OMAHA, Neb. (Reuters) – A U.S. farm group wants tighter government oversight of beef and poultry companies, charging that corporate monopolies are squeezing independent producers.
The outcry is aimed at rallying support for the United States Department of Agriculture’s Grain Inspection, Packers and Stockyards Administration (GIPSA), which is completing a new rule aimed at promoting fairness in the marketing of livestock and poultry.
GIPSA published the rule in June and a comment period expires Nov 22.
Competition in the U.S. meat industry is also attracting the attention of the U.S. Department of Justice, which is holding a forum on industry antitrust concerns in Colorado Aug. 27.
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The Organization for Competitive Markets is working to rally support for the GIPSA rule and to beat back a lobbying effort by corporate meat companies and organizations working to weaken the regulation.
Supporters of tighter regulations say anti-competitive actions by meat companies are hurting producers while boosting profits for meat packers.
They say independent producers are struggling with declining profitability, despite rising demand for beef, because more of their share of the prices that consumers pay for beef shifts to meat packers.
“All we want is a fair deal for the farmers… to be fair and competitive,” said Fred Stokes, executive director of the Organization for Competitive Markets.
“The answer is enforcement of our antitrust laws. Right now the market is rigged.”
R-CALF USA and the National Farmers Union are among the organizations supporting the GIPSA rule-making, which was called for in the 2008 farm bill.
On the other side are the American Meat Institute, the National Cattlemen’s Beef Association, the National Pork Producers Council and other livestock and poultry industry groups, which say the new regulations will be costly and burdensome to business.
Tyson chief executive officer Donnie Smith said the current market system encourages and rewards farmers who are progressive, innovative and efficient. He said the new rules would hurt those farmers and favour less effective farmers.
“This would take money out of the pockets of our most progressive, most efficient producers and put it in the pockets of the least progressive growers,” he said.
However, R-CALF CEO Bill Bullard said the U.S. live cattle industry is under siege as a shrinking percentage of cattle are sold on the cash market, which is the basis for transparent price discovery, and more are sold through contracts to packers.
“You have just a few meat packers who act as gatekeepers who then decide who will and who will not have timely access to the marketplace,” he said.
“The alarm sirens couldn’t be wailing any louder.”
