010536 Federal Court Upholds Missouri Beef Pricing Law

St. Louis, MO - A Missouri law aimed at leveling the playing field for smaller, independent beef producers is constitutional, a federal appeals court has ruled.

The decision, issued Monday by the 8th U.S. Circuit Court of Appeals, could give other states more leeway to regulate competition in the livestock industry.

The law passed in 1999 by the Missouri Legislature requires beef packers to pay the same price for cattle they buy from different producers, and to make those prices public. Larger producers often receive premiums for the livestock, giving them a competitive advantage.

The appeals court's ruling reversed a decision by U.S. District Judge Scott O. Wright, who last year struck down the law, saying it unfairly burdens interstate commerce because it discriminates against out-of-state beef packers.

In its ruling, the appeals panel said that because the law only regulates livestock sold on Missouri soil, it is not an unfair restriction on interstate commerce.

“It is certainly within the purview of the Missouri legislature to regulate the manner in which livestock is sold within its borders when federal law supports such legislation,” the court said.

Under the Missouri law, livestock producers can sue for three times the damages and attorneys' fees if they aren't offered the same price as the packer offers another Missouri producer for meat of similar quality.

The suit opposing the law was filed by the American Meat Institute, the Missouri Cattlemen's Association and the Missouri Livestock Marketing Association.

Gary Mahnken, president of the cattlemen's group, said out-of-state packers have promised to curb their purchases of cattle in Missouri if the law takes effect.

“It's very disturbing to me and all of our group because it's going to destroy our market here,” said Mahnken, who runs a 6,000-acre cattle farm about 50 miles east of Kansas City. He promised an appeal.

“I know we're going to fight tooth-and-nail,” Mahnken said.

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