U.S. Senators Mike Enzi, R-Wyo., Tim Johnson, D-S.D., Chuck Grassley, R-Iowa, and Jon Tester, D-Mon., introduced a bill Thursday, May 19, that would target unfair meat packer practices that negatively influence and impact independent ranchers and farmers.

“This bill is common sense. Some bad actors have been known to stack the deck in sale barns and this bill protects market competition by prohibiting packers from using prices in livestock contracts that they directly influence. American ranchers produce the finest quality meat and they only ask that they get the price they deserve when they take their livestock to market,” said Enzi.

“The top four multi-national meat-packing companies today control roughly 85 percent of the domestic slaughter capacity in the United States,” said Johnson. “It is increasingly tough for independent farmers and ranchers to gain fair market access. This bipartisan bill will keep our farmers and ranchers in the fold and ensure that they get a fair price for their product.”

“America’s family farmers are the most productive in the world, yet they often have a hard time getting a fair shake in the marketplace. Bringing transparency to the marketplace and ending price manipulating practices carried on by some of the large packers will create a healthy, competitive environment for small and large producers and packers alike,” said Grassley

“A level playing field is essential for our family farms and ranches to compete and remain a strong part of Montana’s economy,” said Tester. “This common sense bill will bring transparency and accountability to the livestock industry and help strengthen jobs and opportunities for Montana’s number one industry.”

The Livestock Marketing Fairness Act would put ranchers and farmers on equal footing with packer-owned herds by amending the Packers and Stockyards Act of 1921 to end certain anti-competitive forward marketing contracts and ensure that the ranchers and farmers have full access to the marketplace.

In recent years, the meat packing industry has become increasingly concentrated with only a handful of firms controlling the majority of the domestic cattle and hog slaughter. As a growing number of large packing operations own their own livestock or control them through forward contracting agreements, these firms are able to buy from themselves when prices are high and buy from others when prices are low.

The bill would:

  • Require marketing agreements to have a firm base price derived from an external source. This guarantees that local contract prices are not subject to manipulation by packer owned herds.
  • Call for future forward contracts for livestock (cattle, hogs and lambs) to be traded in public markets where buyers and sellers can witness bids and make their own offers. This openness ensures market competition through multiple offers
  • Exempts producer owned cooperatives, packers with low volumes and packers who own only one processing plant. This exemption targets the source of price manipulation and ensures that the business practices of small family-owned processors are not impacted by the law.
  • Guarantees that trading is done in quantities that provide market access for both small and large livestock producers.
The legislation would allow ranchers and farmers to continue choosing the best methods for selling their livestock and would improve the stability and openness of forward contracting to provide ranchers and farmers more options to sell their animals.