The National Pork Producers Council fears, if allowed to move forward, a proposed ban on packer ownership of livestock could mean producer ownership of packing plants would also be banned.
As a means of stimulating competition for livestock thereby raising prices, a ban on the ownership of livestock by packers is being championed by Iowa Senator Chuck Grassley.
Dr. Steve Meyer, the Vice President Pork Analysis with EMI Analytics and Consulting Economist with the National Pork Producers Council, says banning packer ownership would mean packers would be competing for all of their hogs but there would be more hogs flooding the market so prices would not likely be affected.
We now have a significant portion of our packing industry that’s owned by producers. The last major plant built here was owned by producers down in Saint Joseph, Missouri, the two big plants being built right now have producer involvement in those.
So, if packers can’t own pigs, will producers be allowed to own their packing plants which they’re very interested in doing? There’s a number of problems with this and we don’t think there’s very much support for it but you don’t have to have support for it to do bad things.
We need to remember, and your listeners in Canada will love this one, this was actually part of the 2002 Farm Bill. It was dropped out of that in committee before it got to the floor.
The kind of consolation prize for the Senator losing his packer ownership ban was Mandatory Country of Origin Labelling so the fact that this was here kind of paved the way for something that caused lots of problems in our industry. ~ Dr. Steve Meyer, National Pork Producers Council
Dr. Meyer also fears a clause which bans “anything that gives packers managerial control” could be used to ban marketing contracts.
He says marketing contracts cover 70 percent of the hogs sold and are an important tool for producers, packers and lenders in managing risk and for managing factors like nutrition, genetics and rearing methods.
