The packer lobby is fighting to derail the proposed competition rule (GIPSA rule) issued by the Grain Inspection, Packers and Stockyards Administration (GIPSA). They are making outrageous claims that misrepresent the purpose and effect of the GIPSA rule. Unfortunately, very few people understand how the fed cattle market functions, where it is broken, and why the GIPSA rule is urgently needed as a first step to begin restoring competition to the U.S. cattle industry.
Cattle producers are encouraged to send comments to GIPSA in support of the GIPSA rule, contact their members of Congress to urge them to fully support GIPSA's effort to restore competition, and visit with their members of Congress about the importance of the GIPSA rule while they are in their districts from now until after the election.
What is needed to restore competition to our cattle market is for actual cattle producers to explain in their comments to GIPSA and to members of Congress how the specific provisions in the GIPSA rule will benefit them. To help in this effort, below are the provisions contained in the GIPSA rule along with some ideas you can use to explain how your cattle operation will benefit when the GIPSA rule is finalized. You can use any of these ideas to write your comments to GIPSA and your letters to each of your congressional members (see addresses below).
What the GIPSA rule does and how it benefits U.S. cattle producers:
1. The GIPSA rule clarifies that when a packer engages in unfair, unjustly discriminatory or deceptive practices against a cattle feeder, the cattle feeder can file a complaint with GIPSA to stop the packer's unlawful actions without first having to prove that the packer's actions also harmed the competitiveness of the entire industry (known as "harm to competition").
This provision benefits all cattle producers by preventing packers from forcing cattle feeders out of business one cattle feeder at a time. It prohibits packers from targeting an individual cattle feeder, or a small group of cattle feeders, to make it unprofitable for them to stay in the cattle feeding business. By keeping more cattle feeders in business, cow/calf producers, backgrounders and stockers benefit because they will have more individual cattle feedlots to sell their cattle to when their cattle are ready to feed. .
2. The GIPSA rule prohibits packers from granting their preferred feedlots undue or unreasonable preferences or advantage, such as giving select feedlots more timely access to the slaughtering plant, higher premiums for quality traits, and higher prices for plain cattle.