Senators: Bill Would Stop Manipulative Livestock Markets
U.S. Senators Mike Enzi, R-Wyo., Byron Dorgan, D-N.D., Chuck Grassley, R-Iowa, and Tim Johnson, D-S.D., introduced a bill today they say would "stop years of unfair and manipulative meat packer practices that negatively impact ranchers and farmers."
The senators say the Livestock Marketing Fairness Act would put ranchers and farmers on equal footing with packer-owned herds by amending the Packers and Stockyards Act of 1921 to end certain anti-competitive forward marketing contracts and ensure that ranchers have full access to the marketplace.
"A growing number of large packing operations own their own livestock or control them through forward contracting agreements. This allows these firms to buy from themselves when prices are high and buy from others when prices are low. In recent years, the meat packing industry has become increasingly concentrated with only a handful of firms controlling a majority of the domestic cattle and hog slaughter," state the senators in their announcement of the bill.
The bill would:
- Require that forward contracts for livestock (cattle, hogs and lambs) be traded in public markets where buyers and sellers can witness bids as well as make their own offers. This ensures the market is open to multiple offers.
- Require marketing agreements to have a firm base price derived from an external source. This ensures that local contract prices are not subject to manipulation by packer owned herds.
- Exempts producer owned cooperatives, packers with low volumes and packers who own only one processing plant. This exemption targets the source of price manipulation and ensures that the business practices of small family-owned processors are not impacted by the law.
- Ensures that trading is done in quantities that provide market access for both small and large livestock producers.
"The legislation is aimed at improving the stability and openness of forward contracting to provide ranchers and farmers more options to sell their animals. The legislation allows ranchers and farmers to continue choosing the best methods for selling their animals," say the senators.
