Grassley Plans Livestock Marketing Bill

July 16, 2002

Sen. Chuck Grassley (R-IA) is preparing legislation he says would increase competition in the livestock market. Grassley said his proposal would give independent producers a guaranteed share in the marketplace by making improvements to the mandatory price reporting system.

"Allowing independent livestock producers to receive a fair price should be everyone's goal. Producers need a consistent spot market for information and access," Grassley said.

Grassley's bill would eventually require 25% of a packer's daily kill to come as a result of purchases made on the daily, open market or spot market. By requiring a 25% spot market purchase, the mandatory livestock reporting system would be able to provide consistent, reliable numbers about what is being purchased from the spot market and, thereby, improve the accuracy and transparency of daily prices.

In addition, independent producers would be assured a competitive position due to the packers need to fill the daily 25% spot market requirement, Grassley said

Grassley said his proposal would guarantee that contracts packers make to assure sufficient kill numbers at their plants are based on legitimate information. A packer's contracts typically are related in some fashion to the mandatory price reporting data.

Contracts could not be manipulated, giving livestock producers a contractual fair shake, says Grassley. He will introduce the legislation before the August congressional recess.

Separately, the Senate Agriculture Committee holds a hearing today on the broader issue of banning livestock ownership by meat packers.