OCM Members Should Ready
Themselves For Farm Bill Pressure

There is real hope for competition related provisions in the Farm Bill. Senate Ag Committee Chairman Tom Harkin continues to work hard for a bill that will increase enforcement of the Packers & Stockyards Act in a real, not deceptive, way. His Competitive and Fair Agricultural Markets Act of 2007 will also prevent packer/processor contracts from taking away farmers right to go to court, repeal the 11th Circuit decision in the Pickett v. Tyson case, and make it easier for farmers to challenge unfair production contract terminations. Iowa Representative Boswell (D IA) introduced a companion bill in the House, but did not push it hard.

The Harkin bill is getting close to having sufficient votes to pass in the Senate Ag Committee.
More work must be done on bills to change the structure of the livestock industry. The Packer Ownership Prohibition has a good chance of passing in the Senate Ag Committee. It passed the full Senate twice during the 2002 Farm Bill debate, though then-House Chairman Larry Combest had enough strength to kill it in the Conference Committee (where the House and Senate work out their differences in bills).

Senator Charles Grassley’s (R IA) Market Transparency Act would eventually require pork packers to buy 25% of their slaughter needs from the spot market. Less than 10% of hogs are sold in the spot market now. Because the spot market is the daily price reported by USDA, and there is no credible alternative market for supply and demand purposes, it is crucial to increase the number of hogs traded this way. Low spot market volume increases the risk of price manipulation as any person who actually sells hogs regularly knows.

Senator Mike Enzi (R WY) introduced the Captive Supply Reform Act to eliminate formula livestock contracts. When producers commit livestock to a packer without a market price, but rather for a price determined upon delivery, the packer can manipulate the open market price easier. The Enzi bill does not eliminate contracts, but merely requires all contracts to be openly bid, and with an actual price set when the agreement is made. Representative Herseth Sandlin (D SD) introduced a House companion bill.

OCM members should be prepared to contact their Senator or Representative to demonstrate voter support for these bills. The packers are spreading disinformation in an all out effort to defeat these bills.MS