Agriculture department reworking rules for meat-processing industry
They're beefing about beef again.
Actually, arguments extend to livestock of all kinds as the U.S. Department of Agriculture looks to limit the market power of an industry in which the four top meat companies control about 80 percent of the business.
"The current system is broken and now is the time to make a change," said Roger Johnson, president of Washington, D.C.-based National Farmers Union, referring to proposed rule changes at the Grain Inspection and Stockyards Administration that oversees the meat-processing industry.
"Some of the aspects of the proposed rule would benefit from additional clarification, but overall, the changes add up to a much-needed regulatory measure to increase competition and allow access to fair markets for farmers and ranchers," he said.
The rules added to the Packers and Stockyards Act of 1921 would prohibit meatpackers from selling livestock to each other and require justification for a packer that chooses one supplier over another.
The number of U.S. beef and hog operations has declined rapidly during the past 30 years, said Johnson. "In 1980, there were 660,000 hog farms while only 67,000 remain today. Thirty years ago, there were 1.3 million beef cattle operations but only 950,000 today. The GIPSA rule would prevent packers and processors from abusing their market power and would protect the rights of producers," he said.
But livestock groups such as the National Cattlemen's Beef Association, National Pork Producers Council and National Turkey Federation are opposed to the proposed change.
"The rule will add to the costs of buying and selling hogs, increase the risk of litigation and lead to more vertical integration in the pork industry," said Doug Wolf, president-elect of the Pork Producers at a recent news conference.
Cimeron Frost, spokesman for Springfield-based Illinois Beef Association, said changes could mean less high-quality meat products for consumers. "The pricing structure they want to put in place could mean one price to fit everybody," he said.
"Nobody can prepare for this because we don't know how the final rules will be written," said Frost.
The National Council of Farmer Cooperatives said Monday that provisions in the proposal could harm farmer-owned livestock marketing co-ops.
Bloomington-based Illinois Farm Bureau also filed comments on the proposal, said spokeswoman Tamara Nelsen. "As the number of packers and processors has decreased, we've heard a lot of complaints from members," she said.
"Our main areas of concern were contract language, company policies on capital investment and the choice of venue in the event of a dispute," said Nelson, who expects USDA regulators to revisit the proposals before any change is enacted.
Fred Baker, a beef producer in Streator since 1972, said the real problem stems from the government's failure to enforce existing regulations in the past.
"Maybe it should never have come to this. (The USDA) should have enforced rules that were in place, rules that all farm organizations support. It's like we've seen in the banking industry, rules on the books just weren't enforced," he said.