NFU: GIPSA rule still missing critical elements

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National Farmers Union President Roger Johnson issued the following statement after USDA officials sent portions of the June 22, 2010, proposed GIPSA rule to the Office of Management and Budget for final review before implementation:

“NFU is encouraged to see portions of the GIPSA rule advance to the final stages of the regulatory process. The portions of the original rule that have been included in the final rule will provide poultry and pork producers with a degree of protection from abuse by integrators and processors.

“USDA did not yet forward to OMB the most critical parts of the rule, which include a clearer definition of USDA’s interpretation of competitive injury. The competitive injury definitions address the fundamental problems that have plagued the livestock and poultry industries.

“It is time for USDA to act in implementing the GIPSA rule, to give America’s family farmers and ranchers an opportunity to compete in an open and fair marketplace. We’ve lost more than 1.1 million pork and beef operations in the last 30 years and rural America will struggle to absorb any more losses.

“The final and interim final rules do not address any of the issues facing beef producers. A rapidly concentrating marketplace has already hit poultry and pork producers hard. A proactive rule must be put in place to prevent the same fate from befalling ranchers and cattlemen.

“Misleading economic studies of the GIPSA rule, funded by packer-producer organizations, used flawed assertions about the impacts of the rule and claimed that thousands of jobs would be lost, that the rule would cost billions of dollars, and that retail meat prices would increase. In order to make these claims, the studies assumed that all premium programs would be eliminated, used an arbitrary meat retail price increase assumption, and did not take into account the losses that many producers are currently suffering. An economic study is only as good as its assumptions, and the assertions of these studies are not grounded in fact.

“NFU is encouraged to see parts of the GIPSA rule advanced, but much more work has yet to be done. The most critical aspects of the GIPSA rule must be finalized in order to prevent further damage to rural America.”

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Maxine Jones    
Midland, SD  |  November, 05, 2011 at 06:07 PM

There they go AGAIN! Trying to legislate profitability for themselves by cutting it for those they perceive to be 'too big', whether cattle producers, feeders, or packers. Let's take the emotion out of this picture and put the facts back into it. FACT: cattle producers can CHOOSE whether or not to participate in grid marketing. No one forces anyone to do so. FACT: grid pricing was originated by cattlemen, NOT packers. FACT: there are many factor in the 'loss' of producers of one commodity or another, a very large factor being desire for a shorter work day and 'easier' life with more of lifes' luxuries of time for recreation than running a farm allows for most people.

TN  |  November, 06, 2011 at 02:09 PM

Maxine, no one is trying to legislate profitability except meat packers. Your electric company doesn't charge you any more than your neighbor per unit and there are laws against that type of market behavior. Similarly, giant meat packers, the bigger they are, must provide the same pricing for the same quality animal. There is noting wrong with grid pricing but it was used illegally, according to a jury, push down prices in the price setting cash market. That was meat packers breaking the law to reduce the prices to producers. The market depression did cause, on the longer term, less supply of cattle (the cattle cycle is long so it was not instantaneous) and in the end, the meat packers who had positions in poultry were the most profitable as the price of poultry (GA dock prices) went from 53 cents per lb. to over 90 cents per lb. Meanwhile, Tyson bought the largest beef processor in Canada and processed and shipped BSE prohibited meat from Canada (live cattle were not allowed in the U.S. but Hillary and others allowed it to be shipped via boxed beef) brought the price of beef down further than it would otherwise be. Again, Mrs. Jones, your understanding of this issue is at a quite elementary level. Do you have some kind of sweetheart deal with a meat packer that you are trying to protect? Tom

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