USCA comments on impending publication of the proposed GIPSA rule

The Grain Inspection, Packers and Stockyards Administration (GIPSA) rule is the result of USDA re-working the Packers and Stockyards Act of 1921, and has received strong positive, and negative, attention from producers across the country.     The United States Cattlemen’s Association (USCA) is one of very few organizations that is neither strong opposed, nor in complete support, of the bill as currently written.
“There were some points we really liked, and some areas on which we have asked for additional clarification. Our current focus on this proposed rule is to make sure it isn’t defunded, and that we look at it in its entirety. The packer-producer groups are lobbying heavily to get it overruled, and that’s ridiculous,” says USCA Executive Vice President Jess Peterson.
“USDA was directed by the Farm Bill to better define the Packers and Stockyards Act, and they did just that. They put together classifications and clarifications for the Packers and Stockyards Act. That should be the big focus, not the idea of de-funding or suing prior to seeing what the final format even looks like,” adds Peterson.
“We strongly support the business justification clause. Defining how prices are set really gets to us, and some of these captive supply agreements make it difficult in a competitive market setting,” he says.
“We’re also in support of the competitive injury clause,” he adds. “With that clause you don’t need to hire a bunch of economists to determine prices around you just to file a case and prove you were harmed. We’ve worked on both of these areas, and support them.’
Peterson adds that USCA asked for more discussion and clarification on the aspect of packer buyers representing multiple packers in livestock markets.
“We’ve also asked for additional clarification on the clause regarding the packer to packer ban on sales, and the reason is that we want to know if a member of U.S. Premium, as a stockholder, is defined as a packer. Then, does that define their eligibility, and what contracts they are able to enter into? There needs to be clarification that addresses larger versus smaller packers, and exemptions for those individuals that are involved in companies like U.S. Premium,” says Peterson.
He notes there is also concern that packers will see increased liability from this rule, and won’t go after cattle that don’t provide premiums.
“Packers aren’t currently giving incentives out of the kindness of their heart. It’s because the retail side is asking for age and source verified beef. Japan is asking for it, and in order to meet those demands they’ll have to provide some type of premium to offset break-even costs,” states Peterson.
“We’ve met with everyone who is a stakeholder in this, and we see the value of the rule, but also see some points that need further clarification. That’s why we’re the livestock group that’s right down the middle. We are 110 percent opposed to defunding the rule. We feel people need to see what it looks like, listen to the interim discussions, and consider the entire economical picture before threatening to sue,” says Peterson.
He adds that producers’ interested in learning more about GIPSA should start with reading the four-page rule.
A lot of public discussion has occurred on GIPSA, including five USDA DOJ (Department of Justice) meetings last year, one of which was held in Fort Collins, Colo. in August 2010, where farmers and ranchers from across the country were given the opportunity to voice their support or objection to the proposed rule. USDA also considered all comments received via mail or email through Nov. 22, 2010.
“This issue has caught some back and forth in the country. We’ve read and seen a lot of bits and pieces on it. Look to see the rule published in the next month, in its final format,” says Peterson.
For more information on GIPSA, or to read the proposed rule, visit gipsa.usda.gov. Heather Hamilton is editor of the Wyoming Livestock Roundup and can be reached at heather@wylr.net.