http://billingsgazette.com/news/state-and-regional/montana/article_88d2a91d-f601-5550-ae43-94aee28f55cd.html

Northern Plains note: Ending the monopoly meatpackers hold over Montana ranchers is a major issue Northern Plains has been working on for many years.

By TOM LUTEY
Of The Gazette Staff‌

Progressive ranchers have a beef with President Barack Obama, who as a candidate promised to end unfair trade practices in the meat industry.

Livestock producers who supported Obama in 2008 said recently the president needs to pull the trigger soon on regulations intended to give ranchers more bargaining power when dealing with meatpackers. The reforms empowering the Grains Inspection, Packers and Stockyards Administration to do more for ranchers were drafted one year ago and are now losing congressional support.

“Farmers and ranchers need a fair marketplace now more than ever,” said Roger Johnson, National Farmers Union president. “We have waited long enough.”

At issue is the way the nation’s largest meatpackers buy cattle. Ranchers say too often meatpackers are making private sale arrangements, both between themselves and with individual cattle operations. And when sales are private, other ranchers can never quite be sure they’re getting as good a deal.

It would be fairer to ranchers, said Bill Bullard, of the Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America, if the private sales arrangements were made public. He suspects ranchers selling cattle publicly in auction houses would begin asking considerably more for their cattle if the meatpacker deals made in private were exposed. As it is, the number of sales done publicly is declining, which is bad for competition, Bullard said.

“In our cattle industry in 2005, about 52 percent of all cattle were sold in a cash market. In 2010 that fell nationally to just 37 percent,” Bullard said. “The packers can pick up residual need supplies without having to competitively bid for cattle in a cash market.”

The new rules would make it easier for a rancher who believes he’s been harmed by such practices to call for government intervention. Currently, before the government will intervene in a market fairness issue, ranchers must prove a meatpacker’s business practices caused competitive injury to the entire marketplace. The rules proposed last year would lower the bar, requiring the rancher prove only his own operation was treated unfairly. RCALF-USA, based in Billings, supports the change.

However, an equally large number of ranchers have sided with the meatpacking industry in attempting to keep the proposed rule changes off the books.

The National Cattlemen’s Beef Association earlier this month persuaded the House of Representatives to cut off all funding for the regulations from the 2012 budget funding agriculture, rural development and the Food and Drug Administration.

NCBA is also lead by a Montanan, Melville rancher Bill Donald, who doesn’t think ranchers will be better off if the proposed rules take effect.

Any rancher involved in a private sale has done so of his own volition and has probably spent years developing livestock to a buyer’s specific wants, Donald said. He probably is getting more than the cash market price, but buyers have threatened that those premiums will end if the prices become public.

“The problem that we have is that the people who are on the buying end have said if this passes they’re going to put a hold on all premiums and discounts,” Donald said. What NCBA wants is a full economic impact study of the new rules before the U.S. Department of Agriculture thinks about enacting them.

Convincing the House to cut funding for the new rules was one way to buy time for further study, Donald said.

Bullard, on the other hand, would like to see the rules enacted sooner rather than later. The USDA has already collected 60,000 public comments about the rules, now it’s time to act.

Bullard said the new regulations will find better support in the U.S. Senate, where he’s optimistic the funding will be restored. The House cuts were approved by a 14-vote margin. That’s narrow enough that it could change, he said.

The Obama administration said last week that is opposes the House cuts, which would prevent the new livestock market rules from being carried out.

The White House said concerns about the new rules should be addressed through the standard rulemaking process, not through appropriations riders.