The Likelihood of Regional Triggers Under the Industry’s Proposed “75% Rule”

Authors

Elliott James Dennis, University of Nebraska - LincolnFollow

Date of this Version

12-2-2020

Document Type

News Article

Citation

Farm and Ranch Management, December 2, 2020.

This was first published by In the Cattle Markets.

Also available at https://farm.unl.edu/likelihood-regional-triggers-under-industry’s-proposed-“75-rule”

DOI: 10.32873/unl.dc.frm00030

Comments

Copyright 220, the author. Used by permission.

Abstract

First two paragraphs:

Concern about packing concentration has led to numerous requests for USDA to investigate the potential connection between packet concentration and depressed cattle prices. These calls for investigations and concerns about meatpacking concentration and impact on cattle prices are not new. The most recent concern raised by cattle producers about packer concentration was due to depressed fed cattle prices post-Holcomb fire and COVID-19 pandemic resulted in a USDA report and pending DOJ investigation.

Some legislation has been enacted as a result of previous investigations; most notably the Packers and Stockyards Act in the early 1920s. The recently proposed legislation has largely focused on the potential connection between these market shocks and the level of negotiated trade that occurs. One overarching concern is that to achieve price discovery that is informative in the marketplace, a regional sufficient level of negotiated trade must occur. To help achieve these goals, three bills have been proposed: Senator Grassley’s “50-14” rule, Senator Fisher’s “Cattle Transparency” bill, and Congressman Johnson’s “PRICE” act. These primarily aim to increase the level of negotiated trade, and, in some cases, create a cattle contracts library similar to the one available in the hog industry.