Secretary of Agriculture Tom Vilsack and US Attorney General Eric Holder opened the discussion, according to Reuters.
NPR reports that many participants voiced differing opinions on the rule proposed by the Grain Inspection, Packers & Stockyards Administration (GIPSA) which "aims to preserve competition in a livestock industry dominated by a handful of corporate giants." The proposed rule is intended to keep "markets fair and competitive for livestock producers dealing with meatpacking" companies and would also articulate a standard under the Packers and Stockyards Act that, in certain situations, claimants do not need to prove "industrywide anticompetitive behavior to file suit."
Vilsack stated that he was "deeply concerned" about the impact of consolidation on rural America. "Since 1980, the number of hog farms has dropped from 660,000 to 71,000, according to the Department of Agriculture. The number of cattle farms has fallen from 1.6 million to 950,000."
The National Cattlemen's Beef Association says that the contracts "allow ranchers to manage risk" and "they can earn lucrative premiums for high-quality cattle, even if they have to accept steep discounts for inferior beef."
Ranchers represented by R-Calf USA argue that "the contracts thin the spot markets, which help to determine prices for those contracts, thereby depressing prices for everyone."
The comment period for the proposed rule was recently extended November 22, 2010. The proposed rule is available here. For more information on the proposed rule, click here and here to read past US Ag&Food Law and Policy blog posts on the subject.
To read the Reuters story, click here.
To read the NPR story, click here.
Posted: 08/30/2010
