ORGANIZATION FOR COMPETITIVE MARKETS

P.O. Box 6486

Lincoln, NE 68506

Web site: www.competitivemarkets.com 

 

Date:  May 14, 2001                            For Immediate Release

 

Contact:           Fred Stokes: 662-476-5568

                        Michael C. Stumo: 860-379-6199

 

OCM Praises Court Decision Upholding Missouri Price Discrimination Law

 

The Organization for Competitive Markets (OCM) praised a court decision released today which upheld a Missouri law prohibiting price discrimination in the livestock market.  The law, passed by the Missouri legislature in 1999, prevents meat packers from discriminating against producers in purchasing livestock except for reasons of quality, transportation costs, or special delivery times.  Before the law took effect, the American Meat Institute (an association of large meat packers) and other meat packer interests sued the state to prevent the law from taking effect.

 

The meat packing interests succeeded in persuading the U.S. District Court in Missouri to set aside the law on the claim that it unconstitutionally affected interstate commerce.  The state appealed. 

 

Today, the United States Court of Appeals for the Eighth Circuit overturned the lower court by deciding that the law was a valid attempt by a state legislature to protect its agriculture economy.  The decision is available on the OCM website (http://www.competitivemarkets.com/whats_new/).

 

“This is a great victory for independent farmers and ranchers,” said Fred Stokes, president of OCM.  “Producers worked very hard for state laws banning price discrimination by meat packers.  When the meatpackers succeeded in halting the enforcement of the law, it was a very bad day for justice.”

 

The Missouri law was a part of a multi-state legislative effort spearheaded by Cap Dierks, OCM board member and Senate Agriculture Committee chair in Nebraska, and Jack Kibbie, OCM member and Iowa state senator.  A similar price discrimination law was passed in South Dakota in 1999 and struck down by a federal court there.  The attorney general for South Dakota did not appeal.

 

“OCM believes that price discrimination is a major problem which has driven producers out of business,” stated Keith Mudd, vice president of OCM.  “Independent producers are just as efficient as the big corporate or packer-aligned producers.  But if packers discriminate against us in the marketplace for the same or better quality livestock, the corporate producers will take over.”

 

“This victory will give tremendous impetus for states to take matters into their own hands next year,” predicted Michael C. Stumo, general counsel for OCM.  “The federal Packers & Stockyards Act prohibits price discrimination, but USDA enforcement has been nonexistent.  Missouri has taken the lead in promoting competition and protecting their agriculture economy from abuse of private market power.  They should serve as an example to other states.”

 

The Organization for Competitive Markets is a multidisciplinary, nonprofit group of farmers, ranchers, academics, attorneys, business persons and policy makers dedicated to reclaiming the agricultural marketplace for independent farmers, ranchers and rural communities.

 

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