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18 September 2010 - GIPSA - Your Voice Needs to be Heard

A couple of weeks ago I talked about the Department of Agriculture’s proposed changes in GIPSA, Grain Inspection Packers & Stockyards Administration rules on livestock marketing. I asked for your reaction and your comments. I heard from you and frankly, was surprised at how many of you were opposed to the changes. Let me share some of the comments, first from an Illinois producer.

“I can only comment as a pork producer and one whose production only goes to basically one packer. I view our relationship with the packer as a partnership. The packer’s mission is to provide what the consumer wants and, of course, make a profit in the process. To that end the packer needs a dependable uniform supply of hogs every day to maximize the efficiency of the slaughter facility. Obviously it is easier to do so with large supplies of known genetics and known feeding programs that provide a consistent quality of meat coming out of the plant. A financial incentive is the logical way to accomplish that goal.

“It seems to me if the producer and the packer enter into a contract that provides a margin to the producer and a product the packer wants, it’s a win-win for each. Actually it’s a win-win-win because the consumer also gets what he or she prefers. I don’t see the difference between that scenario and a grain producer who contracts grain to a terminal at a designated time and place; or seed and chemical companies providing a quantity discount to large producers.” He concludes by saying “Capitalism is cruel but it gets the right product in the right place at the right time.”

A Kentucky producer e-mailed this comment...

“As a consumer, the rule changes will hurt; as a small, very small producer, it may help me, but in the long run it will even hurt the folks like me. I am old enough to know that the small family farm is doomed as far as having a significant influence on agribusiness. The small beef producers like me are fading. I sell sixty to seventy feeder steers a year; real producers here sell at the most, 400.” He concludes “This situation just makes it clear that big is the future and these government intrusions into the business will do nothing but hurt the industry.”

Again, I was surprised at the number of producers, large and small, who were not in favor of the rule changes. While I appreciate your sending me your thoughts, it’s far more important to you and your business to share them with the Department of Agriculture. The comment period on the USDA proposals continues until November 20th. I strongly urge you to communicate with USDA and tell them how you feel about the proposed rule changes.

My thoughts on Samuelson Sez.