Meat Institute pushes back against USDA’s cattle market rules

The U.S. Department of Agriculture has requested additional information on potential new rules under the Packers and Stockyards Act concerning price discovery in cattle markets. Not everyone, however, is pleased with this potential new rule.

In response, Julie Anna Potts, President and CEO of the Meat Institute, issued a statement criticizing the USDA’s proposed changes and accusing the administration of overreach in an industry that already maintains high levels of transparency.

Potts argued that the Biden administration’s attempts to further regulate cattle markets would have negative consequences for producers, packers, and consumers. “This is not about transparency,” Potts stated. “This is about the government dictating how cattle may be bought and sold.”

One of Potts’ primary concerns revolves around Alternative Marketing Arrangements, which allow producers to differentiate their products by investing in herd genetics, sustainability, and quality traits. AMAs have enabled livestock producers to reap financial rewards for innovation, which Potts emphasized as vital to maintaining industry competitiveness. She worried that new USDA regulations could force producers and packers into the traditional cash market, reducing competition, innovation, and product quality.

Potts pointed out that AMAs align with many of the goals the USDA claims to support, such as market flexibility and transparency. She highlighted that AMAs provide producers with higher prices and consumers with a consistent supply of high-quality beef at stable prices. In her view, the USDA’s proposed rule changes would undermine the very values the agency aims to promote.

Potts also emphasized that the cattle and beef markets already have robust price discovery mechanisms in place, facilitated by the USDA’s Livestock Mandatory Reporting Act. The LMR requires packers to report daily prices, slaughter data, and other information, which is then anonymized and published by the Agricultural Marketing Service (AMS). These reports, released both daily and weekly, provide detailed insights into market activities and ensure transparency across all market participants, regardless of size.

In 2022, Congress allocated funds for a Cattle Contracts Library Pilot Program, which further enhances transparency. This program collects contract and volume data from packers, making it accessible through a searchable database.

Potts reiterated that the Meat Institute opposes all of the Biden administration’s proposed rule changes under the Packers and Stockyards Act, asserting that they exceed the USDA’s authority and could harm the entire cattle industry.

As the debate over the USDA’s proposed regulations continues, stakeholders across the cattle industry will closely watch for any potential impacts on the market, competition, and innovation in the sector.