House Ag Subcommittee hears livestock market issues
Tuesday, April 17, 2007, 4:31 PM
by Peter Shinn
The ethanol industry may hold some lessons for livestock producers. That's one conclusion that could be drawn from a House Ag Subcommittee on Livestock, Dairy and Poultry hearing chaired by Leonard Boswell of Iowa on livestock market concentration Tuesday morning.
Everyone who testified, from government officials to university researchers to ag producer group leaders, agreed concentration is happening across agriculture, not just in the livestock sector. But there is one exception, and that's the ethanol industry. National Farmers Union President Tom Buis told lawmakers that, in contrast to nearly every other agricultural sector, ethanol industry consolidation has declined. 10 years ago, he said, 73% of the U.S. ethanol market was controlled by the top-four ethanol producers. Now, however, those top-four ethanol producers control just 31.5% of the market.
"It's all a result, I think, of public policy encouraging producers to get together [and] own these plants," Buis testified, adding that National Farmers Union wants a competition title in the next farm bill and also calls for implementation of mandatory country-of-origin labeling.
American Farm Bureau President Bob Stallman said his group favors greater oversight of mergers and acquisitions among meat packers, and called for several other actions to strengthen USDA's enforcement of the Packers & Stockyards Act. But he stopped short of calling for a competition title in the next farm bill. And Stallman also said greater livestock producer unity would make a big difference in their market power.
"All you have to do is get together and you have all the market power you want," Stallman explained. "The problem is producers are reluctant to get together."
Officials from two of the nation’s largest livestock producer groups, meanwhile, urged Congress to go slow before taking legislative action to address livestock market concentration issues. Joy Philippi, immediate past president of the National Pork Producers Council, pointed out pork producers have enjoyed more than three years of continuous profits. And she said taking steps against meat packers may prove counter-productive.
"Punitive actions against packers do not necessarily benefit pork producers in the long run, unless the packers are clearly in the wrong," she said in her opening statement. "And we have not seen any evidence of this."
National Cattlemen’s Beef Association President John Queen went further, suggesting Congress should keep out of the marketing relationships between cattlemen and meat packers. "When it comes to market structure and competition issues, NCBA's position is simple," Queen testified. "We ask that the government not tell us how we can or cannot market our cattle."
Philippi said more study is needed of a recent report commissioned by USDA on livestock market concentration. Queen pointed out that report showed alternative marketing arrangements beyond the cash market benefit producers, packers and consumers alike. Queen will testify at a hearing of the Senate Agriculture Committee on the same subject on Wednesday.
Tuesday, April 17, 2007, 4:31 PM
by Peter Shinn
The ethanol industry may hold some lessons for livestock producers. That's one conclusion that could be drawn from a House Ag Subcommittee on Livestock, Dairy and Poultry hearing chaired by Leonard Boswell of Iowa on livestock market concentration Tuesday morning.
Everyone who testified, from government officials to university researchers to ag producer group leaders, agreed concentration is happening across agriculture, not just in the livestock sector. But there is one exception, and that's the ethanol industry. National Farmers Union President Tom Buis told lawmakers that, in contrast to nearly every other agricultural sector, ethanol industry consolidation has declined. 10 years ago, he said, 73% of the U.S. ethanol market was controlled by the top-four ethanol producers. Now, however, those top-four ethanol producers control just 31.5% of the market.
"It's all a result, I think, of public policy encouraging producers to get together [and] own these plants," Buis testified, adding that National Farmers Union wants a competition title in the next farm bill and also calls for implementation of mandatory country-of-origin labeling.
American Farm Bureau President Bob Stallman said his group favors greater oversight of mergers and acquisitions among meat packers, and called for several other actions to strengthen USDA's enforcement of the Packers & Stockyards Act. But he stopped short of calling for a competition title in the next farm bill. And Stallman also said greater livestock producer unity would make a big difference in their market power.
"All you have to do is get together and you have all the market power you want," Stallman explained. "The problem is producers are reluctant to get together."
Officials from two of the nation’s largest livestock producer groups, meanwhile, urged Congress to go slow before taking legislative action to address livestock market concentration issues. Joy Philippi, immediate past president of the National Pork Producers Council, pointed out pork producers have enjoyed more than three years of continuous profits. And she said taking steps against meat packers may prove counter-productive.
"Punitive actions against packers do not necessarily benefit pork producers in the long run, unless the packers are clearly in the wrong," she said in her opening statement. "And we have not seen any evidence of this."
National Cattlemen’s Beef Association President John Queen went further, suggesting Congress should keep out of the marketing relationships between cattlemen and meat packers. "When it comes to market structure and competition issues, NCBA's position is simple," Queen testified. "We ask that the government not tell us how we can or cannot market our cattle."
Philippi said more study is needed of a recent report commissioned by USDA on livestock market concentration. Queen pointed out that report showed alternative marketing arrangements beyond the cash market benefit producers, packers and consumers alike. Queen will testify at a hearing of the Senate Agriculture Committee on the same subject on Wednesday.