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Congress Examines Industry Concentration Issues

by 5m Editor
24 April 2007, at 11:33am

US - Both houses of Congress last week began the examination of consolidation and concentration in the livestock industry. The hearings quickly generated a firestorm of controversy among competing interests in the business.

In testimony before the House Agriculture Subcommittee on Livestock, Dairy, and Poultry on Market Structure of the Livestock Industry, National Cattlemen’s Beef Association (NCBA) President and North Carolina cattle producer John Queen told subcommittee members that livestock markets shouldn’t be restricted by Congressional mandate.

“When it comes to market structure and competition issues, NCBA’s position is simple—we ask that the government not tell us how we can or cannot market our cattle,” Queen said.

Queen pointed to the recently released Grain Inspection, Packers and Stockyards Administration (GIPSA) Livestock and Meat Marketing study which concluded that alternative marketing arrangements (AMAs) such as forward contracts, production contracts, packer ownership or custom feeding have provided benefits to some producers without harming the competitiveness of the marketplace.

“The report states that the leading reasons ranchers participate in AMAs are the ability to buy or sell higher quality cattle, improve supply chain management, and obtain better prices,” says Queen. “The study concludes that restrictions on AMAs would cause a decrease in the supply of cattle, quality of beef, and feeder cattle prices.”

Not surprisingly, groups such as R-CALF United Stock Growers of America and National Farmer’s Union (NFU) took the opposite stance, claiming that market concentration has hurt competition in the industry.

Source: Western Livestock Journal

5m Editor