The U.S. Department of Agriculture (USDA) launched its pilot Cattle Contracts Library on Tuesday.
The Consolidated Appropriations Act of 2022 directed USDA to create a pilot library to increase market transparency for cattle producers.
This pilot library will provide new disclosure to the industry and public regarding the key terms, conditions, and volumes under which cattle are contracted.
USDA says the library will empower cattle producers to negotiate better terms, more carefully monitor risks relating to marketing preferences and pricing practices, and ultimately take better advantage of market opportunities to produce cattle that the market demands.
“USDA is committed to creating a more level playing field for cattle producers and a more balanced, equitable economy for everyone working in food and agriculture,” Agriculture Secretary Tom Vilsack said. “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.”
WATCH: Taylor Cox, Associate Deputy Administrator for Agricultural Marketing Service Livestock and Poultry Programs with Agricultural Marketing Service, provides an overview of the Cattle Contract Library
The initial release of the library will allow users to browse a range of terms and information contained in active contracts used for the purchase of fed cattle. In addition to active contracts in use, the library will provide information on terms most commonly used in cattle contracts, such as base price determination, base price adjustments and selling basis options; contract specifications for such things as quality, yield, breed, weight, delivery, financing, profit/risk-sharing, and more (where present in a contract); and the full range of premiums and discounts used in final price determination.
Upcoming enhancements to the library will display information on the number of head of cattle moving through current contracts defined by contract base price source, including the actual numbers for the prior month and estimates for the current month. Additionally, volume information by contract specification for quality, breed, weight, source-verified and others will provide users with information about how often each specification is used. During the term of the pilot, AMS expects to further enhance transparency through 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 empower producers to take advantage of new economic opportunities, improve their marketing strategies, and manage risks relating to contractual terms including pricing references on which they rely. AMS will conduct 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 on that webinar, and all other information related to the pilot, can be found at www.ams.usda.gov/market-news/livestock-poultry-grain/cattle-contracts-library.
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 email@example.com.