-----Original Message-----
From: Mike Callicrate [mailto:[email protected]]
Sent: Friday, April 29, 2005 1:58 PM
To: xxxxxxxxxxxxxxxxxxxxxxx
Subject: DRA applauds re-introduction of Captive Supply Reform Act
Dakota Rural Action
Main: PO Box 549, Brookings, SD 57006
Phone: 605-697-5204/Fax: 605-697-6230
Email: [email protected]
WR Field Office: PO Box 296, Newell, SD 57760
Phone: 605-456-1322/Fax: 605-456-1323
Email: [email protected]
FOR IMMEDIATE RELEASE DATE: April 29, 2005
CONTACT: Shane Kolb, DRA Livestock Team Chair, Meadow, 605-244-7145
Ron Wieseler, DRA Livestock Team Member, Orient, 605-392-2358
Robin EH. Bagley, DRA Organizer, Newell, 605-456-1322
DRA applauds Senators for re-introduction of Captive Supply Reform Act
Dakota Rural Action (DRA) commended Senator Mike Enzi (R-WY) and co-sponsors Senator Tim Johnson (D-SD), Senator Craig Thomas (R-WY), Senator Byron Dorgan (D-ND) today for re-introducing the Captive Supply Reform Act to restore market competition in the livestock industry.
"Meatpackers are acquiring an increasing percentage of the cattle and hogs they slaughter through arrangements known as 'captive supplies' – livestock that packers either own themselves, or control through contracts with farmers and ranchers," said Shane Kolb, DRA's Livestock Team Chair. "We commend Senators Enzi and Johnson for introducing this bill to end the secret livestock contracts that are so deadly to a working, competitive livestock market."
Four companies control 59 percent of U.S. hog slaughter and 81 percent of U.S. fed cattle slaughter, according to USDA data. Many family farmers and ranchers contend that this level of concentration allows meatpacking corporations to manipulate the purchase of cattle and hogs to their advantage through what are called "captive supplies." This manipulative practice by meatpackers costs independent livestock producers over $1 billion every year.
"In the cattle industry, direct ownership by processors amounts to only seven percent, whereas control through contracts is as high as 85 percent," said Kolb. "If you're going to make any headway reforming market manipulation, the use of captive supplies through forward contracts must be addressed."
The Captive Supply Reform Act does not prohibit the use of contracts; instead, it would implement two reforms designed to restore open, fair competition to the process of marketing livestock through contracts.
Most contract arrangements for livestock do not contain a negotiated price. Instead, these agreements base the amount livestock producers receive on prices determined after the deal is made – allowing packers to drive down the price in the meantime. The Captive Supply Reform Act would end this practice by requiring contracts and agreements to state a fixed base price. The bill also will require that such contracts be traded in open, public markets (such as an electronic market) to which all buyers and sellers of livestock have access.
The bill is the fruition of years of grassroots movement to restore competition to U.S. livestock markets. Long before it was called the "Captive Supply Reform Act," the bill was referred to as the "WORC Petition for Rulemaking." This rule, whose language is now the bill language, was originally presented to USDA for consideration. The petition was presented to then-U.S. Secretary of Agriculture Dan Glickman at Farm Aid in 1996. DRA member Ron Wieseler, Orient, presented the petition to Glickman at the concert on behalf of the Western Organization of Resource Councils (WORC) and its state affiliates, including DRA.
"We've waited nine years, and we've lost a lot of producers. Hopefully we can get this passed before we lose more," said Wieseler. "I applaud all the sponsors for starting the process to restore competition to our markets."
# # #
From: Mike Callicrate [mailto:[email protected]]
Sent: Friday, April 29, 2005 1:58 PM
To: xxxxxxxxxxxxxxxxxxxxxxx
Subject: DRA applauds re-introduction of Captive Supply Reform Act
Dakota Rural Action
Main: PO Box 549, Brookings, SD 57006
Phone: 605-697-5204/Fax: 605-697-6230
Email: [email protected]
WR Field Office: PO Box 296, Newell, SD 57760
Phone: 605-456-1322/Fax: 605-456-1323
Email: [email protected]
FOR IMMEDIATE RELEASE DATE: April 29, 2005
CONTACT: Shane Kolb, DRA Livestock Team Chair, Meadow, 605-244-7145
Ron Wieseler, DRA Livestock Team Member, Orient, 605-392-2358
Robin EH. Bagley, DRA Organizer, Newell, 605-456-1322
DRA applauds Senators for re-introduction of Captive Supply Reform Act
Dakota Rural Action (DRA) commended Senator Mike Enzi (R-WY) and co-sponsors Senator Tim Johnson (D-SD), Senator Craig Thomas (R-WY), Senator Byron Dorgan (D-ND) today for re-introducing the Captive Supply Reform Act to restore market competition in the livestock industry.
"Meatpackers are acquiring an increasing percentage of the cattle and hogs they slaughter through arrangements known as 'captive supplies' – livestock that packers either own themselves, or control through contracts with farmers and ranchers," said Shane Kolb, DRA's Livestock Team Chair. "We commend Senators Enzi and Johnson for introducing this bill to end the secret livestock contracts that are so deadly to a working, competitive livestock market."
Four companies control 59 percent of U.S. hog slaughter and 81 percent of U.S. fed cattle slaughter, according to USDA data. Many family farmers and ranchers contend that this level of concentration allows meatpacking corporations to manipulate the purchase of cattle and hogs to their advantage through what are called "captive supplies." This manipulative practice by meatpackers costs independent livestock producers over $1 billion every year.
"In the cattle industry, direct ownership by processors amounts to only seven percent, whereas control through contracts is as high as 85 percent," said Kolb. "If you're going to make any headway reforming market manipulation, the use of captive supplies through forward contracts must be addressed."
The Captive Supply Reform Act does not prohibit the use of contracts; instead, it would implement two reforms designed to restore open, fair competition to the process of marketing livestock through contracts.
Most contract arrangements for livestock do not contain a negotiated price. Instead, these agreements base the amount livestock producers receive on prices determined after the deal is made – allowing packers to drive down the price in the meantime. The Captive Supply Reform Act would end this practice by requiring contracts and agreements to state a fixed base price. The bill also will require that such contracts be traded in open, public markets (such as an electronic market) to which all buyers and sellers of livestock have access.
The bill is the fruition of years of grassroots movement to restore competition to U.S. livestock markets. Long before it was called the "Captive Supply Reform Act," the bill was referred to as the "WORC Petition for Rulemaking." This rule, whose language is now the bill language, was originally presented to USDA for consideration. The petition was presented to then-U.S. Secretary of Agriculture Dan Glickman at Farm Aid in 1996. DRA member Ron Wieseler, Orient, presented the petition to Glickman at the concert on behalf of the Western Organization of Resource Councils (WORC) and its state affiliates, including DRA.
"We've waited nine years, and we've lost a lot of producers. Hopefully we can get this passed before we lose more," said Wieseler. "I applaud all the sponsors for starting the process to restore competition to our markets."
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