December 7, 2000

USDA's mandatory price disclosure rule for meat packers is a "solid step in the right direction," according to Sen. Charles Grassley (R-IA). It will give independent livestock producers "a shot at better bargaining power with the nation's meat packers" and "let the sun shine in on the prices packers pay farmers and ranchers for their hogs, cattle and sheep."

In a statement, Grassley said marketing livestock has changed dramatically in recent decades as public auctions gave way to contract delivery between large-scale producers and packers. "Concentration in the meat packing industry continues to change the dynamics and puts an even bigger squeeze on the independent producer, who finds himself with fewer and fewer competitive options to market his livestock," he said. "In many cases, consolidation has turned a marketing decision into a take-it-or-leave-it proposition."

Mandatory disclosure won't guarantee profits for producers, but it does "send a welcome signal to farm and ranch country. When buyers lock in a price with contractors in advance, it erodes the leverage that independent producers have held to position themselves for the best price on the market on any given day. Mandatory price disclosure will inject a healthy dose of transparency to the business climate involved in the marketing of livestock."

The new law requires USDA's Agriculture Marketing Service to collect market data and make it immediately available to the public via the Internet. That gives farmers immediate access to market information, including price, volume and terms of the sale. The disclosure requirement will apply to packers who process 125,000 cattle, 100,000 hogs or 75,000 lambs each year. Importers who import an average of 5,000 metric tons of lamb products also would be required to report prices they pay.

"Many feel like the changing marketplace and its increasingly concentrated farm sector is stacking the deck against the independent producer. Mandatory price disclosure should begin to shuffle things around for the better to help ensure the family farmer isn't getting a raw deal," said Grassley.