WORC has put 20 years of effort into trying to correct anticompetitive livestock markets that have driven generations of farmers and ranchers from the land. This broken market has taken hundreds of millions of dollars out of the heartland and put it in the pockets of multinational corporations. USDA has finally issued rules to define what “undue and unreasonable practices” by the multi-national packers actually means.

• Read WORC statement
• Read WORC news release
• Read WORC commentary

Congress needs to support the fair livestock marketing rule and ensure that the rule is fully funded and fully implemented. Action is need now, so that the rule can be put in place before more livestock producers and contract growers lose their farms and ranches because of unfair markets.

Family farmers urge President Obama to release final livestock rules

On the first anniversary of the release of the proposed Grain Inspection, Packers and Stockyards Administration rules, family farm groups held a news conference today. Listen to brief statements by Roger Johnson, National Farmers Union; Mabel Dobbs, WORC; Mike Weaver, Contract Poultry Growers Association of the Virginias; and Darwyn Bach, a hog producer from Minnesota. About 30 minutes long with questions from media.

• Read statements by family farm leaders

Wyoming rancher promotes Fair Livestock Marketing Rules in D.C.

Powder River Basin Resource Council member Judy McCullough briefed Senate and House staff members in Washington, D.C., February 28, 2011, on the Fair Livestock Marketing Rules proposed by the Grain Inspection, Packers and Stockyard Administration. “The rules will promote competition in the market, and allow individual producers to show injury, and prevent retaliation against a producer,” Judy told the staffers. “They are an important step, but only the first step to restore competition in the cattle markets.”

• Read Judy's presentation

WORC comments on proposed livestock rules

WORC and its seven member groups support proposed changes to the rules protecting ranchers and farmers when they sell livestock and say more reforms are needed to improve the livelihoods of independent livestock producers.

• Read comments
• Read news release

Farm Advocates Laud Senate Support of USDA Proposed Livestock Rules

Twenty-one Senators have signed a letter to the USDA in support of the proposed livestock and poultry rules that were released in late June. Farm advocates that have long-pressed for increased oversight of the meatpacking, hog processing and poultry integrator industries expressed support for the letter from the Senators. Read rest of news release.

• Read letter

Rein in the Packers: It’s Time to Give the Packers & Stockyards Act Some Teeth

The Packers & Stockyards Act of 1921 (P&SA) was enacted to comprehensively regulate packers, stockyards, marketing agents and dealers. At the time of its passage, it was considered to be the strongest anti-trust law ever enacted. However, in the last few decades, the law has not been effectively enforced.

Consolidation and vertical integration have created a playing field ripe for abuse in which corporate meat packers and large integrators manipulate markets, deny or severely restrict market access to independent livestock producers, and use unfair practices like confidentiality clauses to the detriment of both contract producers and independent producers.

Congress worked to remedy this lack of enforcement in the 2008 Farm Bill. The Farm Bill required USDA to write rules to address the problems of manipulative markets and unfair contracts as a first step to addressing the problems of the unfair livestock markets.

On November 22, 2010, USDA closed the comment period for the proposed rule. The fair livestock marketing rule was issued by USDA’s Grain Inspection Packers and Stockyards Administration (GIPSA) and aimed at bringing fairness to livestock and poultry markets. The new rule clarifies which unfair, discriminatory or deceptive practices meatpackers and their partners will be prohibited from using in the procurement of livestock under the Packers and Stockyards Act.

The fair market livestock rule is vital to the livelihood of ranchers, poultry growers and feeders across our country. Without this rule, the trend of vertical integration, manipulated markets and unfair contracts will persist, destroying any free market system left in the livestock and poultry sectors. USDA is reviewing 60,000 comments submitted – the majority of which support the rule – as well as conducting any additional analysis before publishing the final rule.

What the rule does
The rule sets criteria the packers must follow to ensure contracts with producers, feeders and growers are fair. The rule would help livestock producers in five major areas:

1. Requires packers to maintain written records to show justification for any price differentials or deviations from a standard price including for any premium or discounts they offer to livestock producers. Packers must have a good reason for giving any individual feeder a better or worse price than they gave another feeder for the same quality cattle and they must keep records that document the cost or revenue justification for the difference.

2. Clarifies that in some circumstances a violation of the Act can be proven without showing an injury to competition in general. Recent court cases have held that to prove a violation of the Act, a poultry grower must show the processor’s action harmed him/her individually as well as competition in general. The proposed rule clarifies that a producer or grower can, in certain circumstances, prove a violation of the Act by showing that a packer action harms the producer without showing that it harmed competition in general.

3. Prevents a packer from retaliating against a producer in response to the lawful expression, spoken or written, association, or action.

4. Sets criteria for determining when a packer violates the Act by giving differential treatment to producers solely based on volume of livestock. Currently some packers might offer better price terms to producers that can provide larger volumes of livestock but not offer the same terms to a group of producers that would collectively provide the same volume of equal quality livestock. The proposed rule establishes that USDA may consider this practice a violation of the Act.

5. Prohibits bonded packer buyers from purchasing livestock for more than one packer. One buyer can only buy for one packer.

Resources

• Captive Supply Reform chronology
•  Background on USDA rules
•  Recommendations to USDA
• Section 202 of the Packers and Stockyards Act
• Rein in the Packers fact sheet
• How the GIPSA Rule Impacts Cattle Marketing fact sheet