TEXAS 

CATTLE 

FEEDERS 

ASSOCIATION 

5501 l-40W. 

Amarillo, TX 79106-4617 

(806) 358-3681 

FAX (806) 352-6026 

info@tcfa.org 

www.tcfa.org 

Kevin H. Buse 

Chairman 

Michael Bezner 

Chairman-Elect 

Gene Lowrey 

Vice Chairman 

Ben Weinheimer 

President & CEO 

DIRECTORS 

Scott Anderson 

Larry Brown 

Paul J. Defoor 

Tom Fanning 

Jim Friemel 

Don Gales 

Tommy Kenworthy 

Doug Lantz 

Laphe LaRoe 

Matt Mclennan 

Stanley M. Peters 

Thomas A. Portillo, DVM 

Craig Prue! 

Heath Schulte 

Jack D. Scoggins 

Mike Shafer 

Warren White 

April 22, 2022 

Mr. Michael Sheats, Director 

USDA-AMS Livestock, Poultry, and Grain Market News Division 

1400 Independence Avenue, SW STOP 0249 

Washington, DC 20250-0249 

RE: Comments on Development of Cattle Contract Library Pilot Project 

Texas Cattle Feeders Association (TCFA) represents feedyards in Texas, Oklahoma 

and New Mexico, plus cattle feeding customers across the country who feed 

approximately 28% of the nation's fed beef. Our mission is, "To ensure the 

sustainability of cattle feeding by serving and advancing the economic, political, 

environmental, and cultural interests of cattle feeders and feedyard members, 

enhancing the reputation of fed beef production and increasing consumer confidence 

in beef." 

We appreciate the opportunity to provide comments to help inform the design and 

implementation of a Cattle Contract Library (CCL) pilot project that will be managed 

and administered by the Livestock, Poultry, and Grain Market News Division. We 

appreciate the CCL pilot project being administered by the Livestock Market News 

Division, whereby 20 years of expertise and experience can be drawn upon to design 

and implement the CCL pilot project. 

As the CCL pilot project is developed, we ask USDA to consider three important 

elements: 

First, a library must be structured in a manner that provides factual and reliable 

information and does not result in unintended consequences of divulging confidential 

or proprietary business information, does not provide packers with additional market 

information that could inadvertently give packers more leverage, and does not limit nor 

constrain the future negotiating opportunities for cattle feeders. 

Second, while the intent of a cattle contract library is to provide insights on the type, 

structure and duration of marketing transactions utilized by cattle feeders and packers 

to arrive at a final price, it should not be constructed in a way that stifles marketing 

innovation and results in "forcing" cattle feeders to trade on the averages. One option 

to avoid this outcome is to not organize the library in the same manner as the swine 

contract library, where individual contracts are listed with numeric, non-identifying 

numbers. Instead, we recommend organizing the library by disaggregating the terms 

contained within all contracts and then aggregating those terms into four categories: 

(1) Determination of Base Price, (2) Premium/Discounts, (3) Freight Costs and (4) 

Final Price Formulas. This approach has multiple benefits in that it adds another layer 

of protecting confidentiality. Please refer to the attached "Example Categorical 

Summary of Contracts" using the first two pages from the most recent "Swine Packer 

Marketing Contract Summary for Iowa and Minnesota." We believe this provides a 

useful example of how the CCL might differ from the swine library. 
Mr. Michael Sheats 

Page Two 

April 22, 2022 

Third, we encourage USDA to limit the scope of the Cattle Contract Library pilot project to 

deliver timely results and reports by focusing on: 

1. "Market transaction terms" contained within existing contracts, which would be defined to 

include only those terms of a contract that determine the final payment paid to the owner 

of the cattle, such as how the base price is determined, premiums and discounts, freight 

costs and final price formulas. Other non-market related terms of contracts, such as 

animal raising provisions, financing arrangements, climate change or sustainability, 

should not be collected nor reported by USDA in the Cattle Contract Library. 

2. Developing report forms, similar to the current LMR reporting process between packers 

and USDA, that would allow to provide "market transaction terms" on the prescribed 

LMR form in lieu of submitting copies of actual contracts to USDA. We believe this 

approach is reasonable since USDA has the authority to review or inspect actual 

contracts during the course of on-site audits conducted at the packers. USDA uses this 

same approach for audits conducted as part Process Verified Programs. This will further 

ensure that confidentiality is protected. 

3. Developing producer education information on existing USDA market news reports and 

any new reports that might be developed as part of a Cattle Contract Library pilot 

project. We recommend that USDA consider expanding the scope of the USDA Cattle 

and Carcass Training Centers to help deliver this information to producers. 

4. Lastly, we recommend that USDA not expend any time or resources to collect 

information from packers for the purposes of reporting the total number of fed cattle 

committed under contracts for delivery to packers within the 6-month and 12-months 

periods. The confidence in these types of projections is questionable and could have the 

unintended consequence of providing more information to the teams of packer analysts 

that might inform future negotiations and purchasing decisions by packers. It could also 

result in potentially false or inaccurate data erroneously influencing cattle futures 

positively or negatively. 

Thank you for the opportunity to provide these comments on behalf of Texas Cattle Feeders 

Association members. 

Sincerely, 

)l , *L--- Kevin H. Buse 

Chairman 

Attachment 
EXAMPLE CATEGORICAL SUMMARY OF CONTRACTS 

Swine Packer Marketing Contract Summary - Iowa Minnesota 

April 22, 2022 

This example provides an alternative means of reporting the same information provided in the latest published 

version of the "Swine Packer Marketing Contract Summary- Iowa Minnesota: Swine or Pork Market Formula." The 

difference here is that the contract "market transaction terms" are reported in FOUR categories: (1) Determination 

of Base Price, (2) Premium/Discount Type, (3) Freight Costs, and (4) Final Price formulas. For purposes ofthis 

example, only the first two pages of the existing report are illustrated below in this categorical format: 

Determination of Base Price 

LM_HG203, Negotiated Base Weighted Average Range, 2 days prior to delivery 

LM_PK602, Pork Carcass Cutout, 2 days prior to delivery 

LM_HG212, Negotiated Base Weighted Average, Two Days Prior to Delivery 

LM_HG203, Negotiated Base Weighted Average, Average - 3 days prior to delivery 

LM_HG203, Negotiated Base Weighted Average, Day Prior to Delivery 

LM_HG212, Weighted Average, Day prior to Slaughter 

LM_PK602, Pork Carcass Cutout, Day prior to Slaughter 

LM_HG203, Negotiated Base Weighted Average, Average - 3 days prior to delivery 

LM_HG203, Negotiated Base Weighted Average, Day ofDelivery 

Premiums/Discounts 

Premium/Discount Type: Carcass Merit See Schedule: 64 

Premium/Discount Type: Sort See Schedule: 85 

Premium/Discount Type: Cutout Premium, ($13.25) 

Premium/Discount Type: Weighted Average Premium 

Premium/Discount Type: Contract Premium, ($1.00) 

Premium/Discount Type: Sort See Schedule: 78 

Premium/Discount Type: Carcass Merit See Schedule: 18 

Premium/Discount Type: Contract Premium, $2.00 

Premium/Discount Type: Sort See Schedule: 80 

Premium/Discount Type: Lean See Schedule: 34 

Premium/Discount Type: Carcass Merit See Schedule: 7 

Premium/Discount Type: Contract Premium, $3.50 

Premium/Discount Type: Cutout Percentage 92% 

Premium/Discount Type: Contract Premium, $1.00 

Premium/Discount Type: Contract Premium, $2.75 

Premium/Discount Type: Contract Premium, $3.00 

Freight Costs 

Freight, $1.25 Delivery to Specified Plant 

Final Price Formulas 

Final Price= 35% (Cutout Value+ Cutout Premium)+ 65% (Weighted Average +Weighted Average 

Premium) 

+ Carcass Merit Adjustment 

Final Price= Day Prior Weighted Average+ Contract Premium+ Carcass Merit Adjustment 

Final Price= 3-day Average Weighted Average+ Contract Premium+ Carcass Merit Adjustment. 

Final Price= 60% * Cutout Percentage* Cutout Value+ 40% * (Weighted Average+ Contract 

Premium)+ Carcass Merit Adjustment+ Freight, if applicable. 

Final Price= 3-day Average Weighted Average+ Contract Premium+ Carcass Merit Adjustment. 

Final Price= Weighted Average+ Contract Premium+ Carcass Merit Adjustment 

Page 1 of 1 
Swine Packer Marketing Contract Summary - Iowa Minnesota 

Swine or Pork Market Formula 

Determination of Base Price 530 

All Reports Referenced 

LM_HG203, Negotiated Base Weighted Average Range, 2 days prior to delivery 

LM_PK602, Pork Carcass Cutout, 2 days prior to delivery 

Other Terms 

Final Price= 35% (Cutout Value+ Cutout Premium)+ 65% (Weighted Average +Weighted Average Premium) 

+ Carcass Merit Adjustment 

Premium/Discount Type: Carcass Merit See Schedule: 64 

Premium/Discount Type: Sort See Schedule: 85 

Premium/Discount Type: Cutout Premium, ($13.25) 

Premium/Discount Type: Weighted Average Premium 

Determination of Base Price 1475 

All Reports Referenced 

LM_HG212, Negotiated Base Weighted Average, Two Days Prior to Delivery 

Other Terms 

Premium/Discount Type: Carcass Merit See Schedule: 64 

Premium/Discount Type: Sort See Schedule: 85 

Premium/Discount Type: Contract Premium, ($1.00) 

Determination of Base Price 1490 

All Reports Referenced 

LM_HG203, Negotiated Base Weighted Average, Average - 3 days prior to delivery 

LM_HG203, Negotiated Base Weighted Average, Day Prior to Delivery 

Other Terms 

Option 1: Final Price = Day Prior Weighted Average+ Contract Premium+ Carcass Merit Adjustment Option 

2: Final Price = 3-day Average Weighted Average+ Contract Premium+ Carcass Merit Adjustment. 

Premium/Discount Type: Sort See Schedule: 78 

Premium/Discount Type: Carcass Merit See Schedule: 18 

Premium/Discount Type: Contract Premium, $2.00 

Determination of Base Price 1499 

All Reports Referenced 

LM_HG212, Weighted Average, Day prior to Slaughter 

LM_PK602, Pork Carcass Cutout, Day prior to Slaughter 

Other Terms 

Final Price= 60% * Cutout Percentage* Cutout Value+ 40% * (Weighted Average+ Contract Premium)+ 

Carcass Merit Adjustment+ Freight, if applicable. 

Premium/Discount Type: Sort See Schedule: 80 

Premium/Discount Type: Lean See Schedule: 34 

Premium/Discount Type: Carcass Merit See Schedule: 7 

Premium/Discount Type: Freight, $1.25 Delivery to Specified Plant 

Premium/Discount Type: Contract Premium, $3.50 

Premium/Discount Type: Cutout Percentage 92% 

Page 1 of 69 
Swine Packer Marketing Contract Summary- Iowa Minnesota 

Swine or Pork Market Formula 

Determination of Base Price 1500 

All Reports Referenced 

LM_HG203, Negotiated Base Weighted Average, Average - 3 days prior to delivery 

LM_HG203, Negotiated Base Weighted Average, Day of Delivery 

Other Terms 

Option 1: Final Price= Weighted Average+ Contract Premium+ Carcass Merit Adjustment Option 2: Final 

Price= 3-day Average Weighted Average+ Contract Premium+ Carcass Merit Adjustment. 

Premium/Discount Type: Sort See Schedule: 78 

Premium/Discount Type: Carcass Merit See Schedule: 18 

Premium/Discount Type: Contract Premium, $1.00 

Determination of Base Price 1501 

All Reports Referenced 

LM_HG203, Negotiated Base Weighted Average, Average - 3 days prior to delivery 

LM_HG203, Negotiated Base Weighted Average, Day of Delivery 

Other Terms 

Option 1: Final Price = Weighted Average+ Contract Premium+ Carcass Merit Adjustment Option 2: Final 

Price= 3-day Average Weighted Average+ Contract Premium+ Carcass Merit Adjustment. 

Premium/Discount Type: Sort See Schedule: 78 

Premium/Discount Type: Carcass Merit See Schedule: 18 

Premium/Discount Type: Contract Premium, $2.75 

Determination of Base Price 1502 

All Reports Referenced 

LM_HG203, Negotiated Base Weighted Average, Average - 3 days prior to delivery 

LM_HG203, Negotiated Base Weighted Average, Day of Delivery 

Other Terms 

Option 1: Final Price = Weighted Average+ Contract Premium+ Carcass Merit Adjustment Option 2: Final 

Price = 3-day Average Weighted Average+ Contract Premium + Carcass Merit Adjustment. 

Premium/Discount Type: Sort See Schedule: 78 

Premium/Discount Type: Carcass Merit See Schedule: 18 

Premium/Discount Type: Contract Premium, $3.00 

Determination of Base Price 1503 

All Reports Referenced 

LM_HG203, Negotiated Base Weighted Average, Average - 3 days prior to delivery 

LM_HG203, Negotiated Base Weighted Average, Day of Delivery 

Other Terms 

Option 1: Final Price = Weighted Average+ Contract Premium + Carcass Merit Adjustment Option 2: Final 

Price= 3-day Average Weighted Average+ Contract Premium + Carcass Merit Adjustment. 

Premium/Discount Type: Sort See Schedule: 78 

Premium/Discount Type: Carcass Merit See Schedule: 18 

Premium/Discount Type: Contract Premium, $3.50 

Page 2 of 69