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About Turn for Meatpacker ban

by 5m Editor
26 November 2007, at 12:11pm

IOWA - Iowa Pork Producers Association is opposing a ban on meatpackers owning and rearing thier own livestock. It fears that such a ban would upset the marketing arrangements farmers have made with processors and put even more pressure on the already fragile pork market.

The last time Congress came close to stopping meatpackers from finishing their own livestock, the Iowa Pork Producers Association supported the proposed ban. This was five years ago but fortunes have now changed and so has IPPA opinion.

"Our bottom line is that we acknowledge the right of all producers of any size or type of production to have market access and oppose anything that would hinder that market access," said Eugene Ver Steeg of Inwood, IPPA past president.

A provision inserted into the Senate's farm bill would prohibit processors from owning or controlling livestock supplies within 14 days of slaughter.

Yet many of Iowa's producers say they like the certainty of raising livestock under contract with a packer, but promoters of the ban are trying to get it enacted as part of the next farm bill.

Controlling issues
The ban's leading proponent is Senator Charles Grassley, who argues that packers drive down livestock prices by controlling supplies. However, he did recognise that some producers' attitudes are changing.

Sen Grassley said the Senate bill should not affect the marketing contracts farmers have with packers, although producers had been telling him otherwise.

A study commissioned by Congress released earlier this year supported Grassley's argument. It said that meatpackers' use of contracts and ownership of livestock did reduce the prices farms were paid for their animals.

However, another study, conducted by an independent consulting firm, showed that restricting the way processors buy livestock would drive up retail meat prices without adding to farmers' bottom lines. Packers would be less efficient and consumers would buy less meat, said the analysts.

"Simply banning certain activities doesn't mean that you're going to get a better outcome," said John Lawrence, an Iowa State University economist who was involved in the study.

5m Editor