By Mike Stranz, NFU Government Relations Representative
NFU has been very active in advocating for greater enforcement of the Packers and Stockyards Act. However, a majority in Congress has also been very active in trying to undermine nearly all of the authorities provided to the U.S. Department of Agriculture’s Grain Inspection, Packers and Stockyards Administration (GIPSA) from the recent rule making process. But opposition to market regulation comes at cost.
Much of the discussion of markets has focused on the impact of concentration in the beef, pork, and poultry markets, where the top three or four largest processors dominate the markets, with up to 85 percent control.
Market manipulation, though, is not unique to those markets. Sheep ranchers are also being hit hard by a combination of a persistent drought in grazing areas, high feed costs, a glut of imports from New Zealand, and allegations of price manipulation by feedlots. The top four lamb processing companies control 65 percent of the market. Prices received by farmers have fallen to 85 cents per pound, although consumers have been paying in excess of $7 a pound at the supermarket.
Back in October, Sen. John Thune (R- S.D), along with a bipartisan group of eight senators, sent a letter to Agriculture Secretary Tom Vilsack, urging GIPSA to investigate the conditions in the lamb market. A similar letter was sent from the House of Representatives. NFU and other organizations that represent farmers, rural Americans, and consumers also called for further inquiries into the price collapse.
The New York Times also ran an article on the matter on Tuesday, which brings more attention to the issue of fair and competitive markets in agriculture.
Given the price collapse for sheep ranchers and the outcry by some lawmakers, one would expect Congress to be working to increase the oversight of the marketplace. Unfortunately, two separate provisions – a policy rider in the fiscal year 2013 agriculture appropriations bill and an amendment in the House Agriculture Committee version of the farm bill – would roll back most of the remaining GIPSA rules, first proposed in 2010, that went into effect last year.
If the trend of regulatory rollbacks is allowed to continue, all producers of livestock and poultry can expect to experience similar circumstances as sheep ranchers are bearing today. Congress needs stop eroding market oversight and should start to move towards a fair marketplace for farmers and ranchers.