New Bill Targets Unfair Livestock Marketing Practices

Legislation targets practices that negatively impact independent ranchers and farmers.

Published on: May 20, 2011

U.S. Senators Mike Enzi, R-Wyo., Tim Johnson, D-S.D., Chuck Grassley, R-Iowa and Jon Tester, D-Mont., have introduced the Livestock Marketing Fairness Act, a bill that would target unfair meat packer practices that negatively influence and impact independent ranchers and farmers. The bill would amend the Packers and Stockyards Act of 1921. The Senators say it addresses the issue of fairness in pricing when large packing operations own or control livestock through forward contracting agreements.

In introducing the bill Senator Enzi said this bill is common sense. Some bad actors have been known to stack the deck in sale barns and this bill protects market competition by prohibiting packers from using prices in livestock contracts that they directly influence.

"It is increasingly tough for independent farmers and ranchers to gain fair market access," said Johnson. "This bipartisan bill will keep our farmers and ranchers in the fold and ensure that they get a fair price for their product."

Grassley said that bringing transparency to the marketplace and ending price manipulating practices carried on by some of the large packers will create a healthy, competitive environment.

The Livestock Marketing Fairness Act would: 1/ Require marketing agreements to have a firm base price derived from an external source; 2/ Calls for future forward contracts for cattle, hogs and lambs to be traded in public markets where buyers and sellers can witness bids and make their own offers; 3/ Exempts producer owned cooperatives, packers with low volumes and packers who own only one processing plant; and 4/ Guarantees that trading is done in quantities that provide market access for both small and large livestock producers.

The Senators concluded that their legislation would allow ranchers and farmers to continue choosing the best methods for selling their livestock and would improve the stability and openness of forward contracting to provide ranchers and farmers more options to sell their animals.