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Analysis Concludes GIPSA Competition Rule Would Have No Impact On U.S. Premium Beef's Marketing Arrangements

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Billings, Mont. In response to recent concerns expressed by members of U.S. Premium Beef (USPB) regarding the proposed competition rule (Competition Rule) by the U.S. Department of Agriculture's (USDA's) Grain Inspectors, Packers and Stockyards Administration (GIPSA), R-CALF USA analyzed any potential negative impacts to USPB members and found there would be none.

The USPB members said they were told by representatives of the U.S. beef industry the proposed rule would limit, restrict, or otherwise harm the marketing program established between USPB and National Beef Packing Co. (National Beef), so R-CALFUSA submitted its findings to GIPSA Administrator J. Dudley Butler and requested that GIPSA evaluate whether the group's analysis is correct.

R-CALF USA found that according to the Competition Rule, USPB would not be subject to provisions within the rule because USPB is not a packer, stockyard owner, market agency or a dealer. Furthermore, USPB is neither on the USDA-GIPSA list of Bonded Packers in the United States, which is current as of Feb. 1, 2010, nor is it on USDA-GIPSA lists of registered and bonded market agencies and dealers.

Additionally, USPB markets its cattle to National Beef, a packer that would be subject to the provisions of the Competition Rule. However, pursuant to the Competition Rule, National Beef can justify differential pricing and deviation from standard price or contract terms for USPB members based on: 1) payments to USPB members' investment in USPB units, (which give each member the right to deliver a specified number of cattle based on the number of units owned or leased), and, 2) members' ability to meet certain quality based standards established by National Beef for USPB members.

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R-CALF USA, Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America, represents thousands of U.S. cattle producers on domestic and international trade and marketing issues. R-CALF USA, a national, non-profit organization, is dedicated (more...)
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