On June 22, USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA) published its proposed plan to overhaul livestock marketing. The rule (see it www.gipsa.usda.gov) has a 60-day comment period that expires on Aug. 23.
Leading U.S. livestock groups requested that GIPSA Administrator J. Dudley Butler extend the comment period to 120 days. But, in a July 8 letter to National Meat Association CEO Barry Carpenter, Butler said GIPSA doesn’t plan on extending the comment period.
“If granted, such an extension of the public comment period would unduly delay implementation of the specific reforms mandated by Congress in the 2008 Farm Bill,” he said.
But what’s the rush? Certainly a rule that stands to upend the value-based marketing inroads the industry has built and utilized to better serve consumer demand deserves careful and thorough study.
“No matter where you stand on the issue, everyone would benefit from additional time to analyze and provide feedback on this extremely complex rule,” says Collin Woodall, vice president of government affairs for the National Cattlemen’s Beef Association.
“Even though the proposed regulation targets packers, it’s the producer that will ultimately be hurt. The requirement to report and justify contractual purchases from producers, while being measured on ‘fairness,’ could result in packers responding to the regulation through ‘risk avoidance’ by stopping marketing agreements with producers,” he says.
Woodall points out that such marketing agreements “have been the foundation for producer financing and producer profitability for more than 60% of beef marketed. Without these agreements, all cattle could be valued on the average, regardless of quality, resulting in a generic market and generic product. History has proven that generic products do not meet consumer demand. Without consumer demand, prices to producers fall.”
Meanwhile, Butler hit a buzzsaw when he went before the House Ag Subcommittee on Livestock, Dairy and Poultry this week. The hearing was to review livestock and related USDA programs in advance of the 2012 farm bill, but starting with Chairman David Scott (D-GA) and moving on from there, members roasted USDA officials, reports Ron Hays of Radio Oklahoma Network.
Hays says Scott “lambasted the administration for drafting these rules as they claimed they were implementing the 2008 farm bill, when in fact many of the controversial parts of the GIPSA rule were discussed by the House Ag Committee during the writing of the bill and rejected as bad policy.”
Members also expressed outrage over the fast-tracking of the rule, indicating that members on both sides of the aisle want an extension to 120 days to further digest what all these rules may mean to livestock producers, Hays says. In fact, last week, 22 House Ag Committee members sent a letter to USDA Secretary Vilsack seeking an extension of the comment period.
Another interesting point about this comment period is that it concludes before USDA and the Department of Justice hold their much-ballyhooed joint workshop on competition issues affecting the beef, hog and other animal sectors. This public meeting is set for Aug. 27 on the Colorado State University campus in Fort Collins. The deadline for comments on the proposed rule, however, is Aug. 23.
Meanwhile, Phil Brasher of the Des Moines Register also blogged on last week’s Congressional proceedings, noting that Rep. Scott said USDA officials went well beyond what Congress intended. In addition, Brasher writes: “Walter Minnick of Iowa called the regulations ‘silly.’ Rep. Jim Costa, (D-CA) said the rules would be a ‘lawyers’ field day.’ And, the chairman of the full committee, Rep. Collin Peterson, (D-MN) worried that the rules would make it harder to continue branded marketing arrangements between farmers and processors.”
Peterson’s sentiment is one shared by a majority of BEEF readers, according to polls conducted the last couple of months at beefmagazine.com. The current poll asks: “GIPSA published a proposed rule June 22 that could prohibit packers from paying more for some cattle than others, and could derail current value-added marketing agreements between feedlots and packers. Do you agree or disagree with the rule? A total of 82% of respondents say they disagree with the rule.
Beef producers have a huge stake in the outcome of this rule, and you’d better make your voice heard. You can access the rules by going to www.gipsa.usda.gov. Click on Federal Register in the “Hot Links” box on the bottom right of the opening page, and then go to the June 22 edition.
Send comments by email to [email protected]; by regular mail to Tess Butler, GIPSA, USDA, 1400 Independence Avenue, SW, Room 1643-S, Washington, D.C. 20250-3604; fax to 202-690–2173; or online at www.regulation.gov.