Skip to content

Senators to help ranchers stay competitive

New bill would stop manipulative markets

May 20, 2009

Washington, D.C. - U.S. Senators Mike Enzi, R-Wyo., Byron Dorgan, D-N.D., Chuck Grassley, R-Iowa, and Tim Johnson, D-S.D., introduced a bill today that would stop years of unfair and manipulative meat packer practices that negatively impact ranchers and farmers. 

“This bill is common sense. Certain companies have been stacking the deck. This not only hurts their competitors it hurts our economy. There is a continued need to restore transparency and competitiveness in all our markets, including the sale barn. Packers who own herds shouldn’t be able to manipulate prices and now is the time for Congress to rein in anti-competitive meat packers and give ranchers an honest chance to make a living,” said Enzi.  

“The big meat packing companies have held far too much power over the livestock industry for far too long,” Dorgan said. “It’s time we injected some fairness into this market. Our independent ranchers are out there working hard every day, and they deserve a fair shake at the stockyard. We need to pass this bill and stand up for their interests.”

“Family farmers can compete with anybody if there’s a level playing field. Unfortunately, all too often they are working with one arm tied behind their backs, because they are at the mercy of the big packers.  Our bill works to create a healthy, competitive environment for small and large producers and packers by bringing transparency to the marketplace and ending manipulative behavior,” said Grassley

“The top meat-packing companies continue to gain more power over the independent farmer and rancher. This bipartisan bill will prevent anti-competitive practices and keep our family farmers and ranchers in the fold.  Our hardworking producers simply deserve a fair price for their product,” Johnson said. 

The Livestock Marketing Fairness Act, S. 1086, would put ranchers and farmers on equal footing with packer-owned herds by amending the Packers and Stockyards Act of 1921 to end certain anti-competitive forward marketing contracts and ensure that ranchers have full access to the marketplace.

A growing number of large packing operations own their own livestock or control them through forward contracting agreements. This allows these firms to buy from themselves when prices are high and buy from others when prices are low. In recent years, the meat packing industry has become increasingly concentrated with only a handful of firms controlling a majority of the domestic cattle and hog slaughter.

The bill would:

               Require that forward contracts for livestock (cattle, hogs and lambs) be traded in public markets where buyers and sellers can witness bids as well as make their own offers. This ensures the market is open to multiple offers.

               Require marketing agreements to have a firm base price derived from an external source.  This ensures that local contract prices are not subject to manipulation by packer owned herds.

               Exempts producer owned cooperatives, packers with low volumes and packers who own only one processing plant. This exemption targets the source of price manipulation and ensures that the business practices of small family-owned processors are not impacted by the law.  

               Ensures that trading is done in quantities that provide market access for both small and large livestock producers.

The legislation is aimed at improving the stability and openness of forward contracting to provide ranchers and farmers more options to sell their animals. The legislation allows ranchers and farmers to continue choosing the best methods for selling their animals.