How Deb Fischer Delivered for Big Ag – The American Prospect
It is a long and complex saga, difficult to understand is an understatement, for those that have not been engaged with food and agriculture issues over many years, but let it suffice to say that when a member of Congress who is voted into office on the strength of their commitment to family/small/local farming and ranching sells out to corporate ag. interests it surely puts those voters in quite a bad mood – as it damn well should. Hopefully, Deb Fisher has signed her “leaving office” papers over this latest betrayal. BSR
How Deb Fischer Delivered for Big Ag – The American Prospect
How Deb Fischer Delivered for Big Ag
An obscure fight over cattle prices could be one reason the Nebraska senator is in trouble in her re-election campaign.
by David Dayen
October 30, 2024
Sen. Deb Fischer (R-NE) is seen during a Senate committee hearing on Capitol Hill in 2021. Patrick Semansky/AP Photo
Perhaps the most surprising election in America right now is the tight battle for a U.S. Senate seat in Nebraska. Dan Osborn, a union leader running as an independent populist, is functionally tied with Sen. Deb Fischer, the incumbent Republican. The latest New York Times/Siena poll has Fischer leading by two points, well within the margin of error. Other polls show Osborn in front, and even in the Siena poll, he’s ahead among registered voters.
The situation has left many wondering why Fischer, who has mostly lain low during her two terms in the Senate, would be in any trouble in a red state. But a sleeper issue sheds light on what Osborn’s challenge is really all about.
One of Osborn’s closing ads features a farmer and longtime Republican explaining why he turned against Fischer. “Senator Deb Fischer is a fake rancher … She got ten times richer in office, we pay her millions, and she can’t even pass a farm bill,” the farmer says, going on to make a pitch for Osborn over scenes of the candidate standing in a crop field and fixing a John Deere tractor.
Agriculture is clearly important in Nebraska, and the “fake rancher” issue—Fischer’s family ranch has been dissolved multiple times due to unpaid corporate taxes—amid indifference over a languishing farm bill could be resonant. But there’s a separate, more obscure history … that is, obscure unless you’re a rancher in Nebraska, and probably know the details well.
In 2021, Fischer, a member of the Senate Agriculture Committee since 2018, intervened to significantly weaken a bill about cattle prices that the agribusiness lobby opposed. The resulting compromise never passed, meaning that ranchers who for decades have been pleading with Washington to deal with sagging revenues for their operations are still waiting for relief.
“Senator Fischer tried to look like she was helping the cattle producers, and instead kicked the can down the road,” said Bill Bullard, a cow/calf rancher in South Dakota who is CEO of the Ranchers-Cattlemen Action Legal Fund (R-CALF USA), a membership organization for cattle and sheep ranchers. Bullard’s group opposed Fischer’s watered-down compromise bill two years ago. According to him and other critics, Fischer took the side of the dominant meatpackers, longtime donors of over $1.5 million across her Senate career, who have been stiffing those ranchers while earning record profits.
The controversy fits perfectly with Osborn’s general critique of Fischer: that she is captured by corporate interests rather than delivering on the needs of ordinary Nebraskans. “For 12 years, Deb Fischer has taken money from big meatpackers to do their bidding in Washington and vote against the interests of hardworking Nebraskans,” Osborn spokesperson Dustin Wahl said in a statement provided to the Prospect. “Fischer has shown Nebraska ranchers time and again that she thinks they’re for sale, leaving them behind while big donors line her pockets.”
THE SITUATION INVOLVES CATTLE PRICE TRANSPARENCY, a vital issue for ranchers. Cattle are sold either in a negotiated fashion, primarily through live auctions at stockyards (known as the cash market) or through sight-unseen purchases involving so-called “captive supply” contract offers from meatpackers. Generally speaking, ranchers believe that cash market systems lead to more competition and better prices for their product. “There is a strong correlation between increased alternative marketing arrangements and decreased cattle prices,” Bullard said.
Four meatpackers control around 85 percent of the nation’s beef, and can therefore dictate prices if not conducted through a negotiated cash market. During the pandemic, it became clear that the prices meatpackers paid for cattle were not correlated to what consumers were paying at the grocery store. Even when plants reopened and cattle prices remained low, consumer meat prices leaped up.
Cash markets have to be robust enough to establish benchmark prices that can ensure a better going rate for cattle. But cash markets are wildly uneven, and nonexistent in some parts of the country. Dominant meatpackers take advantage of this to lowball ranchers in their captive supply contracts, sell to retailers at high prices, and pocket the difference.
Ranchers who for decades have been pleading with Washington to deal with sagging revenues for their operations are still waiting for relief.
Cattle price transparency may sound like an obscure issue, but to ranchers it’s the difference between having a viable livelihood and having to close up shop.
Several years ago, cattle ranchers thought they had a solution. They worked initially with Sens. Chuck Grassley (R-IA) and Russ Feingold (D-WI) on something called the 50-14 bill. The idea was that the meatpackers would be obligated to purchase at least 50 percent of their cattle in the negotiated cash market, and then slaughter the cattle within 14 days. This would have created enough volume for ranchers to know the price of their product, and not be subject to meatpacker domination. In short, it would have forced competition for cattle pricing.
The 50-14 bill was first introduced in 2002, and in subsequent Congresses. When Feingold lost his seat, Sen. Jon Tester (D-MT) became the Democratic lead. Over time, the list of bipartisan sponsors and the increased urgency of the unfixed problem made action more possible. Grassley and Tester reintroduced the bill in March 2021, at the top of the Biden administration and right after the pandemic revelations on cattle and meat prices. The stars were aligning.
But the National Cattlemen’s Beef Association (NCBA), the meatpacking industry’s leading trade group, didn’t like the idea. “Simply put, Senator Grassley’s bill misses the mark,” said NCBA’s VP of government affairs Ethan Lane upon the reintroduction of the bill in 2021. “Any legislative solution to increased price discovery must account for the unique dynamics within each geographic region.”
The industry was saying that competing on the cash market would be too high a burden in certain regions of the country. Bullard responded by remarking that the burden of negotiating a fair price would be the point: “You want cattle prices to be determined by competitive market forces, not by the packers’ buyer power.” But the packers had other ideas—and a secret weapon.
RIGHT AROUND THE TIME THE NCBA WAS COMPLAINING, a new bill called the Cattle Market Transparency Act of 2021 was introduced. The lead sponsor was Deb Fischer. This bill did not set stringent market guidelines for the cash market, but instead authorized the U.S. Department of Agriculture (USDA) to establish a “contract library” of the types of offers meatpackers make to ranchers for cattle purchases. USDA would also have to determine regional mandatory minimums for cash-market purchases after a two-year investigation. Meatpackers would have to report how many of their cattle would be slaughtered in 14 days, but did not have to slaughter all of their cash-market purchases in that time frame.
In other words, all of the hard requirements of the 50-14 bill were softened, punted to USDA, and kicked down the road. There were now two competing bills to solve the cattle price transparency problem—but not for long.
Prospective buyers view cattle at the Wahoo Livestock Sales cattle auction in Wahoo, Nebraska, September 18, 2020. Nati Harnik/AP Photo
By the end of 2021, Fischer had successfully brokered a compromise with Grassley and his co-sponsors. But it’s hard to call it a compromise; it was almost a full victory for Fischer’s version of the legislation. The new bill did not have the 50-14 framework at all; instead, it opted for Fischer’s regional mandatory minimums, to be decided within two years by USDA. It included the contract library idea, and had some more stringent reporting requirements for meatpackers.
R-CALF opposed the compromise, with Bullard saying in a statement, “The proposal authorizes the USDA to take up to two more years before it even establishes minimum cash volume requirements; to set those minimum requirements at the same inappropriate level that they’ve been at during the past two years; and then to keep them at that inappropriate level following the required review after the first two years of implementation and periodic reviews after each five-year increment.”
If compromise was needed to get a bill through Congress, maybe it would have been understandable. But after passing the Senate Agriculture Committee, the bill died. It was reintroduced this session, with little hope of success. There has also been no farm bill that a solution like this could have been folded into.
Meanwhile, USDA decided to go ahead and initiate the investigation on its own, using different authorities. Earlier this month, the agency issued an advance notice of proposed rulemaking under the Packers and Stockyards Act aimed at greater price transparency in cattle markets. But that has to go through public comment to decide what benchmark, index, or other tool to facilitate competition can be used for price discovery.
The process will likely take years and is dependent on who controls the executive branch after the election. Its mandate from Congress is also less clear, especially in the age after Chevron deference, where courts can simply nullify executive actions if they determine them not to spring from clear guidance from the legislative branch.
R-CALF supports the proposed rulemaking from USDA. “It is specifically addressing the problems with an ultra-thin cash market,” Bullard said. However, he added, “there’s a question of whether they could impose a percentage [of cash market sales]. If Congress passed legislation, there would be no question.”
Yet the main vehicle within Congress is now the very study that USDA is already conducting. The 50-14 bill is a dead letter, thanks to the Fischer compromise. This maintains a status quo that has worked very well for the National Cattlemen’s Beef Association members. The organization has given $9,354 to Fischer in this election cycle, and the agribusiness industry has donated over $1.5 million to Fischer throughout her career in Washington, according to the Center for Responsive Politics.
Meanwhile, when Congress turned to demanding investigations of the meatpacking industry, Fischer was not available. She did not sign a 2021 letter to Attorney General Merrick Garland, led by Sens. Mike Rounds (R-SD) and Tina Smith (D-MN), calling for an inquiry into possible meatpacking antitrust violations. Grassley and Tester, her partners in the cattle price transparency effort, did sign the letter.
“Even when Congress came together in a bipartisan effort to create a more equitable meatpacking industry, Deb chose to stand in defense of her wealthy donors at the expense of small businesses,” Wahl, the Osborn spokesperson, told the Prospect.
Fischer and the NCBA didn’t respond to a request for comment.
Ranchers are well-versed on the twists and turns of their industry. They know that beef still experiences strong demand, strong exports, and strong prices at the retail level. Yet their prices for cattle, while above the five-year average, remain depressed relative to the signals elsewhere. They know that there isn’t a competitive market. And they know that the solution to this was snuffed out by Sen. Deb Fischer.
If Osborn prevails against all odds next week, ranchers may have held the key to his victory.
David Dayen is the Prospect’s executive editor. His work has appeared in The Intercept, The New Republic, HuffPost, The Washington Post, the Los Angeles Times, and more. His most recent book is ‘Monopolized: Life in the Age of Corporate Power.’
Barbara Ross
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What people believe prevails over truth. Sophocles
Great article.
We have high retail beef prices and relatively low finished cattle prices because of the abuse of meatpackers in the market and a federal judiciary that is not willing to follow the explicit laws that have been passed by Congress and signed by the President. The meat packers have agency capture and incompetent investigations into these abuses. Blame high prices on federal judges who want to make their own economic policy while ignoring the plain written law that protects the markets. Their thumb on the scales of justice have injured all consumers with higher prices and lower supplies which will continue the problems. Just a few in Congress have been able to block more competency in policy. It is one of the reasons John Boehner, former speaker of the house, was given a position of payoff by the meatpackers. Others follow suit. Congress is sprinkled with corporate hacks who are able to block progress on this and many issues. The voices of reason seem as if they have no ability prevail as they don’t know how to speak out against these simple political moves.