• If you are having problems logging in please use the Contact Us in the lower right hand corner of the forum page for assistance.

Iowa Hogs Lose Free Market--Cattle Next

Econ101

Well-known member
Articles in this document:



House lawmakers shelve spot market bill

Environmentalists rally for livestock legislation



House lawmakers shelve spot market bill



By Randy Mudgett, Managing Editor

Farm News

4/19/2007



HUMBOLDT — An Iowa bill requiring that all major pork processors purchase a portion of their animals from the open spot market will likely never make it out of an Iowa House committee, said legislators at a recent meeting in Humboldt.



State Sen. Jack Kibbie, D-Emmetsburg, said his support of the bill (S.F. 504) is clear.



‘‘The Senate passed it 34 to 16 and we sent it to the House,’’ Kibbie said. ‘‘Right now there are about 11 percent of all the hogs selling on the spot market, and if producers want to go it alone without signing contracts, we need this legislation.’’



SF 504 calls for processors to eventually purchase 25 percent of their swine from the open market. That requirement would not take effect until 2012. However, processors would be required to purchase at least 10 percent of their kill by July 1, 2007, 15 percent by 2009 and 20 percent by 2011.



Over the course of the past decade, the spot market for pork has decreased virtually forcing producers to sign contracts with processors to insure they will have a market for their animals. But, all producers would not agree that they have to have a contract to sell hogs into a successful market.



Max Schmidt, a northeast Iowa pork producer who lives near Elma, said after signing a three-year contract with Cargill (contract expired last fall), he is back to selling all his pigs on the open market. ‘‘It is pretty tough to require processors to buy 25 percent of their hogs on the open market,’’ Schmidt said. ‘‘The problem is there is only about 10 percent of the hogs sold in that manner today.’’



Iowa Rep. Delores Mertz, a member of the House Agriculture Committee, said she is not in favor of the legislation because of the language in the bill.



‘‘We have seen things like this challenged in the courts,’’ Mertz said.



The Iowa attorney general’s office ended up making a deal with packers Smithfield Foods, Cargill and Hormel when lawmakers banned packers from owning hogs in Iowa. About one year ago, Hormel agreed to purchase 25 percent of its slaughter from the open market (for a period of two years) in exchange for the rights to raise swine in the state. Cargill and Smithfield signed earlier agreements out of court.



Schmidt said even though the popular sentiment is to pile requirements on the packers to increase competition, producers are partially to blame for the ever-decreasing spot market as well. He said producers want to guarantee they have a market for their finished hogs and their banker likes the agreements too.



‘‘It is tough to sell animals on the open market, many processors simply say ‘No, we don’t need any today’ and then they hang up,’’ Schmidt said. ‘‘That can be a bit unnerving, especially if you have a couple of loads you need to move quickly.’’



Schmidt, who sells nearly 25,000 head of finished hogs annually, said producers should also be required to sell a portion of their animals on the open market as well to insure there is an open market price and an adequate supply for processors.



Mertz said, ‘‘We just don’t want to see these packers leave the state. I question the constitutionality of forcing processors to buy from the open market.’’



Steve Moline, Iowa assistant attorney general, said the AG’s office was asked to testify about the bill in committee meetings and to try to assist the authors of the bill regarding current Iowa law. Moline said the AG’s office were supportive of the measure but did not sign on when the bill was introduced and eventually passed in the Senate.



‘‘We are supportive of anything that would encourage competition in the marketplace,’’ Moline said.



Moline said past deals with Smithfield Foods, Cargill and Hormel ended disputes the packers had with Iowa’s packer ownership laws.



In the near future, Smithfield will be free of their requirement to purchase hogs on the open market in Iowa, while Cargill and Hormel have some time left on their agreements with the state.



farmnews-iowa.com


Chicken, then pigs, beef is next!!!

One is one two is two, three is a pattern.

By then it will be too late.
 
Top