To amend the Agricultural Marketing Act of 1946 to foster efficient markets and increase competition and transparency among packers that purchase livestock from producers.

To amend the Agricultural Marketing Act of 1946 to foster efficient markets and increase competition and transparency among packers that purchase livestock from producers. 1. Spot market purchases of livestock by packers Chapter 5 of subtitle B of the Agricultural Marketing Act of 1946 ( 7 U.S.C. 1636 (1) by redesignating section 260 ( 7 U.S.C. 1636i (2) by inserting after section 259 the following: 260. Spot market purchases of livestock by packers (a) Definitions In this section: (1) Covered packer (A) In general The term covered packer (B) Exclusion The term covered packer (2) Livestock The term livestock (A) pork; (B) poultry; (C) a dairy-bred, dairy-bred cross, or beef animal over 30 months of age; or (D) a foreign-born beef animal. (3) Nonaffiliated producer The term nonaffiliated producer (A) that sells livestock to a packer; (B) that has less than 1 percent equity interest in the packer, which packer has less than 1 percent equity interest in the producer; (C) that has no officers, directors, employees, or owners that are officers, directors, employees, or owners of the packer; (D) that has no fiduciary responsibility to the packer; and (E) in which the packer has no equity interest. (4) Spot market sale (A) In general The term spot market sale (i) under an agreement that specifies a firm base price that may be equated with a fixed dollar amount on the date the agreement is entered into; (ii) under which the livestock are slaughtered not more than 14 days after the date on which the agreement is entered into; and (iii) under circumstances in which a reasonable competitive bidding opportunity exists on the date on which the agreement is entered into. (B) Reasonable competitive bidding opportunity For the purposes of subparagraph (A)(iii), circumstances in which a reasonable competitive bidding opportunity shall be considered to exist if— (i) no written or oral agreement precludes the producer from soliciting or receiving bids from other packers; and (ii) no circumstance, custom, or practice exists that— (I) establishes the existence of an implied contract (as determined in accordance with the Uniform Commercial Code); and (II) precludes the producer from soliciting or receiving bids from other packers. (b) General rule Of the quantity of livestock that is slaughtered by a covered packer during each reporting week in each plant, the covered packer shall slaughter not less than 50 percent of the quantity through spot market sales from nonaffiliated producers. (c) Nonpreemption Notwithstanding section 259, this section does not preempt any requirement of a State or political subdivision of a State that requires a covered packer to purchase on the spot market a greater percentage of the livestock purchased by the covered packer than is required under this section. (d) Relationship to other provisions Nothing in this section affects the interpretation of any other provision of this Act, including section 202. .

Summary: This bill establishes that a minimum of 50% of a covered packer's weekly volume of livestock slaughter must be purchased through spot market sales from nonaffiliated producers. (The term covered packer applies to a packer that is required to report to the Department of Agriculture each reporting day information on the price and quantity of livestock purchased by such packer and does not include a packer that owns only one livestock processing plant.) A spot market sale is a purchase and sale of livestock by a packer from a producer under (1) an agreement that specifies a firm base price that may be equated with a fixed dollar amount on the date the agreement is entered into, (2) which the livestock are slaughtered not more than 14 days after the date on which the agreement is entered into, and (3) circumstances in which a reasonable competitive bidding opportunity exists on the date on which the agreement is entered into.