Tags: Meat-Monopoly | Rule | Cut | Jobs

Meat-Monopoly Rule May Cut 104,000 Jobs, Group Says

Friday, 22 Oct 2010 02:48 PM

A U.S. Department of Agriculture proposal to boost competition in meat processing may eliminate 104,000 jobs and boost retail costs by 3.3 percent, a meatpacker lobbying group said.

About 30,000 jobs would be lost among farmers, processors and other groups directly related to the meat industry, while 74,000 jobs in “supplier and ancillary industries” will be cut, according to a study released today by the American Meat Institute. Consumer costs would increase by $2.7 billion from $80.6 billion spent annually on meat.

The rule, proposed by the USDA in June, would require meatpackers to justify their choice of one farmer supplier over another. This may make packers vulnerable to lawsuits, spurring them to eliminate most marketing contracts with producers, said Mark Dopp, the institute’s general counsel. The study assumes prices that meatpackers pay for livestock will mirror spot markets, which are more volatile and would boost costs, he said.

“The way this rule is written is going to fundamentally change packer behavior,” Dopp said on a conference call with reporters. “It is going to largely make marketing agreements go away.”

The proposed rule would reduce the U.S. gross domestic product by $14 billion, and federal, state and local governments would face $1.36 billion in lost tax revenue, according to the Washington-based group. Smithfield Foods Inc., the world’s biggest pork processor, and Tyson Foods Inc., the largest U.S. chicken processor, are members.

‘Fair Shake’

The USDA is accepting comments on the proposed rule and cannot comment on the lobbying group’s study, agency spokesman Caleb Weaver said.

“USDA has a responsibility to look out for all of our farmers and make sure that the playing field is as level as it can possibly be, so that farmers and ranchers of all sizes get a fair shake,” Weaver said in an e-mail. “We will take all of the comments we receive very seriously.”

Bill Bullard, the chief executive officer of producer group R-CALF USA, said the economic impact will be “minimal” because “absolutely no language” in the rule prohibits packers from entering marketing accords with producers. The institute “grossly over-exaggerated any costs,” he said in a telephone interview from Billings, Montana.

“This study is based on the premise that packers will decide not to participate in marketing programs,” Bullard said. “We believe that is nothing but a hollow threat to prevent packers from disclosing information about their cattle- procurement practices.”

There are about 950,000 cattle farms in the U.S., compared with 1.6 million in 1980, and the hog industry has declined to 71,000 farms from 666,000, according to the USDA. The average poultry grower makes about 34 cents per bird, while processing companies make about $3.23 per bird, the USDA said.

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A U.S. Department of Agriculture proposal to boost competition in meat processing may eliminate 104,000 jobs and boost retail costs by 3.3 percent, a meatpacker lobbying group said. About 30,000 jobs would be lost among farmers, processors and other groups directly related...
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2010-48-22
Friday, 22 Oct 2010 02:48 PM
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