A Senate bill was introduced yesterday that, according to U.S. Senators Mike Enzi, R-Wyo., Byron Dorgan, D-N.D., Chuck Grassley, R-Iowa, and Tim Johnson, D-S.D., would "stop years of unfair and manipulative meat packer practices that negatively impact ranchers and farmers." See related article on cattlenetwork.com.
According to FarmPolicy.com, the legislation would amend the Packers & Stockyards Act to "put farmers and ranchers on equal footing with packer-owned herds," by ending "certain anti-competitive forward marketing contracts, and ensur[ing] that producers have full access to the market place."
The problem, according to the press release from Grassley's office, is that a
"growing number of large packing operations own their own livestock or control them through forward contracting agreements. This allows these firms to buy from themselves when prices are high and buy from others when prices are low. In recent years, the meat packing industry has become increasingly concentrated with only a handful of firms controlling a majority of the domestic cattle and hog slaughter."
This bill, according to the same press release, would
- Require that forward contracts for livestock (cattle, hogs and lambs) be traded in public markets where buyers and sellers can witness bids as well as make their own offers. This ensures the market is open to multiple offers.
- Require marketing agreements to have a firm base price derived from an external source. This ensures that local contract prices are not subject to manipulation by packer owned herds.
- Exempt producer owned cooperatives, packers with low volumes and packers who own only one processing plant. This exemption targets the source of price manipulation and ensures that the business practices of small family-owned processors are not impacted by the law.
- Ensure that trading is done in quantities that provide market access for both small and large livestock producers.
To view the legislation, click here.
Posted: 5/21/09
