Grassley hears from Iowa cattlemen on market reform bill

     Sen. Chuck Grassley was in Monticello last week, May 4, to meet with members of the Iowa Cattlemen’s Association (ICA).

     Hundreds of farmers from across Iowa filled the Youth Development Center to hear from the Senator on Senate Bill 949, of which he is a co-sponsor. The bill has gained bi-partisan support from Grassley’s fellow members in Congress.

     The cattle reform bill Grassley is proposing “would require any U.S. meat processing facility that slaughters over 125,000 head of cattle annually to purchase 50 percent of its weekly volume on the open market,” according to “Capital Press.”

     Grassley’s bill is also co-sponsored by Democratic Sen. Jon Tester of Montana.

     Grassley has the support of the U.S. Cattlemen’s Association (USCA), but not the National Cattlemen’s Beef Association.

     Grassley’s bill is also challenged by Sen. Deb Fischer of Nebraska. Fischer’s bill “would establish regional minimums for negotiated cash trade to enable price discovery and provide cattle producers with more market information.”

     Fischer also has the support of the USCA.

     Grassley informed the crowd in Monticello that cattle reform is nothing new. In fact, he first introduced the idea to Congress back in the 1980s.

     “There wasn’t enough transparency in the cattle market,” he said at the time.

     That bill went nowhere.

     Then, in the early 2000s, Grassley again brought the topic up.

     “I introduced a bill similar to what I put in last year at the behest of cattlemen from Iowa,” recalled Grassley. “I gave up because it didn’t get support.”

     Having been approached by the Cattlemen again, in March, Grassley introduced his version of the cattle market reform bill.

     “I was surprised at the number of co-sponsors that we got on this bill. Probably because the cattlemen will get help from it and worked hard to get it done. That support is evident by you being here today.”

     Brad Kooima was also present at the event, fielding questions from the crowd. Kooima, himself, is a cattle producer, broker, and a member of the ICA’s feedlot council.

     “I’m quite passionate about this. For me, yes, it’s a living. But it’s so much more than that,” said Kooima. “I have a son and grandchildren. I don’t know if this industry is going to work for them. That’s what I’m fighting for and that’s what the Senator is fighting for. It’s not just a living, it’s a way of life. And I would bet most of you in here would agree with that. It is very important.”

     Kooima said the issue is about finding a regulatory solution regarding the packing plants/slaughter houses.

     “The secrecy of what the deals are, the relationship between these huge feed yards and packers, is part of the problem,” he explained.

     Grassley went into detail on just how he plans to sell this bill… There are four major producers in the U.S. that conduct about 80 percent of the slaughter of cattle. He said a majority of their sales stem from cattle these facilities already own or people they have contracts with.

     “The independent producer, the person who wants to negotiate a price on a daily basis, has two problems,” outlined Grassley. “One, can he get a market? Is he going to get a fair price? Even if we get a price, it’s probably $20-$40 a head less than other people.

     “You become a residual supplier and the market doesn’t treat you fair.”

     One cattleman inquired as to laws against price gouging, which certainly pertains to this situation with the plants. Grassley said in 2020, during the pandemic, laws were put in place to protect people against price gouging.

     Someone also asked whether Grassley felt the Biden administration would move on this bill over the former Trump administration.

     “I’d have to assume so, that we have a better chance of getting this through right now,” Grassley answered.

     With former Iowa governor Tom Vilsack serving as U.S. Secretary of Ag, Grassley said the two have privately met about the bill, but he could not divulge their conversation or whether Vilsack would come out in support of it.

     “He did make a very clear point though about not enough transparency. So he’s aware of the problem,” offered Grassley.

     Cora Fox, director of government relations with the ICA, facilitated the discussion between Grassley, Kooima, and the cattlemen. She asked Grassley whether he’d be willing to negotiate and compromise with Sen. Fischer on her bill.

     “We need to move forward on the best solution for the industry,” urged Fox.

     All Grassley would say is, “We’re not far along. I presume that if we were that far along, then we’d be discussing it because you don’t negotiate through the press.”

     Several of the cattlemen said while a bill and an eventual law is a good thing, it does not fix the immediate issue that farmers are losing money right now, and can’t find the help they need.

     “We have workers not showing up at packing plants. The plants get backed up. There are cattle needing to go to slaughter,” said one cattleman. “There are government programs that keep them out of work (unemployment and stimulus checks). It’s the workforce at these packing plants that’s really backing things up right now.”

     Grassley said things won’t improve any time soon until the current unemployment law ends in early September, with those unemployed receiving that extra $300.

     “Forty-two percent of the people who are unemployed are making more on unemployment than if they were working. To that extent, it’s a problem,” voiced Grassley.

     Another farmer emphasized the need for a fair marketplace.

     “We have packers that their profits are shooting through the roof. We’re so far away from breaking even that it isn’t even funny. When does accountability happen?”

     Grassley said the marketplace needs to do a better job of governing this issue, and it isn’t. He said this is an example of why his legislation is necessary.

     If packing plants don’t follow the law, should Grassley’s bill proceed, they would be subject to penalties, up to $10,000 a day. However, Kooima said the insurance that covers these facilities would handle the fine, and it wouldn’t reflect poorly on the plant.

     “From the conversations I’ve had with countless cattlemen across Iowa, something has to be done now,” urged Fox in wrapping up the hour-plus conversation and Q&A session with Grassley. “We’re approaching 20 years since the Senator first introduced this legislation in 2002. We don’t want to reach that 20-year mark. We cannot wait any longer. This will be a process, but we do believe that what Sen. Grassley is doing with his legislation is certainly a step in the right direction.”