990758 Farm Group Seeks U.S. Livestock Price Law

Washington - A family farm group urged the Senate Agriculture Committee to strengthen a ban on price discrimination as part of planned legislation requiring meatpackers to report prices paid for cattle, sheep and hogs.

Momentum has been building in Congress for a federal mandatory price reporting law since several Midwestern states rushed to adopt their own legislation after hog prices fell last winter to Depression-era lows.

The Senate panel is expected to draft a law this week to help small farmers get a fair price for their livestock from meatpackers, who typically buy most supplies through confidential contracts with large producers.

The Center for Rural Affairs, a Nebraska-based group representing family farmers, noted that an 80-year-old federal law is already on the books prohibiting price discrimination, but the U.S. Agriculture Department has failed to aggressively enforce it.

“Congress and the USDA must act decisively to ensure fair competition and a return to the original intent of the law,” said Chuck Hassebrook, director of the center. “In the absence of bold action, family farm hog production could largely end in a few years or perhaps months.”

The group urged the Senate panel to require meatpackers to offer the same price and terms to small farmers, who meet the same standards as large producers for product quality and time of delivery.

Purchases at auction barns and stockyards, where bids are made openly, would be exempt from the law, under the group's proposal.

South Dakota's new law was challenged last month in federal court as unconstitutional by the American Meat Institute and Smithfield Foods Inc. The meat industry contends that the law unfairly requires the same daily price to be paid to farmers in all U.S. states and even Canada for similar-quality livestock, regardless of changes in market conditions.

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

IBP Inc., ConAgra Inc., Cargill Inc. unit Excel, and Farmland National Beef, a unit of Farmland Industries Inc., control about 80% of the U.S. beef market. The same companies, plus Smithfield Foods, also control more than half of the U.S. pork market. Farmland Industries is North America's largest farmer-owned cooperative.

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