Producers, packers react to USDA proposed rule on packer practices
Some producer groups praised USDA’s proposed rule, announced last Friday aimed at protecting livestock and poultry producers from unfair packer practices, while the major trade organization representing the packers, the American Meat Institute (AMI), sharply criticized it. A sample of reaction:
R-CALF USA said USDA’s action was “bold” and “absolutely essential.” The group praised the proposed rule that would enable a producer to prove a violation of the Packers and Stockyards Act without having to prove predatory intent, injury to competition or the likelihood of injury to competition. President Max Thornsberry also praised proposed rules preventing packers from buying or trading livestock among themselves, preventing two or more packers from using a single cattle buyer, and requiring packers to maintain written records to justify different prices offered to livestock sellers.
AMI: USDA is trying “to turn back the clock on the livestock and meat marketing practices that have made the U.S. meat production system the envy of the world,” said Senior Vice President of Regulatory Affairs and General Counsel Mark Dopp. “Courts have affirmed that our industry is dynamic and competitive and rejected USDA’s arguments repeatedly. Now…USDA is engaging in a regulatory end-run and attempting to change the law through administrative fiat. This is not an appropriate role for (USDA) to play and could potentially cause harm and economic disruption.”
NCBA President Steve Foglesong said “In general, we have serious concerns with any efforts to increase government intrusion into the marketplace. Cattle producers support free-market principles and we deserve the right to enter into private negotiations between willing buyers and sellers…NCBA will fight to protect the use of contract and alternative marketing arrangements in the cattle industry…” He added, “Multiple studies have shown that current regulations…have been successful” in ensuring that the marketplace is “free from anti-trust, collusion, price fixing and other illegal activities that could damage the viability of the market and interfere with market signals.”
National Meat Association spokesman Jeremy Russell questioned the proposed ban on packers trading livestock among themselves. He said it “seems both sweeping and arbitrary,” and said NMA has asked USDA to substantiate the claim that it has received complaints about the practice.
The Western Organization of Resource Councils said the proposed rules are a “good first step to protect producers from unfair practices by the large meatpackers but more reforms are needed.” South Dakota rancher, and WORC Chairman Shane Kolb, said the next step “is to require packers to pay a firm bid price for all livestock they procure, and require them to sell in an open, public market where all buyers and sellers have access.” WORC says it is a “network of grassroots organizations representing farmers, ranchers, landowners and consumers” in seven states.
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