Rep. Bruce Braley, D-Iowa, has introduced legislation making it unlawful for a meat packer to own or feed livestock intended for slaughter. The move is an effort to combat vertical integration and anti-competitive behavior in the livestock industry to protect family farmers in Iowa and other states, Braley said.
The bill is similar to legislation introduced in the Senate last month by Senators Chuck Grassley, R-Iowa, and Tom Harkin, D-Iowa.
Braley's bill excludes single packers that are too small to participate in the Mandatory Price Reporting Program. The bill also exempts farmer cooperatives where the members own, feed, or control the livestock themselves.
“This bill is about protecting Iowa family farms,” Braley said. “The increasing consolidation of the meat packing industry has put downward pressure on livestock prices, which in turn hurts Iowa farmers. Now, meat packers have been looking toward vertical integration to stifle competition.”
“This bill is a common sense step to protect free market competition in the livestock industry,” according to Braley. “It’s important to have this debate now with the Farm Bill reauthorization coming up later this year."
R.C. Hunt, president of the National Pork Producers Council (NPPC) and pork producer from Wilson, N.C., however, does not see Braley's “common sense” angle. "There's nothing common sense about the federal government telling pork producers they can't enter into contracts to sell their hogs to meat packers," said Hunt. “We are surprised that someone who represents one of the country's top pork-producing districts would introduce such a bill."
According to Hunt, the bill would have negative consequences on the nation’s pork producers as well as the industry as a whole. "Rather than protecting competition and stopping consolidation of the industry, a ban on packers 'owning' livestock would increase (packers')transactions costs and risks, which, in turn, would increase producers' costs,” Hunt said. “That likely would put some producers out of business, decreasing competition and increasing vertical integration of the industry.”
"This legislation is a retread of an argument that has been proved false through the USDA-Department of Justice hearings in 2010, through congressional hearings and through a number of academic findings,” adds Hunt.