Family ranchers fighting growing meatpacking industry

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MOVILLE, Iowa - Eric Nelson, a fourth-generation rancher and farmer who operates a feedlot here, isn't looking for more government cash like many farmers are. But he's still hoping for a little help when the Senate debates a farm bill this fall.

Nelson and many other family ranchers in the Midwest and West are hoping Congress can help them fight the gradual consolidation of the meat industry, which they say is hurting their business. A handful of large meatpacking companies slaughtered 80 percent of steers and heifers in 2005, up 30 percent from 20 years ago.

"We just want a level playing field, an environment in which we can be profitable," Nelson said. "Give us true competition and we'll take care of ourselves."

Ranchers who own smaller operations have long sought changes in the law that would help their operations stem growing competition from the larger companies. And with new political dynamics in Congress, that could happen this year.

The laws won't be changed without strong opposition from some cattle groups. The National Cattlemen's Beef Association, which represents many of the larger meatpackers along with some smaller outfits, says changing the way the cattle business operates is a challenge to the free market.

"We have no doubt we will have to continue to explain why a cattleman should continue to be able to sell cattle to whoever he wants," Jay Truitt, a lobbyist for NCBA, said of the upcoming Senate debate.

Many of the ranchers advocating change would like to ban meatpackers from owning or contracting for cattle more than a week or two before slaughter. That way, the large companies couldn't have control over the cattle for a long period of time and would be forced to pay current market prices for meat.

Supporters of the reform say meatpackers can manipulate the prices they pay for cattle with "captive supplies," or stock they own or control through contracts and marketing agreements. They argue that such control allows meatpackers to time their purchases, allowing them to save money, but also depress prices.

Wyoming Sen. Mike Enzi, a Republican, is expected to offer an amendment on the Senate floor that would require packers to have a fixed base price in their contracts and to put contracts up for bid in the open market. Enzi maintains this would prevent the large meatpacking companies from manipulating the base price after the point of sale.

Bill Bullard, chief executive officer of R-CALF USA, a group that represents smaller independent producers and advocates the changes, says the livestock industry has long been left out of the farm bill.

"Until we correct the deficiencies in the marketplace, the entire U.S. cattle livestock industry could be jeopardized," he said.

But some cattle ranchers say those advocating the changes aren't working in the modern era.

Cevin Jones, a feedlot operator in Eden, Idaho, says his business would be hurt dramatically if such laws were passed. He does much of his business with Tyson Foods Inc., one of the biggest packer operations, and he says limiting the period in which he could sell to the company would damage his profits.

Errol Rice, executive vice president of the Montana Stockgrowers Association, said evidence doesn't suggest there has been price manipulation.

"This is a direct invasion of the federal government in the free marketplace," he said of efforts to change the market rules.

The House passed its version of the farm bill in July, but that legislation didn't include any major livestock reforms. That will be left up to the Senate, which is expected to take up the bill this fall.

The Senate debate may be a repeat of 2002, when the last farm law was passed.

A ban on packer ownership of cattle within 14 days of slaughter was passed on the Senate floor, but the senators eventually agreed to a compromise that allowed for country of origin labeling of meat products instead.

This time around, many House Republicans who opposed the ban have left Congress.

Members from Western and Midwestern states who advocated the legislation last time around are more optimistic.

"The prospects for all these things are better than the last time we did a farm bill," said North Dakota Sen. Kent Conrad, a Democrat who is on the Senate Agriculture Committee and supports the changes.

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