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Packer Ownership Only Touchy Issue Among NCBA Resolutions

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Feb 13, 2005
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Packer Ownership Only Touchy
Issue Among NCBA Resolutions

By David Bowser

SAN ANTONIO — Jim Sinton of Shandon, Calif., objects to packer control and ownership of cattle prior to slaughter.

At the closing session of the National Cattlemen's Beef Association convention here this month, some 75 resolutions and directives were presented to the membership for consideration.

The only one to draw fire was renewal of a policy concerning packer ownership and control.

With that resolution set aside, the others passed unanimously.

The one set aside for discussion says that NCBA opposes federal legislation that would eliminate packer ownership or control of livestock because it would eliminate value-based pricing, reduce risk management options and eliminate a significant number of cattle buyers in the country.

The resolution contends that packer control has led to progress in producing a more consistent product. It says value-based pricing procedures link a flow of information between cattle producers and beef packers to improve product quality, that the packer's ability to manage supply for more than 14 days prior to delivery helps improve quality, and that it is a risk management tool for beef producers.

"What this resolution is all about," Sinton said, "is the ownership of cattle in feedlots and ranges by meat packers."

It concerns consolidation in the meat packing industry, he added.

Sinton asked the assembled NCBA membership to consider the future as they pondered this resolution.

"This is the same slippery slope down which the independent producers of hogs, chickens and turkeys have all gone," Sinton said. "They no longer exist. I'd hate to see this organization giving the independent range cattlemen of the country a push in that same direction. I think if the meat packers are allowed to do this, if the concentration of the meat packers is not curbed, I think that we as independent producers are doomed."

"I just want to point out one thing," countered James Herring, a Texas cattle feeder. "This is policy that's been on the NCBA books for years."

Herring said many of the programs, one of which he's involved in, have set up alliances and vertically supported production systems to make beef products better, more efficient and fit the consumers' ever-changing demand for other protein.

Herring encouraged NCBA voting members to remember that some of the increase in demand the beef industry has experienced has resulted from making beef products better for the consumer.

"Please keep in mind that the packer may not be our friend," Herring said, "but he is our customer, and through him goes all the fed beef in this country. A slap in the face to our customer is not a good way to proceed."

Herring said it would take hours to talk about all the benefits of having a vertically aligned production system, all the way back to the cow-calf producer.

"In the state of Texas," Herring said, "we pay huge premiums because we are aligned with the retailer and with the packer and are paid to do so."

Herring said he has supported the policy in the past and continues to do so.

"I would love to have this issue stay the policy of the National Cattlemen's Beef Association," Herring said.

"I would like to state that Wyoming has policies against packer control," said Lois Herbst of Riverton, Wyo.

Under Wyoming law, packers cannot control cattle supply for more than seven days prior to delivery.

"Our Senator (Mike) Enzi has legislation before Congress on a ban on packer control except for a limited number of days," Herbst added.

She supports Sinton's view.

"In the Northwest, we've got a pretty critical situation that's happened with our packers and our feeders," said Cevin Jones of Eden, Idaho.

Jones said elimination of the standing policy would greatly limit the Northwest's ability to maintain packers in that area.

"I would speak in favor of this resolution," Jones said. "We don't need any more artificial limitations in our free market system."

In the end, only half a dozen people voted against the resolution. The majority voted to continue the NCBA policy.

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