Optimizing the Cattle Market Act of 2021

To amend the Packers and Stockyards Act, 1921, to establish a cattle contract library, and for other purposes. 1. Short title This Act may be cited as the Optimizing the Cattle Market Act of 2021 2. Sense of Congress It is the sense of the Congress that there is a need for expedited reauthorization of the Livestock Mandatory Reporting program of the Department of Agriculture, including formula base prices subject to the same reporting requirements as negotiated cash and the creation of a contract library. 3. Cattle contract library (a) In general Title II of the Packers and Stockyards Act, 1921, is amended by inserting after section 223 ( 7 U.S.C. 198b C Cattle contracts 231. Definitions In this subtitle: (1) Base price The term base price (2) Contract (A) In general Subject to subparagraph (B), the term contract (B) Exclusion The term contract (3) Fed cattle The term fed cattle (4) Formula marketing arrangement The term formula marketing arrangement (A) by any means other than through a negotiated purchase, negotiated grid purchase, or forward contract; and (B) using a method for calculating price— (i) under which the price is determined at a future date; (ii) the basis of which is a price established for a specified market, which may be based on any publicly reported price, including plant average price, regional price, downstream price, or some other mutually agreeable price source; and (iii) that may include a grid or nongrid price. (5) Forward contract The term forward contract (A) an agreement for the purchase of fed cattle, executed in advance of slaughter, under which the base price is established by reference to— (i) prices quoted on the Chicago Mercantile Exchange; or (ii) other comparable publicly available prices; or (B) any other contract for the purchase of fed cattle, executed in advance of slaughter, as determined by the Secretary. (6) Heifer The term heifer (7) Negotiated grid purchase The term negotiated grid purchase (A) the buyer-seller interaction results in a negotiated base price, which may be adjusted by premiums and discounts; and (B) the cattle are scheduled for delivery to the packer not more than 14 days after the date on which the agreement for purchase is made. (8) Negotiated purchase The term negotiated purchase cash spot market (A) the buyer-seller interaction that results in the purchase and the agreement on the actual base price for the purchase occur on the same day; and (B) the cattle are scheduled for delivery to the packer not more than 30 days after the date on which the agreement for purchase is made. (9) Packer The term packer 7 U.S.C. 1635d (10) Producer The term producer (11) Steer The term steer (12) Type of contract (A) In general The term type of contract (i) into 1 of the categories described in subparagraph (B); and (ii) by determining the base price of the cattle. (B) Categories The categories for classification of a type of contract are the following: (i) Formula marketing arrangement. (ii) Forward contract. (iii) Negotiated grid purchase contract. 232. Cattle contract library (a) In general Subject to the availability of appropriations to carry out this section, the Secretary shall establish and maintain a library or catalog of each type of contract offered by packers to producers for the purchase of all or part of the production of the producers of fed cattle (including cattle that are purchased or committed for delivery), including any schedules of premiums or discounts associated with the contract. (b) Information collection (1) In general To maintain the library or catalog established under subsection (a), the Secretary shall obtain information from each packer on each type of existing contract of the packer by requiring a filing or other form of information submission from each packer. (2) Contracted cattle numbers Information that shall be submitted to the Secretary by a packer under paragraph (1) shall include, with respect to each existing contract of a packer— (A) the type of contract; and (B) a description of the provisions in the contract that provide for expansion in the numbers of fed cattle to be delivered under the contract for the 6-month and 12-month periods following the date of the contract. (c) Availability of information (1) In general The Secretary shall make available to producers and other interested persons information on the types of contracts in the library or catalog established under subsection (a), including notice (on a real-time basis, if practicable) of the types of contracts that are being offered by packers to, and are open to acceptance by, producers for the purchase of fed cattle. (2) Monthly report (A) In general Beginning 30 days after the library or catalog is established under subsection (a), the Secretary shall make the information obtained each month in the library or catalog available in a monthly report to producers and other interested persons. (B) Contents The monthly report described in subparagraph (A) shall include— (i) an estimate by the Secretary of the total number of fed cattle committed under contracts for delivery to packers within the 6-month and 12-month periods following the date of the report, organized by reporting region and type of contract; and (ii) an estimate by the Secretary of the total maximum number of fed cattle that may be delivered within the 6-month and 12-month periods following the date of the report, based on the provisions described in subsection (c)(2)(B) in existing contracts, organized by reporting region and type of contract. (d) Maintenance of library or catalog Information in the library or catalog established under subsection (a) about types of contracts that are no longer offered or in use shall be removed from the library or catalog. (e) Educational outreach activities The Secretary shall conduct educational outreach activities for producers on how best to use the cattle contract library or catalog established under subsection (a). (f) Confidentiality The reporting requirements for packers under this section shall be subject to the confidentiality protections provided under section 251 of the Agricultural Marketing Act of 1946 ( 7 U.S.C. 1636 (g) Violations It shall be unlawful and a violation of this Act for any packer to willfully fail or refuse— (1) to provide to the Secretary accurate information required under this section; or (2) to comply with any other requirement of this section. (h) Authorization of appropriations There are authorized to be appropriated to the Secretary such sums as are necessary to carry out this section. . (b) Conforming amendment Section 201 of the Packers and Stockyards Act, 1921 ( 7 U.S.C. 191 When used in this Act Unless specified otherwise, in this Act, 4. Cash market acquisition of cattle Title II of the Packers and Stockyards Act, 1921 ( 7 U.S.C. 191 et seq. D Cash market acquisition of cattle 241. Definitions In this subtitle: (1) Negotiated grid purchase The term negotiated grid purchase (A) the buyer-seller interaction results in a negotiated base price, which may be adjusted by premiums and discounts; and (B) the cattle are scheduled for delivery to the packer not more than 14 days after the date on which the agreement for purchase is made. (2) Negotiated purchase The term negotiated purchase cash spot market (A) the buyer-seller interaction that results in the purchase and the agreement on the actual base price for the purchase occur on the same day; and (B) the cattle are scheduled for delivery to the packer not more than 30 days after the date on which the agreement for purchase is made. (3) Packer The term packer (A) has the meaning given the term in section 221 of the Agricultural Marketing Act of 1946 ( 7 U.S.C. 1635d (B) for calendar years beginning on or after January 1, 2022, includes only a federally-inspected cattle processing plant that slaughtered an average of 125,000 head of cattle per year during the immediately preceding 5 calendar years. (4) Producer The term producer (5) Regional mandatory minimum The term regional mandatory minimum (6) Slaughter week The term slaughter week current slaughter week 7 U.S.C. 1635a 242. Regional mandatory minimums (a) In general Not later than 2 years after the date of enactment of this subtitle, the Secretary, in consultation with the Chief Economist, shall establish— (1) regional mandatory minimums for the purpose of enhancing price discovery and transparency for cattle market participants; and (2) methods for establishing those regional mandatory minimums, which shall be publicly available. (b) Duration Regional mandatory minimums established for each reporting region under subsection (a)(1)— (1) may be weekly or on another periodic basis, as determined by the Secretary; (2) shall account for improbable events with profound consequences (commonly referred to as black swan events (3) shall be applicable for not more than a 24-month period. (c) Public input In carrying out subsection (a), the Secretary shall make all proposed regional mandatory minimums and proposed methods for establishing those minimums subject to a notice and comment period. (d) Considerations In carrying out subsection (a) for each reporting region, the Secretary, in consultation with the Chief Economist, shall consider the following factors: (1) The number of packers in the reporting region. (2) The availability of cattle in the reporting region. (3) Pre-existing contractual arrangements of packers in the reporting region. (4) The number of pricing transactions (pens of cattle sold) in the reporting region. (e) Land-Grant research In carrying out subsection (a), the Secretary, in consultation with the Chief Economist, shall take into account relevant research conducted by land-grant colleges and universities (as defined in section 1404 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 ( 7 U.S.C. 3103 (f) Biannual review On establishing regional mandatory minimums under subsection (a)(1), the Secretary— (1) shall review the regional mandatory minimums not less frequently than once every 2 years; and (2) may, in consultation with the Chief Economist, modify the regional mandatory minimums after— (A) making the proposed modification subject to a notice and comment period; and (B) consulting with representatives of the United States cattle and beef industry. (g) Enforcement On establishing regional mandatory minimums under subsection (a)(1), the Secretary shall— (1) regularly monitor compliance by packers with those regional mandatory minimums; and (2) enforce this section in accordance with section 203. (h) Cost-Benefit analysis Not later than 3 years after establishing regional mandatory minimums under subsection (a)(1), the Secretary, in consultation with the Chief Economist, shall conduct a quantifiable, data-driven cost-benefit analysis regarding the operation and effect of those regional mandatory minimums. . 5. 14-day cattle slaughter (a) Definition of cattle committed Section 221(1) of the Agricultural Marketing Act of 1946 ( 7 U.S.C. 1635d(1) 7-day 14-day (b) Mandatory reporting for live cattle Section 222(c) of the Agricultural Marketing Act of 1946 ( 7 U.S.C. 1635e(c) (1) in paragraph (1)— (A) by striking subparagraphs (B) and (C); and (B) by redesignating subparagraph (D) as subparagraph (B); (2) by redesignating paragraph (2) as paragraph (3); and (3) by inserting after paragraph (1) the following: (2) Prior day reporting (A) In general The corporate officers or officially designated representatives of each packer processing plant shall report to the Secretary, for each business day of the packer processing plant, not later than 10:00 a.m. Central Time on each reporting day, the information from the prior business day described in subparagraph (B). (B) Information required The information required under subparagraph (A) shall be, with respect to the prior business day, the number of cattle, organized by cattle type, scheduled for delivery to a packer processing plant for slaughter for each of the next 14 calendar days. .

Summary: Optimizing the Cattle Market Act of 2021 This bill directs the Department of Agriculture (USDA) to establish and maintain a library or catalog of each type of contract offered by packers to producers for the purchase of all or part of the production of fed cattle (including cattle that are purchased or committed for delivery). Fed cattle means a steer or heifer that has been feeding on a ration of roughage and feed concentrates prior to slaughter, including grains, protein meal, grass, and other nutrient-rich feeds. USDA must create and maintain a publicly available library or catalog of the types of contracts that are being offered by packers to, and are open to acceptance by, producers for the purchase of fed cattle. It must also conduct educational outreach activities for producers on how best to use the library or catalog. Additionally, USDA must also establish (1) regional mandatory minimum thresholds to enhance price discovery and transparency for cattle market participants; and (2) methods for establishing such thresholds, which shall be publicly available. Further, the bill revises daily reporting requirements for packer processing plants by requiring them to include the number of cattle scheduled to be delivered for slaughter each day for the subsequent 14 days.