Source: MEATINGPLACE, 5/12/16

Sen. Chuck Grassley (R-Iowa) said he has introduced legislation that would ban packer ownership of livestock after seeing continued consolidation in the livestock industry.

The consolidation means independent producers have fewer choices for where to buy from and sell to, said Grassley, who is chairman of the Senate Judiciary Committee and also a member of the Agriculture Committee.

He has introduced similar versions of the packer ban in previous Congresses and had challenged both JBS USA’s acquisition of Cargill Inc.’s pork unitand Tyson Foods’ purchase of Hillshire Brands.

“An effective and efficient marketplace is one where packers that control all harvest capacity of the industry do not also own a majority of the animals to be processed,” Grassley said in a statement. “The fact of the matter is that the market continues to become less competitive. It’s time to see if ending packer ownership of livestock will reverse that trend.”

Grassley’s bill contains exceptions to the ban for:
• an arrangement entered into within seven business days before slaughter of the livestock;
• a cooperative, if a majority of the ownership interest is held by active cooperative members that own or feed livestock;
• a packer that is not subject to mandatory price reporting laws; 
• a packer that owns one livestock processing plant.

The North American Meat Institute reiterated its opposition to Grassley's proposal, citing USDA research that found that such a ban would not cause livestock prices to increase and would harm producers for a variety of reasons.The report also found the U.S. livestock and meat marketing complex to be dynamic and competitive.   

“We share Senator Grassley’s desire for an 'effective and efficient marketplace’ and that is exactly what dozens of studies affirm we have,” said Meat Institute President and CEO Barry Carpenter.  “Dismantling our dynamic livestock and meat production and marketing system will only turn the clock back on progress and hurt producers, packers and the consuming public in the process.”

Separately, the United States Cattlemen’s Association (USCA) on Thursday called on Congress to investigate volatility in the cattle market, saying prices have collapsed after setting records in 2015.

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