How massive? Take a small hog farmer with a 150 sow farrow-to-finish operation that receives a small-volume discount of 6 cents per pound for his market hogs - a conservative estimate for volume discounts. At 250 pounds for each of 3,500 hogs marketed, that would mean an annual loss of $52,500 for that producer, simply for being small.
USDA is poised to propose a new rule under the Packers and Stockyards Act that will, hopefully, help address this price discrimination against smaller producers. The rule will define the term "unreasonable preference," the granting of which is prohibited under the Act but has not been well enforced absent a definition of what constitutes an "unreasonable preference."
The packers will hate whatever they come up with. But, honestly, USDA has given the packers a pass on competition laws for decades, so why should we listen to them on this one? Family farmers and ranchers want, need and deserve competitive markets in which to sell their livestock. Agriculture Secretary Tom Vilsack should end the volume-based discrimination against small volume producers and breathe some life into their livestock markets.