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The Future of Beef Under the Meat Packer's Plan

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Well-known member
Oct 13, 2007
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Tags: news | opinion - editorial | point of view

FAIRMONT -- I have been a contract poultry producer since 1992, and the closure of the Townsends, Inc., plants in Siler City and Mocksville, which news reports say will cost more than a thousand poultry workers their jobs and terminate contracts with about 200 chicken farmers, is like a bad case of déjà vu.

Just two years ago, Pilgrim's Pride idled many of its operations, including one in Siler City, devastating many family farmers. Raising birds for a large processor has changed a lot over the years, but the core issues for farmers have not. Short-term contracts and minimal compensation are exchanged for long-term debt, lack of independence and a close check on ingenuity.

There is one major factor in these plant closings that is rarely discussed in the media, and that is how undisciplined the poultry industry is when it comes to supply management.

Certainly the current economy and volatility of commodities have harmed the industry, but the constant state of overcapacity of poultry housing and the perpetual flooding of the market make the industry one of its own worst enemies. Surely, there are steps that could be taken to keep this kind of situation from occurring, but it seems the industry can't correct itself without a huge bloodletting. That ruins the lives of my peers, hard-working farmers who didn't have a fantasy about getting rich growing chickens. It was just their means to make a living.

In 2008 Congress addressed these problems in the Farm Bill and directed the U.S. Department of Agriculture to clear up the 90-year-old Packers and Stockyards Act so it would offer farmers some protections from these kinds of situations. But in typical Washington fashion, the wheels turn slow, and the lobbyists keep throwing up hurdles.

In May, the U.S. House passed a bill that would prevent the USDA from writing these regulations (called the GIPSA rule). If a similar amendment comes up in the Senate, I hope Sens. Kay Hagan and Richard Burr will do the right thing and protect the rule. If it had been in place, the company that bought the Townsend plants would have had to be more accountable to the farmers, who still owe substantial amounts of money on their facilities.

Webster's defines "monopsony" as demand coming from one source. This is the reality for poultry producers - I doubt any got a call from another processor requesting their services. This isn't the free market. Adam Smith's invisible hand has been severed, and folks from rural America are paying the price.

While I believe that government intervention is the court of last resort, it is unfortunate that is exactly where we, contract poultry producers, are. It is time for our representatives to step out of the Beltline and quit keeping score of "political" points. We need the GIPSA rule yesterday.
J. Craig Watts is a contract poultry grower in Fairmont in Robeson County.

Read more: http://www.newsobserver.com/2011/08/24/1431264/easing-the-plight-of-poultry-growers.html#disqus_thread#ixzz1W4MdGUpt

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