Industry groups critical of proposed livestock rule
June 21, 2010
by Bryan Salvage
WASHINGTON – Late last week, the American Meat Institute said a proposed rule attempting to dramatically change how livestock are procured and marketed in the U.S. meat industry is a “regulatory end-run” around judicial rulings that would have a significant impact on livestock producers and the meat industry. Officials with A.M.I. and the National Cattlemen’s Beef Association are critical of the U.S. Department of Agriculture Grain Inspection, Packers and Stockyards Administration’s plans for a proposed rule to be published in the Federal Register regarding livestock and poultry marketing practices.
A.M.I. warns that if finalized, the rule could dismantle many business models for livestock marketing and procurement. Packers who own cattle feedlots, for instance, would no longer be permitted to sell their livestock to other packers and would instead be forced to sell their cattle only to the packing division of their company. The same would apply to pork companies that raise pigs. This would harm meat companies with livestock production divisions and other packers who have come to rely on them as a source for animals.
“U.S.D.A. is attempting to turn the clock back on the livestock and meat marketing practices that have made the U.S. meat production system the envy of the world and that have delivered the most abundant and affordable meat products available to the American consumer,” said Mark Dopp, A.M.I. senior vice president of regulatory affairs and general counsel.
“Courts have affirmed that our industry is dynamic and competitive and has rejected U.S.D.A.’s arguments repeatedly,” Dopp added. “Now, in the face of repeated judicial rejection of their arguments, U.S.D.A. is engaging in a regulatory end-run and attempting to change the law through administrative fiat. This is not an appropriate role for the Department to play and could potentially cause harm and enormous disruption.”
N.C.B.A. president Steve Foglesong said while his association is still looking at the details of the proposal, it has serious concerns with any efforts to increase government intrusion in the marketplace.
“Cattle producers support free-market principles and we deserve the right to enter into private negotiations between willing buyers and sellers — just like other sectors of American business,” he said. “N.C.B.A. will fight to protect the use of contract and alternative marketing arrangements in the cattle industry to satisfy the demands of our consumers."
Foglesong said N.C.B.A. is encouraging U.S.D.A. to closely involve producer input throughout every step of the rule-making process to make sure the final rule supports commerce that’s fair, open and transparent without undue government intrusion that would hinder producers’ ability to market cattle when, how and where they want to.
The proposed rule is scheduled to be published in the Federal Register on June 22. N.C.B.A. plans to submit detailed comments during the 60-day comment period.