States Taking Lead On Issue
Of Packer Price Disclosure

WASHINGTON —(AP)— More and more farm states are taking the lead on an issue bogged down in Congress: requiring meatpackers to reveal the prices they pay.

``Washington is all wrapped up in the booming economy, thinking there's really not a problem,'' said Mike Callicrate, a cattle feedlot manager in St. Francis, Kan. ``The states are closer to the problem.''

Farmers have pushed for what is called mandatory price reporting for some time, but with greater urgency over the past year. All areas of livestock are experiencing low prices, particularly the hog industry, where prices have dipped to their lowest levels in four decades.

In December, pork producers were getting $8 a hundredweight compared with around $40 a year ago.

According to USDA figures, as of 1997, the four largest packing firms accounted for 80 percent of cattle slaughter, 54 percent of hog slaughter and 70 percent of sheep slaughter.

Farmers have accused the big companies of pushing them out by controlling prices and keeping them secret.

For instance, prices reported now on a voluntary basis set the market. Farmers say processors do not reveal the premium prices being paid to producers with contracts to raise livestock for companies, an omission they maintain keeps the market at a low level.

``The concern is that low sales are getting reporting and thus that's what the market is being created off of,'' said Tom Buis, vice president of government relations for the National Farmers Union. ``You need an adequate reflection of the entire market.''

The future is uncertain this year for several bills in Congress that would implement mandatory price reporting. Efforts to pass such a requirement failed in 1998.

Agriculture Secretary Dan Glickman, who supports price reporting but has contended he did not have authority to step in, recently reversed himself.

``I think a fair reading of the Packers and Stockyards Act gives us broad discretionary authority to collect more information than we do,'' Glickman told a meeting of the National Cattlemen's Beef Association last month.

He has promised to announce a plan within weeks detailing steps USDA will take to collect additional price information and ``determine if there is evidence of price manipulation or unfair pricing activity by packers.''

In the meantime, states have acted.

``Being practical people, these state legislatures decided if they (the federal government) are not going to do it, we're going to do it,'' said Chuck Hassebrook, a Nebraska member of Glickman's National Commission on Small Farms.

Commission members last month criticized Glickman for not moving to implement some form of price reporting to help small farmers.

Rep. Earl Pomeroy, D-N.D., a sponsor of a House bill, said, ``It's not at all surprising this thing is producing legislation at the state level.''

Pomeroy accused big meat packer lobbyists of getting last year's measure killed — even after lawmakers had agreed to include it in the agriculture spending bill.

``They were able to stop it behind closed doors in Washington, but they've hardly stopped the public sentiment,'' Pomeroy said.

Once of the states wrestling with the issue is Kansas, where cattlemen last week told the state Senate Agriculture Committee they are at a competitive disadvantage and fighting for their economic lives because meatpackers discriminate against them in what they pay for live cattle.

The cattlemen want a bill passed that would require daily cattle price disclosure, prohibit discrimination in what packers pay different producers, and forbid business retaliation against producers for statements they make about packers.

The Senate committee on Wednesday heard from the bill's supporters, including the Kansas Farmers Union.

It expected to hear from opponents, likely the Kansas Livestock Association and Kansas Farm Bureau, this week. The two big groups say the problem is a national one, and they question whether individual state actions will work.

The South Dakota Legislature has passed a law requiring mandatory cattle price reporting, which supporters said would enable farmers and ranchers to know what beef is selling for so they can demand a fair price.

Producers from St. Francis, Meade, Johnson and Brewster said they are getting bottom dollar for their cattle — regardless of quality — because four major packing companies control nearly 90 percent of the market.

Consumers are the victims just as much as the producers, they said, because packers and processors are raking off massive profits by paying low prices to producers and charging high prices at the supermarket.

``U.S. demand for beef today exceeds U.S. domestic supply,'' said Mike Callicrate, who operates a 12,000-head commercial feedlot near St. Francis.

``Consumers are paying record high prices while cattle producers are going broke,'' he said. ``Today, the livestock producers' share of the consumer dollar is at an all-time low, and so are the local economies of our farm communities.''

Ivan Reimer of Meade said farmers can't know whether they're getting a fair deal because buyers for the packers offer a price for their cattle and the farmers have only ``a 5-to-15 minute window each week whether to take that price or leave it.''

``The only fair thing is for producers to know what packers are paying for all grades of cattle,'' Reimer said. ``Better communication will restore competition to the cattle industry.''

Similar efforts are under way in Iowa, Minnesota, Nebraska and Kansas, and advocates expect the trend to continue.

South Dakota took the lead in passing such a law, which becomes effective July 1. South Dakota Gov. Bill Janklow signed it, but nevertheless worries that it may backfire on the state's livestock industry.

``The more I read it, the more I think there's things wrong with it,'' Janklow told reporters last Friday, noting that it may have been passed too hastily and without proper scrutiny.

Senate Bill 95 filled the South Dakota Capitol with farmers and ranchers who insisted that it be passed without changes. Few bills go through the lawmaking process without any change, and many bills are changed extensively as they are reviewed in the House and Senate.

``I knew this freight train was moving too fast, but that's the way all the people that wrote that law wanted it,'' Janklow said of SB95.

``The people that wanted it got it,'' he said ``Now let's see if it works.''

Packers who must report the prices they pay are going to be leery of making purchases, the governor said. ``I just think they're going to quit buying.''

The bill contains at least one major flaw, Janklow added. It does not cover the purchase of South Dakota livestock that will be slaughtered in other states.

The measure says packers who buy livestock for slaughter in South Dakota must report prices.

``If a packer purchases livestock for slaughter in another state, that section doesn't apply to them,'' the governor said. ``That is not what anybody meant, but that is exactly how this law reads.''

Supporters have said the new law should give South Dakota farmers and ranchers more bargaining power in dealing with packers.

The measure could have a significant influence if other states pass similar laws, said House Democratic Leader Pat Haley of Huron.

He also said SB164, which shifts some federal antitrust language into state law, would augment the price-reporting law.

``It is the enforcement provision that tells packers that they will not boycott or isolate the state of South Dakota because of the price reporting requirements,'' Haley said.

Janklow did not say Friday if he would sign or veto SB164, which was sent to his office a few days ago.

The problem of low livestock prices cannot be fixed by states, the governor said. It is an issue that must be dealt with on the federal level, he said, although adding he is doubtful that will be done.

``No one in Washington has guts enough to deal with this.''