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Montana Ag Network: questions about the Packers & Stockyards Act

Cattle Near Lewistown
Posted at 7:05 PM, Mar 03, 2024

In this week's Montana Ag Network feature, Ryan Gamboa learns more about the impact of the The Packers & Stockyards Act. Watch the video above.

For over 100 years, the Packers and Stockyards Act has protected agriculture producers from monopolistic practices in the meat packing industry.

Enacted into law in 1921, by President Warren G. Harding, Montana Farmers Union had its hand passing the legislation and remains a vital component to its work in the 21st century.

“At that time, the Packers had total control of the markets vertically integrated. They controlled the feed lots, they owned the grocery stores, they owned the railroads, they owned the packing plants, they owned the freezers. They had total control," explained Walter Schweitzer, President of the Montana Farmers Union

Leading up the legislation becoming law in the early 1920s, the "Big Five" Packers were Armour, Cudahy, Morris, Swift, and Wilson. Today, Tyson Foods , Cargill, JBS, and National Beef Packing. In present day, Packers and Stockyards remains an important piece of legislation for fair practice enforcement to the larger packing corporations.

In the 1920s, Congress identified several purposes for the legislation:

  • Assuring fair competition and trade practices.
  • Safeguarding farmers and ranchers.
  • Protecting consumers.
  • Protecting livestock, meat, and poultry industry members from unfair, deceptive, unjustly discriminatory, and monopolistic practices.

"It regulates the administration of Packers and Auction markets in areas like how producers have to be paid." John Grande, President of the Montana Stockgrowers Association explained.

Congress has been at a stalemate in the Appropriations process in Washington since Fall of 2023. A stopgag measure was passed last week to push a Friday deadline for funding to March 8. The Agriculture Appropriation bill is expected to be passed by the new deadline.

Senator Tester sent a letter to his Senate colleagues urging them to reconsider "riders" in the legislation and the new rules it adds to Packers and Stockyards.

Sen. Tester (D-MT) wrote in the letter issued in a press release:

"Improving competition is critically important to ensuring consumers have safe and affordable protein options at the meat counter, and family farmers and ranchers get a fair deal for their products,” the Senators wrote, emphasizing the importance of fair practices in the industry. “We write today to ask for your help opposing any policy rider in the FY 2024 Agriculture Appropriations bill that would prevent the United States Department of Agriculture (USDA) from enforcing the Packers and Stockyards Act to hold multi-national food manufacturers accountable.”

It raises some questions and concern over the the new "riders" inside the legislation. A rider is defined as a non-germane amendment to a permanent funding law.

“We just believe that our producers should have the ability to market cattle the way they want to. If they want to go to a packer and come up with an agreement on how they market cattle. That should be their choice to do so, without a bunch of new rules making Packers and Stockyard more government overreach," state Grande.

Montana Stockgrowers Association wanted to make it clear it supports enforcement within the Packers and Stockyards Act, but it promotes a ranchers right to choose how it markets cattle.

Montana Farmers Union encourages the urge from Senator Tester to his colleagues for the benefit of the family farmer.

“Softening, as you will, the oversight of the Big Four Corporate monopolies, really still holds us hostage to them." Schweitzer said.

Schweitzer told MTN that we can compare the "riders" within the Appropriations Bill to changes to NFL helmet to helment contact rules.

"We’ve updated some of the rules to Packers and Stockyards, so that we can protect the players on the field… the consumers, the producers… against these anti-competitive practices.”

Grande added, "If we need substantive changes to Packers and Stockyards, ideally the way to do that would be through Congress, the way the system is meant to work."