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Grassley says he'll reintroduce packer ban legislation

Grassley says he'll reintroduce packer ban legislation
NFU commends Grassley, says concentrating ownership is bad for competition.

Updated with bill number, comments from Grassley.

Iowa Senator Chuck Grassley, a Republican, introduced S.2911, a bill amending the 1921 Packers and Stockyards Act to make it illegal for a packer to own, control or feed livestock, on May 10, 2016.

Related: Consolidation increases calls for livestock packer ownership ban

Iowa Sen. Charles Grassley said concentration in the marketplace is impacting the beef market. (Photo: Scott Olson/Thinkstock)

“An effective and efficient marketplace is one where packers that control all harvest capacity of the industry do not also own a majority of the animals to be processed,” Grassley said in a media statement.  “The fact of the matter is that the market continues to become less competitive.  It’s time to see if ending packer ownership of livestock will reverse that trend.”

National Farmers Union commended Grassley.

“The livestock market today is heavily concentrated among a handful of conglomerates, and our family farmers and ranchers are forced to compete in an increasingly uneven playing field in the marketplace,” said NFU president Roger Johnson in a media statement.

Large companies have been merging to create new business giants, leaving independent producers with fewer choices.

“Recent mergers and acquisitions – such as the mergers of JBS USA and Cargill pork divisions or Tyson Foods and Hillshire Brands – have only advanced the concentration in the packing industry,” Johnson said. “When you concentrate livestock ownership among a few multinational firms, competition in the livestock sector is severely reduced and there’s a strong potential for market price manipulation. In addition, consumers are experiencing increased food costs at the grocery store while the family farmer is receiving pennies of every dollar spent on food.”

Grassley's bill has four exemptions:
1. An arrangement entered into within seven days (excluding any Saturday or Sunday) before slaughter of the livestock by a packer, a person acting through the packer, or a person that directly or indirectly controls, or is controlled by or under common control with, the packer;
2. A cooperative or entity owned by a cooperative, if a majority of the ownership interest in the cooperative is held by active cooperative members that own, feed, or control livestock; and provide the livestock to the cooperative for slaughter;
3. A packer that is not subject to mandatory price reporting laws; or
4. A packer that owns one livestock processing plant.

Grassley has introduced similar versions of the legislation in previous Congressional sessions.

Source: National Farmers Union, Sen. Charles Grassley

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