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Proposed Ban On Packer Ownership Of Livestock
R-CALF USA charges that the National Cattlemen’s Beef Association (NCBA) has resorted to outrageous lies in order to defeat a measure in the Senate version of the 2007 Farm Bill that would protect independent producers from the anti-competitive practices of the largest multinational meatpackers.
“In various radio broadcasts, NCBA has made the outrageously false claim that the prohibition on packer ownership of livestock as contained in the Senate version of the Farm Bill would make it illegal for producers to participate in value-added marketing programs such as Certified Angus Beef, any sort of marketing alliance, any sort of contracting,” said R-CALF USA CEO, Bill Bullard.
In another sound bite, an NCBA spokesman said, “It actually keeps producers from entering into marketing contracts and marketing alliances with other producers, feeders and packers to be able to have value-added cattle move forward.”
“These are outright lies,” Bullard asserted. “The provision in the Senate version of the Farm Bill actually protects a producer’s right to participate in marketing arrangements and contracts by clearly stating that the prohibition does not apply when producers maintain ownership of their livestock and when they materially participate in the management of their livestock production.
“In addition, the prohibition exempts any packer that owns only one processing plant, regardless of size, exempts any packer that slaughters fewer than 125,000 cattle annually (based on a five-year average), and exempts any packer that is owned by producers through a cooperative,” he pointed out.
“It is difficult enough for producers to protect the competitiveness of their U.S. livestock market when just four meat packers that have more than 80 percent control over steer and heifer slaughter have such dominate control over our markets,” Bullard continued.
“Now, with NCBA going around the country and spreading false and outrageous claims in order to protect the largest meat packers from needed reforms, producers are faced with an impossible situation.”
R-CALF USA believes the prohibition on packer ownership of livestock is a necessary reform to prevent the multinational packers from restricting producer access to the marketplace, a practice that enables those packers to gain a significant pricing advantage over cattle producers.
“The practice of packer ownership of livestock is what allowed the packers to gain full control over the entire U.S. poultry production industry, and which allowed the packers to eliminate 90 percent of independent U.S. hog operations,” said Bullard.
“According to USDA (U.S. Department of Agriculture), in just the last 25 years, the number of U.S. hog operations fell from 667,000 to only 67,000 from 1980 to 2005.”
“Unless the cattle industry takes steps right now to protect the integrity of their marketplace, U.S. cattle producers will go the way of the hog industry . They will have to trade their independence for a production contract with the packers, provided they even receive an invitation to do so,” he emphasized.
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