Stockards and Packers Act

[Dave]

According to the Stockyards and Packers Act it is illegal for packers who own more than one kill plant to own cattle for more than 14 days. Not sure on that 14 days but that is pretty close. The reason for this was if a packer owned enough of their own cattle they could just kill their own and go off the market which would drive the price down. It use to be that the packers would sneak around this some and the USDA turned a blind eye. Now the packers are right out in the open about doing this and the USDA does nothing. Friday when I went to pick up my cow at the sale I stepped into a little shack by the loading chute to get out of the wind and cold. There on the counter was a load out slip which some one left behind. It was for a semi load of 600-700 lb steers. The buyer for those steers was plainly printed there. It was Tyson Fresh Foods.
A couple years ago Easterday got caught for billing Tyson for the purchase and feeding of a bunch of cattle which didn't exist. He was convicted of fraud and is now sitting a 11 year sentence in prison. At some point after his conviction he attempted to sue Tyson over the fact that it was illegal for them to own cattle. The courts ruled that he had no standing in the matter.
Obviously the USDA isn't going to enforce a law which they are responsible to enforce. NCBA isn't going to push the issue because are pretty much in bed with the packers. The packers are once again facing a lawsuit over price fixing. This time it is being brought by McDonalds. They might have enough money and pull to win. But that is the meat selling side of things. My thought is suing the packers isn't going to work. The only other course of action is to take the USDA to court for not doing their job. Probably need to get some powerful legislators on this to bring pressure on the USDA.

 

[Dave]

I know back when I was working that there was a group of environmental lawyers from Portland who had someone come to the Washington Dept of Ecology. Using the freedom of information act they got copies of everything DOE had done that week. They were looking for some way in which DOE did not enforce the law. And if they found an error committed by DOE they would use that error to bring a suit or threaten to sue. Right or wrong it sure made DOE make sure that they followed the letter of the law.

 

[4hfarms]

So then how far would it go? The packers close down, barns slow to a halt and we have no where to sell beef? Food shortage in a week or two.

I would think it needs to be regulated, not hung out to dry... if only people did the job they were hired to do, it would have never of gone this far.

 

[Ky hills]

Problem is the influence the packers have with the USDA and politicians.
The politicians probably think it’s either too big to manage or not in their interest to do so. Kind of like a too big to fail situation.

 

[Dave]

So then how far would it go? The packers close down, barns slow to a halt and we have no where to sell beef? Food shortage in a week or two.

I would think it needs to be regulated, not hung out to dry... if only people did the job they were hired to do, it would have never of gone this far.

It wouldn't close down anything. Packers would need to buy fat cattle from the feedlots. Feeders would still be buying at the sale yards. It was put in place to begin with to prevent the packers from manipulating the market. Right now what if one of the big 4 has enough of their own fats that they don't have to buy any on the open market for a couple weeks. The other 3 can't take up the slack so there is a glut on the market which drives the price paid for fat cattle down. Which in turn drive the price of feeder cattle down.

 

[SBMF 2015]

Right now what if one of the big 4 has enough of their own fats that they don't have to buy any on the open market for a couple weeks.

They don't have to own them to do that. I market fats directly to Tyson. They are always buying for two weeks out. The cattle aren't paid for until they are delivered.
All they have to do is start buying for 30 days out and they can control the price.
They call it “putting them on the shelf”

 

[Dave]

They don't have to own them to do that. I market fats directly to Tyson. They are always buying for two weeks out. The cattle aren't paid for until they are delivered.
All they have to do is start buying for 30 days out and they can control the price.
They call it "putting them on the shelf"

Here Tyson flat out owns tens of thousands. They have them in feedlots paying the feeders to feed them. And they are basically the only game in town as far as a plant which can process large numbers.

 

[SBMF 2015]

Here Tyson flat out owns tens of thousands. They have them in feedlots paying the feeders to feed them. And they are basically the only game in town as far as a plant which can process large numbers.

It’s a regional thing. We’re dead center of the corn belt. Tyson is about 25 miles away. But we used to have a middle man who would showcase our fat cattle to several packers and the one who netted the most money got the load of cattle. We sent cattle to Tyson (IBP at the time) at Joslin, IL, Aurora Pack at Aurora, IL, Packer Land and Green Bay Dress in Green Bay, Wi, Moyers in Philadelphia, PA, Tyson at Grand Island, NE.
There are also plants at Tama, Iowa Postville, Iowa and St Paul, MN.
Plenty of competition around here. Not to mention the two or three order buyers who buy cattle live in the sale barns and put them on the rail themselves.

 

[Dave]

We don't have that many options. There is Tyson in Pasco, WA. That is a good solid 4 hours and a mountain pass from here. That makes it 7 hours from all the big feedlots in Idaho. Out at the freeway here you will see 30, 40, 50 pot loads of fats headed to Pasco everyday. There is Washington Beef in Toppenish which is about 5 hours from here. That is owned by Agribeef. They have several big feedlots in Idaho and Washington. I don't know that you can sell there. It is legal for a company who only owns on kill plant to own cattle. I know people who retain ownership and get their cattle fed in an Agribeef feedlot. Those cattle go to Agribeef's kill plant.