Fight over livestock ownership begins anew in Congress

WASHINGTON -- Not for 14 years had South Dakota cattleman Herman Schumacher culled his herd because of severe drought. Retail beef prices are higher now, but his cows are bringing only $35 for every 100 pounds they weigh, down $15 from 1988.

He and other small-scale producers, believing meatpackers are manipulating markets to pay lower prices to ranchers and farmers, want Congress to stop meatpackers from owning cattle and hogs.

"There is no greater evidence that something is wrong than to witness the record retail prices that you as consumers are paying and the tremendous losses producers are experiencing," Schumacher told the Senate Agriculture Committee last week.

Senators from Plains states lost a battle in the spring to add the restriction to the new farm bill. They are trying again as drought and low prices batter producers.

Legislation pushed by Sen. Tim Johnson, D-S.D., would require processors to sell off cattle and hogs they own and prohibit them from owning or controlling livestock more than 14 days before slaughter.

"Ranchers have fewer choices than ever as to where to sell their livestock," Johnson said. "If meaningful competition is not restored to cattle and hog markets, livestock producers in the U.S. will become low-wage employees on their own land."

Lucrative contracts

The issue is not simply producer versus packer. Some producers have lucrative contracts with packers and strongly disagree with supporters of the ban.

Opponents of the ban agree that markets appear to be distorted. They insist, however, that banning packer ownership will not make the industry more competitive and actually could do more harm than good.

"If an investigation was done today, there is evidence that prices have been controlled and in fact manipulated," said Sen. Larry Craig, R-Idaho. But "you're still going to get concentration because of the nature of the world market today."

The Bush administration is urging Congress to hold off on legislation and instead study why prices for cattle producers do not match the health of the industry's processors, wholesalers and retailers.