990710 Senator Seeks Review of Meatpacker Actions in SD

Washington - A Democratic lawmaker asked the Clinton administration to probe allegations that meatpackers have stopped buying some livestock in South Dakota because of a new state law that requires companies to pay uniform prices.

The request for an investigation comes amid efforts by the Senate and House Agriculture committees, livestock industry groups and meatpackers to draft a federal bill for mandatory price reporting.

Sen. Tim Johnson, a South Dakota Democrat, requested an “emergency review” by the Agriculture and Justice Departments of whether U.S. meatpackers could lawfully refuse to buy slaughter livestock on the spot market in South Dakota.

The American Meat Institute, which represents most major meatpackers, recently filed a federal lawsuit challenging the South Dakota law, which went into effect on July 1.

The industry group contends the law is unconstitutional because it requires the same daily price be paid to farmers in South Dakota, other states and even Canada for similar-quality livestock, regardless of changes in market conditions.

Under the state law, farmers could sue packers if they believe they have not received the highest possible price.

Some of the nation's biggest meatpackers said they will no longer buy slaughter livestock on the spot market in South Dakota because of legal liability.

“Livestock producers strongly believe the actions are politically charged and over-dramatized steps that stretch the context of the South Dakota law,” Johnson said in a letter to Agriculture Secretary Dan Glickman.

A spokesman for Glickman declined to comment, saying he had not yet seen the letter. “Secretary Glickman has repeatedly expressed his concern about concentration in various agricultural industries,” the spokesman said.

Farm groups across the nation have criticized the growing concentration in the livestock industry, contending that ranchers and farmers are not paid fair prices.

IBP Inc., ConAgra Inc., Cargill Inc. unit Excel, and Farmland National Beef control about 80% of the U.S. beef market. The same companies plus Smithfield Foods Inc. also control more than half of the U.S. pork market.

Meatpackers, alarmed at the state laws springing up around the nation, reluctantly agreed this spring to work with farm groups on federal legislation for mandatory price reporting of cattle, pigs and sheep.

Aides with the House and Senate Agriculture Committees have indicated they hope to get a final bill reported out of committee before the August recess.

Officials with the American Meat Institute were not immediately available for comment. The industry group has previously described the South Dakota law as a “misguided effort” to help farmers.

“Now is the time for all of us to make sure we get this mandatory price reporting legislation on the federal level worked out,” said Dale Moore, executive director for legislative affairs at the National Cattlemen's Beef Association.

“These actions on the state level points to a tremendous amount of grass- roots support for more price transparency in the market,” Moore added.

Adding to the confusion over the new South Dakota law is the state agriculture department's slow progress in finalizing rules for meatpackers to comply with the legislation, according to livestock industry experts.

South Dakota, Minnesota, Iowa, Missouri and other states rushed to adopt mandatory price reporting laws after hog prices fell last winter to Depression Era lows. Cattle and sheep prices have also been depressed for some time.

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