Sen. Chuck Grassley (R., Iowa) introduced legislation to ban packer ownership of livestock after he said he is seeing continued consolidation within the livestock industry.
“An effective and efficient marketplace is one where packers that control all harvest capacity of the industry do not also own a majority of the animals to be processed,” Grassley said. “The fact of the matter is that the market continues to become less competitive. It’s time to see if ending packer ownership of livestock will reverse that trend.”
Grassley said over the last several years, he has seen large companies join forces to create new business giants in every sector of the economy, including agriculture. Tyson Foods purchased Hillshire Brands. JBS purchased Cargill's pork division. Smithfield, by far the largest pork producer in the world, was sold to a Chinese company. In the beef industry, meanwhile, packing plants have closed in West Texas and Denison, Iowa, which further concentrated power in that industry.
Grassley said this means independent producers now have fewer choices available regarding whom to buy from and sell to. More and more family farmers and independent producers are feeling the pressure and impact of concentration in agriculture.
Grassley’s bill contains four exceptions to the ban for:
1. 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;
2. 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;
3. A packer that is not subject to mandatory price reporting laws, or
4. A packer that owns one livestock processing plant.
Grassley introduced similar versions of the packer ban in previous sessions of Congress.
Grassley’s bill received high praise from the National Farmers Union, which noted that the recent mergers and acquisitions — such as between JBS and Cargill or Tyson and Hillshire — have advanced the concentration in the packing industry.
“When you concentrate livestock ownership among a few multinational firms, competition in the livestock sector is severely reduced, and there’s a strong potential for market price manipulation,” the farmers union said in a statement. “In addition, consumers are experiencing increased food costs at the grocery store, while the family farmer is receiving pennies of every dollar spent on food.”
