MN Farmers Call for Fair & Open Livestock Markets at National Agriculture Competition Workshop

Department of Justice/USDA Workshop Draws Nearly 2,000 to Discuss Market Concentration & Issues Facing Livestock Producers

CONTACT: Tim Henning, farmer & Land Stewardship Project member, 507-360-9136; Darwyn Bach, farmer & LSP member, 507-829-8820; Sarah Lesnar, LSP staff, 612-722-6377

8/30/10
ADRIAN, Minn.—Livestock producers from Minnesota joined farmers and ranchers from across the country Friday in calling for immediate action to create fair, open markets. These demands came in Fort Collins, Colo., during an unprecedented Department of Justice/USDA workshop on livestock issues. The workshop, led by USDA Secretary Tom Vilsack and U.S. Attorney General Eric Holder, is one in a series of five forums focusing on competition and antitrust issues related to agriculture.

This marks the first time two members of a Presidential cabinet have taken testimony directly from farmers on agricultural competition issues. Tim Henning, a Land Stewardship Project (LSP) member who raises beef cattle and crops near Adrian, was one of the farmers who testified before Holder and Vilsack.

"Now is the time," said Henning. "Everyone knows there are serious problems with the influence and reach of the huge meatpackers, the Monsantos and Cargills in agriculture. Congress and USDA need to act and rein in corporate agribusiness and Walmart-style retailers to ensure a vital rural America."

Although only a small percentage of attendees had the opportunity to speak, LSP member-farmers provided oral comments during the workshop's designated listening session. Nearly 2,000 farmers and others turned out for the workshop. The large turnout was attributed to the June 22 release of a USDA Grain Inspection, Packers and Stockyards Administration (GIPSA) proposal to significantly strengthen market protections for livestock farmers.

Hailed by family farm groups, the proposed GIPSA rule strengthens and clarifies existing laws designed to protect livestock producers from unfair, deceptive and discriminatory practices by giant meatpackers. Congress passed a measure in the 2008 Farm Bill requiring GIPSA to issue such a rule.

In providing comments at the workshop, Darwyn Bach, an LSP member who raises hogs and crops near Boyd, Minn., explained the importance of the USDA proposed rule. In particular, Bach highlighted a provision that restricts packer-to-packer sales of livestock.

"The GIPSA rule is a necessary first step," said Bach. "The restriction on packer-to-packer sale of livestock is a good start. Right now more hogs are sold packer-to-packer than procured in the open market. This results in price suppression and has also allowed packers to send price signals to one another."

Opposition to the GIPSA rule has been voiced by packer-producer groups such as the National Pork Producers Council and National Cattlemen's Beef Association, as well as trade associations such as the American Meat Institute.

"These packer-producer groups and commodity organizations don't represent me," said Henning. "I've seen firsthand discrimination by packers; these new rules are needed."

Since the 1990's, the meatpacking industry has consolidated considerably, resulting in vertical integration and captive supplies of hogs and cattle. In that same period, terminal auction markets in places like South St. Paul, Minn., and Sioux Falls, S. Dak., have closed, further restricting producers' ability to sell livestock in a competitive marketplace.

"Overall, the proposed GIPSA rule is saying, 'Giant meatpackers, you can no longer give sweetheart deals to your favored operators,' " said Henning. "Packers need to document and justify their pricing tactics. You can't pay one guy one price and some other guy or group of producers another price for the same quality animal and terms of sale. Quality premiums and early deliveries will not be affected by the proposed rule unless the packer chooses to eliminate them."

Henning and Bach believe the rule will provide family farmers better access to competitive markets, greater price discovery and a more level playing field. Along with many other farmers at the workshop, they urged USDA to enact the proposed rule swiftly after the public comment period concludes November 22.

"The claims of those opposing the rule are overblown and are about keeping in place an unfair and unbalanced system that has resulted in big profits for giant meatpackers and losses for farmers and rural communities," said Bach. "Make some tweaks, clarify a few things, and get the new rules in place. The other option is not acceptable: an ineffective law that hasn't been enforced or helped farmers in decades."

The proposed GIPSA rule was published in the Federal Register June 22, 2010, vol. 75, p. 35338. Information about the proposed rule is at: www.gipsa.usda.gov. 

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PHOTOS AVAILABLE: For photos of Minnesota farmers Darwyn Bach and Tim Henning at the Fort Collins workshop, contact Brian DeVore at bdevore@landstewardshipproject.org or 612-722-6377.