990724 "Swat Teams" to Study Packer Actions in SD

Washington - The U.S. Agriculture Department said it will send “rapid response teams” to South Dakota to study if meat packers in the state are violating federal laws and cheating ranchers.

The decision comes after a Democratic lawmaker asked the Clinton administration to probe allegations that meatpackers stopped buying some livestock in South Dakota because of a new state law that requires companies to pay uniform prices.

Under the law that went into effect July 1, farmers can sue packers if they believe they have not received the highest possible price. But 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.

“Any indication that South Dakota producers are being treated illegally will be promptly and vigorously investigated,” USDA undersecretary Mike Dunn said in a statement, adding that his office has receive numerous calls from South Dakota producers since the beginning of the month.

The government officials will travel to Sioux Falls, Brookings and Mitchell to meet with producers individually.

The American Meat Institute, which represents most major meatpackers, recently filed a lawsuit challenging the South Dakota law. AMI 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.

But farm groups across the nation have criticized the growing concentration in the livestock industry, contending that ranchers and farmers are not paid fair prices because only a handful of companies control the market.

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.

This Article Compliments of...