A tiny handful of giant meatpackers and processors have been underpaying and unfairly treating livestock producers for decades. These packers control the livestock markets and their market power harms independent producers and the prosperity of rural communities.
In 1921, when Congress passed the Packers & Stockyards Act, it was the most comprehensive antitrust legislation enacted in this country. Back then, five companies controlled between 75% and 80% of all interstate livestock slaughter. Today, the livestock packing industry is even more concentrated. Three packing companies control over 80% of all livestock slaughter and have taken control of the marketplace in beef and hogs.
These companies manipulate the market and keep the real prices they pay for hogs and cattle a secret. Packers use livestock they own or control under contract, known was captive supplies, to drive down prices to livestock producers. When the cattle prices are high, packers slaughter the cattle they already own or control. When the prices are low, they slaughter my cattle.
This manipulation impedes the ability of ranchers to earn a decent price for their cattle sold on the cash market. A 2006 study by the U.S. Department of Agriculture found that use of captive supplies cost cattle producers $69 per head and hog producers $32 per head. In total, captive supplies cost family farmers and ranchers nearly $2 billion in 2006--four years later those losses continue to increase.
USDA needs to address the market power of the large packers. The agency should develop an open and competitive market by requiring packers to pay a firm bid price for all livestock they procure and require them to sell livestock in an open public market where all buyers and sellers have access.
Ranchers from around the country are gathering in Fort Collins this week to focus on corporate concentration and lack of competition in the livestock industry. On Thursday, August 26, ranchers are joining with meatpacking workers, consumers, urban farmers, and food justice activists for a Public Forum to Save Rural America and Family Ranching. Sponsored by the Western Organization of Resource Councils, Rocky Mountain Farmers Union, R-CALF, and Food & Water Watch, the forum begins at 7 p.m. in the Marriott Hotel of Fort Collins, 350 East Horsetooth Road.
Then, on Friday, ranchers have an opportunity to voice their concerns during a
USDA and Department of Justice workshop, "Agriculture and Antitrust Enforcement Issues in Our 21st Century Economy: Livestock." The workshop begins at 9 a.m., at Colorado State University, Lory Student Center, 1101 Centre Avenue Mall.
Secretary of Agriculture Tom Vilsack, Assistant Attorney General for the Justice Department's Antitrust Division Christine Varney, and U.S. Attorney General Eric Holder will participate in the workshop.
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