GIPSA rule focus of Senate Ag Committee meeting

by Meat&Poultry Staff
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WASHINGTON – Questions and frustrated comments from the members of the Senate Agriculture Committee were directed to Joe Glauber, US Department of Agriculture chief economist, during a June 28 hearing on the state of the US livestock industry, according to the American Meat Institute. The livestock marketing rule proposed by USDA’s Grain Inspection Packers and Stockyards Administration took center stage with Glauber declaring the rule appears to cost more than $100 million – a threshold that should have triggered an economic impact analysis before the massive proposed rule was published in June 2010, AMI said.

In opening remarks, Sen. Pat Roberts (R-Kan.) said, “To be perfectly blunt, this rule as proposed looked like a trial lawyers Full Employment Act,” he said. “Better yet I'll read a quote from Administrator Mr. [Dudley] Butler regarding the core of the material in the rule. His quote, ‘That's a lawyer’s dream – a plaintiff lawyers dream.’ He was a plaintiff's lawyer.

“I understand part of government service is that folks with diverse backgrounds and experience will fill the political positions and that is usually a good thing,” Roberts added. “We need people with real-world experience helping to run our government. The problem is when those serving seem to have trouble checking their past agendas at the door. In this instance, since we're talking about livestock, it seems like the fox is guarding the henhouse and we're missing a few hens.”

In prepared testimony submitted by USDA, the Department acknowledged the economic analysis is now being done at the urging of Congress. A team headed by Glauber “is studying the rule and preparing the necessary cost benefit analysis, USDA said. His analysis will reflect the comments and especially the cost-related comments that were received by the agency. We have no preset timeline for completing this rulemaking. Our focus is on getting the rule done right and making sure that outstanding issues or concerns are addressed properly.”

Roberts probed Glauber about whether the analysis will consider the potential chilling effect it could have on marketing agreements between livestock producers and meat processors that have contributed to the success of the meat and livestock sector. Glauber said that the potential impact is a “very big issue that figured into lots of the comments received.”

Steve Hunt, US Premium Beef CEO, said the valued-based pricing his company uses is necessary to attract cattle for some of their key programs like branded, natural and age verified.

“Our records show that producers of all sizes have benefited from USPB’s value-based system. However, our smallest producers typically have earned the largest premiums per head,” Hunt said. “Through fiscal year 2010, USPB has purchased more than 8.3 million head of cattle since beginning operations. Eighty-three percent of USPB deliverers ship less than 500 head per year. In analyzing the top 25 percent of all the lots of USPB cattle delivered since we began operations, the group of producers with the highest average premium delivered less than 250 head per year, earning a premium of $63.48 per head.

“The second-highest premium group consists of producers who delivered less than 100 head per year, with a premium of $62.92 per head,” he added.

Sen. Chuck Grassley (R-Iowa) asked FSIS Administrator Almanza about the status of USDA’s response to a Farm Sanctuary petition asking that all non-ambulatory livestock be condemned, noting that many hogs are simply fatigued and there are no food-safety gains to be made by not permitting them to rest, recover and be processed. Almanza said the agency is still reviewing comments, but noted that “concerns with down swine are totally different than concerns with down beef animals.”
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