Bill to Ban Packer Ownership of Livestock is Reintroduced
Late last week, Senator Chuck Grassley reintroduced legislation to ban packer ownership of livestock. A news release from his office noted that the long-time Iowa senator is concerned about the continued impact of consolidation within the livestock industry.
“Over the last several decades large packing companies in the poultry and pork industries have moved to concentrate and vertically integrate,” the release said. “The beef industry is also showing similar signs of consolidation. According to the Department of Agriculture, the amount of cattle traded on the cash market declined from 52% in 2005 to 21% in 2015. This trend illustrates the outsized power of packers in the marketplace.”
The National Pork Producers Council (NPPC) is opposed to mandates on ownership of livestock.
"While we haven't reviewed the legislation yet, NPPC is opposed to any government mandate that would restrict producers' ability to sell and packers' ability to buy livestock," said NPPC President Ken Maschhoff, a pork producer from Carlyle, Ill. "This ban would hurt producers, packers and, ultimately, consumers."
Maschhoff also pointed out that at least one existing packing plant and all five of the new plants coming online over the next two years are partially or fully owned by producers, raising concerns about the legislation's effect on them.
From Grassley’s viewpoint, the bottom line is a competitive marketplace.
“An effective and efficient marketplace is one where packers that control all harvest capacity do not also own a majority of the animals to be processed,” Grassley said in the release. “We need a competitive marketplace in the livestock industry that delivers a fair market price to farmers. Eliminating packer ownership of livestock would be a good first step in accomplishing that goal.”
Grassley believes family farmers are feeling the pressure and impact of concentration in agriculture. The purpose of his bill is to ensure that all producers receive fair prices.
Grassley’s bill contains four exceptions to the ban:
1. An arrangement entered into within 7 days (excluding any Saturday or Sunday) before slaughter of the livestock by a packer, a person acting through the packer, or a person that directly or indirectly controls, or is controlled by or under common control with, the packer;
2. A cooperative or entity owned by a cooperative, if a majority of the ownership interest in the cooperative is held by active cooperative members that own, feed, or control livestock; and provide the livestock to the cooperative for slaughter;
3. A packer that is not subject to mandatory price reporting laws; or
4. A packer that owns one livestock processing plant.
Grassley has introduced similar versions of the packer ban in previous Congresses. He has long-standing concerns about the impact of concentration in agriculture. PORK Network will continue to monitor the bill and industry responses.
Grassley shared his viewpoints with Farm Journal Radio. Listen below.
