Attorney General's News Release

Sept. 17, 1998

Nixon, 19 other AGs urge Congress to protect farmers and consumers by requiring more disclosure from meatpackers

Jeffeson City, Mo. — Missouri Attorney General Jay Nixon and 19 other state Attorneys General have sent a letter to members of Congress, urging them to require meatpackers to provide much more public information on the prices they pay to livestock producers.

The Attorneys General urged Congress to approve a program that would allow livestock producers to compare prices and terms offered by packers on cash sales and on forward contracts. They cited the fact that the five largest pork packers account for more than 60 percent of the hogs slaughtered and that the top four beef packing companies account for more than 87 percent of the cattle slaughtered.

The program "would make the market transparent and would help reveal any anti-competitive practices or behaviors occurring in the packing industry," the Attorneys General wrote to House and Senate conferees who are about to consider final action on the FY99 Agriculture Appropriations bill. The livestock improvement provisions were approved in the Senate version of the bill that passed in July.

The provisions supported by the Attorneys General call for the U.S. Secretary of Agriculture to conduct a three-year pilot program requiring livestock packers to report to the Secretary information relating to the prices and terms of all livestock sales, including forward contracts. The Secretary in turn would publicly report the information in a form that did not disclose which companies submitted the information nor other proprietary business information.

The letter called the program "an effective, yet measured" approach. "This pilot program would allow livestock producers to compare prices and terms offered by packers on cash sales and forward contracts. At the same time, it would shield confidential packer information and impose minimal costs of the compliance on packers," the letter said.

"Unfortunately, accurate price discovery is increasingly difficult in livestock markets," the Attorneys General wrote. "A growing percentage of sales of fed cattle and slaughter hogs are made through forward contracts, the terms of which are not publicly reported. In certain places and at certain times, it is estimated that over 80 percent of cattle are acquired under these so-called captive supplies."

"Concerns have been raised that the disparity of information and bargaining power between packers and producers may lead to anti-competitive practices and behaviors," the Attorneys General wrote.

The letter also supported other measures to foster competition that are contained in the Senate version of the Ag Appropriations bill, including provisions to require the Secretary of Agriculture to define by regulation what constitutes noncompetitive practices by packers relating to price and other terms of livestock sales; to provide protection for livestock producers against retaliation by packers on account of any statements made by producers regarding actions of packers; and to provide for a review of the effect of federal agriculture credit policies on concentration in agriculture.

"This legislation is in the best interest of producers and consumers in our states and across the nation," the Attorneys General wrote.

Besides Missouri, the letter was signed by the Attorneys General of Arizona, Arkansas, Idaho, Iowa, Louisiana, Massachusetts, Minnesota, Mississippi, Montana, Nevada, North Dakota, Oklahoma, Pennsylvania, South Dakota, Utah, Vermont, Washington, West Virginia and Wisconsin.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818