WASHINGTON, January 31, 2023 — The United States Department of Agriculture (USDA) launched its pilot Livestock Contract Library today at noon Eastern Time on the Agricultural Marketing Service (AMS) Cattle contracts library Web page. The Consolidated Appropriations Act of 2022 directed the USDA to create a pilot library to increase market transparency for cattle producers. This pilot library will provide new information to industry and the public regarding the main terms, conditions and volumes under which cattle are contracted, bringing sunshine to practices in what is now the largest part of the cattle market. This will allow cattle producers to negotiate better terms, more carefully monitor risks associated with trade preferences and pricing practices, and ultimately better take advantage of market opportunities to produce the cattle the market demands. .
“The USDA is committed to creating fairer conditions for cattle producers and a more balanced and equitable economy for all who work in food and agriculture,” said the Secretary of Agriculture, Tom Vilsak. “The Cattle Contracts Library pilot program supports this commitment by providing producers with the market information they need to make informed production, marketing and business decisions.
“With this Cattle Contract Library pilot, American ranchers will enjoy an exciting new window into market opportunities and trends in cattle contracts, one of the most critical parts of the cattle market,” said Jenny Lester Moffitt. , USDA Under Secretary for Marketing and Regulatory Programs. “Transparency is the foundation of fair and competitive markets and essential for producers seeking to develop economic opportunities. As we continue to lay the foundation for more and better markets, the USDA looks forward to working with all stakeholders and Congress to enable this pilot library to deliver meaningful and lasting value to growers.
The library will look the same as the working library template developed and shared with stakeholders last year, but will now be populated with information from active contracts. Packers who slaughtered an average of at least five percent of the number of feeder cattle slaughtered nationwide in the immediately preceding five calendar years were required to submit this information to AMS, as set out in a final rule. published on December 7, 2022, and entered into force on January 6, 2023.
The initial release of the library will allow users to browse a range of terms and information contained in active contracts used to purchase fed cattle. In addition to active contracts in use, the library will provide information on the terms most commonly used in livestock contracts, such as base price determination, base price adjustments, and base options. sale ; contractual specifications for things like quality, yield, breed, weight, delivery, financing, profit/risk sharing, etc. (if applicable in a contract); and the full range of premiums and discounts used in determining the final price.
Upcoming library enhancements will display information on the number of head of cattle going through current contracts defined by the contract’s base price source, including actuals for the previous month and estimates for the current month. Classes. Additionally, volume information by contract specification for quality, breed, weight, verified source and others will provide users with information on how often each specification is used. During the life of the pilot, AMS plans to further improve transparency with additional reports and features as they are developed, subject to confidentiality.
With the library, producers will be able to see a much more complete picture of marketing practices and trends, including upcoming volumes. This transparency will allow producers to take advantage of new economic opportunities, improve their marketing strategies and manage the risks associated with the contractual conditions, including the price references on which they rely. AMS will host a series of meetings and webinars in the coming weeks and months to help stakeholders understand how to use the pilot library. The first webinar is scheduled for February 8, 2023 at 11:00 a.m. ET. Details of this webinar and all other pilot related information can be found at www.ams.usda.gov/market-news/livestock-poultry-grain/cattle-contracts-library.
Under the Biden-Harris administration, the USDA is transforming the U.S. food system with a greater emphasis on more resilient local and regional food production, promoting competition and fairer markets for all producers, ensuring the access to safe, healthy and nutritious food in all communities, building new markets and income streams for farmers and producers using climate-smart food and forestry practices, making historic investments in infrastructure and capacity clean energy in rural America, and committing to equity across the department by removing systemic barriers and creating a workforce that is more representative of America. To learn more, visit www.usda.gov.
For questions or to request additional information, please contact Michael Sheats, director of the livestock, poultry and grain market news division, at 202-690-3145 or michael.sheats@usda.gov.
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