020205 Meatpackers Look to Reverse Restrictions on Livestock

Washington - Meat industry officials say they are optimistic the Senate will reverse itself and kill tough new restrictions on processors' control of cattle and hog supplies.

The Senate narrowly approved the limits in December as an amendment to legislation extending federal farm programs, but packing companies say the restrictions could cripple their efforts to improve the consistency and quality of meat.

"We expect to see strong bipartisan support" for dropping the restrictions when the Senate returns to work on the farm bill, said Sara Lilygren, a lobbyist for the American Meat Institute, a packer trade group.

The amendment, which was approved 51-46, would ban packing companies from owning or having control of cattle or hogs within two weeks of their slaughter. Packers say that would make it difficult to procure adequate supplies of high-quality livestock and improve the consistency of the beef they sell to stores.

The anti-packer amendment is widely popular in the Midwest, and could be an issue in several Midwest states where Democrats are defending Senate seats.

"It is going to be very difficult to retain the amendment," Sen. Tim Johnson, a South Dakota Democrat who introduced the measure, said Thursday.

"We've had good support from agricultural organizations, all over the country, that has been broad based from left to right ... but I'm also enough of a realist to know that this amendment is in for a difficult time."

Packers say the legislation would outlaw the use of marketing agreements and certain kinds of contracts through which producers pledge to supply processors with livestock that have specific characteristics.

Johnson denies the legislation would do that, but in recent letters to hog farms, the Excel Corp. said the measure "could have far reaching implications that could drastically impact our industry."

Producers are divided over the ban. The National Cattlemen's Beef Association and the National Pork Producers Council are both opposed, but the American Farm Bureau Federation supports it.

Poultry is exempted from the Senate legislation, and so are packing houses owned by farmer cooperatives.

The Senate may return to work on the farm bill next week. Sen. Larry Craig, R-Idaho, is expected to propose stripping the packer restrictions from the farm bill and requiring the Agriculture Department to study the issue.

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