Ag Groups Unify in Denver: Press Conference Held Eve of USDA Hearings on WORC Petition.

Ag Groups Unify in Denver
Press Conference Held Eve of USDA Hearings on WORC Petition.

By Leesa Kiewel

Kathleen Kelly, Vice-President of R-Calf, summed it up best.  “It’s obvious USDA is playing one of the oldest, filthiest political games in the book.  By holding the WORC petition in limbo, the administration continues to keep us from more aggressive political action.  USDA keeps open the door for the packing industry to trade largely without restraint and oversight by handling this petition like dirty laundry.  The Glickman Administration sent a message to our public employees at P & S and those at the Justice Department  don’t broaden any enforcement of the law.  USDA is mocking the democratic process and cheating producers who are diligently trying to use and believe in our system of government.eventually making them bitter enemies of our government,” she said.  “We now ask this of USDA: help us now or get out of the way.”

And so it was, on the evening before USDA hearings on the Western Organization of Resource Council’s (WORC) petition on captive supplies in the meatpacking industry, a panel of producer organizations met before members of the press in an impressive show of strength and support for the WORC petition.

The petition, which was filed with USDA in October of 1996, calls for a firm fixed-base price on forward contracts on cattle and asks that cattle ownership by packers be prohibited unless offered for bid in an open, public manner.

The panel was an unprecedented gathering of producer organizations, who are vowing to form a joint counsel or ‘hub’, to provide more coordination between independent groups in the future.  Each organization agreed to provide one representative to the joint counsel, which will begin meeting as quickly as possible to develop joint strategy on issues like captive supplies.  Additionally, the groups discussed joint litigation as a possible alternative if USDA fails to act on the WORC petition.

At the conclusion of the press conference, held at the Holiday Inn Airport in Denver, representatives representing hundreds of thousands of ag producers nation wide signed an unprecedented unity statement.  The statement supports the WORC petition, pledging a common effort to stop the illegal price-fixing and discriminatory practices of the packing industry while demanding that USDA enforce existing anti-trust laws.  Participants at the press conference, which was hosted by the Organization for
Competitive Markets included, R-Calf, Cattlemen’s Legal Fund, Rocky Mountain Farmer’s Union, Livestock Marketing Association, Colorado Cattleman’s Association, and the Western Organization of Resource Councils. During the press conference, additional written statements of support from Oregon Cattleman’s Association (OCA) and Colorado Cattleman’s Association (CCA) were read into the record.  Immediately prior to the press conference, messages of support were also received from Wyoming Stockgrowers Association, America’s Rural Crisis Organization and Perkins County (SD) Livestock Improvement Association, and were made available to the media.  The organizations join a host of others already on the record supporting the WORC petition.

John Hays, President of OCA wrote, “Contrary to others who claim to represent the livestock producer, we contend that the key to an efficient economy, with equitable profit distribution, is competition.  Further, we argue that the necessary competitors in the beef processing industry do not exist, and that consequently the market is being controlled by large corporate entities using illegal methods of price fixing, including the use of captive supplies.  As a result, the beef industry as a whole suffers, while a powerful few maintain exorbitant profit margins.”

Hays’ comments, and those of other state livestock associations, are part of an effort by state cattlemen’s groups to ‘neutralize’ the testimony of the National Cattlemen’s Beef Association (NCBA) against the WORC petition.  NCBA President George Hall testified during the USDA hearings the following day, bringing forth NCBA policy on the WORC petition, stating NCBA is ‘the national organization representing America’s beef producers.’  Not so, say many cattlemen throughout the U.S. As a result, individual state organizations are recognizing the need to make their position of support for the WORC petition clear and independent of current NCBA policy, and are taking action to do so.

Clarence Newcombe, Chairman of the CCA Cattle Feeder Committee questioned the lack of action by USDA on the WORC petition saying, “I would ask the Glickman Administration why something hasn’t been done?  I want an answer.”  Newcombe continued, “Market access is the new buzzword.  I don’t have market access when nearly 95% of this week’s cattle slaughter movement is captive supplies.  There are hundreds of cattle feeders who want tospeak out on this issue, but they won’t.  Why?  Because they’re afraid.  They’re afraid to get crosswise with the packer buyer who calls on their feedlot.  Why is this so in America?  Why aren’t they free to come and support this issue?  It’s manipulation and it’s dirty,” he said. Nancy Robinson, representing the Livestock Marketing Association (LMA) said, “It’s readily apparent to LMA that producers are going to have to take the bull by the horns and make something happen within USDA.  LMA represents over 800 livestock auction markets, commission firms, dealers and allied business throughout the U.S.  At LMA we receive numerous accounts of packer intimidation, market manipulation and anti-competitive trade practices.  Because these complaints are not easily proven however, they seldom reach the courts.  Nonetheless, these exhibitions of market power are very real to producers and livestock markets struggling to survive in a market controlled by a shrinking number of agribusiness conglomerates.  The Packers and Stockyards Act of 1921 was intended to protect producers and consumers from what we’re witnessing in the meat industry today.  Neither USDA nor the Justice Department seems capable of effectively enforcing the Act in order to bring balance to the marketplace.  That being the case, there is little choice but for we the people to take this issue in-hand and initiate action,” she said.

Robinson illustrated her point referencing USDA’s recent announcement to seek contracts with CPA firms to validate producer signatures on the beef checkoff referendum petitions.  “After ten months during which USDA supposedly was validating producer signatures, we are now being told that USDA is seeking to contract with CPA firms to analyze and validate the data submitted by LMA.  Contract specifications call for a mail-in survey, which includes a provision requiring producers to send in private financial data.  The contract also calls for a maximum error rate of zero percent by contractors.  This is nothing but a recipe for failure, and it’s proof that we must unify and force the Glickman Administration to take affirmative action,” she said.

When asked by the press whether LMA was considering litigation to compel USDA to move forward with a referendum vote, Robinson said, “Litigation is an alternative that LMA is seriously considering at this point.”

Don Nelson, Chairman of the Dakota Resource Council from Keene, ND said he was pleased with the increasing support by producer organizations shown during the press conference.  “The most positive thing to occur during the Denver meetings was the number of allies WORC gained on the issue.  Each and every time another producer organization signs on to the effort we gain more credibility.  During this session we gained the public support of groups like OCA, CCA and Kansas Cattleman’s Association (KCA).  USDA cannot ignore the increasing demand for action exhibited here.”

Fred Stokes, President of the Organization For Competitive Markets agreed saying, “”There’s a change in the wind.  Finally, agricultural groups are banding together on the issues, bringing forth a collective power that cannot be denied.  We’re going to move forward from here with a new
strength.  We’re determined to win the fight on this issue.” he stated.

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