Proposed New Livestock Marketing Rules Receive Mixed Reaction

Some organizations voiced support while others had concerns about proposal.

Published on: Jun 21, 2010

There was a good deal of positive response to the proposed rule outlined by Ag Secretary Tom Vilsack Friday. R-CALF USA President Max Thornsberry calls the proposed Livestock and Poultry Marketing Rules a bold and absolutely essential step in ridding the U.S. cattle market of anticompetitive practices. He says the proposed rules not only establish standards for identifying when meatpackers have unlawfully engaged in granting unreasonable preference or advantage to a select group of cattle sellers, but also clarifies that a violation of the Packers and Stockyards Act can be proven without the need to also provide proof of predatory intent, competitive injury or likelihood of competitive injury.

Senator Chuck Grassley, R-Iowa, says there is more work to be done. However he says the Department of Agriculture has made a concerted effort to address some of the unprecedented levels of concentration in the agriculture industry and he called the proposed rules a step in the right direction.

The American Farm Bureau Federation is also pleased with the proposed rule dealing with competition in the livestock and poultry industries. Farm Bureau President Bob Stallman says producers have had to bear the financial hardship of being at the whim of production contractors for too long, resulting in inequality in production practices, increasing losses and decreasing profitability. He says the proposed rule would level the playing field.

John Crabtree of The Center for Rural Affairs says the rule isn't perfect but is the most aggressive, significant livestock market reform to come out of Washington perhaps since the passage of the Packers and Stockyards Act itself. Crabtree predicts the rule will breathe some life, some competition back into our livestock markets. He promised the Center will fight tooth and nail to ensure the packers cannot weaken the rule.

Not every response to USDA's proposed rule was positive. The American Meat Institute and National Cattlemen's Beef Association both issued statements Friday about their concerns with the proposed rule regarding livestock and poultry marketing practices. AMI says the rule could dismantle business models for livestock marketing and procurement if finalized. According to AMI Senior Vice President of Regulatory Affairs and General Counsel Mark Dopp USDA is attempting to turn the clock back on livestock and meat marketing practices that have made the U.S. meat production system the envy of the world. Dopp called it a regulatory end-run around judicial rulings that would have a severe and detrimental impact on livestock producers and the meat industry.

NCBA President Steve Foglesong says NCBA has serious concerns with any efforts to increase government intrusion in the marketplace. Foglesong says meat producers rely on federal regulators to ensure the marketplace is free from anti-trust, collusion, price fixing and other illegal activities that could damage the viability of the market and interfere with market signals. He notes multiple studies have shown the current regulations in place have been successful in achieving those goals in the cattle market.

Foglesong says NCBA encourages USDA to closely involve producer input in every step of the rule-making process to make sure the final rule supports fair, open and transparent commerce without undue government intrusion that would hinder the ability of producers to market cattle as they please. NCBA plans to submit detailed comments during the 60-day comment period on the rule once it's published.