Blog for Rural America

The Center for Rural Affairs, a private, non-profit organization, is working to strengthen small businesses, family farms and ranches, and rural communities. Permission to reprint items from this web log is hereby granted, on the condition that clear credit is given to the original source of the material. If the blog provides information for a story, please let us know by sending an email to johnc@cfra.org.

Thursday, November 10, 2005

Action Alert - Competition in Livestock Markets

- from our friends at the Western Organization of Resource Councils

Action Alert: Call your Representative to Return Competition to Livestock Markets

Representatives Earl Pomeroy (D-ND), Barbara Cubin (R-WY) and Stephanie Herseth (D-SD) have introduced the Captive Supply Reform Act, H.R. 4257. The Act would require packers to bid for livestock in an open, public market and pay a fair price to the farmers and ranchers who raise that livestock.

Your call of thanks is needed to show your support for this important bill.

What You Can Do:

Call your Representative and thank him or her for cosponsoring H.R 4257. Ask you Representative to urge the leadership of the House Agriculture Committee to hold hearings on H.R. 4257.

Contact friends and family in other states and ask them to contact their Representatives to sign on to H.R. 4257, too.

You can reach your Representative by calling the Capitol Switchboard at
202-224-3121 and asking for your Representative by name.

You can also find contact information for your Representative by logging on to http://www.house.gov.

What to Say When You Call:

Thank you for taking this important step in returning competition to the livestock markets by sponsoring the Captive Supply Reform Act, H.R. 4257.

This Act is vital to returning competition to the livestock markets.

I am a [consumer or livestock producer] and I support fair markets and strong economies. This legislation would make the contracts fair, and open to everyone, instead of the secret backroom deals we have now.

I ask you to encourage your House Agriculture Committee leadership to hold hearings on this important bill.

Background:

Meatpackers acquire half of all cattle and hogs they slaughter through what are known as captive supplies - livestock they own themselves or control through contracts with farmers and ranchers. These livestock are called captive because they are tied to one packer instead of being subject to normal market forces of supply and demand.

Four companies buy 80% of the cattle and half of the hogs that end up as steaks and chops on American dinner tables. In such a concentrated market, buyers (the packers) can - and do - use captive supplies to manipulate markets.

The Captive Supply Reform Act fixes the problems with captive supplies without prohibiting their use. Rather than banning contracts, the Captive Supply Reform Act would make two reforms to restore competition in the market for livestock contracts.

The Act would:

Require a fixed base price on contracts and marketing agreements

Require that contracts be traded in open, public markets - no more secret deals.

The Captive Supply Reform Act would restore competition by making packers and livestock producers bid against each other to win contracts. Forward contracts and marketing agreements allow packers and producers to coordinate supply and reduce risk, but as currently negotiated - in secret, with all the bargaining power on one side - they depress prices and shut small and independent producers out of markets. The Captive Supply Reform Act would require such contracts be traded in open, public markets to which all buyers and sellers have access.

H.R. 4257 is a companion bill to S. 960, sponsored by Senators Mike Enzi (R-WY), Byron Dorgan (D-ND), Craig Thomas (R-WY), Tim Johnson (D-SD) and Kent Conrad (D-ND).

For more information on the Captive Supply Reform Act post a question or comment here or at http://www.worc.org/ - or contact Jeri Lynn Bakken, jerilynn@worc.org - or contact John Crabtree, johnc@cfra.org

Center for Rural Affairs
Values. Worth. Action.

1 Comments:

  • At 7:28 PM, Anonymous Anonymous said…

    Thank you for posting this! I will make sure I contact my Representative right away and tell them to support this bill!

     

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