Iowa Senate requires meatpackers to buy from independent producers; low feed prices save industrial operations billions of dollars

>> Meatpackers will have to purchase more of their hogs from independent family farmers if legislation approved by the Iowa Senate on March 20, 2007, becomes law. SF 504 requires them to purchase at least 25 percent of their hogs from independent farmers. Senator Jack Kibbie (Democrat-Emmetsburg) urged the Senate to pass the bill, saying the market for independent hog producers has almost disappeared. He described signs at packers’ unloading docks that say “contract hogs only” and called on the Senate to pass the bill to provide a market for the independent producer.

>> On February 26, 2007, a Tufts University paper entitled Industrial Livestock Companies’ Gains from Low Feed Prices, 1997-2005 was released. Report authors Timothy Wise and Elanor Starmer estimate that low corn and soybean costs saved industrial hog operations $8.5 billion and saved the broiler chicken sector $11.25 billion in feed costs.

The leading hog and poultry firms benefited most from these feeds cost savings, contributing to continued consolidation in both sectors. For example, Smithfield hog production division, the nation’s largest pork producer with over one-third of total U.S. production, saved as much as $283 million per year, or a total of $2.6 billion over the period from feed cost savings. You can view the full report at

>> In March scores of farmers, ranchers, and representatives of the Sustainable Agriculture Coalition, National Campaign for Sustainable Agriculture, Center for Rural Affairs, Western Organization of Resource Councils, and other organizations traveled to Washington to lobby their senators and representatives on a variety of livestock market competition issues.

Although the farmers, ranchers, and growers had a dramatic impact, and several members were moved closer to publicly supporting bills on these issues, at the end of the day, there were still precious few Senate Agriculture Committee members joining Senator Harkin and Senator Grassley on their bills.

Contact: John Crabtree, or 402.687.2103 x 1010 for more information on the Center’s Corporate Farming Notes.

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