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by Joe Cornely

Livestock producers may need some new protections if they are to survive in the face of a rapidly changing livestock marketing system. An American Farm Bureau Federation (AFBF) Livestock Industry Task Force report includes recommendations on how Farm Bureau can help assure livestock producers are not put at a disadvantage in the meat supply chain.

The task force was appointed following last year’s AFBF annual meeting when delegates asked Farm Bureau to examine four specific questions: Should there be a ban on packer ownership of livestock; how can packers be encouraged to participate in an open and competitive market; how effective is mandatory price reporting; and is the Packers and Stockyards Act (PSA) effective?

Much of the task force work focused on anti-competitive practices. Its report calls for more clarity in the Packers and Stockyards Act. The PSA currently states it is unlawful for any packer to engage in unfair, discriminatory or deceptive practices. AFBF believes the terms unfair, discriminatory and deceptive need to be better defined. On the subject of packer concentration, AFBF sent a letter to the Department of Justice (DOJ) explaining why consolidation in the packing industry is believed to be harmful by many livestock producers. AFBF specifically expressed concern over the acquisition of Farmland’s pork packing plants by Smithfield Foods. Regarding packer ownership, the task force advised current AFBF policy is the appropriate way to move forward. That policy states "the Department of Justice should ensure that proposed cooperative and/or vertical integration arrangements should continue to maintain independent producers’ access to markets." AFBF also is encouraging the Packers and Stockyards Administration to study several questions about packer-owned livestock including how packer ownership affects market performance and price discovery, how retail pricing affects producer prices, do packers use captive supplies to influence spot market prices and do anti-trust laws adequately protect independent producers.

Outside of legislative and regulatory issues, AFBF will follow a task force suggestion that communications with other participants in the meat supply chain should be improved. AFBF plans to host periodic discussions with retailers, packers and processors to better understand those industries’ concerns, and how they view the farmer’s role in the supply chain.

In total, the task force made 15 specific recommendations. AFBF will work with Ohio and other state Farm Bureaus to provide educational materials about all the issues covered in the report.