ORGANIZATION FOR COMPETITIVE MARKETS

P.O. Box 6486

Lincoln, NE 68506

Web site: www.competitivemarkets.com

Date: January 21, 2002 For Immediate Release

Contact: Fred Stokes: 662.476.5568

Michael C. Stumo: 860.379.6199

Meat Packers Continue Misinformation Campaign:

Excel Sends Inaccurate Letters to Thousands of Pork Producers – and -

USDA Representative Refuses to Equate “Control” with “Captive Supplies”

Meat packers and the American Meat Institute have continued providing misinformation on the packer feeding ban since its passage in the U.S. Senate last month as part of the Farm Bill. Their methodology is to intentionally misconstrue the legislative language and repeatedly speak of unproven “unintended consequences” that may result from this market facilitating measure.

The packer feeding ban will prohibit meat packers from “owning, feeding or controlling” livestock. It is supported by large majorities of the citizenry, as shown in all polls on the issue as well in the immense grass roots support for this legislation. Packer feeding of livestock is one part of the larger captive supply problem. Captive supplies are all livestock committed to delivery to a certain packer more than 14 days before slaughter.

However, the co-sponsors of the bill (Johnson, Grassley, Wellstone, Harkin, and Thomas) were clear that the word “control” does not include forward contracts and marketing agreements. In a statement in the Senate record, Senators Johnson and Grassley were clear that the word “control” is a loophole closer which prevents clever attorneys from circumventing the will of Congress. Control means substantial control over the production operation by a packer – not a mere contract right of delivery of cattle to a packer from an operation controlled by a producer.

Major agricultural states prohibit packer ownership and control of livestock but not contracting. Examples include Iowa and Nebraska. Both states have agricultural sectors that are as strong as other states. There is no evidence that packer feeding bans have harmed farmers in those states.

Further, in a USDA press conference last Friday (January 18, 2002), JoAnn Waterfield, acting director of Packers & Stockyards Programs for USDA, refused to state that captive supplies were packer controlled livestock within the meaning of the Senate bill. That statement was in direct response to a question by a Cargill/Excel attorney seeking a statement that “control” and “captive supplies” are the same. The USDA definition of captive supplies is “all livestock committed to a packer more than 14 days before slaughter.”

One of the most recent examples of the meat packer misinformation campaign is a letter sent by Excel to thousands of pork producers. (See full text below). Excel, a subsidiary of Cargill, not only says that control includes contracting – it claims that the bill “clearly prohibits almost all risk management tools that packers offer to producers.” This claim by Excel, one of the biggest meat packers in the country, and a major owner of cattle, is blatantly false and without support.

OCM sincerely hopes that decision makers, the media and the general public will disregard false claims and misstatements when determining whether the packer feeding ban is good public policy to facilitate a stronger agricultural marketplace which is resistant to abuses of market power.

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

*** Text of Excel letter to pork producers follows ***

Excel Corporation

151 North Main St.

Wichita, KS 67202

January 11, 2002

Dear Pork Producer:

We want to communicate with you today on an issue we are very concerned about. The U.S. Senate adopted an amendment recently that would prohibit packers from owning, feeding or controlling livestock for more than 14 days prior to slaughter.

This type of legislation is full of unintended consequences, and could have far reaching implications that could drastically impact our industry and the services we are legally allowed to offer producers. In our opinion, this amendment clearly prohibits almost all risk management tools that packers offer to producers. The term “control” includes forward contracting. If the intent is to eliminate forward contracting, then this takes away one of the most important risk management tools livestock producers have. This legislation could also eliminate or reduce our ability to offer long term supply contracts to producers, many of which have been very successfully in assisting producers in acquiring capital and reducing marketing risk.

Additionally, it could make illegal any number of successfully joint venture companies with pork processors and producers. It could eliminate successful programs companies have created with producers, assuming some production risk in exchange for the farmer producing a very specialized hog for a specialized export or branded market.

Many of us have experienced the disastrous effects emotionally charged legislation can have on the marketplace, such as the negative consequences that the Missouri and South Dakota price discrimination (sic) had the last couple years. We are very concerned this legislation could have the same negative effects on all involved in the Pork chain. We urge you to contract your lawmakers to express concern about this legislation. Legislators can be reached through the U.S. Capitol switchboard at (202) 224-3121.

We would also welcome the opportunity to discuss this serious issue further with you. If you would like to discuss this issue with us, or would like more information, please call Rich Gallant at (316) 291-3405 or Doug Ott at (316) 291-3062.

Sincerely,

Excel Corporation