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State attorneys general back Packers and Stockyards Act enforcement

Legislative Watch: Competition in meat processing critical; GAO finds MFP payments unfair; NACMPI nominations.

P. Scott Shearer

December 30, 2021

4 Min Read
State attorneys general back Packers and Stockyards Act enforcement

A bipartisan group of 16 state attorneys general is supporting the USDA's efforts to promote competition in the agriculture industry by strengthening enforcement under the Packers and Stockyards Act.

In a letter to Secretary of Agriculture Tom Vilsack, the attorneys general said, "Competition in meat processing is critical to ensure producers have access to fair and competitive markets, but corporate consolidation has led to fewer competitors and less competition for producers' livestock and poultry."

The letter discussed the consolidation that has taken place in the meat industry. In 1977, the four largest beef packers accounted for 25% of the market, but in 2018 they controlled 85% of the market. The four largest pork processors in 1976 controlled 33% of the market and in 2018 they had 70% of the market. In 1986, the four largest chicken processors had 35% of the market compared to 54% in 2018.

The state attorneys general are recommending that the USDA:

  • Establish a working group to bring together federal and state agencies to discuss issues in the market and facilitate interagency collaboration and information sharing.

  • Evaluate whether it has the power, under the Packers and Stockyards Act, to breakup meat processing operations and partner with state antitrust enforcers.

  • Invest in "new competitive entrants into meat and poultry processing" and "more than strengthen existing small and very small" facilities.

  • Review exclusive contracts established by meat packers and processors, which suppress prices and make producers more beholden to packers and processors.

  • Encourage and examine the proposals for reform put forth by producers' organizations.

  • Update regulations governing what information companies are allowed to collect and share for profit. 

  • Establish a grant that state antitrust enforcers could access to support their efforts to investigate and bring antitrust actions in agricultural markets.

The attorneys general signing the letter were from Minnesota, Wyoming, California, Delaware, Hawaii, Idaho, Illinois, Iowa, Maryland, Nevada, New Mexico, North Dakota, Oregon, Rhode Island, South Dakota and Utah.

GAO finds regional differences in MFP Payments
The nonpartisan U.S. Government Accountability Office (GAO) in its report on the Market Facilitation Program found USDA overestimated trade damages and the 2019 payments were disproportiontely distributed among commodities and regions of the United States. The report was requested by Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI).

The report said, "USDA paid higher rates to producers of a crop in a county where others planted crops with higher trade damages per acre than it paid producers of that same crop where others planted crops with lower trade damages per acre.

"Crop payment rates were generally higher in the South because of the South's higher proportion of cotton, sorghum and soybeans, which had higher trade damages per acre."

The GAO found that corn producers from the South received an average payment of $69 per acre, while the Midwest was $61 per acre, Northeast $34 per acre and the West $29 per acre.

Stabenow said in a press release, "This report confirms that the Trump USDA picked winners and losers in their trade aid programs and left everyone else behind. Making larger payments to farmers in the South than farmers in the Midwest or elsewhere, regardless of whether those farmers actually experienced a larger loss, undermines our future ability to support farmers when real disasters occur. I will continue to support all of agriculture through investments in infrastructure and support to farmers who suffer losses due to extreme weather, the COVID crisis and other events beyond their control."

The MFP was established in 2018 to provide payments to producers who were impacted by the loss of exports as a result of retaliatory tariffs. China and other countries imposed retaliatory tariffs on U.S. exports as a result of President Trump imposing tariffs on various imports. The program paid $23 billion to producers in 2018 and 2019.

The GAO is recommending the USDA revise its internal review process of future economic analyses to improve methodology transparency and use more representative baselines.

USDA seeking nominations for food safety committee
The USDA is seeking nominations for membership to the National Advisory Committee on Meat and Poultry Inspection (NACMPI).  

The committee is looking for individuals with knowledge and interest in meat and poultry food safety and other FSIS policies. Also, USDA would like to see representatives of small and very small establishments and geographic diversity in members. Individuals from academia, industry, state and local governments, public health organizations, and industry and consumer organizations are invited to submit applications.  

Nominations are due Feb. 18, 2022 and must be accompanied by a cover letter addressed to the Secretary of Agriculture. Submissions must include a resume or curriculum vitae and a completed USDA Advisory Committee Membership Background Information form AD-755.

NACMPI, established in 1971, consists of 20 members and provides advice and recommendations to the Secretary of Agriculture on food safety concerns and other matters affecting inspection program activities, including food safety policies that will contribute to USDA's regulatory policy development. 

About the Author(s)

P. Scott Shearer

Vice President, Bockorny Group, Inc.

Scott Shearer is vice president of the Bockorny Group Inc., a leading bipartisan government affairs consulting firm in Washington, D.C. With more than 30 years experience in government and corporate relations in state and national arenas, he is recognized as a leader in agricultural trade issues, having served as co-chairman of the Agricultural Coalition for U.S.-China Trade and co-chairman of the Agricultural Coalition for Trade Promotion Authority. Scott was instrumental in the passage of China Permanent Normal Trade Relations and TPA. He is past chairman of the USDA-USTR Agricultural Technical Advisory Committee for Trade in Animals and Animal Products and was a member of the USAID Food Security Advisory Committee. Prior to joining the Bockorny Group, Scott served as director of national relations for Farmland Industries Inc., as well as USDA’s Deputy Assistant Secretary for Congressional Affairs (1993-96), serving as liaison for the Secretary of Agriculture and the USDA to Congress.

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