Fewer livestock producers worries USDA's Vilsack

FORT COLLINS, Colo Fri Aug 27, 2010 10:03pm EDT

Cattle are seen in this undated handout. REUTERS/National Cattlemen's Beef Association/Handout

Cattle are seen in this undated handout.

Credit: Reuters/National Cattlemen's Beef Association/Handout

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FORT COLLINS, Colo (Reuters) - There are fewer U.S. livestock producers now than 30 years ago, and Agriculture Secretary Tom Vilsack believes that may be because concentration in the meat industry has forced many to leave the business.

Vilsack and U.S. Attorney General Eric Holder on Friday jointly chaired a public hearing on such concentration, with the intent of slowing the decline in rural populations.

The session, which was the fourth of five to be held this year, was attended by more than 1,000 producers, many of whom favored increased government intervention to ensure them access to key markets, a move they say would help smaller producers stay in business.

"We have lost hundreds of thousands of (cattle) producers, We see the same thing in hogs, we see the same thing in dairy," Vilsack said during a Friday press conference.

The number of U.S. meat companies that buy U.S. cattle, hogs and chickens has decreased in the past 20 years to where a handful of large companies now control the majority of each market.

Larger producers, many of which sell thousands of hogs or cattle a year, in general argued for less government intervention and to let the markets dictate how cattle and hogs are priced and sold.

"There are opportunities in the market today where the smaller producer can participate," argued panelist Jerry Bohn, manager of a large Kansas feedyard.

As an example, he said, some of the top prices paid out in a popular beef marketing program went to producers who sold less than 250 cattle a year.

"If those opportunities were out there, I don't think this room would be full," countered panelist Armando Valdez, a Colorado rancher.

PRICE DISPARITY ALLEGED

Chris Peterson, a hog producer from Clear Lake, Iowa, wearing a "Family Farms First" sign on his shirt, testified of instances where pork plants paid rival producers 5 to 6 cents more per pound for hogs "simply because they (the producers) were large."

For a small to medium producer, he said that equals "$56,000 in income."

While Friday's hearing was designed to focus on concentration in the meat industry, many of the attendees used the forum to speak out for or against marketing rules proposed by USDA's Grain Inspection and Packers and Stockyards Administration (GIPSA).

Large producers in attendance opposed the rules, claiming they would dismantle marketing agreements that reward them for producing the size and quality of cattle and hogs that meat packers want.

"The GIPSA rule assumes all the cattle are the same." said James Herring, chief executive of Friona Industries in Amarillo, Texas.

Herring and others argued there can be differences of $100 to $400 per head in the same pens of cattle.

Smaller producers want the rules, claiming they would make marketing agreements public and would give leverage to GIPSA to prosecute violators.

The comment period on the GIPSA rules ends on November 22.

"I can't tell you today that I know what the solution is, but I know we can't continue this trend because if we do, we will end up with a handful of farmers, a handful of packers, a handful of processors, and a handful of grocery stores." Vilsack said of the decline in rural populations.

(Editing by David Gregorio, Gary Hill)

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