Meatpackers, producers, contractors and producers totaled hundreds in all. They came from around the country to attend the workshops on the proposed federal rules.
Attorney General Eric Holder and USDA Secretary Tom Vilsack also attended. This is the fourth of five the administration set this year to hear about competition and consolidation in the agriculture industry.
The rules would make it easier to file suits under the Depression-era Packers and Stockyards Act by stating that farmers don't need to prove industry-wide anticompetitive behavior to file a lawsuit under the act.
Vilsack has said increasing consolidation has strengthened the bargaining power that big companies have over farmers, giving producers an ever decreasing share of the money consumers spend at the grocery store. As a result, farms are failing, with the number of hog farms dropping from 660,000 in 1980 to 71,000 now. The number of cattle farms has fallen from 1.6 million in 1980 to 950,000. Of course, USDA counts every site with even one hog or one cow as a production site of equal value to famers raising the bulk of the U.S. meat supply, so USDA’s numbers are somewhat mis-leading.
Cattlemen in particular, heatedly disagree on whether the rule would help or hurt.
In both the pork and beef sectors, packer contracts have become a commonplace business practice versus selling animals on the cash market.
The NCBA says contracts, or alternative marketing agreements, allow ranchers to manage risk and earn premiums for high-quality cattle, even if they have to accept steep discounts for inferior beef.
Other ranchers represented by Montana-based R-Calf USA contend that contracts thin the cash markets, which help determine prices for those contracts, thereby depressing prices for everyone.
Other provisions of the proposed rule also have drawn objections.
USDA contends that the rule finally offers a clearer definition under the law of what practices are considered unfair, discriminatory or deceptive. It points out the law would prevent packer-to-packer sales, which could potentially tip packers off to what prices they offer producers, and it would require packers to make sample contracts available online, so markets are more transparent. Buyers would have to keep records justifying any differential pricing to producers.
Officials with the NCBA and the NPPC say the rule could lead to unintended consequences, including more lawsuits, damage to producers who process some of their own meat, and the public release of information that should be a confidential part of business contracts.
"Claims by the rules proponents that somehow this proposal will help rural America simply don't stand up to scrutiny," said Mark Dopp, general counsel for the American Meat Institute.
The night before the Friday workshop, a couple hundred supporters of NCBA and NPPC held a meeting in a hotel ballroom to rail against the proposed rule, reports the Associated Press.
Later, a few hundred producers with R-Calf USA filled a ballroom at another hotel for a gathering that was part pep talk, part revival meeting, to support the proposed rule. A crowd dotted with cowboy hats and checked shirts gave standing ovations and hearty applause.
Source: The Associated Press contributed to this article.