Nebraska Legislature review
May 6, 2016
The Legislature adjourned for the year April 20. I returned to the ranch on the 24th, just in time for several days of rain and a late spring blizzard, which dumped a foot of snow on the Grant County area. In most parts of District 43, water levels in the lakes are at historic highs and early fears of a severe grass fire season have given way to a sigh of relief on the part of many in the ranching business. Warm weather is restoring green to the hills all over the state.
Looking back over the past session, I am struck by how a few votes can impel a dramatic shift in the approach government takes to a particular issue.
Take LB 176, a bill I still feel very passionate about, and one which carried the day due to one vote. LB 176 removes a ban on packer ownership of hogs in the state. I return to the issue today to emphasize again what a bad precedent this is for Nebraska. As most of you know, I led the opposition to bill and learned first-hand how a well-funded lobbying effort can steer a vote to an unfortunate conclusion.
The U.S. cattle industry is in the midst of instability in terms of price. Many in the industry have questioned for years the power of the packing industry to control the price of beef through the use of forward contracting. Packers do not need to dip into the open market for supply when they have a significant number of animals under their control. Logically, reducing the demand for cattle in this way will result in lower prices. Ironically, it is those lower prices upon which the price for the captive supply cattle are also set.
Despite the prohibition on packer ownership of livestock, Nebraska has the enviable position as the number one cattle feeding state. In fact, Nebraska is the real center of price-reporting today, in large part due to this prohibition.
LB 176 technically does not affect cattle, but it sets a dangerous precedent. Packers may potentially be able to sue the state over the constitutionality of a packer ban. Consequently, I feel that the packer ban on cattle is probably on borrowed time.
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Nationwide, the repeal of a packer ban on cattle in Nebraska will have grave long-term consequences. While it would help many feedlots manage their risks more carefully, I believe a long-term destruction of the marketing system will result in continual declines in the amount of each retail dollar retained on the farm or ranch. These trends inevitably result in smaller producers moving out of the business, moving away, and starting life over somewhere else. In turn, that draining away of the population results in empty buildings on Main Street. The cost of providing essential services in rural areas will be shouldered by fewer and fewer taxpayers, and the cycle of depopulation which began in 1920 will continue to hollow out our rural communities.
The Legislature took many positive steps this year to make life better for Nebraskans. But LB 176 was not one of those, and I regret the passage of that bill more than any other.