Five Rivers Cattle Feeding, LLC 4848 Thompson Parkway Suite 410 Johnstown, CO 80534 970-408-0303

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

On behalf of Five Rivers Cattle Feeding and Colorado Cattlemen’s Association (CCA), we would like to 

submit this letter of recommendations for the CCL pilot project administered by Livestock Market News.

Five Rivers is actively involved in various industry issues at both the state and national level. With a onetime capacity of approximately 900,000 head, Five Rivers employs more than 700 people across 6 states. 

Since 1867, Colorado Cattlemen's Association has been committed to protect and promote the Colorado 

ranchers' way of life and advance the legacy of Colorado's beef industry.

I would like to begin by expressing my appreciation for the opportunity to provide comments regarding the 

Cattle Contract Library this past week in Kansas City. I sincerely hope our suggestions were valuable to 

you and your team.

.

Working in conjunction with Texas Cattle Feeders Association, we ask USDA to consider three crucial 

elements prior to implementing the Cattle Contract Library:

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. For the sake of brevity, I’ve not included the TCFA example here. Please refer to their 

original document for reference.

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. 
Five Rivers Cattle Feeding, LLC 4848 Thompson Parkway Suite 410 Johnstown, CO 80534 970-408-0303

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.

On a final note, I’m sure you’re aware the state of Colorado is often scrutinized for its lack of reportable

cash negotiated trade. While numerous industry led attempts have been to made to increase cash negotiated 

volumes, we often lack adequate packing capacity to fulfill LMR confidentiality requirements. Please be 

cognizant of confidentiality issues within our state and potentially other states we conduct business in.

Detailed analyses have shown no strong statistical relationships between the supply of Five Rivers cattle 

and macro level FSIS slaughter. It is even difficult to draw notable correlations between Five Rivers 

shipments and marketing data from the Cattle on Feed sample. As one begins to “deconstruct” MPR data 

from an aggregate to more granular level (i.e. total volume vs. net formula dressed, net formula live, etc.) 

our contribution to the sample becomes noteworthy. Please see attachment regarding my comments made 

this past week in Kansas City.

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

Association members.

Sincerely,

Billy Schmitz

CCA Marketing Committee Chairman

Five Rivers Cattle Feeding, Head Analyst