Leveling the field
Making things fair for buyers and sellers in the livestock market is the goal of legislation recently introduced by Sen. Mike Enzi, R-Wyo., and co-sponsored by Sen. Byron Dorgan, D-N.D.
The Livestock Marketing Fairness Act, introduced last week in the Senate, is an idea that goes back a number of years, said Link Reinhiller, chairman of Dakota Resource Council's Trade and Livestock Task Force.
Small and big producers alike would have more say in their selling price and avoid being locked into a certain buyer.
"DRC and other livestock organizations have had concerns about enforcement of the 1921 Packers and Stockyards Act," Reinhiller said. "The act prohibited packers from engaging in unfair and deceptive practices."
Reinhiller said he feels the United States Department of Agriculture has been looking the other way on unfair buying practices.
"You've had fewer and fewer buyers available as years go by," Reinhiller said "In many cases they aren't doing much competing with each other."
The bill, if passed, would require that forward contracts for livestock be traded in public markets and would exempt producer-owned cooperatives, packers with low volumes and packers who own only one processing plant, according to DRC information.
Requiring contracts to have a fixed base price on the day the agreement is made will level the playing field, Reinhiller said.
"It's like Dickinson State University playing a junior high team and then saying 'what's the big deal, you both have 11 players,'" Reinhiller said. "You need referees to enforce the rules."
Dorgan said he got behind the bill because he felt it's important to keep things fair.
"Our livestock producers are put at a very big disadvantage dealing with the big packing houses," Dorgan said. "I want to put farmers and ranchers on some equal footing."
The bill also requires trading is done in quantities that provide market access for both small and large livestock producers.
"Many large feedlots have a working arrangement with a packing plant," Reinhiller said. "There is very little competition in regards to establishing a price."
"Farmer/feeders", as Reinhiller calls them, often don't have much choice when selling and are often locked into one buyer.
"Wyoming's livestock producers can compete in a fair market, but they are at a disadvantage now to the large meat packers," said Enzi in a statement. "We need to amend the Packers and Stock