Cattlemen seek antitrust reins on packers

Published Sunday
May 12, 2002

Cattlemen seek antitrust reins on packers
BY BILL HORD  
WORLD-HERALD STAFF WRITER

In spite of a congressional setback with the latest farm bill, about 300 cattlemen sent a signal Saturday that they aren’t going to give up the fight for a more competitive marketplace.
After eight hours of presentations by experts and complaints from the floor, the group that gathered at Omaha’s Holiday Convention Centre voted to demand antitrust action from the U.S. Justice Department and new laws from Congress to rein in packer control of livestock.

That was identified as the biggest issue after cattle producers from nearly a dozen states spewed out frustration, partly because Congress declined to ban packer ownership of livestock and partly because cattle losses in the last year have totaled about $2.8 billion.

Those attending endorsed several other resolutions that will be refined by a joint committee of the three sponsoring groups – the Nebraska Cattlemen, the Organization for Competitive Markets and R-Calf USA, which stands for Rancher-Cattleman Action Legal Fund/United Stockgrowers of America.

The resolutions:

A two-year moratorium on all imports of cattle into the United States for reasons of biosecurity and health.

Support for three class-action lawsuits that seek damages from IBP Inc., ConAgra Inc. and Excel Corp., a division of Cargill Inc., for alleged losses due to packer control of livestock.

An antitrust breakup of the big packing companies and huge retailers such as Wal-Mart.
The participants also discussed reform of the futures markets and ways to offset the negative impact of the high value of the U.S. dollar relative to currency in other countries.
Tom Spencer, a veteran Pueblo, Colo., cattleman, said congressional leaders “would recognize this as a good, viable grassroots outfit.”

Although moments of disagreement surfaced during the day, leaders of the three sponsoring groups said they were satisfied with the result.

“I feel good about going forward with Nebraska Cattlemen in their circle of associations and R-Calf in theirs,” said Connecticut lawyer Michael Stumo, legal counsel for the OCM.
Said Leo McDonnell of Columbus, Mont., founder of R-Calf: “Anytime you can pool your groups you benefit everybody.”

“Captive supply” proved to be the easiest issue on which to get consensus. Captive supply refers to cattle that packers own or have contracts for in advance.

Producers contend that the contracts and packer ownership make it possible for packers to bid less aggressively on the remaining cattle they need for slaughter.

Two class-action lawsuits were filed Friday against ConAgra and Cargill in U.S. District Court in Lincoln.
The lawsuits accuse the companies of monopolistic practices and using livestock contracts and ownership to depress cash prices. An Excel spokesman said the lawsuits had no merit.

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