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USDA/DOJ Work To Prevent Anticompetitive Behavior

A

Anonymous

Guest
Group Praises Announcement by USDA, Justice Department

to Explore Antitrust, Anticompetitive Activities in Ag Markets




Source: R-CALF USA

August 5, 2009



Washington, D.C. – In the wake of President Obama’s campaign promise to prevent anticompetitive behavior against family farmers and ranchers, the U.S. Department of Agriculture (USDA) and the U.S. Department of Justice (Justice) today announced that both Departments will work together to accomplish this important goal.



The agencies’ joint news release states, “the U.S. Department of Agriculture (USDA) and the Department of Justice will hold joint public workshops to explore competition issues affecting the agriculture industry in the 21st century and the appropriate role for antitrust and regulatory enforcement in that industry.”



This announcement came less than a week after R-CALF USA met in Washington, D.C., with numerous officials from Justice’s antitrust division and with USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA) Administrator.



“During that meeting, R-CALF USA delivered a 61-page presentation demonstrating that the U.S. cattle market is suffering from antitrust activities and anticompetitive practices by the highly concentrated beef packing industry,” said R-CALF USA CEO Bill Bullard. “We provided charts and graphs that demonstrate the entire U.S. livestock industry is in a severe state of crisis, including 12 specific examples demonstrating market failure in the U.S. cattle market.”



These 12 examples include:



1) a disconnect between cattle prices and beef prices;

2) an increasing price spread between ranch gate prices and wholesale prices, as well as ranch gate prices and retail prices;

3) a shrinking number of U.S. cattle operations while domestic beef consumption keeps increasing;

4) an inability for domestic beef production to keep pace with increased beef consumption;

5) an inability for domestic beef production to maintain its share of the total available U.S. beef supply; 6) a long-run lack of profitability for U.S. cattle feeders while retail beef prices climb to record levels;

7) an increase in gross packer margins while cattle feeders suffer extended losses;

8) an above-the-five-year-average retail beef price while cow/calf producers receive below-the-five-year-average prices for calves;

9) a historical depression in cattle prices when U.S. beef exports rise to record levels;

10) a shrinking number of states that continue to receive above-the-national-average cattle price;

11) a disruption in the historical U.S. cattle cycle; and,

12) a significant disparity in regional weekly cattle prices.



In addition, R-CALF USA explained why the current structure of the U.S. cattle industry makes it highly susceptible to manipulation: the high concentration both in the industry’s feedlot sector and the meatpacking sector, as well as a unique characteristic of the cattle industry itself – the perishable nature of slaughter-ready cattle.



“Today’s announcement is a huge victory for our members who have been working for more than a decade to call attention to the market power abuses that are destroying the economic viability of our industry,” said Bullard. “R-CALF has joined with a broad coalition of organizations that, like us, are fighting to restore competition to our nation’s livestock markets.”



This coalition also met with the Department of Justice last month to encourage greater enforcement of antitrust laws and the Packers and Stockyards Act (PSA).



“We could not be more pleased than to learn that both the Department of Justice and USDA are now taking our concerns seriously and we will continue working with our coalition partners to ensure that we turn this unprecedented opportunity into a genuine solution to permanently restore the opportunity for profitability to our nation’s hard-working farmers and ranchers,” Bullard concluded.



The joint USDA/Department of Justice announcement indicates the first public workshops to explore competition issues will likely be held in early 2010 with the dates, locations and times to be announced later. However, the agencies have asked that written comments be sent to the Department of Justice no later than Dec. 31, 2009.



r-calfusa.com
 

PORKER

Well-known member
Kraft Foods buyer gets prison sentence in tomato scandal
By Caroline Scott-Thomas, 13-Aug-2009
Related topics: Financial & Industry, Fruit, vegetable, nut ingredients

A former Kraft Foods executive has been sentenced to two years and three months in prison for accepting bribes from Californian tomato product supplier SK Foods, becoming the first to be sentenced in the case.

Robert Watson pleaded guilty in January to accepting bribes between 2004 and 2008 from Randall Lee Rahal, then a sales broker for SK Foods. The bribes, which amounted to $158,000, were intended to ensure that Watson purchased tomato products only from SK Foods, thereby shutting out competition and keeping prices high.

SK Foods and its directors have not been accused of any crimes, but some of its employees have pleaded guilty, including Randall Lee Rahal, among others. Rahal admitted in December that he had offered bribes to purchasing managers at some of the country’s largest food companies.

Watson has also been ordered by Sacramento federal court US District Judge Lawrence K. Karlton to pay $1.85m to Kraft to remunerate the company for its losses, after he facilitated the sale of millions of pounds of tomato products at inflated prices.

Four others are still awaiting sentencing for their parts in the tomato scandal, including Rahal, as well as those who have admitted taking bribes from him – a former purchasing manager for B&G Foods, Robert Turner, and a former manager at Frito-Lay, James Wahl.

Jennifer Dahlam, a former record and business analyst at SK Foods, is also awaiting sentencing. She admitted to causing the introduction of adulterated and misbranded food onto the marketplace with intent to defraud, by mislabeling products that should have been thrown out due to their high mold content.

The lawsuit was filed against employees at SK Foods in August last year, accusing them of distributing hundreds of thousands of dollars in bribes, price fixing, and mislabeling offences. The California-based company supplies about 15 percent of the bulk tomato paste and diced tomatoes supplied to American manufacturers of salsa, ketchup and juices.
 

PORKER

Well-known member
August 16, 2009

New watchdog just might bite

BY ALAN GUEBERT


Who is J. Dudley Butler and why are meatpackers and their allies saying nasty things about the courtly, 61-year-old from Yazoo County in Mississippi?

The short answer is that Butler is the new administrator of the U.S. Department of Agriculture's Grain Inspection, Packers and Stockyards Administration (GIPSA). That makes him the watchdog over Big Meat and their apologists -- or, as Iowa Republican Senator Charles Grassley more accurately tags them, "the packer lackeys."


Another answer is one that Butler gave to a luncheon crowd at the Organization for Competitive Markets (OCM) annual meeting in St. Louis Aug. 7. He said he's in Washington to work "and to enforce the Packers and Stockyards Act."

That's tall talk from a diminutive country lawyer; most GIPSA chiefs never read the P&S Act, let alone enforce it. But, as is said in the Mississippi Delta where Butler grew up and still owns a farm, it ain't a brag if you've done it.

And he has. Butler often testified to Congress on livestock issues -- especially on how the Meat Gang's market concentration has led to enormous market power -- and served on the task force to develop Mandatory Price Reporting, the 1999 law that shined some light into packers' dark closets.

Given that background, the meat grapevine rattled when Secretary of Agriculture Tom Vilsack named Butler GIPSA boss May 11.

One of those rattled was Steve Cornett, the former full-time editor of Farm Journal's Beef Today and now a part-time packer defender. Cornett called Butler "an anti-corporate activist," a cattle "outsider," and "a trial lawyer."

Sticks and stones thrown, Cornett continued his May 20 blog posting by noting, "My concern is Butler will use all his new power to attack causes rather than symptoms. My concern with the approach of OCM is that they want to approach beef consolidation as if it were occurring in a vacuum. It's not."

First, startling insight that is not and, second, with giant packers sucking the air out of the industry the cattle business is as close to the completely airless poultry industry and rapidly-suffocating hog industry as it's ever been.

According to data released by the General Accountability Office June 30, the number of U.S. farms with cattle and calves declined 352,000 in the years 1987 to 2007, from 1.15 million to 798,290.

More importantly, reports the GAO, "the fewest number of farms accounting for 50 percent of the sales" in cattle plunged by more than 60 percent during the same period. Only 2,862 farms today account for more than half of all cattle sales in the U.S. In 1987, it took 7,471 farms to reach that tipping point.

Worse, the July USDA Cattle on Feed report shows the U.S. cattle inventory at a 36-year low, just 94.5 million head today, even as cattle producers suffer through one of their biggest, longest blood-lettings.

In short, the packer-led market model that has cut the cattle sector to its smallest size in nearly 40 years, concentrated ownership in its fewest hands ever and now has ranchers and feeders adrift on a rising sea of their own blood is the model the lackeys want to keep?

A more sustainable move would be for them to back Butler so he gets the political support he needs to enforce the P&S Act.

If they don't, however, two things are certain to happen very quickly. First, Butler will be back in Mississippi inside two years and, second, the lackeys will be out of business shortly thereafter.

Guebert's e-mail address is [email protected]
 

Tex

Well-known member
PORKER said:
August 16, 2009

New watchdog just might bite

BY ALAN GUEBERT


Who is J. Dudley Butler and why are meatpackers and their allies saying nasty things about the courtly, 61-year-old from Yazoo County in Mississippi?

The short answer is that Butler is the new administrator of the U.S. Department of Agriculture's Grain Inspection, Packers and Stockyards Administration (GIPSA). That makes him the watchdog over Big Meat and their apologists -- or, as Iowa Republican Senator Charles Grassley more accurately tags them, "the packer lackeys."


Another answer is one that Butler gave to a luncheon crowd at the Organization for Competitive Markets (OCM) annual meeting in St. Louis Aug. 7. He said he's in Washington to work "and to enforce the Packers and Stockyards Act."

That's tall talk from a diminutive country lawyer; most GIPSA chiefs never read the P&S Act, let alone enforce it. But, as is said in the Mississippi Delta where Butler grew up and still owns a farm, it ain't a brag if you've done it.

And he has. Butler often testified to Congress on livestock issues -- especially on how the Meat Gang's market concentration has led to enormous market power -- and served on the task force to develop Mandatory Price Reporting, the 1999 law that shined some light into packers' dark closets.

Given that background, the meat grapevine rattled when Secretary of Agriculture Tom Vilsack named Butler GIPSA boss May 11.

One of those rattled was Steve Cornett, the former full-time editor of Farm Journal's Beef Today and now a part-time packer defender. Cornett called Butler "an anti-corporate activist," a cattle "outsider," and "a trial lawyer."

Sticks and stones thrown, Cornett continued his May 20 blog posting by noting, "My concern is Butler will use all his new power to attack causes rather than symptoms. My concern with the approach of OCM is that they want to approach beef consolidation as if it were occurring in a vacuum. It's not."

First, startling insight that is not and, second, with giant packers sucking the air out of the industry the cattle business is as close to the completely airless poultry industry and rapidly-suffocating hog industry as it's ever been.

According to data released by the General Accountability Office June 30, the number of U.S. farms with cattle and calves declined 352,000 in the years 1987 to 2007, from 1.15 million to 798,290.

More importantly, reports the GAO, "the fewest number of farms accounting for 50 percent of the sales" in cattle plunged by more than 60 percent during the same period. Only 2,862 farms today account for more than half of all cattle sales in the U.S. In 1987, it took 7,471 farms to reach that tipping point.

Worse, the July USDA Cattle on Feed report shows the U.S. cattle inventory at a 36-year low, just 94.5 million head today, even as cattle producers suffer through one of their biggest, longest blood-lettings.

In short, the packer-led market model that has cut the cattle sector to its smallest size in nearly 40 years, concentrated ownership in its fewest hands ever and now has ranchers and feeders adrift on a rising sea of their own blood is the model the lackeys want to keep?

A more sustainable move would be for them to back Butler so he gets the political support he needs to enforce the P&S Act.

If they don't, however, two things are certain to happen very quickly. First, Butler will be back in Mississippi inside two years and, second, the lackeys will be out of business shortly thereafter.

Guebert's e-mail address is [email protected]

The meats industry needs to be looked at as a whole. Butler will do that but he has a lot of people surrounding him who were part of the problem for so long. I am not so sure that the bureaucrats have the mental capacity to do anything different than bureaucratic nothing they have become so accustomed to. I haven't seen the change yet.

Butler knows that the real issues will be answered in court where damages can be won. He recognizes that the interpretation of the courts that have made plaintiffs prove competitive injury are flat out wrong and judicial activism at its worst, concentrating wealth with the help of breaking the economic laws that protect the markets. All of the anti trust laws have the prima facia case requirement, not the competitive injury requirement that corrupt or incompetent courts have fallen for. Of course when the Tysons of the world can hire former law clerks for Alito from K street, place judges with the help of Arlen Specter, and get the Supreme Court to take an Anna Nichole Smith case over an anti trust case, there isn't a lot of hope for the rule of law.

Our judicial system is as much to blame for the current crisis in Agriculture as the regulatory agencies. Corruption or incompetence rules the day just as it has in the regulatory agencies. Humpty Dumpty isn't so easy to fix after a fall. They all have egg on their faces.

Tex
 

PORKER

Well-known member
Sticks and stones thrown, Cornett continued his May 20 blog posting by noting, "My concern is Butler will use all his new power to attack causes rather than symptoms. My concern with the approach of OCM is that they want to approach beef consolidation as if it were occurring in a vacuum. It's not."

First, startling insight that is not and, second, with giant packers sucking the air out of the industry the cattle business is as close to the completely airless poultry industry and rapidly-suffocating hog industry as it's ever been.
According to data released by the General Accountability Office June 30, the number of U.S. farms with cattle and calves declined 352,000 in the years 1987 to 2007, from 1.15 million to 798,290.

Dudley Butler doesn't have to look too far as this problem is in every part of the livestock and grain industry. No balance of paying prices whether large or small.
 

Silver

Well-known member
Oldtimer said:
Group Praises Announcement by USDA, Justice Department

to Explore Antitrust, Anticompetitive Activities in Ag Markets




Source: R-CALF USA

August 5, 2009



Washington, D.C. – In the wake of President Obama’s campaign promise to prevent anticompetitive behavior against family farmers and ranchers, the U.S. Department of Agriculture (USDA) and the U.S. Department of Justice (Justice) today announced that both Departments will work together to accomplish this important goal.



The agencies’ joint news release states, “the U.S. Department of Agriculture (USDA) and the Department of Justice will hold joint public workshops to explore competition issues affecting the agriculture industry in the 21st century and the appropriate role for antitrust and regulatory enforcement in that industry.”



This announcement came less than a week after R-CALF USA met in Washington, D.C., with numerous officials from Justice’s antitrust division and with USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA) Administrator.



“During that meeting, R-CALF USA delivered a 61-page presentation demonstrating that the U.S. cattle market is suffering from antitrust activities and anticompetitive practices by the highly concentrated beef packing industry,” said R-CALF USA CEO Bill Bullard. “We provided charts and graphs that demonstrate the entire U.S. livestock industry is in a severe state of crisis, including 12 specific examples demonstrating market failure in the U.S. cattle market.”



These 12 examples include:



1) a disconnect between cattle prices and beef prices;

2) an increasing price spread between ranch gate prices and wholesale prices, as well as ranch gate prices and retail prices;

3) a shrinking number of U.S. cattle operations while domestic beef consumption keeps increasing;

4) an inability for domestic beef production to keep pace with increased beef consumption;

5) an inability for domestic beef production to maintain its share of the total available U.S. beef supply; 6) a long-run lack of profitability for U.S. cattle feeders while retail beef prices climb to record levels;

7) an increase in gross packer margins while cattle feeders suffer extended losses;

8) an above-the-five-year-average retail beef price while cow/calf producers receive below-the-five-year-average prices for calves;

9) a historical depression in cattle prices when U.S. beef exports rise to record levels;

10) a shrinking number of states that continue to receive above-the-national-average cattle price;

11) a disruption in the historical U.S. cattle cycle; and,

12) a significant disparity in regional weekly cattle prices.



In addition, R-CALF USA explained why the current structure of the U.S. cattle industry makes it highly susceptible to manipulation: the high concentration both in the industry’s feedlot sector and the meatpacking sector, as well as a unique characteristic of the cattle industry itself – the perishable nature of slaughter-ready cattle.



“Today’s announcement is a huge victory for our members who have been working for more than a decade to call attention to the market power abuses that are destroying the economic viability of our industry,” said Bullard. “R-CALF has joined with a broad coalition of organizations that, like us, are fighting to restore competition to our nation’s livestock markets.”



This coalition also met with the Department of Justice last month to encourage greater enforcement of antitrust laws and the Packers and Stockyards Act (PSA).



“We could not be more pleased than to learn that both the Department of Justice and USDA are now taking our concerns seriously and we will continue working with our coalition partners to ensure that we turn this unprecedented opportunity into a genuine solution to permanently restore the opportunity for profitability to our nation’s hard-working farmers and ranchers,” Bullard concluded.



The joint USDA/Department of Justice announcement indicates the first public workshops to explore competition issues will likely be held in early 2010 with the dates, locations and times to be announced later. However, the agencies have asked that written comments be sent to the Department of Justice no later than Dec. 31, 2009.



r-calfusa.com

Nice to see RCALF putting their efforts in the right direction. This seems to be the sort of reform the industry truly needs.
 
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