Washington, D.C. -- In meetings held earlier this month, R-CALF USA CEO Bill Bullard and R-CALF USA member Judy McCullough, a Wyoming cow/calf rancher and past president of the Independent Cattlemen of Wyoming, urged the U.S. Department of Justice (Justice), the U.S. Department of Agriculture's (USDA's) Grain Inspection, Packers and Stockyards Administration (GIPSA), the U.S. Senate agriculture committee, and members of Congress to immediately begin enforcement of antitrust laws, finalize the GIPSA competition rule, and put an end to the packers' use of price-depressing captive supplies.
In meetings with Sen. Mike Enzi, R-Wyo., and Sen. John Barrasso, R-Wyo., and Rep. Cynthia Lummis, R-Wyo., as well as with an official of the Senate agriculture committee, McCullough and Bullard explained the need for Congress to support USDA's efforts to finalize its proposed competition rule.
"My neighbors are losing their children who normally would remain on the ranch to the coal, oil and gas industries where they can make a decent living for their families," McCullough said. "The improved market transparency and restoration of market fairness that would result from the GIPSA rule would create new opportunities for young people who want to enter the ranching business."
McCullough cautioned that today's higher cattle prices should not be used as an excuse for delaying the GIPSA rule, because, like her, many cow/calf producers in the West must sell their calves in the fall, before their ranches are struck with severe winter weather.
"The market was still soft last fall when I sold my calves, which made calf prices lower and reduced my profits," she said. "The pricing rally that has led to the historical high cattle prices of today did not begin until the end of 2010, well after many Western ranchers sold their annual calf production."
In addition to urging support for the finalization of the GIPSA rule, McCullough and Bullard also urged McCullough's congressional delegation to take the next step.
"The GIPSA rule is only the first step toward restoring competition; the next step is to prohibit the largest packers from using captive supply cattle to manipulate the market, which occurs when packers remove large numbers of cattle from the marketplace without first establishing a competitive price for those cattle," Bullard said.
In a meeting with Justice officials, Bullard pointed out cattle producers had expected aggressive antitrust enforcement action following the conclusion of the Aug. 27, 2010, livestock competition workshop in Fort Collins, Colo. He said producers numbering in the thousands converged on Fort Collins, Colo., from all across the U.S. to tell Justice and USDA that their markets have been captured by dominant meatpackers and they expect the agency to begin addressing the problem.
Bullard explained that because no action has yet been taken, producers are becoming discouraged, "especially those who risked retaliation from the dominant meatpackers for having explained the manipulation and anticompetitive practices that are ongoing in their markets."
He also emphasized that the currently favorable cattle prices do not at all demonstrate the market has corrected itself. He said today's higher prices are the direct result of extremely tight cattle supplies caused by years of unprofitable prices that forced hundreds of thousands of cattle producers out of business and decimated the size of the U.S. cattle herd.
"Justice Department officials said they were following up on a number of complaints we had submitted to the agency, including our complaint involving meatpacker JBS' involvement in the October 2009 futures market transaction for which the Commodity Futures Trading Commission imposed a $220,000 sanction against the trading firm also involved in the transaction," said Bullard.
In a meeting with GIPSA Administrator J. Dudley Butler, McCullough and Bullard expressed appreciation on behalf of R-CALF USA members for Butler's commitment to ensure that the Packers and Stockyards Act (PSA) is properly enforced and that producers receive the marketplace protections the PSA was designed to provide. Butler said his agency is continuing to review the tens of thousands of public comments received on the proposed GIPSA rule, but he gave no indication of when a final rule might be issued.
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R-CALF USA (Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America) is a national, nonprofit organization dedicated to ensuring the continued profitability and viability of the U.S. cattle industry. R-CALF USA represents thousands of U.S. cattle producers on trade and marketing issues. Members are located across 46 states and are primarily cow/calf operators, cattle backgrounders, and/or feedlot owners. R-CALF USA directors and committee chairs are extremely active unpaid volunteers. R-CALF USA has dozens of affiliate organizations and various main-street businesses are associate members. For more information, visit www.r-calfusa.com or, call 406-252-2516.