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Cattle Groups Discuss GIPSA Rule's Potential Impact on Cattle Producers

Cattle Groups Discuss GIPSA Rule's Potential Impact on Cattle Producers
Rule designed to keep what has happened in poultry and hog industry from happening to cattle.

The Rocky Mountain Farmers Union, Independent Cattle Growers of Colorado and Independent Cattlemen of Wyoming hosted five public meetings last week focusing on informing cattle ranchers about the importance about USDA's proposed Grain Inspection, Packers and Stockyards Administration rule. The meetings included a presentation called Under Siege by R-CALF USA about the current competition state in the nation's cattle industry. R-CALF CEO Bill Bullard says the proposed rule disrupts the strategy of meatpackers to capture control over the live cattle supply chain and that's why they are pulling out all the stops to kill it before it becomes a part of federal regulations.

Bullard says the GIPSA rule is designed to break the cycle meatpackers have used very successfully to reduce competition in the hog and poultry industries and also reduce the number of participants in those industries. He says cattle producers need to critically look at the rule because it will prevent the meatpackers from capturing any further control over the live cattle supply chain just as they have done with the hog and poultry supply chain. According to Bullard, the strategy of meatpackers has resulted in a 90% loss of independent hog producers in the last 30 years, which equals over 600,000 hog producers.

Bullard says the overall effect of the strategy is to lower the price of all livestock below production cost, forcing hundreds of thousands of producers to leave the industry and leave those remaining with one economic choice. He says that choice is to enter a production contract giving the meatpacker full control over production and marketing terms and livestock value.

Bullard states the GIPSA rule will require accountability on the part of the meatpacker preventing them from engaging in the anticompetitive practices that force more producers out of the cash market each day in order to depress cattle prices. If immediate steps aren't taken to block the strategy of the meatpackers Bullard says cattle producers need only to look at the now-gutted hog industry to see their future.

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