Nebraska Ban on Packer Ownership of Livestock is Constitutional

As Nebraska lawmakers debate the state’s ban on meatpacker ownership of hogs, opponents of the law are raising a new argument about the constitutionality of the ban. We believe the present law is constitutional, and we urge lawmakers to oppose LB 176 on final reading.

The argument being lodged against the ban on packer ownership is that the current law violates the equal protection clause. The same argument was lodged against Nebraska's anti-corporate farming law, Initiative 300.

While Initiative 300 did fall to a court challenge in 2006, it was ruled unconstitutional based on a dormant commerce clause argument, not the equal protection clause. In fact, Initiative 300 survived court challenges based on the equal protection clause.  

To claim that since Initiative 300 fell in the courts, the packer ban is also unconstitutional overlooks this critical distinction in the law. For this reason, we believe the current law is constitutional.  

There are two additional points to consider.

First, it is worth noting that large agribusiness interests sued repeatedly over a 25 year period to strike down Initiative 300. If the current packer ban law is clearly suspect on the same grounds, why haven't they sued over it?

Second, if opponents of the packer ban are worried about a constitutional issue, they should amend LB 176 to strike the ban for all livestock, not just hogs. We surmise they will not do that because they (rightly) fear the political backlash from cattle and ranching country.

At the same time, we raise a flag of concern on behalf of independent cattle producers. Among other changes, LB 176 takes the unusual step of striking the entire legislative finding for the original Competitive Livestock Markets Act. Here is an excerpt of what LB 176 proposes be struck:

The Legislature finds that family farmers and ranchers have been experiencing, with greater frequency, severely depressed livestock market prices. These market conditions are disproportionately affecting independent producers, which make up the majority of farms and ranches, and are threatening the economic stability of Nebraska's rural communities. The Legislature further finds that packer concentration, vertical integration, and contractual arrangements are undermining the system of price discovery. In the absence of any meaningful federal response to the conditions described, the purpose of the Competitive Livestock Markets Act is to increase livestock market price transparency, ensuring that producers can compete in a free and open market.

You can read the full intent here. By striking the full legislative intent, while leaving parts of the law on the books, the remaining ban on packer ownership of cattle would be left with no intent expressed in law. If the ban on cattle ownership is later drawn into court, this move will weaken the case for independent cattle producers.

The Center for Rural Affairs has long believed livestock should be owned by farmers and ranchers, not by large multinational corporations. We urge Nebraska senators to stand with the state’s independent farmers and ranchers by opposing LB 176 on final reading.