II 118th CONGRESS 1st Session S. 2792 IN THE SENATE OF THE UNITED STATES September 13, 2023 Mr. Fetterman introduced the following bill; which was read twice and referred to the Committee on Agriculture, Nutrition, and Forestry A BILL To amend the Agricultural Marketing Act of 1946 to require the Secretary of Agriculture to procure a minimum amount of meat and poultry products from small meat processors and to develop a digital livestock exchange platform, and for other purposes.

1. Short title This Act may be cited as the Strengthening Local Meat Economies Act of 2023 . 2. Procurement of meat and poultry Subtitle A of the Agricultural Marketing Act of 1946 ( 7 U.S.C. 1621 et seq. ) is amended by adding at the end the following: 210B. Procurement of meat and poultry (a) Definitions In this section: (1) Digital livestock exchange platform The term digital livestock exchange platform has the meaning given the term in section 210C(a). (2) Eligible processor The term eligible processor means a livestock or poultry processor that— (A) is engaged in the slaughter of livestock or poultry; (B) (i) employs fewer than 150 full-time employees; or (ii) processes less than 1,000,000 total pounds of meat food product and poultry product per month; (C) is not owned or in partnership with any entity that— (i) employs 150 or more full-time employees; or (ii) processes 1,000,000 total pounds or more of meat food product and poultry product per month; and (D) is not owned or in partnership with any foreign entity. (3) Livestock The term livestock means cattle, sheep, swine, and goats, whether alive or dead. (4) Meat food products The term meat food products has the meaning given the term in section 2(a) of the Packers and Stockyards Act, 1921 ( 7 U.S.C. 182 ). (5) Poultry The term poultry has the meaning given the term in section 4 of the Poultry Products Inspection Act ( 21 U.S.C. 453 ). (6) Poultry product The term poultry product has the meaning given the term in section 4 of the Poultry Products Inspection Act ( 21 U.S.C. 453 ). (7) Secretary The term Secretary means the Secretary of Agriculture. (b) Procurement requirements In procuring meat food products and poultry products for the Department of Agriculture, the Secretary— (1) shall increase procurement of meat food products and poultry products from eligible processors— (A) in the first fiscal year that begins on or after the date that is 1 year after the date of enactment of this section, by an amount that is the greater of— (i) $50,000,000; and (ii) 50 percent of the amount spent in the previous fiscal year for that procurement; and (B) in the first fiscal year following the fiscal year described in subparagraph (A), by an amount that is the greater of— (i) $100,000,000; and (ii) 75 percent of the amount spent in the previous fiscal year for that procurement; (2) shall, in each fiscal year following the fiscal year described in paragraph (1)(B), procure not less than 20 percent of meat food products and poultry products from eligible processors; (3) shall establish procurement contracts for the procurement increases under paragraphs (1) and (2) through a digital livestock exchange platform; (4) notwithstanding any other provision of law, shall not accept the lowest possible bid on a meat food products or poultry products procurement contract if that acceptance would result in prices that would not be commercially viable for eligible processors, as determined by the Secretary in consultation with the advisory board established under section 210C(g) and using the data described in section 210C(d)(4); (5) shall post competitive or sole source contracts exclusively to eligible processors through a digital livestock exchange platform; (6) shall determine fair market price for meat food products and poultry products processed by eligible processors (taking into account product attributes such as organic, regenerative, and high-welfare) through the price reporting expertise of the Secretary; and (7) shall prioritize procurement from— (A) enterprises owned by beginning farmers or ranchers, socially disadvantaged farmers or ranchers, or veteran farmers or ranchers (as those terms are defined in section 2501(a) of the Food, Agriculture, Conservation, and Trade Act of 1990 ( 7 U.S.C. 2279(a) )); (B) enterprises that— (i) source at least 51 percent of their livestock, poultry, meat food products, or poultry products from producers or processors within a 250-mile radius; (ii) exclusively sell meat food products or poultry products with a label of the Department of Agriculture designating the product as a product of the United States, if such label exists; or (iii) purchase at least 51 percent of their livestock, poultry, meat food products, or poultry products to fulfill Federal procurement contracts through a digital livestock exchange platform; and (C) enterprises with labor agreements. (c) Interagency assistance The Secretary shall assist other Federal agencies seeking to procure meat food products and poultry products by— (1) sharing information about the 1 or more digital livestock exchange platforms; (2) offering technical assistance on how to utilize a digital livestock exchange platform; and (3) facilitating through a digital livestock exchange platform procurement contract opportunities with eligible processors. (d) Offset Of amounts available to the Secretary for procurement in a fiscal year, the Secretary shall use not less than $35,000,000 to carry out procurement in accordance with this section. (e) Outreach The Secretary shall conduct outreach, and provide technical assistance, to eligible processors and producers of meat food products and poultry products seeking procurement contracts with the Federal Government. (f) Report Not later than 1 year after the date of enactment of this section, the Secretary shall submit to Congress a report that— (1) describes all procurement of meat food products and poultry products by the Department of Agriculture during the preceding 5 years, including— (A) the companies that those products were sourced from; and (B) by disaggregating information by categories of slaughter volume and processed volume; and (2) (A) analyzes barriers to eligible processors engaging in procurement contracts with the Department of Agriculture; and (B) makes recommendations on how to remove those barriers. . 3. Digital livestock exchange platform Subtitle A of the Agricultural Marketing Act of 1946 ( 7 U.S.C. 1621 et seq. ) (as amended by section 2) is amended by adding at the end the following: 210C. Digital livestock exchange platform (a) Definitions In this section: (1) Digital livestock exchange platform The term digital livestock exchange platform means a digital application or website that fulfills the purposes and activities described in subsection (d). (2) Eligible processor The term eligible processor has the meaning given the term in section 210B(a). (3) Formula price (A) In general The term formula price means any price term that establishes a base from which a purchase price is calculated on the basis of a price that will not be determined or reported until a date that is after the date on which the forward price is established. (B) Exclusions The term formula price does not include— (i) any price term that establishes a base from which a purchase price is calculated on the basis of a futures market price; or (ii) any adjustment to the base for quality, grade, or other factors relating to the value of livestock that are readily verifiable market factors and are outside the control of the packer. (4) Forward contract The term forward contract means an oral or written contract for the purchase of livestock that provides for the delivery of the livestock to a packer at a date that is more than 7 days after the date on which the contract is entered into, without regard to whether the contract is for— (A) a specified lot of livestock; or (B) a specified number of livestock over a certain period of time. (5) Livestock The term livestock means cattle, sheep, swine, and goats, whether alive or dead. (6) Meat food products The term meat food products has the meaning given the term in section 2(a) of the Packers and Stockyards Act, 1921 ( 7 U.S.C. 182 ). (7) Poultry The term poultry has the meaning given the term in section 4 of the Poultry Products Inspection Act ( 21 U.S.C. 453 ). (8) Poultry product The term poultry product has the meaning given the term in section 4 of the Poultry Products Inspection Act ( 21 U.S.C. 453 ). (9) Secretary The term Secretary means the Secretary of Agriculture, acting through the Administrator of the Agricultural Marketing Service. (b) Establishment The Secretary shall enter into cooperative agreements with entities (including private entities, nonprofit organizations, and small businesses) to develop, as determined by the Secretary— (1) a single digital livestock exchange platform; or (2) multiple digital livestock exchange platforms by region. (c) Status as market agency A digital livestock exchange platform shall be a market agency (as defined in section 301 of the Packers and Stockyards Act, 1921 ( 7 U.S.C. 201 ), except that livestock in paragraph (1) of that section shall include poultry) for purposes of that Act. (d) Purposes and activities of platform A digital livestock exchange platform shall— (1) facilitate open access to online cash transfer and open bidding on forward contracts and procurement contracts between— (A) livestock and poultry producers; (B) livestock and poultry producers and eligible processors; (C) livestock and poultry producers or eligible processors and institutional, private sector, and government buyers; and (D) distributors of meat food products and poultry products to institutional, private sector, and government buyers; (2) facilitate ease of access to— (A) Federal procurement opportunities for eligible processors and producers of meat food products and poultry products; and (B) subcontracting opportunities by private entities fulfilling Federal meat food products and poultry products procurement contracts; (3) facilitate connection between producers and eligible processors offering copacking services, so that producers may fulfill governmental, retail, restaurant, or institutional contracts directly; (4) facilitate reporting by the Secretary of regional agricultural prices while ensuring data privacy and data ownership for individual digital livestock exchange platform participants; (5) provide open-source access for producers to a tool that allows producers to enhance the traceability of their product attributes; (6) aim to prevent manipulation within markets subject to the Packers and Stockyards Act, 1921 ( 7 U.S.C. 191 et seq. ), and transactions across the livestock and poultry industry; and (7) test the value of new forms of technology, including distributed ledger and smart contract technologies, in livestock and poultry market platforms and supply chains, to accomplish the objectives described in paragraphs (1) through (6). (e) Compliant forward contracts (1) In general In effectuating any sale of livestock on a digital livestock exchange platform, it shall be unlawful to use a forward contract that— (A) does not contain a firm base price that may be equated to a fixed dollar amount on the date on which the forward contract is entered into; (B) is not offered for bid in an open, public manner under which— (i) buyers and sellers have the opportunity to participate in the bid; (ii) more than 1 blind bid is solicited; and (iii) buyers and sellers may witness bids that are made and accepted; (C) is based on a formula price; or (D) provides for the sale of livestock in a quantity in excess of 50 animals. (2) Penalties Any participant that violates paragraph (1) shall— (A) be barred from participation in a digital livestock exchange platform or for consideration for any Federal meat food product or poultry product procurement contract; and (B) forfeit any existing Federal meat food product or poultry product procurement contract for the 5-year period following the violation. (f) Prohibited participation (1) Daily harvest volume A meatpacker that has a daily harvest volume that is more than 5 percent of the national daily harvest volume may not participate in a digital livestock exchange platform, including by posting subcontracting opportunities on the digital livestock exchange platform. (2) Eligible processors A meatpacker that is not an eligible processor may not participate in a digital livestock exchange platform, including by posting subcontracting opportunities on the digital livestock exchange platform. (g) Outreach The Secretary shall conduct outreach through extension services regarding the availability and use of a digital livestock exchange platform. (h) Authorization of appropriations There is authorized to be appropriated to the Secretary to carry out subsection (b) $2,000,000, to remain available until expended. .