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LIMITS TO PACKER OWNERSHIP

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HAY MAKER

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Packer ownership bill introduced



SEN. SALAZAR INTROS LIMITS TO PACKER OWNERSHIP

Bill would encourage fair competition for large and small producers

April 15, 2005



Washington, D.C. – United States Senators Ken Salazar and Chuck Grassley (R-IA) have introduced bipartisan legislation that will ban packer ownership and ensure market access for large and small cattle producers. Senator Salazar is the lead Democratic sponsor of the bill. The other co-sponsors includes Senators Dorgan (D-ND), Dayton (D-MN), Enzi (R-WY), Harkin (D-IA), Johnson (D-SD), and Thune (R-SD).



“The market practices in place today, where our small ranchers are forced to sell their cattle herds into anti-competitive markets where they cannot earn sustainable profits, only serve to choke the breath out of rural communities from Colorado to Iowa,” said Senator Salazar.



Currently, four meatpackers control over 80% of the beef market. This legislation will prohibit packers from owning, feeding or controlling livestock for more than seven business days prior to slaughter which will provide increased options for small farmers and ranchers to get fairer prices for their cattle.



“We have a duty to ensure fair market access for all producers – big and small,” said Senator Salazar. “Placing this seven day limit on packers will enable our small farmers and ranchers to get fairer prices for their cattle.”



Surveys done by the Colorado Department of Agriculture have cited steady declines in the number of cattle across the state. In fact, last year Colorado reported the lowest inventory of cattle since 1962. Furthermore, in 2002, 60 percent of farms and ranches in Colorado had annual sales of less than $10,000.



“The facts show an industry that is being forgotten, withering on the vine,” said Salazar. “Small, independent ranchers in Colorado and across the country have faced several years of drought combined with increased concentration in the market, we have seen a declining farming and ranching population while the market power of large agribusinesses has dramatically increased – this must stop.”



The packer ownership provisions were included in the Senate-passed version of the 2002 farm bill. Unfortunately, the House of Representatives strongly opposed this measure and it was not included in the final farm bill. That is why Senator Salazar joined with Senator Grassley to continue the fight for this important provision.



Senator Salazar asked that the following statement be added to the record today.



Regarding the Introduction of Legislation to Ban Packer Ownership



Mr. President, I rise today with my distinguished colleague from Iowa to introduce a very important piece of legislation – legislation that will ban packer ownership. This is not a new legislative initiative. In fact, it is legislation that has been debated in Congress for many years. The years of debate and delay have only made this proposal more essential.



Ranchers across the country are facing increased concentration in the meatpacking industry. Today, four meatpackers control over 80 percent of the market. Consider that, Mr. President, in a multi-billion dollar industry, four packers control 80 percent of the market.



I am extremely concerned that such a market structure easily allows meatpackers to influence markets. Imagine how ranchers – in Iowa or Colorado or anywhere in this great country – are disadvantaged in such a marketplace.



My family has ranched in the San Luis Valley and northern New Mexico for more than 400 hundred years. My family’s farm in the San Luis Valley has nurtured six generations of my family and continues to operate today.



What I have seen in my home community is also occurring across the great state of Colorado. Surveys done by the Colorado Department of Agriculture have cited steady declines in the number of cattle across my state. In fact, last year my state reported the lowest inventory of cattle since 1962. Furthermore, in 2002, 60 percent of farms and ranchers in Colorado had annual sales of less than $10,000.



These numbers show us an industry that is being forgotten, withering on the vine. Small, independent ranchers in Colorado and across the country have faced several years of drought. Combined with increased concentration in the market, we have seen a declining farming and ranching population while the market power of large agribusinesses has dramatically increased.



That is why I rise today to introduce this bipartisan measure designed to ensure market access for all producers, big and small. Specifically, this legislation would modify the Packers and Stockyards Act to prohibit packers from owning, feeding or controlling livestock for more than 7 business days prior to slaughter.



Our goal with this legislation is simple: check vertical integration, create open and competitive markets and ensure a place for independent producers in the marketplace. We must address this continuing concentration and we must allow all producers the chance to compete in the marketplace and increase their business.



I am hopeful that my colleagues will join this bipartisan effort and stand up for small, independent producers across the country.



I yield the floor.



Source: Salazar office media release



HARKIN SEEKS TO PROTECT ROLE OF INDEPENDENT

PRODUCERS IN LIVESTOCK INDUSTRY



Senator urges passage of legislation to ban packer ownership of livestock

April 15, 2005



WASHINGTON, D.C.‹ Seeking to level the playing field for independent pork and beef producers in Iowa and across the country, U.S. Senator Tom Harkin (D-IA) joined Senator Charles Grassley (R-IA) and six other senators today in introducing legislation to ban packer ownership and feeding of livestock. Packers owning livestock from birth to slaughter has increased steadily and markedly in the last 15 years. This practice, a feature of vertical integration, allows meat packers to avoid competing to buy livestock on the open market, and it severely limits marketing options for independent producers.



³Independent livestock producers deserve to have an open, fair and evenhanded marketplace,² Harkin said. ³Today, independent producers are at the mercy of market prices heavily dictated and controlled by the largest corporate livestock firms. The court challenge to Iowa¹s law banning packer ownership points to the need for a federal, nationwide law to balance the power between the largest livestock firms and independent producers.²



This legislation will make it unlawful for a packer to own, feed, or control livestock except for the seven days prior to slaughter. Senator Harkin has long championed the need for a ban on packer ownership. As then-chairman of the Senate Committee on Agriculture, Nutrition and Forestry, Harkin was instrumental in including a ban on packer ownership in the Senate version of the 2002 farm bill. However, leaders from the House of Representatives flatly refused to agree to the packer ownership ban during farm bill conference negotiations.



On a related matter, Harkin is pushing USDA to carry out and fully enforce the Packers and Stockyards Act¹s protections against unfair and anti-competitive practices in livestock markets. Harkin raised the issue directly with Secretary of Agriculture Mike Johanns at a hearing on April 12. And Harkin wrote to USDA Inspector General Phyllis Fong on April 4 raising serious questions about the lack of enforcement activity by USDA¹s Grain Inspection, and Packers and Stockyards Administration (GIPSA) against anti-competitive and unfair practices in livestock markets.



Last October, Harkin released a Senate Agriculture, Nutrition and Forestry Committee Democratic staff report detailing the detrimental affects that vertical integration and consolidation in the livestock industry poses to independent family farmers. A ban on packer ownership was one of several policy options explored in the report. This report can be obtained by going to Senator Harkin¹s website www.harkin.senate.gov, and clicking on agriculture. The report is titled ³Economic Concentration and Structural Change in the Food and Agriculture Sector: Trends, Consequences and Policy Options.²





Source: Senator Harkin’s office
 

cedardell

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Now that we are in a global market they will just carry on else where. Why do you think the packing conglomerates are in such an all fired hurry to get set up in other countries? They know that when their monopolistic practises hurt US producers enough that we will pass laws to help producers. So they need to get ouside the country and ship into it. Kind of looks to me like WTO is a big joke. R-Calf looked at WTO as the only recourse. Didn't realize WTO is big bunch of nothing when it comes to protecting US interests. Never before has a country as great as the USA been positioned to slide so far. The only question is are we going to raise the standards of third world nations to ours or lower ours to theirs. What we are talking about here not only applies to cattle, but to all the rest of industry in US. Look at trade deficit......
 

SMS

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Ok, i have been quiet the last few days, but this is something that needs a bit of sanity put back into it:

If the US goverment limits packer owned and controlled cattle to 7 days, then how would a feedlot operator or cow/calf operator use forward contracts, bais contracts, futures hedging or even grid marketing? All of these tools are useful in locking in a profit or limiting risk potential. The smart cattlemen knows how to use them. The problem is that there is getting to many small 30 - 50 cow herds. These ppl work off farm, but because they own a cow think they are cattlemen, and dont actually make their living from cattle.

Now to address Cedarell concerns about the world be against the US and its trade deficit. The USA one time was a large manufacturing country. This has changed due to high labor costs and expectation of low cost consumer goods. To meet this demand for low cost consumer goods, the manufacturing plants moved to low cost of production countries like taiwan or korea. Just think back, in the '50 and '60 in USA and Canada everyone produced something real and sold it to each other. Now we trade in paper and dont produce anything REAL. The north americian market has turn largelly into a consuming population rather than a producing population. If you consume more than you produce you have a trade deficit.

Ok Economics 101 is over...i am going back to the real world of cows and horses.
 

HAY MAKER

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Bull Burger said:
Yea, but Haymaker, are they doing anything about captive supplies? :)


Well now MR. Burger,that would depend on your definition of CAPTIVE SUPPLIES would'nt it ?.........................good luck
 

HAY MAKER

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SMS said:
Ok, i have been quiet the last few days, but this is something that needs a bit of sanity put back into it:

If the US goverment limits packer owned and controlled cattle to 7 days, then how would a feedlot operator or cow/calf operator use forward contracts, bais contracts, futures hedging or even grid marketing? All of these tools are useful in locking in a profit or limiting risk potential. The smart cattlemen knows how to use them. The problem is that there is getting to many small 30 - 50 cow herds. These ppl work off farm, but because they own a cow think they are cattlemen, and dont actually make their living from cattle.

Now to address Cedarell concerns about the world be against the US and its trade deficit. The USA one time was a large manufacturing country. This has changed due to high labor costs and expectation of low cost consumer goods. To meet this demand for low cost consumer goods, the manufacturing plants moved to low cost of production countries like taiwan or korea. Just think back, in the '50 and '60 in USA and Canada everyone produced something real and sold it to each other. Now we trade in paper and dont produce anything REAL. The north americian market has turn largelly into a consuming population rather than a producing population. If you consume more than you produce you have a trade deficit.

Ok Economics 101 is over...i am going back to the real world of cows and horses.


Markets will change and adjust,CAPTIVE SUPPLLIES are to be limited to 7 days.Cattle men are demanding it...................good luck
 

Andy

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Haymaker you are demanding it, not cattlemen. Do you relize that if a feeder uses foward contracts to make more money he can pay more for your calves? or didn't you think that far ahead?
 

mrj

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Haymaker, are you and your "lawmakers" going to also limit auction markets/owners to owning cattle for no more than seven days? Maybe that should come first to see how well such laws work for the producer.

That line about "checking vertial integration"......what is that going to do to producer controlled alliances? Or is that what the aution barn supported/controlled R-CALF people are really out to stop?

MRJ
 

HAY MAKER

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Andy said:
Haymaker you are demanding it, not cattlemen. Do you relize that if a feeder uses foward contracts to make more money
he can pay more for your calves? or didn't you think that far ahead?



HHHHHHAAAAAAAA HHHHHHAAAAAAAAAAA THATS GOTTA BE FUNNIEST DAMN THANG I HEARD IN A MONTH....................GOOD LUCK BOY
 

HAY MAKER

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MRJ said:
Haymaker, are you and your "lawmakers" going to also limit auction markets/owners to owning cattle for no more than seven days? Maybe that should come first to see how well such laws work for the producer.

That line about "checking vertial integration"......what is that going to do to producer controlled alliances? Or is that what the aution barn supported/controlled R-CALF people are really out to stop?

MRJ

MRJ comparing sale barns to packers is like comparing day lite to darkness,seems to me you are forgetting a little thang called previous activity..............good luck
 

HAY MAKER

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Andy said:
it is prety funny that you didn't think that far ahead. Or maybe it is just sad.

whats sad is people like you are gullible enough to believe feeders,packers or anyone else is gonna pay you more than the markets demand...............good luck
 

Andy

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You just don't get it haymaker. The demand for beef drives all the markets, but if i can get more of the profit out of a carcass then i can pay more for the calves. That is the way all feeders look at it. And feeders buy most of the calves so they drive the feeder calf market.
 

HAY MAKER

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Andy said:
You just don't get it haymaker. The demand for beef drives all the markets, but if i can get more of the profit out of a carcass then i can pay more for the calves. That is the way all feeders look at it. And feeders buy most of the calves so they drive the feeder calf market.

I agree as anyone would the demand for beef drives the markets,the rest of your post is spectulation at best .You come down here and trade cattle with the Texas boys you will find out Damn fast what IM talkin bout there aint no good ole boys when it comes to tradin cattle..............good luck
 

cedardell

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To get back to my original concern about packing industry wanting to ally with low cost producer, especially those outside the country, I'd like to say this. SH is right. There are a lot of producers that have small herds and aren't able to produce enough to make a go of it. We agree that to compete with all the low cost producers around the world we will just have to say good-bye your out. What I am trying to say is that because this applies to all industry in US, is the rest of the world going to support us when we are broke and our dollar is worth nothing? We are close to being at that stage now, just nobody realizes it. Seems to me like sometime way back in time China was the hub of world trade. That ended when they held all the gold. So who's currency is backed by gold now? How long can we continue to buy with worthless paper? What are the consequences? Seems like China wants to own more land, like a country at a time. I seem to be the only one concerned about their warmongering. But how can we defend ourselves if our dollar is worthless? To me not being able to compete in the world market is very troubling. So I guess if we are not the low cost producer, we'll just kiss ourselves good-bye cruel world.
 

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