Agricultural News
Farmers, Ranchers Call for Amendment Banning Packer-Owned Livestock
Tue, 05 Jun 2012 13:10:44 CDT
National and state farm organizations including the National Farmers Union and the National Farmers Organization have joined with populist livestock groups like R-Calf USA in calling on the U.S. Senate to amend the Senate Ag Committee's 2012 Farm Bill proposal to ban packer ownership of livestock.
The groups were among 108 signatories to a joint letter (available by clicking here) sent to U.S. Senators to urge their support of the anticipated 2012 Farm Bill amendment by Senator Chuck Grassley (R-IA) to ban packer ownership of livestock. The U.S. Senate is expected to debate the 2012 Farm Bill during the week of June 4.
The joint letter states in part: "Mega-meatpackers such as Tyson, Cargill, JBS and Smithfield Foods use packer-owned livestock as a major tool for exerting unfair market power over farmers and ranchers. This practice fosters industrial livestock production and freezes independent farmers out of the markets. Packer ownership of livestock has been proven to artificially lower farmgate prices to farmers and ranchers while consumer food prices continue to rise.
"By prohibiting direct ownership of livestock by major meat packers, a ban on packer ownership would reduce the anticompetitive effects of captive supplies, which packers use to manipulate markets, and would help increase market access for America's independent producers who currently experience significant market-access restrictions due in large part to packer ownership of livestock.
"We urge you to join Senators Grassley, Conrad, Harkin and Johnson in championing strong, competitive markets in the Farm Bill by supporting the Packer Ban amendment when it comes to the Senate Floor."
In a factsheet prepared by R-CALF USA titled "Why Congress Must Support a Ban on Packer Ownership of Livestock" the group explains that there is nothing inherently wrong with packers owning and feeding livestock unless the packers that own and feed livestock are large enough to also control access to the marketplace.
"That's the situation our industry faces today," said R-CALF USA CEO Bill Bullard adding, "There are four large packers that control over 80 percent of our cattle market and those packers do control access to the marketplace and they do use packer-owned cattle to depress cattle prices."
The factsheet explains that dominant packers harm competition with packer-owned cattle in two ways: It states that dominant packers compete against independent cattle feeders to purchase available feeder cattle and they can overbid the price of feeder cattle, forcing independent feedlots to pay more than fair market value. Then, when the cattle feeders that competed against the dominant packers for available feeder cattle are ready to sell their finished feeder cattle, the dominant packers are the only available market outlet and they restrict the independent feeder's access to that market outlet simply by slaughtering their packer-owned cattle.
"This anticompetitive practice drives down cattle prices and forces independent cattle feeders out of business," Bullard said.
Bullard said that cattle producers around the country should immediately contact their U.S. Senators to urge them to put a stop to the manipulation occurring in the U.S. cattle market by supporting the amendment to the 2012 Farm Bill that will ban packer ownership of cattle.
"If we don't take corrective action immediately, our cattle supply chain will soon be captured by the dominant packers just as they already have captured the poultry and hog supply chains. We can't let that happen." Bullard concluded.
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