U.S. packers portion bigger than thought

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Published: January 31, 2002

WASHINGTON, D.C. – The four largest American meat packers feed or hold

contracts on one-third of the cattle they slaughter – a far larger

portion than thought, according to a United States Department of

Agriculture report.

The updated figure for captive supply could heighten demands for

Congress to ban packer ownership of livestock. Last month, the Senate

voted for a ban as part of a new farm subsidy law. The version of the

bill passed by the House of Representatives has no such provision.

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Agriculture department officials said the four leading packers got 32.3

percent of their cattle from captive supplies in 1999, not the 25.2

percent indicated in annual reports to the Grain Inspection, Packers

and Stockyards Administration.

The difference was due to varying interpretations by packers of what to

include in the reports. “They were as concerned as we were” to assure

uniformity, said administrator JoAnn Waterfield.

Cargill Inc., Farmland Industries, ConAgra and Tyson Foods Inc. account

for 80 percent of beef and heifer slaughter.

Bill Bullard of the cattle producer group Ranchers-Cattlemen Action

Legal Fund, or R-CALF, said the higher figure for captive supply is

significant and probably growing larger still due to consolidation in

the livestock industry.

R-CALF supports a ban on packer ownership out of concern captive

supplies could be used to hold down cattle prices. Bullard said

R-CALF’s analysis of sales figures suggested that in some weeks 80

percent of the cattle slaughtered in some states came from captive

supplies.

USDA said it would revise reports to include clearer definitions,

double-check numbers and report captive supply information in greater

detail.

The new definition used in compiling the latest report would cover

livestock owned or fed by a packer more than 14 days before slaughter,

or livestock procured by a packer through a contract or marketing

agreement in place for more than 14 days or livestock otherwise

committed to a packer more than 14 days before slaughter.

Jay Pruitt of the National Cattlemen’s Beef Association said the report

“puts the ball in play” and would allow the industry to agree on a

definition of captive supply. NCBA opposed the Senate language to ban

packer ownership.

“We want producers to have freedom to market cattle in whatever form

they want to,” said Pruitt. “If they want to market cattle prior to

slaughter, there should not be any artificial restrictions.”

The American Meat Institute, a trade group for meatpackers and

processors, welcomed the idea of a uniform definition.

R-CALF and NCBA members were expected to discuss the report at annual

meetings in early February.

About the author

Charles Abbott

Reuters News Agency

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