By DOUG SCHMITZ
WASHINGTON, D.C. – Five national livestock groups threw their support behind legislation that would amend the Packers and Stockyards Act, allowing livestock auction market owners to invest in or own small- and medium-sized meatpacking operations.
Currently the Packers and Stockyards Act prohibits owning both an auction company and a meatpacking firm or a meat marketing business based on decades-old concerns about the transparency of livestock transactions.
“This is an antiquated rule that does not fit with the current, transparent method of selling livestock at an open auction where sellers can view the transaction either in person or by streaming the auction online,” said part of a May 19 letter to the leadership of the U.S. Senate and House Agriculture committees. The groups which signed the letter included the National Pork Producers Council, the American Sheep Industry Assoc., the Livestock Marketing Assoc., the National Cattlemen’s Beef Assoc., and the United States Cattlemen’s Assoc.. The groups asked that the “Amplifying Processing of Livestock in the United States,” or A-PLUS Act, be considered and advanced.
Introduced by Rep. Vicky Hartzler, R-Missouri, and Rep. Jimmy Panetta, D-California, in April, the A-PLUS Act directs the USDA secretary to amend the Packers and Stockyards Act to allow livestock auction market owners to hold ownership in, finance, or participate in the management or operation of a meatpacking entity with a cumulative slaughter capacity of less than 2,000 animals per day, or 700,000 animals per year. This cap would exclude investment in the top 10 meatpackers.
“For decades, livestock auction markets have played by an outdated and restrictive book of rules, which limited capacity and created a system where large meatpacker behemoths literally and figuratively slaughtered the competition,” Hartzler said.
“The A-PLUS Act would even the playing field, and fix these regulations for the benefit of our livestock auctions and small packers,” she added.
In the letter, the groups said, “Supply chain challenges experienced in the livestock packing sector during COVID-19 highlighted the need to increase U.S. livestock packing capacity. It became readily evident that current processing capacity must run full time, which was not possible in the early weeks and months of the pandemic, to avoid a backlog of livestock.
“This limited processing capacity relative to the available supply of livestock also harms the bargaining power of livestock producers seeking to have animals processed,” the group added. “On top of this, the demand for local processing and locally-sourced meat have increased.”
To remedy that, livestock auction owners have expressed interest in getting involved in the meatpacking business, the groups said.
Brooke Miller, United States Cattlemen’s Assoc. president, said, “The Packers & Stockyards Act is over 100 years old. It’s time to modernize parts of this historic legislation that no longer make sense in the modern world. Today’s livestock auctions are often family-owned and regionally-based.
“If one of these entities wanted to invest in a local processing facility to increase processing capacity for producers in their area, there shouldn’t be an outdated regulation holding them back from doing so,” he added.
The groups said numerous livestock groups have called for a focus on expanding capacity.
“The desire to expand capacity and add new packers to the marketplace has caused some within the livestock industry to explore new or expanding packing plant projects,” the groups said. “Some of these projects involve pooling funds from investors within the industry.
“We ask that your committees consider and advance this common sense legislation, which will increase packing capacity, add competition for producers, and modernize the law by reducing an unnecessary and outdated regulatory burden,” they added.