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April 29, 2022 By Montana Cattlemen

Opening Statement US House Ag Committee

“An Examination of Price Discrepancies, Transparency, and Alleged Unfair Practices in Cattle Markets”

by MCA President, Gilles Stockton
April 27, 2022

Mr. Chairman, Members of the Committee:

Thank you for the opportunity to address you today.  My name is Gilles Stockton. I raise sheep and cattle near Grass Range Montana. Today, I am representing the Montana Cattlemen’s Association of which I am president, and the Northern Plains Resource Council. The mission of both these organizations is to preserve family agriculture and the rural communities upon which we depend.

I took over the family ranch in 1975, the same year that I graduated from Montana State University with a Master’s Degree in Animal Science. My wife and I started ranching with nothing except our degrees. My parents were as generous as they could afford to be. We had a loan from the Farmers Home Administration which was the most effective program USDA ever had. With this, we were able to make it work.

However, looking at the current economics of production agriculture, it is now impossible for beginning farmers and ranchers. We are losing an entire generation of motivated, talented, and trained young men and women, because they cannot afford to take over the family farm or ranch. The economic realities just do not allow it.

In 1975, the concentration in the beef packing industry had four firms controlling 25% of the market. Today they monopolize 85%. I lived and ranched through the entire period that has seen the beef industry become subservient to a monopoly cartel.

In 1975, the year I started ranching, the farm to retail spread for beef stood at 71.3%. We ranchers and feeders were able to retain 71.3 cents of every dollar spent by the consumer at the grocery store. In 2021 the farm to retail spread was 36.5%. Over the course of my career in ranching, the primary producers of beef lost more than one third of the dollar spent by consumers. This is money that does not come back to me, my fellow ranchers, or my community. In terms that are very concrete, in 1979 I purchased a one-ton four-wheel drive truck from the proceeds of selling 18 calves. The equivalent truck today would cost me 59 calves.

I do not want to give you the impression that I am looking for sympathy. Far from it. I have had a wonderful life working in an occupation that I love. I experienced as a routine part of my day activities that many people can just dream of.  I have been blessed to have two wonderful women willing to put up with me. My first wife passed away in 2003. Between us, we have three sons. One of whom has volunteered to look after my sheep, which are currently having their lambs. Without his help, I could not be here today.

My concern is for my community, the future of agriculture, and the future of food security for this nation. My community of Grass Range has over the course of my life as a rancher dried up and blown away like a tumbleweed. The Cheap Food Policy has been extraordinarily effective. Over the past half century Rural America has been impoverished and hollowed out. Now, from Grass Range Montana to Lumpkin Georgia, rural America is a very large, underpopulated slum.

There is no part of the US Agricultural system that is not oppressed by monopolized dysfunctional markets. This is both for where we sell the food to where we buy our inputs. The American people are not being served by this system. We saw this in the disruptions to the beef supply during the pandemic. Illness in the packing plants slowed the processing of cattle resulting in empty shelves in the meat counter. The packing cartel was able to profit by buying cattle for less and selling beef for more. I am sure that we will hear today how this is all about supply and demand. But it is also about having our entire meat production system funneled through a very narrow bottle neck where packers can exploit both producers and consumers.

Recent research from Georgetown University reveals that for every 1% increase in the level of captive supply cattle procurement there is a 5.9% decrease in the price of cattle. The levels of captive supplies now approach 80%. Another study from Iowa State University shows that beef packers are leveraging their market power across their multiple plants, further eroding true price discovery in the cattle market.

What to do? Actually, it is not that complicated. First pass the American Beef Labeling Act. It is absurd that beef and pork are the only food or manufactured items that do not carry a country-of-origin label. American consumers have the right to know the origins of their beef purchases and cattle producers have the right to a fair and transparent market.

Second, do what your colleagues did in 1921. Require that the beef packers buy their cattle in a competitive and transparent marketplace that they neither own nor control. This is what the Consent Decree that accompanied the passage of the Packers and Stockyards Act required. It was a perfectly free market approach that worked.

Why is this important? Your children’s and grandchildren’s food security is dependent upon your actions to restore competition to agricultural markets. Our entire food system is balanced on a very narrow vulnerable base. We are witnessing extremes in weather phenomena. The western third of America is in the worse drought experienced in the last 1200 years. We see the effects in dramatic wildfires that have burned millions of homes. I just had to sell a quarter of my cattle because there is no grass for the mothers and babies to graze. The south, from Texas to Virginia, Is being hammered by storm after storm. The prediction is that these weather extremes will only get worse. Unless this country moves to reverse a half a century of bad rural policy the American people will find themselves with an unreliable, extremely expensive food supply.

 

Filed Under: Uncategorized

April 28, 2022 By Montana Cattlemen

Tester Urges Senate Vote on Consolidation Bill

Tester Takes to Senate Floor to Ring the Alarm about Agriculture Consolidation, Urge Congressional Action

Senator’s legislation will increase competition and transparency in agriculture markets, giving fairer prices to producers and consumers

 

Thursday, April 28 (U.S. Senate) – Concluding a week of whirlwind activity building bipartisan momentum to tackle agriculture consolidation, U.S. Senator Jon Tester today took to the Senate floor to make the case to his colleagues for immediate congressional action to defend farmers, ranchers, and consumers from rigged prices as a result of anti-competitive behavior by corporate agriculture companies.

 

Tester urged his Senate colleagues to immediately bring his bipartisan Meat Packing Special Investigator Act and Cattle Price Discovery and Transparency Act up for a vote.

 

“The question is why did we lose 345,000 farms in the last 30 years, many of them generational farms?” said Tester. “It’s because folks can’t make the numbers work anymore. And the main culprit is consolidation in the corporate ag world. No competition means you don’t get fair prices.”

 

“…I can guarantee you one thing for sure: If you look at where we have been and predict where we are going, if we do nothing [to combat consolidation in corporate agriculture], there will be very, very, very few people living in rural America,” Tester continued. “Family farm agriculture will be dead in this country. And if we lose family farm agriculture, this country will change for the worse in a major way.”

 

Tester’s Meat Packing Special Investigator Act, which is co-led by Republican Senators Grassley (R-Iowa) and Rounds (R-S.D.), would create the “Office of the Special Investigator for Competition Matters” within the U.S. Department of Agriculture (USDA). This office will have a team of investigators, with subpoena power, dedicated to preventing and addressing anticompetitive practices in the meat and poultry industries and enforcing our nation’s antitrust laws.

 

Tester’s Cattle Price Discovery and Transparency Act, which is co-led by Senators Fischer (R-Neb.), Grassley (R-Iowa), and Wyden (D-Ore.), sets regional mandatory minimum thresholds for negotiated purchases of fed cattle by large meatpackers. It also includes a number of transparency measures, including the creation of a cattle contract library, requirements that packers report carcass weight more quickly and that they report the number of cattle scheduled for slaughter each day for the next 14 days.

 

“So I’m going to tell you what: folks serve in this body because they want to do right by the next generation,” Tester concluded. “They want to make sure our kids and our grandkids have the same opportunity that we had. They want to make sure this country remains the greatest country on earth…I hope you put your feet in the shoes of those people involved in agriculture, and I hope you put your feet in the shoes of the consumer. Because if we do these bills, we will be putting the country back on the right track for food security in the longterm.”

 

As the only working farmer in the U.S. Senate, Tester has long been an advocate for increased market transparency and more competitive practices for Montana producers and consumers. Earlier this year, Tester introduced his Agriculture Right to Repair Act to finally guarantee farmers the right to repair their own equipment and end current restrictions on the repair market. Last year, he introduced his bipartisan American Beef Labeling Act, which would ensure that only beef raised in the United States is labeled as a product of the USA, and his bipartisan New Markets for State-Inspected Meat and Poultry Act, which allows meat and poultry products inspected by Food Safety Inspection Service (FSIS) approved state Meat and Poultry Inspection (MPI) programs to be sold across state lines.

 

Watch Tester’s full remarks HERE.

Filed Under: Uncategorized

April 27, 2022 By Montana Cattlemen

Senate Ag Committee Testimony

At Senate Agriculture Committee, Tester Testifies in Support of His

Bipartisan Anti-Consolidation Legislation

Senator’s Meat Packing Special Investigator Act and Cattle Price Discovery and Transparency Act considered in Committee

April 26, 2022 (U.S. Senate) – As a part of his continued fight to defend family farmers and ranchers from rigged prices as a result of anti-competitive behavior by corporate agriculture conglomerates, U.S. Senator Jon Tester today testified in support of two of his bipartisan bills to tackle consolidation in agriculture: the Meat Packing Special Investigator Act and Cattle Price Discovery and Transparency Act.

“Ag production has gotten far more consolidated than when I took over the farm 44 years ago in 1978,” Tester said. “And it’s not one party’s responsibility, the fact is that both parties’ have watched this happen and we’ve done nothing. Today, we have an opportunity to do something. Why? Because we’ve seen a mass exodus off the land. Rural America is drying up. On the other side of the equation we see consumers are being treated unfairly in the marketplace, because there’s no competition. Today we can address both of those issues with these bills.”

Tester’s Meat Packing Special Investigator Act, which is co-led by Republican Senators Grassley (R-Iowa) and Rounds (R-S.D.), would create the “Office of the Special Investigator for Competition Matters” within the U.S. Department of Agriculture (USDA). This office will have a team of investigators, with subpoena power, dedicated to preventing and addressing anticompetitive practices in the meat and poultry industries and enforcing our nation’s antitrust laws.

Tester’s Cattle Price Discovery and Transparency Act, which is co-led by Senators Fischer (R-Neb.), Grassley (R-Iowa), and Wyden (D-Ore.), sets regional mandatory minimum thresholds for negotiated purchases of fed cattle by large meatpackers. It also includes a number of transparency measures, including the creation of a cattle contract library, requirements that packers report carcass weight more quickly and that they report the number of cattle scheduled for slaughter each day for the next 14 days.

“Today’s market place is more consolidated today than it was in 1921 when this body passed the Packers and Stockyards Act. Rural America is drying up because we can’t get fair prices at the farm gate,” Tester continued. “Capitalism isn’t working in this particular instance because of concentration and consolidation in the industry. Consumers are paying higher prices because without competition, they’re set without regard to what people can afford. We need some sunlight and we need some sideboards…I can guarantee you one thing: if we walk out of here today and we don’t pass these bills, we will see the same result that we’ve seen for the last 100 years. And in the end our food security is put at risk.”

He concluded: “Please do the right thing for the sake of folks like me who want to pass the farm on to the kids.”

As the only working farmer in the U.S. Senate, Tester has long been an advocate for increased market transparency and more competitive practices for Montana producers and consumers. Earlier this year, Tester introduced his Agriculture Right to Repair Act to finally guarantee farmers the right to repair their own equipment and end current restrictions on the repair market. Last year, he introduced his bipartisan American Beef Labeling Act, which would ensure that only beef raised in the United States is labeled as a product of the USA, and his bipartisan New Markets for State-Inspected Meat and Poultry Act, which allows meat and poultry products inspected by Food Safety Inspection Service (FSIS) approved state Meat and Poultry Inspection (MPI) programs to be sold across state lines.

Watch Tester’s full remarks HERE.

Filed Under: Uncategorized

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