Sen. Chuck Grassley (R., Iowa) reintroduced legislation to ban packer ownership of livestock after seeing the continued impact of consolidation within the livestock industry. Grassley has introduced similar versions of the packer ban in previous sessions of Congress.
Over the last several decades, large packing companies in the poultry and pork industries have moved to concentrate and vertically integrate. The beef industry is also showing similar signs of consolidation. According to the U.S. Department of Agriculture, the amount of cattle traded on the cash market declined from 52% in 2005 to 21% in 2015. “This trend illustrates the outsize power of packers in the marketplace,” a statement from Grassley’s office noted.
“An effective and efficient marketplace is one where packers that control all harvest capacity do not also own a majority of the animals to be processed,” Grassley said. “We need a competitive marketplace in the livestock industry that delivers a fair market price to farmers. Eliminating packer ownership of livestock would be a good first step in accomplishing that goal.”
Independent producers are seeing fewer choices in whom to buy from and sell to, the statement from Grassley noted. He warned that more and more family farmers are feeling the pressure and impact of concentration in agriculture. His bill aims to ensure that family farmers and independent producers receive fair prices for their efforts.
Grassley’s bill contains four exceptions to the ban for:
- An arrangement entered into within seven days (excluding any Saturday or Sunday) before slaughter of the livestock by a packer, a person acting through the packer or a person who directly or indirectly controls or is controlled by or under common control with the packer;
- A cooperative or entity owned by a cooperative, if a majority of the ownership interest in the cooperative is held by active cooperative members that own, feed or control livestock and provide the livestock to the cooperative for slaughter;
- A packer that is not subject to mandatory price reporting laws, or
- A packer that owns one livestock processing plant.
Grassley said he has long-standing concerns about the impact of concentration in agriculture on family farms.