Referring to recent company mergers, such as Shuanghui International’s 2013 purchase of Smithfield, the largest pork producer in the U.S., and JBS’s purchase of Cargill pork, the senator believes his bill (S.2911) could be the key to a competitive market.
“An effective and efficient marketplace is one where packers that control all harvest capacity of the industry do not also own a majority of the animals to be processed,” Grassley said in a released statement. “The fact of the matter is that the market continues to become less competitive. It’s time to see if ending packer ownership of livestock will reverse that trend.”
Grassley has introduced the packer ban five times (including this year), but to no avail. When asked why this bill hasn’t been passed before, Beth Levine, the spokeswoman for Grassley, said, “It has passed the Senate in previous Congresses as part of the farm bill, but was taken out during committee negotiations to work out the differences between the House and Senate passed bills.”
She said the bill has remained the same much of the time.
Stating concerns for some producers and the industry as a whole, David P. Anderson, a professor and extension economist at Texas A&M University, shared his take on the bill from an economic perspective.
He explained that within the pork and poultry’s ownership structure, there are economies that have made those meats relatively cheaper and subsequently – more competitive. If the bill were to be enacted, it could make beef less competitive from a price standpoint when compared to other proteins.
“I think for producers who are really concerned about the structure of the beef industry and market power, they prefer to have this bill passed,” Anderson said. “But if that leads to higher cost, then we might argue that there aren’t a lot of winners from passing the bill – because it puts more total costs in the whole beef production system.”
Anderson also explained that producers who raise and feed their own calves, have their own packing plant and brand their own product are concerned that this bill might put them out of business. He said, “There’s a lot of unknowns in how a law like this might be implemented.”
- Progressive Cattleman
- Email Cassidy Woolsey