Note: The comment period for the new GIPSA rule closed Monday; this story looks at another group's comments and it's view of how the new rules could impact U.S. livestock.
The National Council of Farmer Cooperatives filed comments this week with USDA's Grain Inspection, Packers and Stockyards Administration on proposed rule changes to the Packers and Stockyards Act. The organization "strongly objected" to several provisions of the proposed rules it says would harm farmer-owned livestock marketing cooperatives and could lead to a less competitive marketplace for producers.
In its press statement, NCFC says one concern with the proposed rule would require a dealer who operates as a "packer buyer" only purchase livestock for the packer that identifies the deal as its "packer buyer." Since a packer will likely not be able to send an exclusive buyer to smaller sales, such as those held by many livestock co-ops, the result could result in fewer buyers in the market. NCFC contends fewer buyers mean less options and competition.
Chuck Conner, president and CEO of NCFC comments: "Farmer co-ops, including ones that market livestock and own auction barns, are an essential element in ensuring that farmers and ranchers remain competitive and receive a fair price for what they produce. This proposal would hurt livestock co-ops and will have a direct, negative impact on the bottom lines of the co-op's farmer-owners."
NCFC also notes other problems with the proposed rules including competitive injury provisions, a provision that would require public filing of private contracts and a provision that would enact blanket prohibition against packer-to-packer sales.
Conner notes that while the new rules are meant to increase competition, the proposal would "perversely lead to fewer options for livestock producers to market their produce and increase concentration in the sector."