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4 September 2010 - Tell Us How You Feel About GIPSA

The U. S. Dept. Of Agriculture has more than its share of acronyms, but the one that is getting a great deal of attention now is GIPSA. Some of you are asking what is it, what do the letters mean? It is the
89-year old Grain Inspection, Packers and Stockyards Administration that oversees the marketing of grain and livestock in the United States. The Department of Agriculture says it is time to make some changes, to level the playing field for livestock and poultry producers.

It’s a challenge to know exactly what all of the changes are, but here are the top five according to those who have studied the USDA proposal:

  1. Force meat plants and buyers of livestock and poultry to maintain written records that justify variations in prices offered to producers.
  2. Make it a violation to offer better prices to big producers who can provide larger volumes of livestock than to smaller producers who, collectively, can provide the same number and quality of livestock.
  3. Define unfair and anti-competitive practices so that violators can be punished in court. An example would be using inaccurate scales to weigh poultry.
  4. Require livestock buyers to work with only one meat packer.
  5. Prevent a meat packer from buying livestock from another packer. USDA says this would prevent collusion and open the market to more participants.

Here we go again with another very emotional debate, nearly as emotional as the suggestion of a National Animal ID Program a few years ago. This one seems to put small producers against large producers. R-CALF, a trade group representing smaller producers, plus a number of other grassroots producer groups, say the possible changes would help restore marketplace competition.

On the other hand, Don Close, Marketing Director for the Texas Cattle Feeders Association said it kills the incentive for the producer who strives to have the superior genetics and management and makes the investment to consistently produce top-quality beef that attracts a higher price.

As I said, the arguments are angry and emotional suggesting to me there is probably a little “right” on both sides. I would be interested in hearing from you. Should GIPSA be changed, should government become more involved in livestock marketing and pricing? Send me your thoughts and reasons and I’ll share them with my national audience on upcoming editions of Samuelson Sez. E-mail me at agbizweek.com.

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