Help Needed on 2012 Farm Bill: Protect Cattle Market Competitiveness

By Bill Bullard
R-CALF USA

The 2012 Farm Bill process appears to be moving very quickly, so we need the public to help us urge the Senate to include in the Farm Bill both the Livestock Marketing Fairness Act and the Ban on Packer Ownership of Livestock.  These bills will help protect the competitiveness of the US cattle market, by slowing the rapid monopoly concentration of the U.S. feeding industry.

Please call your U.S. Senators this week and urge them to become a cosponsor on both the Livestock Marketing Fairness Act (S. 1026) and the Ban on Packer Ownership of Livestock (S. 2141).

Background:

In both the 2002 and 2008 Farm Bills, we successfully persuaded the U.S. Senate to include a ban on packer ownership of livestock, only to have it removed from the final versions of those Farm Bills by the packer-controlled House. Perhaps the third time will be a charm.

Also during both the 2002 and 2008 Farm Bills, we tried unsuccessfully to include a ban on formula contracts that do not contain a firm base price (known as unpriced formula contracts).  Like outright ownership of cattle, unpriced formula contracts give packers the ability to manipulate cattle prices.

Nationally, in 2011, nearly half of all fed cattle were committed to the packers under these unpriced formula contracts (47.4%).  In some regions the percentage is much higher. In the Texas-Oklahoma-New Mexico region, nearly 73% of all fed cattle were committed to packers without ever establishing a price.

Perhaps more than any other factor, packer ownership of livestock is causing the rapid contraction of our U.S. feeding industry.  We’ve lost over 35,000 feeders from our industry since we began liquidating our U.S. cattle herd in 1996.

Fewer feeders mean fewer buyers for feeder cattle and if the big four packers continue to expand their feedlots (currently JBS is the most aggressive) and drive more independent feeders out of business, guess what happens to the competition for your feeder calves?  That’s right, it evaporates and the four packers will begin dictating the value of your calves just as they now do in the hog and poultry industries.

Please read the full post at our new Food Freedom site.

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