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I hate to say I told you so, but I did. In June, USDA published a new draft rule regarding how meatpackers must deal with farmers and ranchers in the procurement of livestock and poultry. But the packers don't like it and are pitching a fit, just as I said they would. As my mother used to say, "So, what's all the yellin' about?" For four decades USDA has allowed packers to discriminate against family farm and ranch livestock producers by paying them less than they pay mega-producers for the same quality hogs and cattle. These purely volume-based premiums that packers give to large-volume producers are violations of the Packers and Stockyards Act, despite USDA's lackluster record of challenging such price discrimination. The Packers and Stockyards Act specifically prohibits price discrimination by meatpackers, making it unlawful for packers to "...make or give any undue or unreasonable preference or advantage to any particular person or locality in any respect whatsoever..." USDA's draft rule provides a fighting chance of enforcing that law for the first time in 40 years (see the rule at www.cfra.org/competition). The packers and their allies at the National Cattlemen's Beef Association and the National Pork Producers Council can whine and complain all they want. But competitive markets are the foundation of America's economy and family farmers and ranchers asking for a level playing field where the value of their livestock determine price, not the volume, are making a request that is not only eminently reasonable, but long overdue.
John Crabtree is a senior policy advisor at the Center for Rural Affairs in Lyons, Neb. You can email him at johnc@cfra.org.
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