The view from Austin: A compromise on negotiated trade

As anticipated, Senate Republicans this week unveiled another round of coronavirus aid. The Health, Economic Assistance, Liability Protection and Schools Act, or HEALS Act, was introduced on Monday. In addition to proving Congress’ aptitude for creating acronyms, the HEALS Act includes $20 billion in ag relief funding.
Also included was automatic forgiveness of Paycheck Protection Program, or PPP, loans under $150,000, additional flexibility in allowable expenses for PPP loans, and funding to help USDA’s Farm Service Agency keep up with their responsibilities in managing the distribution of funds.
It is still early in the process, and substantive negotiations will be necessary to garner the required support from Democrats. That means a lot may change before the legislation crosses the finish line.
Texas and Southwestern Cattle Raisers Association will continue to work with the Texas delegation to ensure the legislation has a meaningful and positive impact for cow-calf producers.
Also, this week our association leaders and staff participated in the NCBA summer business meeting in Denver.
A variety of issues were covered, but the most intense discussions centered on the need for improved price discovery within the cattle market. The Holcomb fire and market response to COVID-19 highlighted this necessity as cow-calf producers took a tremendous financial hit despite record beef prices.
Earlier in the year, Texas and Southwestern Cattle Raisers Association passed our own policy, which among other things, supports robust price discovery by compelling packers to purchase cattle through negotiated trade at regional levels supported by economic research. TSCRA, along with 21 other cow-calf producer states, brought a similar policy to NCBA but was opposed by NCBA’s feeder affiliates.
After a marathon six-hour meeting, a compromise was reached because of the grassroots policy process.
The compromise requires NCBA to establish a working group that will set, by Oct. 1, specific negotiated trade levels that must be voluntarily met by the major packers. If those levels are not met it will trigger a change in the NCBA policy to support legislative or regulatory action to achieve robust price discovery.
The passage of the compromise policy is a fantastic step forward to ensure the continued viability of cow-calf producers, but much more work is still to come. We will continue to be very involved in the NCBA process to ensure the policy works as intended and that NCBA adequately addresses cow-calf producers’ concerns.
I think that’s enough for one week, so until next time!
-Jeremy
Jeremy Fuchs is the director of pubic affairs for Texas and Southwestern Cattle Raisers Association.