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Farm Press Release

Contact Bob Brammer -- 515-281-6699.

Miller and State Attorneys General Urge U.S.D.A. to Examine Competition in Livestock Industry

DES MOINES. Iowa Attorney General Tom Miller and the state attorneys general of Florida, Minnesota, Montana, North Dakota, and South Dakota have submitted a formal legal comment to U.S. Secretary of Agriculture Dan Glickman, urging the USDA to keep examining ways to promote competition in the livestock industry.

The state attorneys general submitted a "comment" on rules suggested by the Western Organization of Resource Councils (WORC). The letter commended WORC for sparking public debate on the potential anti-competitive effects of captive supplies, but the attorneys general said USDA should gather more information before adopting WORC's proposed rules.

WORC has asked the USDA to restrict the use of certain formula or basis price-forward contracts by packers to acquire cattle, and to prohibit packers from owning or feeding cattle unless the cattle are sold for slaughter in an open, public market. More needs to be known "before strong, well-tailored action can be taken," the attorneys general wrote.

"The competitiveness of the cattle industry can be accurately evaluated only if captive supply arrangements are disclosed by packers to USDA and publicly reported," the attorneys general said. "Without the public reporting of this information, cattle producers are unable to compare prices and terms offered by packers on cash sales and on forward contracts."

Monday's letter to Glickman reiterated an appeal made by Miller and nineteen other state attorneys general last November 20 -- that the USDA should ask packers to voluntarily disclose information on captive supply arrangements, and at the same time seek congressional authority to mandate such disclosure if packers do not do so voluntarily. The states again urged USDA to take action to define in rules what constitutes non-competitive pricing practices.

The states also asked USDA to do a thorough public evaluation "whether packers are using their own cattle to manipulate markets in an anti-competitive manner" before adopting WORC's proposed rule that would prohibit packers from owning or feeding cattle unless the cattle are sold for slaughter in an open, public market.

Miller said: "Our message to the Secretary is that this is an issue that needs continued attention by USDA. We appreciate WORC's leadership, and we appreciate the Secretary recog- nizing the importance of the issue and seeking public comment. We will continue to make our views known about promoting competition in the livestock industry."

Last November, the Farm Division of Miller's office led a multi-state effort to ask the USDA to take several actions to promote competition in the livestock industry. The twenty state attorneys general asked the USDA to foster greater public disclosure of key livestock market information and the "farm-to-retail spread"; to closely examine mergers and consolidations in the livestock industry in order to protect competition; to inform producers about the risks and rewards of production contracts and producer networking and bargaining; and to protect "whistle blower" producers from retaliation by packers.