Senate bill addresses packer ownership

A bill to be considered today in a U-S Senate committee tackles the issue of meatpacking companies that control livestock while it’s still on the farm. It’s similar in some ways to a measure that was removed from the final version of the federal Farm Bill. The version that’ll be considered today was written by Wyoming Senator Mike Enzi. Brad Redlin at the Center for Rural Affairs in Walthill, Nebraska, says this measure would seek to limit contracts that lock farmers in to sell animals without knowing the price.
Whatever the market price is on the day animals are delivered for sale, that’ll be the price, and Redlin says nobody knows what it is when they sign the contract. Redlin says that’s not only risky for farmers, it takes away the sale-barn system of reporting the prices paid for animals, which is the public record.
He says that means there’s no “price discovery” in hog production, for example, where already a year ago only 18-25 percent of animals were sold on the open market. Iowa has its own state law trying to ban packer ownership, but the Enzi bill before the Senate would try to loosen packer control over livestock at the national level.
It would put rules saying you can’t sign a contract on “formula pricing” alone and agree to a future livestock sale without knowing what price will be paid. Smithfield Farms is suing to try to overturn the state law which bans packer ownership of livestock, and vows to build new packing plants in other states which aren’t “hostile.”