March 07, 2021

More debate expected over Livestock Mandatory Reporting

WASHINGTON — September could be a major month, policy-wise, for the U.S. beef industry, from beef producers to packers.

On Sept. 30, the Livestock Mandatory Price Reporting Rule, or LMR, expires. The rule was due for reauthorization on Sept. 30, 2020, but received a one-year extension in the COVID-19 relief bill signed on Dec. 27 by former President Donald Trump.

The LMR is due for reauthorization every five years. That reauthorization was extended in bits and pieces beyond Sept. 30 until Trump granted the extension.

“What that does is really set the stage for another year of debate on a lot of issues that are pertinent to the cattle markets,” said Scott Bennett, director of congressional relations for American Farm Bureau Federation.

That stage could see many players.

“Certainly there will be a chess match of different sides of the industry really looking to set the stage as we move throughout 2021 and get closer to that livestock mandatory reporting reauthorization,” Bennett said.

Various sectors of the industry will have their eyes on the prize of the LMR.

“What that does is really set the stage for another year of debate on a lot of issues that are pertinent to the cattle markets. This Livestock Mandatory Reporting reauthorization is the vehicle by which a lot of these policies would be moved,” Bennett said.

One high priority issue for the industry that could be impacted by the reauthorization discussions is mandatory minimum negotiated trade. Bennett noted that legislation addressing mandatory minimum negotiated trade was introduced by various lawmakers in both houses of Congress in the 116th Congress.

“I do not think that will go away in 2021. Those debates will continue,” Bennett said.

Bennett said the length and strength of discussions on mandatory minimum negotiated trade, along with the direction the discussions on the LMR reauthorization take, could be impacted by economic conditions.

“If our economy remains somewhat strong and we see ourselves clawing out of this pandemic, I think some of this could subside. But if our economy as a whole, and the beef and cattle markets, stay kind of in a churn or there’s concern that the packers are still nipping at the heels of producers, I think that could really drum up a lot more attention and focus on pieces of legislation addressing these issues,” Bennett said.

Managing Risks

In addition to the market issues that will be front and center for the industry and for legislators, risk management has taken on a higher priority after 2020.

“I think there will be a lot of focus on risk management, as well, bills and tools utilized or developed by Congress to allow for there to be more proper risk management for our smaller producers. Giving them tools to further manage their risk, especially during black swan events like we saw in 2020, is important,” Bennett said.

How the Biden administration pursues — or if it does — ongoing investigations into the U.S. meatpacking industry will be another priority for AFBF.

In May 2020, then-President Trump asked the U.S. Department of Justice to look into allegations of antitrust activity after profits for the major U.S. meatpackers soared, along with retail meat prices as consumers stocked up on food — but prices paid to producers remained the same or dropped.

The Trump DOJ request followed on the heels of another probe into the U.S. meat processing industry. In April of last year, Sonny Perdue, the U.S. agriculture secretary, said he was expanding a probe of the beef packing industry, started after the August 2019 fire at a Tyson beef processing plant in Holcomb, Kansas. After the Holcomb fire, prices paid to cattle producers plummeted, even as boxed beef prices soared.

Bennett said the AFBF will be watching to see if — and if so, how vigorously — the Biden administration and the Biden U.S. Department of Agriculture pursue those ongoing probes.

“Something that we at American Farm Bureau will really be keeping an eye on is the Biden administration and how they essentially receive the baton from the Trump administration at the USDA on the investigations that are ongoing at USDA in the meatpacking side of things. We will be keeping a very close eye to see how that transition from the Trump administration to the Biden administration happens on those fronts,” said Bennett, who spoke during a cattle industry outlook session during the 2021 American Farm Bureau Virtual Convention.

Jeannine Otto

Field Editor