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Sunday Talk: Grassley on Beefing Up Cattle Price Transparency and Local Meat Markets

Q: Why did you resurrect your bipartisan cattle price transparency bill?

A: When independent cattle farmers are losing money on each head of cattle while packers are profiting $1,200 per head, they have every reason to be fed up with anticompetitive practices in the marketplace. At my meeting in Jones County in May, I heard from 150 local cattle feeders who shared how their livelihoods are effectively at the mercy of the big four meatpackers who control more than 80 percent of the market. These beef conglomerates fill 80 percent of their daily slaughter with pre-contracted sales, including formula and forward pricing on packer-owned cattle. That leaves independent producers scant leverage to negotiate a fair price for their hard work producing high-quality beef. What’s more, as grilling season gets underway, consumers are paying premium prices for burgers and steaks at the grocery store while their local cattle farmers get table scraps from the packers. It’s an insulting price disparity. That’s why I’m beating the drum in Washington to educate my fellow lawmakers about it. As the top Republican on the Senate Judiciary Committee, I’m working with Chairman Dick Durbin to hold a hearing that would examine concentration and antitrust concerns in the cattle industry and identify what the Judiciary Committee can do to make sure independent producers have enough leverage in the marketplace. As a member of the Senate Agriculture Committee, I’ve called upon Chairman Debbie Stabenow of Michigan to schedule a hearing where subject matter experts, cattle producers and the packing industry are called to testify and answer questions about marketing practices so that independent producers can have a sustainable and profitable business. Earlier this year, I reintroduced my bipartisan price transparency bill with Sen. Jon Tester, a farmer from Montana. Our bill would require at least 50 percent of a meatpacker’s weekly beef volume to be bought from the open market. As it stands today, the independent producer is left in the dark with no price discovery; the packer treats them as a residual supplier and pays pennies on the dollar per head. The COVID-19 pandemic exposed the need for additional price transparency tools to ensure producers are getting a fair shake and a fair price. More transparency brings more accountability and in the case of the cattle market, more sunlight means more competition and better prices for cattle farmers and consumers. Price discovery in the marketplace would help ensure cattle buyers and sellers are competing on a level playing field. In addition, I’ll keep riding herd on the Department of Justice and USDA to enforce federal antitrust laws and the Packers & Stockyards Act to ensure America’s family farms are able to continue their livelihoods and way of life for generations to come. 

Q: How can our food supply chain improve resilience to meet consumer demand?

A: COVID-19 exposed a gap in the farm-to-fork food supply chain and opened a window of opportunity for local producers and meat lockers to fill. When the virus forced large meatpacking plants to idle production to protect their workforce, producers and consumers faced difficulty selling market-ready pigs and buying food to feed their families. Many Americans were surprised to find empty grocery store shelves for the first time in memory. The pandemic has had many teachable moments. One underscores my longstanding warning to anyone who’ll listen: food doesn’t grow in the grocery store. School and restaurant closures also exacerbated production issues for food processors who package cuts of meat and other products for wholesalers and distributors, not direct to consumers. Last summer, I toured Story City Locker in Central Iowa. It’s the first facility in our state to participate in the Cooperative Interstate Shipment program that allows state-inspected facilities to sell meat and poultry across state lines. In February, I met with an Iowa entrepreneur and local farmers involved with Farm Story Meats, a venture that partners with local farms and meat lockers to deliver locally sourced food directly to consumers. It’s encouraging to see start-ups take advantage of opportunity, pursue their dream and meet consumer demand.

As a member of the Senate Agriculture Committee, I helped develop bipartisan pandemic relief legislation enacted last year that cut regulatory red tape to address bottlenecks in the food supply chain and boosted resources for local producers to expand operations and help feed their communities. For example, we beefed up federal grant programs administered by the USDA’s Agricultural Marketing Service to help local and regional producers beef up resilience in our food system. The USDA recently announced applicants may seek competitive grants that support producer-to-consumer marketing and value-added agricultural products. The deadline to apply is June 21, 2021. Learn more here.  In addition, pandemic relief funding will help local meat lockers to meet growing consumer demand. The USDA plans to unveil a new grant program in June that would help meat and poultry slaughter and processing facilities cover upgrade costs associated with achieving compliance with federal inspection standards. I’ll keep working on behalf of Iowans who produce and deliver high-quality, affordable food to keep our families healthy and our economy strong.

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