Farm Action Looking For Transparency In Packers & Stockyards

The fifth and final rulemaking to strengthen the Packers and Stockyards Act was recently released by USDA.

“One of the real problems that we have as producers is the lack of transparency in the market. In cattle production, what we see is that as little as 12% or so of cattle are negotiated cash price, and that's what's reported," noted Joe Maxwell, chief strategy officer and co-founder of Farm Action.  "So when I'm hearing that report, I'm not hearing the full story. Over 80% can be hidden in these alternative marketing agreements. And so, as a smaller producer, we’ve got our hands tied behind our backs because we can't know what's going on because it's not reported today. USDA has just begun a process. It's an advanced notice of a proposed rule, and are seeking advice, and it's for price discovery and competition in markets for fed cattle.”

Maxwell stressed that producers need to advocate for this new rule.

“What I would suggest is that you go online to our Website. We're going to be posting how you can make comments or look at AMS rule-making online, go to USDA’s website, and read the rule. We'll be putting out more information. But the key is, if you're like me and tired of not hearing what the real cattle market is engage, and all you have to do is write a paragraph, just tell your story, and join in before the comment period ends, and that's on December 10. One of the things in the rule I just want to quickly mention it puts a cap on the amount of contracts, the AMAs, forward contracts, and the various contracts that are concealed from the farmer knowing what the price is. It puts a cap of 50 percent on a regional basis.”

Maxwell added another benefit to the new rule is protection from packer retaliation.

“If we speak out against the packer doing bad well, they can't come and take our contract away, or they can't come and not buy our cattle, our hogs, or whatever we might be out there raising for America," Maxwell said.  "That's what the Packers and Stockyards Act is. It's a farmer protection act. Matter of fact, when it was enacted, it was called the Farmers Bill of Rights,  which provides us protections against the monopoly actions, abusive actions and practices of the largest meat packers United States.”

They’re just looking to figure out what’s truly going on in the market.

“In some regions, less than 12% of the cattle are sold on a cash-negotiated basis. That's all the report we're getting," Maxwell said.  "The rest of that. 80-some percent is hidden from us, and you can't operate a business without transparency in the market, especially if you're a farmer. My morning may change if USDA gets their way where I can hear what's really going on in the cattle market.”

For more information, visit Farm Action's Website.

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