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Contract Limitations

Contract Limitations — Senators Mike Enzi (R-WY), Chuck Grassley (R-IA), Byron Dorgan (D-ND) and Tim Johnson (D-SD) have introduced the Livestock Marketing Fairness Act.

Contract Limitations — Senators Mike Enzi (R-WY), Chuck Grassley (R-IA), Byron Dorgan (D-ND) and Tim Johnson (D-SD) have introduced the Livestock Marketing Fairness Act. According to the sponsors the bill would:

  • Require that forward contracts for livestock (cattle, hogs and lambs) be traded in public markets where buyers and sellers can witness bids as well as make their own offers. This ensures the market is open to multiple offers.

  • Require marketing agreements to have a firm base price derived from an external source. This ensures that local contract prices are not subject to manipulation by packer-owned herds.

  • Exempts producer-owned cooperatives, packers with low volumes and packers who own only one processing plant. This exemption targets the source of price manipulation and ensures that the business practices of small family-owned processors are not impacted by the law.

  • Ensures that trading is done in quantities that provide market access for both small and large livestock producers.
This legislation would limit swine contracts to 30 head per contract and beef contracts to 40 beef per contract. Similar legislation was introduced in the previous Congress.

Trade Sanctions Reform with Cuba — Senator Max Baucus (D-MT), chairman of the Senate Finance Committee, and 15 other senators introduced legislation, the “Trade Sanctions Reform and Export Enhancement Act,” to ease restrictions on agricultural exports and allow U.S. citizens to travel to Cuba. In 2000, legislation was enacted to allow U.S. agricultural products to be sold on a cash basis to Cuba. However, in 2005, the Bush administration tightened the “cash-in-advance” requirement. The Bush policy requires payment when products leave the United States, which severely restricted trade with Cuba. Prior to 2005, payment was required before the goods arrived. The Baucus legislation would restore the pre-2005 definition of cash in advance and allow U.S. banks to receive payments directly from Cuban banks. USA Rice Federation said, “While we continue to urge Congress and the administration to lift the U.S.-imposed embargo, this bill would allow rice producers, millers, merchants and allied industries to begin to reclaim the costly ground lost over the last four years.”

Food Safety Working Group Website — The White House Food Safety Working Group launched a website to provide information about the group’s activities and progress. According to USDA, the website, will be a resource for people who want to learn about the current food safety network as well as stakeholders and organizations that are working to upgrade America’s food safety system.

Congress Returns Next Week — Congress will return this week from its Memorial Day recess. Fiscal year 2010 appropriation bills will be a priority for the House of Representatives. A number of House committees, including agriculture, will begin its work on the climate change bill passed by the House Energy and Commerce Committee last week.

P. Scott Shearer
Vice President
Bockorny Group
Washington, D.C.