WASHINGTON – Senator Chuck Grassley has this week reintroduced legislation to ban packer ownership of livestock after seeing continued impact of consolidation within the livestock industry.
Over the last several decades large packing companies in the poultry and pork industries have moved to concentrate and vertically integrate. The beef industry is also showing similar signs of consolidation. According to the Department of Agriculture, the amount of cattle traded on the cash market declined from 52 percent in 2005 to 21 percent in 2015. This trend illustrates the outsized power of packers in the marketplace.
“An effective and efficient marketplace is one where packers that control all harvest capacity do not also own a majority of the animals to be processed,” Grassley said. “We need a competitive marketplace in the livestock industry that delivers a fair market price to farmers. Eliminating packer ownership of livestock would be a good first step in accomplishing that goal.”
Independent producers are seeing fewer choices of who to buy from and who to sell to. More and more family farmers are feeling the pressure and impact of concentration in agriculture. This bill aims to ensure that family farmers and independent producers receive fair prices for their efforts.
Grassley’s bill contains four exceptions to the ban for:
1. an arrangement entered into within 7 days (excluding any Saturday or Sunday) before slaughter of the livestock by a packer, a person acting through the packer, or a person that directly or indirectly controls, or is controlled by or under common control with, the packer;
2. a cooperative or entity owned by a cooperative, if a majority of the ownership interest in the cooperative is held by active cooperative members that own, feed, or control livestock; and provide the livestock to the cooperative for slaughter;
3. a packer that is not subject to mandatory price reporting laws; or
4. a packer that owns 1 livestock processing plant.
Grassley has introduced similar versions of the packer ban in previous Congresses. He has long-standing concerns about the impact of concentration in agriculture on family farms.
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