P.O. Box 6486

Lincoln, NE 68506

December 17, 2003 For Immediate Release

Contact: Steve Cady: 402.792.0041

OCM/Grassley Hold Competition Meetings in Iowa

Lincoln, NE ~ Michael Stumo, legal counsel for the Organization for Competitive Markets (OCM) and Mark Reisinger, legislative assistant to Senator Charles Grassley (R-IA), held a series of competition meetings in Iowa for hog producers on December 8, 9, and 10.

Scores of hog producers, along with a number of state representatives, attended meetings which were held in Winthrop, Forest City and Spencer.

“Price discovery in the swine industry is disappearing rapidly,” said Stumo. “We estimate that three to five percent of hogs sold in southern Minnesota and Iowa constitute the meaningful negotiated market. Those few transactions are setting the price for all other hogs in the country. This is an incredibly thin market which is far easier to manipulate than a high volume spot market,” noted Stumo. “I advise Iowa producers to consider asking the Iowa legislature to roll back the volume of contracted hogs to a less harmful level.”

Stumo pointed out that at least 85% percent of pork production is either packer owned or contracted covered by some sort of contract and there is little or no price negotiation for the rest. “Producers are forced to take the prices packers offer in order to gain shackle space. Producers need to determine who represents their interests. The national commodity organizations have become surrogates to the meat packers. OCM has established the Hog Competition Fund (HCF) to give hog producers the resources and representation to tackle these issues.”

Reisinger discussed several competition bills proposed this year by Senator Grassley, noting that OCM is an important advocate for competition at the federal level. “To date, Senator Grassley has crafted legislation that would require packers to buy at least 25% of hogs on the open market; prohibit packer ownership of livestock; prohibit livestock contracts from forcing producers to arbitrate disputes; and prohibit any packer that slaughters 20 million hogs annually from utilizing more than 10 million of its own hogs. Policy makers can no longer sit by idly and watch the destruction of American agriculture producers while simply paying lip service to them. Meaningful, effective legislation that Senator Grassley is proposing will help restore competition to the marketplace and, in the end, will revitalize rural economies and communities,” said Reisinger.

David Kruse of Commstock Investments, a noted market analyst, told participants that he was one of the original founders of OCM. “I am pleased and surprised at the tremendous influence OCM has generated in Washington and in the countryside in promoting positive solutions to market power problems in agriculture.”

HCF was created this year by OCM to represent producer interests on competition issues. The primary goals are to achieve a staged reduction in captive supply hogs, eliminate packer ownership, fix price reporting, and achieve fairness in contracting. Funding for HCF comes primarily from voluntary contributions of 10 cents per pig from producers.