Holden signs changes to state livestock law

JEFFERSON CITY, Mo. -- Meat packers pledged to resume paying cash for live animals in Missouri after Gov. Bob Holden signed legislation Friday repealing much of the state's unique price discrimination law.

Holden said the revised law, which took effect immediately, should end a financial drain on Missouri's farmers.

"With my signature, stability will return in Missouri's livestock trade," Holden said. "The cash market for live animals will be restored, and producers will no longer face losing millions of dollars."

Intending to protect small farms against increasing corporate competition, lawmakers in 1999 passed a bill prohibiting packers from paying different prices to producers unless based on the quality of the meat.

South Dakota passed a similar law the same year, but a federal judge struck it down as an unconstitutional restraint on interstate commerce.

The Missouri law, which allowed aggrieved farmers to sue for triple damages, was upheld this May by the 8th U.S. Circuit Court of Appeals.

But packers quickly quit paying cash based on the live weight of cattle, hogs and sheep. They cited a fear of costly lawsuits.

That left most farmers with only one option for selling livestock -- a quality-of-meat formula determined after slaughter. And many farmers complained they were losing money.

The U.S. Department of Agriculture statistics office in Columbia estimated the law could have cost Missouri farms and rural communities anywhere from $7 million to $20 million annually.

The South Dakota law had cost livestock producers about $4 million in a 22-day period in 1999, Missouri senators said.

Like they did in South Dakota, meat packers said Friday that they would return to Missouri's cash markets with the demise of the pricing law.

"Beginning Monday, IBP will return to our normal buying practices, which means we will resume negotiating for cattle and hogs on a cash basis, as well as on a graded yield basis," said Gary Mickelson, a spokesman for South Dakota-based IBP, the dominant beef packer in Missouri.