A Reasonable Hope

The Packers and Stockyards Act of 1921 prohibits price discrimination by meatpackers against smaller, family farmers and ranchers. Specifically, the Act makes it unlawful for packers to "...make or give any undue or unreasonable preference or advantage to any particular person or locality in any respect whatsoever."
But, for decades, the law has not been effectively enforced.  For example, packers pay 5, 6 or even 10 cents per pound (or more) in purely volume-based premiums to the largest hog producers just because they are large.  These "sweetheart deals" for large volume producers have become commonplace, but no less a violation of the Packers and Stockyards Act.
Six cents per pound may not sound like much of a discount, but, for a family farmer with 150 sows in a farrow-to-finish operation it amounts to receiving $56,000 less annually for hogs of the same quality, just because he markets fewer hogs.
However, the 2008 farm bill contained a provision requiring USDA to define the term "unreasonable preference", allowing for more aggressive enforcement and, ultimately, more competitive livestock markets.  The time has come to level the playing field for family farmers and ranchers and for large, industrial livestock producers' "sweetheart deals" to end.
USDA has begun the process of writing the rules that are required under this farm bill provision.  Now is the time for all of us who prefer to see livestock production on family farms and ranches to make sure USDA gets this right (www.cfra.org/competition).

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