020360 Meatpackers Protest Ownership Ban

Washington - Groups representing cattle and hog producers warned of massive disruption in their industry if Congress prohibits meatpackers from owning cattle and hogs.

The National Cattlemen's Beef Association and the National Pork Producers Council released a study suggesting a ban would cost their industries at least $4 billion and might force some processors to move their operations to Canada or Mexico.

"There is a price that the industry will pay," said Chandler Keys, a lobbyist for the beef group.

The study was done by the Sparks Companies Inc., an agricultural research and analysis firm.

The ban, which was included in a Senate-passed overhaul of farm programs, would reduce the value of livestock, feed lots and breeding facilities throughout the country while increasing packers' operating costs, the study said.

Processors would be required under the Senate bill to sell off cattle and hogs they own and forbidden to own or control livestock more than 14 days from slaughter.

The proposal is among the biggest unresolved issues facing a House-Senate committee struggling to write a compromise farm bill. Lawmakers had hoped to finish work on the legislation before they head home for a two-week recess.

The prohibition is popular with many small-scale producers in the Midwest, who believe that meatpackers manipulate markets to lower the prices they have to pay farmers and ranchers.

"Rural America will pay the ultimate price if Congress doesn't pass this amendment and say that independent producers should be able to compete in the marketplace," said Sen. Charles Grassley, R-Iowa.

Bob Martin, a spokesman for Sen. Tim Johnson, D-SD, said the study's conclusions were "wildly unsubstantiated."

Advocates of the ban are backed by a small group of agricultural economists and legal experts, who argue that economic effects of the prohibition have been overstated by the industry. The legislation "addresses real problems in the competitive environment of the livestock industry," they said in a recent report.

Packers say they need control over cattle and hog stocks to ensure adequate supplies of acceptable-quality livestock to keep plants running at full capacity. The Agriculture Department estimated recently that the top four beef processors control a third of the cattle they slaughter.

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