and section 
308(a) of the Congressional Budget Act of 1974 and with respect 
to requirements of clause (3)(c)(3) of rule XIII of the Rules 
of the House of Representatives and section 402 of the 
Congressional Budget Act of 1974, the Committee has requested 
but not received a cost estimate for this bill from the 
Director of the Congressional Budget Office. The Committee 
adopts as its own cost estimate the forthcoming cost estimate 
of the Director of the Congressional Budget Office, should such 
cost estimate be made available before House passage of the 
bill.
    The Committee has requested but not received from the 
Director of the Congressional Budget Office a statement as to 
whether this bill contains any new budget authority, spending 
authority, credit authority, or an increase or decrease in 
revenues or tax expenditures. Congressional Budget Office staff 
has informed the Committee on a preliminary, informal, 
nonbinding basis that there does not appear to be any direct 
spending associated with the bill.

                   Constitutional Authority Statement

    The Committee finds the Constitutional authority for this 
legislation in Article I, section 8, clause 3, that grants 
Congress the authority to regulate foreign and interstate 
commerce.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the House of 
Representatives, the performance goals and objectives of this 
measure are to establish a cattle contract library and provide 
a summary of the information in the contracts in a publicly 
available user-friendly format.

                      Advisory Committee Statement

    No advisory committee within the meaning of section 5(b) of 
the Federal Advisory Committee Act was created by this 
legislation.

                Applicability to the Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act (Public Law 
104-1).

                       Federal Mandates Statement

    An estimate of Federal mandates prepared by the Director of 
the Congressional Budget Office pursuant to section 423 of the 
Unfunded Mandates Reform Act was not made available to the 
Committee in time for the filing of this report. The Chair of 
the Committee shall cause such estimate to be printed in the 
Congressional Record upon its receipt by the Committee.

                           Earmark Statement

    This measure does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9(e), 9(f), or 9(g) of rule XXI of the House of 
Representatives.

                    Duplication of Federal Programs

    This measure does not establish or reauthorize a program of 
the Federal Government known to be duplicative of another 
Federal program, a program that was included in any report from 
Government Accountability Office to Congress pursuant to 
section 21 of Public Law 111-139, or a program related to a 
program in the most recent Catalog of Federal Domestic 
Assistance.

                  Disclosure of Directed Rule Makings

    The Committee does not believe that the legislation directs 
an Executive Branch official to conduct any specific rule 
making proceedings within the meaning of 5 U.S.C. 551.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, and existing law in which no 
change is proposed is shown in roman):

                   AGRICULTURAL MARKETING ACT OF 1946

TITLE II

           *       *       *       *       *       *       *


Subtitle B--Livestock Mandatory Reporting

           *       *       *       *       *       *       *


                      CHAPTER 2--CATTLE REPORTING

SEC. 221. DEFINITIONS.

   In this chapter:
          (1) Cattle committed.--The term ``cattle committed'' 
        means cattle that are scheduled to be delivered to a 
        packer within the 7-day period beginning on the date of 
        an agreement to sell the cattle.
          (2) Cattle type.--The term ``cattle type'' means the 
        following types of cattle purchased for slaughter:
                  (A) Fed steers.
                  (B) Fed heifers.
                  (C) Fed Holsteins and other fed dairy steers 
                and heifers.
                  (D) Cows.
                  (E) Bulls.
          [(3) Formula marketing arrangement.--The term 
        ``formula marketing arrangement'' means the advance 
        commitment of cattle for slaughter by any means other 
        than through a negotiated purchase or a forward 
        contract, using a method for calculating price in which 
        the price is determined at a future date.]
          (3) Formula marketing arrangement.--The term 
        ``formula marketing arrangement'' means the advance 
        commitment of cattle for slaughter--
                  (A) by any means other than through a 
                negotiated purchase, negotiated grid purchase, 
                or a forward contract; and
                  (B) using a method for calculating price 
                under which the price is determined at a future 
                date.
          (4) Forward contract.--The term ``forward contract'' 
        means--
                  (A) an agreement for the purchase of cattle, 
                executed in advance of slaughter, under which 
                the base price is established by reference to--
                          (i) prices quoted on the Chicago 
                        Mercantile Exchange; or
                          (ii) other comparable publicly 
                        available prices; or
                  (B) such other forward contract as the 
                Secretary determines to be applicable.
          (5) Negotiated grid purchase.--The term ``negotiated 
        grid purchase'' means a purchase of fed cattle by a 
        packer from a producer under which--
                  (A) the base price for the cattle is 
                determined by seller-buyer interaction on a 
                day;
                  (B) the cattle are scheduled for delivery to 
                the packer not more than 14 days after the date 
                on which the agreement for purchase is made; 
                and
                  (C) the base price is subject to adjustment 
                by premiums and discounts after delivery.
          [(5)] (6) Packer.--The term ``packer'' means any 
        person engaged in the business of buying cattle in 
        commerce for purposes of slaughter, of manufacturing or 
        preparing meats or meat food products from cattle for 
        sale or shipment in commerce, or of marketing meats or 
        meat food products from cattle in an unmanufactured 
        form acting as a wholesale broker, dealer, or 
        distributor in commerce, except that--
                  (A) the term includes only a cattle 
                processing plant that is federally inspected;
                  (B) for any calendar year, the term includes 
                only a cattle processing plant that slaughtered 
                an average of at least 125,000 head of cattle 
                per year during the immediately preceding 5 
                calendar years; and
                  (C) in the case of a cattle processing plant 
                that did not slaughter cattle during the 
                immediately preceding 5 calendar years, the 
                Secretary shall consider the plant capacity of 
                the processing plant in determining whether the 
                processing plant should be considered a packer 
                under this chapter.
          [(6)] (7) Packer-owned cattle.--The term ``packer-
        owned cattle'' means cattle that a packer owns for at 
        least 14 days immediately before slaughter.
          [(7)] (8) Terms of trade.--The term ``terms of 
        trade'' includes, with respect to the purchase of 
        cattle for slaughter--
                  (A) whether a packer provided any financing 
                agreement or arrangement with regard to the 
                cattle;
                  (B) whether the delivery terms specified the 
                location of the producer or the location of the 
                packer's plant;
                  (C) whether the producer is able to 
                unilaterally specify the date and time during 
                the business day of the packer that the cattle 
                are to be delivered for slaughter; and
                  (D) the percentage of cattle purchased by a 
                packer as a negotiated purchase that are 
                delivered to the plant for slaughter more than 
                7 days, but fewer than 14 days, after the 
                earlier of--
                          (i) the date on which the cattle were 
                        committed to the packer; or
                          (ii) the date on which the cattle 
                        were purchased by the packer.
          (9) Type of contract.--The term ``type of contract'' 
        means the classification of contracts for the purchase 
        of fed cattle based on the mechanism used to determine 
        the base price for the fed cattle committed to a packer 
        under the contract, including formula purchases, 
        negotiated grid purchases, forward contracts, and other 
        purchase agreements, as determined by the Secretary.
          [(8)] (10) Type of purchase.--The term ``type of 
        purchase'', with respect to cattle, means--
                  (A) a negotiated purchase;
                  (B) a formula market arrangement; and
                  (C) a forward contract.

           *       *       *       *       *       *       *


SEC. 224. CATTLE CONTRACT LIBRARY.

  (a) In General.--Not later than 90 days after the enactment 
of this Act, the Secretary shall establish and maintain a 
library or catalog of each type of contract offered by packers 
to producers for the purchase of all or part of the producers' 
production of fed cattle (including cattle that are purchased 
or committed for delivery), including any schedules of premiums 
or discounts associated with the contract.
  (b) Information Collection.--
          (1) In general.--To maintain the library or catalog 
        established under subsection (a), the Secretary shall 
        obtain information from each packer on each type of 
        contract of the packer by requiring a filing or other 
        form of information submission from each packer.
          (2) Contracted cattle information.--Information 
        submitted to the Secretary by a packer under paragraph 
        (1) shall include, with respect to each contract of a 
        packer--
                  (A) the type of contract;
                  (B) the duration of the contract;
                  (C) all contract summary information;
                  (D) provisions in the contract that may 
                affect the price of cattle covered by the 
                contract including--
                          (i) base price;
                          (ii) schedules of premiums or 
                        discounts; and
                          (iii) 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, by 
                reporting region;
                  (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 on the number of 
                        cattle that may be delivered to the 
                        packer under the contract; and
                  (G) a description of the provisions in the 
                contract that provide for expansion in the 
                committed 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) Library contents.--The Secretary shall make 
        publicly available in a user-friendly format a summary 
        of the information collected for each type of contract 
        under subsection (b), including notice (on a real-time 
        basis, if practicable) of the types of contracts that 
        are being offered by packers to, and are open to 
        acceptance by, producers for the purchase of fed 
        cattle.
          (2) Reports required.--Beginning not later than 30 
        days after the date on which the library or catalog is 
        established under subsection (a), the Secretary shall 
        make publicly available weekly or monthly reports for 
        producers and other interested persons, which shall 
        include--
                  (A) based on the information collected under 
                subsection (b)(2)(E), the total number of fed 
                cattle committed under 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;
                  (B) based on the information collected under 
                subsection (b)(2)(F), the number of contracts 
                with an open commitment along with any weekly, 
                monthly, annual or other limitations on the 
                number of cattle that may be delivered under 
                such contracts; and
                  (C) based on the information collected under 
                subsection (b)(2)(G), 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 or Catalog.--Information in the 
library or catalog established under subsection (a) about types 
of contracts that are no longer offered or in use shall be 
labeled as inactive in the library or catalog.
  (e) Confidentiality.--The publication of information under 
this section shall be subject to the confidentiality 
protections provided under section 251 of the Agricultural 
Marketing Act of 1946 (7 U.S.C. 1636).
  (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) Producer Education Grants.--
          (1) In general.--The Secretary, acting through the 
        Administrator of the Agricultural Marketing Service and 
        in coordination with the Director of the National 
        Institute of Food and Agriculture, shall make 
        competitive grants to eligible entities for producer 
        outreach and education efforts on best uses of cattle 
        market information, including information made 
        available through the livestock mandatory reporting 
        program and the catalog or library established under 
        subsection (a).
          (2) Selection criteria.--In selecting grant 
        recipients under this section, the Secretary shall give 
        priority to eligible entities that--
                  (A) demonstrate an ability to work directly 
                with cattle producers;
                  (B) can quickly and accurately publish and 
                disseminate information and analysis of 
                relevant Department of Agriculture data in a 
                manner that benefits producer decision making; 
                and
                  (C) collaborate with trade associations or 
                other organizations with a demonstrated ability 
                to provide educational programs on markets and 
                risk management.
          (3) Eligible entity.--The term ``eligible entity'' 
        means an entity listed in subsection (b)(7) of the 
        Competitive, Special, and Facilities Research Grant Act 
        (7 U.S.C. 3157(b)(7)).
  (h) Authorization of Appropriations.--There are authorized to 
be appropriated to the Secretary such sums as are necessary to 
carry out this section.

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