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Livestock producers seek U.S. help

by 5m Editor
20 April 2007, at 11:36am

WASHINGTON - A group of livestock producers and agricultural experts urged a Senate committee Wednesday to press legislation designed to reduce market concentration in the meat and poultry markets, arguing that the dominance of large companies has led to lower prices for smaller producers and a limited number of outlets where farmers can sell their cattle or chickens.

The group, testifying before the Senate Agriculture Committee, said the big companies should face congressionally mandated limits on the amount of livestock they can own and that there should be more market pricing information and a reduction of forward contracts between meat packers and livestock producers.

Those contracts, some livestock owners contend, hurt the cash market because the large packing companies use them to arrange cattle and hog sales at fixed prices long before the slaughter date. The packers, these critics say, use their financial heft to turn away cattle if need be, forcing farmers to take the sale they can get or risk no sale.

"It is essential that the next farm bill address the problem of creating and maintaining fair, transparent, accessible and efficient markets," Peter Carstensen, a law professor at the University of Wisconsin who specializes in agricultural markets, told the committee. "The changing characteristics of those markets are steadily eroding the capacity of the American farmer to get the benefit of workable competition."

Carstensen and several senators on the committee took issue with a recently published, $4.3 million study commissioned by the Agriculture Department that examined allegations of price fixing and market concentration in the livestock industry. The study found that alternative marketing arrangements, such as forward contracts, worked in favor of both the meat packers and livestock producers.

Tim Schmidt, a hog farmer from Sioux County, Iowa, disagreed. He said that such contracts mean that he and his farming partners now sell their usual lot of 80 hogs a week to just one company, compared with 10 years ago when they had offers from several packing companies.

Source: Chicago Tribune

5m Editor