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Chick-News.com Poultry Industry News, Comments and more by Simon M. Shane

Bill to Allow Livestock Auction Markets to Invest in Meat Packing Operations

08/18/2022

The Packers and Stockyard Act prevents owners of livestock auction markets from owning or managing packing plants to avoid conflicts of interest.  A bill sponsored by Senators Ben Ray Lujan (D-NM) and Joni Ernst (R-IA) proposes an amendment to the Packers and Stockyards Act to allow integration.  Senator Ernst stated, “Allowing livestock auction owners to invest in local and regional meat packers will expedite the safe processing of meat, increase competition within the industry, and ultimately lower meat costs for consumers.”

 

The legislation is supported by a number of livestock groups including the National Cattlemen's Beef Association and the Iowa Cattlemen's Association.

 

Bob Noble, President of the Iowa Cattlemen's Association, stated “Daily slaughter capacity in Iowa falls short of our fed-cattle production.  We recognize the value of livestock auction markets in our supply chain, representing the interests of both sellers and buyers.”

 

The USDA is extremely conscious of the disruption caused by COVID that affected a large number of workers in plants with capacities in excess of 2,000 head per day.  In April and May of 2020, hog and beef slaughter was almost halved by a shortage of workers highlighting the vulnerability of the red meat industry to a highly transmissable disease.  For various reasons, the poultry industry was affected to a lesser degree compared to red meat plants with product supplied to stores albeit with sharp increases in price for chicken products.

 

It is questioned whether fragmentation of the packing sector is advisable or will, in any way, contribute to a temporary problem which has now been resolved.  Including the concept of “safe processing of meat”, to support the legislation may be an unrealized objective.  Although the proposal may appear politically expedient, it would be advisable to consider unintended consequences and to revisit why the restriction was considered necessary in the first instance.


 
Copyright © 2022 Simon M. Shane